OPINION AND ORDER.

I. INTRODUCTION

The Securities and Exchange Commission (“SEC”) brought this civil enforcement action against Samuel Wyly and Donald R. Miller, Jr. as the Independent Executor of the Will and Estate of Charles J. Wyly Jr. (Charles Wyly and, together with Samuel Wyly, the “Wylys”). The SEC alleged ten securities violations arising from a scheme in which the Wylys established a group of offshore trusts and subsidiary entities in the Isle of Man (“IOM”), used those offshore entities to trade in shares of four public companies (the “Issuers”) on whose boards the Wylys sat, and failed to properly disclose their beneficial ownership of that stock.

The liabilities and remedies phases of the trial were bifurcated. I presided over a jury trial on nine of the ten claims from March 31 to May 7, 2014. On May 12, *2632014, the jury returned a verdict against both Sam and Charles Wyly on all nine claims, including securities fraud in violation of section 10(b) of the Securities Exchange Act of 1934 (the “Exchange Act”) and section 17(a) of the Securities Act of 1933 (the “Securities Act”), and failure to make various disclosures, in violation of sections 13(d), 14(a), and 16(a) of the Exchange Act.1 Following the jury verdict, I set a discovery and trial schedule for the remedies phase.

On June 6, 2014, the SEC disclosed for the first time in an amended response to defendants’ contention interrogatory that it “intends to seek in disgorgement ... all of the profits Sam [and Charles] Wyly earned through their [o]ffshore Issuer se-' curities transactions.”2 Defendants move to preclude the SEC’s theory of “total profit” disgorgement as insufficient as a matter of law or, in the alternative, as untimely. For the following reasons, defendants’ motion is GRANTED.

II. BACKGROUND

Between 1992 and 1996, Sam and Charles Wyly created a number of IOM trusts, each of which owned several subsidiary companies.3 Michael French, the Wy-lys’ family attorney, and Sharyl Robertson, the Chief Financial Officer (“CFO”) of the Wyly Family Office, served as protectors of the IOM trusts.4 French, Robertson, and Michelle Boucher, the CFO of the Irish Trust Company, a Wyly-related entity in the Cayman Islands,5 conveyed the Wylys’ investment recommendations to the IOM trustees. Most, if not all, of the IOM trustees’ transactions were based on these recommendations.6

The Wylys served as directors of Mi-chaels Stores, Sterling Software, Sterling Commerce, and Scottish Re.7 As part of *264their compensation, the Wylys received stock options and warrants. “Between 1992 and 1999, Sam and Charles Wyly sold or transferred to the [IOM] trusts and companies stock options in Michaels Stores, Sterling Software and Sterling Commerce.”8 Between 1995 and 2005, the IOM trusts and companies exercised these options, separately acquired options and stock in all four companies, and sold the shares.9 The SEC’s expert, Yasmine L. Misuraca, calculates the total profits from these transactions to be $487,780,099.10

III. APPLICABLE LAW

“Disgorgement serves to remedy securities law violations by depriving violators of the fruits of their illegal conduct.”11 “Because disgorgement does not serve a punitive function, the disgorgement amount may not exceed the amount obtained through the wrongdoing.”12 '“[Disgorgement forces a defendant to account for all profits reaped through his securities law violations and to transfer all such money to the court.”13 Because disgorgement is an equitable remedy, “[t]he district court has broad discretion not only in determining whether or not to order disgorgement but also in calculating the amount to be disgorged.”14

“Because of the difficulty of determining with certainty the extent to which a defendant’s gains resulted from his frauds — especially profits from transactions in securities whose market price has been affected by the frauds — the court need not determine the amount of such gains with exactitude.”15 Under Second Circuit law, “ ‘[t]he amount of disgorgement ordered need only be a reasonable approximation of profits causally connected to the violation.’ ” 16

“Once the SEC has met the burden of establishing a reasonable approximation of the profits causally related to the fraud, the burden shifts to the defendant to show that his gains ‘were unaffeet-*265ed by his offenses.’”17 Defendants are “entitled to prove that the [] measure is inaccurate,”18 but the “risk of uncertainty in calculating disgorgement should fall upon the wrongdoer whose illegal conduct created that uncertainty.”19

“Generally, where benefits result from both lawful and unlawful conduct, the party seeking disgorgement must distinguish between the legally and illegally derived profits.”20 In certain contexts, the Second Circuit has affirmed disgorgement awards of all proceeds from a business or activity. In CFTC v. British American Commodity Options Corporation, the court upheld the disgorgement of all proceeds earned by a company that engaged in options trading without registering as a futures commission merchant. In addition to failing to register, the company “seriously misrepresented the risks, guarantees, costs, mechanics of commodities investments, [and its own] status and expertise.”21 The court affirmed the disgorgement award because the company “was involved not in isolated instances of fraud, but in systemic and pervasive fraud,” in addition to committing the regulatory violation of failing to register.22

