Disgorgement: compensation for the lucrative illicit act

Abstract

The research shows that the institute of disgorgement, or restitution of illicit profits, is an innovative and multifaceted tool capable of correcting economic, social and environmental imbalances, acting both in the repair of damages and in the prevention of illicit practices. The study demonstrates that the practical application of disgorgement, originating from the regulatory practices of the financial market, has expanded its reach to areas such as the accountability of administrators and managers, the reparation of damages resulting from environmental disasters and the correction of distortions in international contracts. By imposing the restitution of profits obtained improperly, the institute not only discourages fraudulent and abusive behavior, but also reestablishes the balance in contractual relations, protecting collective and individual interests. It is observed that, in the context of financial markets, the application of disgorgement has proven to be essential to maintain the integrity of the system and ensure investor confidence, functioning as a mechanism that combines punitive and compensatory character by removing the undue benefit of the offender. In cases of environmental disasters, such as dam failures, the study reveals that disgorgement stands out by holding the agents involved accountable and mitigating socio-environmental impacts, allowing the recovered resources to be directed to measures to repair and prevent future catastrophic events. In addition, the application of the institute in international contractual disputes contributes to economic justice, by preventing abusive practices from compromising the balance of the global market. The analysis also points to the need to modernize the compensation mechanisms, integrating disgorgement into the normative systems, in order to expand its scope and effectiveness. It is thus concluded that the restitution of illicit profits through disgorgement plays a crucial role in promoting a more transparent and fair business environment, encouraging the adoption of ethical and responsible practices that benefit society as a whole. The research reinforces the importance of establishing robust reparation measures, which not only correct the imbalances caused by illegal acts, but also act preventively, contributing to the evolution of the legal system and to the protection of the rights of all economic agents involved.