In SEC v. Lorin, the defendant corporation and its president engaged in a scheme to manipulate the price of certain publicly traded securities. The district court ordered disgorgement of all of the profits defendants received from trading in those securities during the relevant time period, while defendants argued that “disgorgement should have been limited to profits from transactions with the other parties to the manipulation agreement.”23 The Second Circuit affirmed the district court’s order, concluding that “because the purpose and effect of the scheme was to manipulate and stabilize the prices of the [ ] stocks, [defendants] likely profited from the scheme in all of their trades in those securities.”24

The Second Circuit has also upheld total profit disgorgement awards in insider trading cases. The court has. held that “where stock is purchased on the basis of inside information, the proper measure of damages [for purposes of disgorgement] is the difference between the price paid for shares at the time of purchase and the price of the shares shortly after the disclosure of the inside information.”25 In SEC v. Razmilovic, the Second Circuit recently affirmed a disgorgement award of total profits from the defendant’s collar transactions, finding that “the transactions themselves were fraudulent because Razmilovic *266falsely represented to the other party that he was not in possession of material nonpublic information.”26

The SEC additionally relies on three cases from other circuits, SEC v. First City Financial Corporation,27 SEC v. Bilzerian, and SEC v. Teo,28 in support of its theory that disgorgement of total profits is reasonable in this case. In First City, the D.C. Circuit affirmed a disgorgement award of all proceeds resulting from defendants’ accumulation of stock in anticipation of a hostile takeover bid. Defendants delayed filing section 13(d) disclosures after reaching the five percent reporting threshold for eleven days in order to conceal their position. After the belated disclosures were filed, the stock price of the target corporation rose dramatically. Although defendants did not succeed in the hostile takeover bid because they were bought out by the target company, they nevertheless secured a significant profit due to the pre-announcement accumulation.

In dealing with “an issue of first impression — whether federal courts have the authority to employ [disgorgement] with respect to section 13(d) violations,” the D.C. Circuit concluded that disgorgement of total profits was an appropriate remedy in light of the circumstances. The court concluded that defendants’ section 13(d) violation amounted to insider trading, because timely disclosures would have “suggest[ed] to the rest of the market a likely takeover and therefore may [have] increased the price of the stock....”29 Indeed, as in insider trading cases, the market reacted strongly to the disclosures once they were made. In this case, there was “no relevant distinction between disgorgement of insider trading profits and disgorgement of post-section 13(d) violation profits.”30

In SEC v. Bilzerian, the defendant entered into a stock accumulation agreement with a broker-dealer who purchased stock in its own account in anticipation of Bilze-rian’s repurchase of that stock on a later date. While Bilzerian was the beneficial owner of these shares, he delayed making the requisite section 13(d) disclosures for fourteen days with respect to one company and thirty days with respect to a second company. Further, Bilzerian’s late disclosures were materially false because he “misrepresented the source of funds used to purchase the stocks.”31 “Bilzerian’s misrepresentations were designed to create the impression that he was ready, willing and able to mount hostile takeovers” of the two target companies in order “to induce a ‘white knight’ to rescue the companies from his hostile takeover by purchasing stock, including his own, at a premium,” which is exactly what happened.32 Bilzerian was found liable for violations of section 10(b) and section 17(a), in addition to the disclosure violations. The D.C. Circuit upheld the disgorgement order of total proceeds, finding that his “misrepresentations inflated the price he received from the sale of the securities.”33

Finally, in SEC v. Teo, defendant and a trust that he controlled filed false or incomplete section 13(d) disclosures misrepresenting Teo’s true ownership in Mu-sicland in order to avoid that company’s *267poison pill provision. The .poison pill provision, which took effect when an individual or group owned 17.5% or more of the stock, allowed other shareholders to purchase large amounts of unsold stock directly from the company at a below market price to deter any hostile takeover effort.34

In July 1998, Teo controlled 5.25% of Musicland stock and filed accurate disclosures. Teo then began to rapidly acquire stock through the trust while filing false or incomplete section 13(d) disclosures. By August 1998, Teo beneficially owned 17.79% of Musicland shares, and by December 2000, Teo beneficially owned 35.97% of Musicland shares. Having secretly accumulated well over 17.5% of the stock, “Teo made multiple requests to be placed on Musicland’s board of directors,” “repeatedly proposed that Musicland become privately held,” and worked with several investment banks to take the company private.35- Shortly after Teo’s efforts, though apparently unrelated to them, Best Buy announced a tender offer and Music-land’s stock price rose. Had Teo disclosed the extent of his beneficial ownership, Mu-sicland’s other shareholders could have activated the poison pill provision and diluted the value of his shares and the percentage of his ownership by acquiring a large amount of stock from the company at a lower price. If this occurred, Teo could not have recognized the same profits because the value of his shares would have been lowered by his reduced ownership share in the company.36 Instead, Teo sold a portion of his shares in the open market and the remainder to Best Buy as part of the tender offer at a significant profit.

Teo and the trust were found liable for fraud in violation of section 10(b), as well as various disclosure violations including section 13(d), and the district court ordered disgorgement of all profits on Teo’s stock sales. Teo challenged the disgorgement award as not causally connected to the violation, arguing that the unrelated tender offer was an independent intervening factor contributing to the profits. The court rejected defendant’s argument, holding that the SEC “presumptively demonstrated a reasonable approximation of the profits arising from transactions tainted by the section 13(d) and section 10(b) violations” because Teo “intentionally misrepresented] [his] beneficial ownership” and “while willfully still failing to correct the false filings .sold all of the Musicland shares.”37 The court concluded that while Teo could have challenged the calculation, “intervening causation is not an element of the SEC’s evidentiary burden in setting out an amount to be disgorged that reasonably approximates illegal profits.”38 “Merely positing the Best Buy tender offer as an intervening cause and pointing to evidence that [Teo] did not bring it about was insufficient to overcome the presumption by the SEC that its approximation of *268illegal profits was not reasonable.”39

IV. DISCUSSION

The court’s authority to order disgorgement arises from its “broad equitable power to fashion appropriate remedies” for the violations in the cases before it.40 “[A] central, well-established principle in disgorgement law [is] that ‘the court may [] exercise its equitable power only over property causally related to the wrongdoing.’ ”41 While the disgorgement calculation does not need to be exact, it has to be a “reasonable approximation of •profits causally connected to the violation.” 42 It is the SEC’s burden to establish both a reasonable approximation of profits and the causal connection between the approximation and the violations.

According to the SEC, “the reasonable approximation [in this case] is the difference between what the [IOM] trusts paid to exercise the options and purchase stock, and what they received when they sold them unlawfully.”43 The SEC argues that “[i]n securities fraud cases, courts routinely require defendants to disgorge all profits made on unlawful trades,” citing some of the cases discussed above applying disgorgement principles to insider trading and market manipulation.44 “[T]he requisite causal link [between the profits and the violations] is established by a showing that the Wylys made profits through unlawful trading in a market that they fraudulently distorted, and the integrity of which they increasingly undermined with every additional fraudulent affirmative misrepresentation and omission.”45 Thus, “there is no reason to treat this fraud case differently, nor is there anything novel in analogizing the unlawful trades at issue here to insider trading violations.”46

While I am bound by the jury’s findings that the Wylys committed fraud in failing to disclose their trading activity in violation of sections 10(b) and 17(a), it is the court’s role to determine an appropriate disgorgement amount to remedy those violations. The context of the violations matters. I begin my analysis by noting that the type of unlawful conduct here is different from that found in other section 10(b) or section 17(a) cases. The unlawful conduct here is not insider trading,47 or the purposeful market manipulation evident in Lorin, First City, or Bilzerian, or the systematic and “serious” misrepresentation as to investment risk in British American. In each of these cases, th*e market distortion directly caused by defendants’ unlawful conduct and the profits flowing to the defendants as a result of the distortion were evident and allowed the court to evaluate the reasonableness of the disgorgement calculation and the causal nexus between the profits and the violation. Even in Teo, which most closely resembles the unlawful conduct at issue here, the defendant’s profits were directly linked to his failure to disclose. Had Teo properly disclosed the extent of his beneficial owner*269ship, Musicland’s other shareholders would have activated the poison pill to dilute Teo’s shares and Teo could not have recognized the profit he made as a result of Best Buy’s tender offer.

Here, the SEC cannot satisfy its burden to reasonably approximate a disgorgement amount merely by proving the violations and then calculating the total profits on each of the trades during the existence of the unlawful scheme. Unlike each of the cases discussed above, there is no evidence here that the defendants’ unlawful conduct — that is, the scheme to hide beneficial ownership by failing to disclose transactions — resulted in any market distortion, price impact, or profit tied to the violation. Nor is there evidence that the scheme was motivated by the expectation of such profits.48 Without proof, a court cannot speculate about the impact of the Wylys’ failure to disclose on share price.49

While the SEC correctly notes that “[t]he disclosure scheme requiring insiders to report beneficial ownership and any changes in that ownership reflects Congress’s judgment that public disclosures of insiders’ ownership of, and trading in, company stock ... provides valuable information to investors,”50 this legislative assumption cannot, without more, provide proof of the required causal link between the profits obtained and the violation. To hold otherwise would create a per se rule requiring disgorgement of all profits made by those who fail to properly disclose their beneficial ownership of securities — regardless of whether that failure resulted in unlawful trading, market manipulation, or distortion. Such a rule would eliminate the requirement that the government provide a reasonable approximation of the profits that are causally connected to the violation. There would be no need for any approximation — reasonable or otherwise— if the required disgorgement is always one hundred percent.

Further, while the SEC liberally refers to the trades at issue here as unlawful or illegal,51 this characterization lacks support in law or fact. The SEC argues that these trades became unlawful or illegal because they “were done pursuant to a fraudulent scheme.”52 The jury found that the Wylys engaged in a scheme to hide their beneficial ownership of a large block of securities in companies they controlled. The jury did not find that the trading itself was unlawful and could not have reasonably done so. There is no authority in any statute or case law that forbids insiders *270from trading, unless they do so while in possession of material, non-public information, or in other limited circumstances not applicable here.53 Sections 13(d) and 16(a) require that insiders report their trades after the fact. Most of the trades at issue here resulted from the exercise of options and warrants that the Wylys lawfully earned as compensation in the 1980s and 1990s. Some of these options and warrants were held for several years before being exercised, with no evidence that the timing of the exercise or the eventual sale of stock was influenced by material nonpublic information the Wylys gained by virtue of their roles as insiders.

The SEC has offered no proof that the trades by the IOM trusts were unlawful, manipulated the market, distorted the price of the shares (i.e., bought at an artificially low price or sold at an inflated price), or constituted insider trading.54 Nor can the SEC establish those facts by virtue of a legislative assumption and a defense expert witness’s testimony about the general importance of disclosures to the investing public.55 It defies logic to presume that all of the rise in the value of a company’s stock price over thirteen years — in the highly charged market of the 90s tech bubble, no less — is reasonably attributable to two directors’ failure to disclose their trading. As a matter of law, the SEC cannot show that all of the profits on all of the sales by the IOM trusts throughout this extensive time period are reasonably connected to the Wylys’ continuous failure to disclose beneficial ownership.

The government’s burden is especially important in light of the fact that disgorgement is an equitable remedy not available to private litigants, who may only recover damages or restitution. An order of disgorgement in SEC enforcement cases “forces a defendant to account for all profits reaped through his securities law violations ..., even if it exceeds actual damages to victims.”56 The purpose of disgorgement is “to prevent wrongdoers from unjustly enriching themselves through violations, which has the effect of deterring subsequent fraud.”57 Disgorgement is thus remedial, not punitive.

*271Of course, disgorgement of all profits is not per se punitive. In certain circumstances — as in the cases discussed above — such an order can be appropriate and equitable. But disgorgement is not a one size fits all remedy. Here, the SEC’s proposed disgorgement does not appear to arise from the violations and therefore smacks of punishment, not equity or deterrence. This calculation is all the more troubling because the SEC is time-barred from seeking a penalty as to many of these transactions.58

Nonetheless “‘[t]he deterrent effect of an SEC enforcement action would be greatly undermined if securities law violators were not required to disgorge illicit profits.’”59 For this reason, the SEC is entitled to one final opportunity to propose a reasonable approximation of profits causally connected to the violations, if it wishes to pursue disgorgement of trading profits.60 The SEC is not required to produce “data to measure the precise amount of the ill-gotten gains,” 61 or to respond in advance to defendants’ expected evidence of intervening factors or other market forces. However, if it wishes to pursue this theory, the SEC must provide a credible explanation as to how its new figure is a reasonable approximation of the profits causally connected to the violation, in light of this Opinion and Order and the unique facts of this case. For example, the SEC may well be able to establish a causal link between specific trades and market distortion in response to the failure to disclose those trades.62 Another example may be the timing of certain trades to precede, coincide with, or follow specific announcements or important corporate actions.63

The remedies hearing will proceed as scheduled on August 4, 2014 regarding the remaining theories of disgorgement. The SEC must notify the Court by August 12, 2014 if it wishes to pursue disgorgement of trading profits. Requests to hold the record open for additional expert reports will be granted only after a proffer to the Court as to the scope of any proposed report and its methodology.

Y. CONCLUSION

For the foregoing reasons, defendants’ motion to preclude the SEC’s disgorgement theory of total trading profits is GRANTED. The Clerk of the Court is directed to close this motion (Dkt. No. 403).

SO ORDERED.