 United States Court of Appeals
         FOR THE DISTRICT OF COLUMBIA CIRCUIT




Argued April 23, 2015                 Decided July 10, 2015

                        No. 14-1126

   MONTFORD AND COMPANY, INC., DOING BUSINESS AS
  MONTFORD ASSOCIATES AND ERNEST V. MONTFORD, SR.,
                   PETITIONERS

                            v.

         SECURITIES AND EXCHANGE COMMISSION,
                      RESPONDENT



           On Petition for Review of an Order of
          the Securities & Exchange Commission



    Ryan C. Morris argued the cause for petitioners. With
him on the briefs were Jeffrey T. Green, Tobias S. Loss-
Eaton, and Christopher R. Mills.

    Theodore J. Weiman, Senior Counsel, Securities and
Exchange Commission, argued the cause for respondent.
With him on the brief were Michael A. Conley, Deputy
General Counsel, Jacob H. Stillman, Solicitor, and Dominick
                               2
V. Freda, Senior Litigation Counsel. Susan S. McDonald,
Attorney, entered an appearance.

   Before: MILLETT and PILLARD, Circuit Judges, and
SENTELLE, Senior Circuit Judge.

   Opinion for the Court filed by Senior Circuit Judge
SENTELLE.

     SENTELLE, Senior Circuit Judge: Petitioners Montford
and Company, Inc., and Ernest V. Montford, Sr., petition this
court for review of a final order of the Securities and
Exchange Commission finding that petitioners violated
Sections 204, 206, and 207 of the Investment Advisors Act of
1940, 15 U.S.C. §§ 80b-4, 80b-6(1)–(2), 80b-7, and Advisors
Act Rule 204-1(a)(2), 17 C.F.R. § 275.204-1(a)(2). In re
Montford & Co., Inc., Investment Advisors Act Release No.
3829, 2014 WL 1744130 (May 2, 2014). The Commission
determined that, by failing to disclose $210,000 in fees
received from an investment manager, petitioners
misrepresented that they were providing independent and
conflict-free advice. The Commission imposed industry bars
and cease-and-desist orders, ordered disgorgement, and levied
a total of $650,000 in civil penalties. Petitioners challenge the
order, arguing that the enforcement action was untimely under
Section 4E of the Securities Exchange Act of 1934, 15 U.S.C.
§ 78d-5. Petitioners further contend that the Commission
abused its discretion in imposing the disgorgement order and
civil penalties. Holding that the Commission reasonably
interpreted Section 4E as not imposing a jurisdictional bar to
late-filed actions, and that the Commission acted reasonably
in imposing its sanctions, we deny the petition for review.
                               3
                      I.   BACKGROUND

       A. Factual Background

     In 1989, Ernest V. Montford, Sr., (hereinafter
“Montford”) founded Montford and Company, Inc. (does
business as, and hereinafter, “Montford Associates”).
Montford Associates operated as a registered investment
advisor to institutional investors. Montford Associates did
not execute securities transactions on behalf of its clients;
rather, Montford Associates recommended various investment
managers, monitored client portfolios, and periodically
reported to its clients on the performance of their investments.
During 2009 and 2010, Montford Associates had
approximately thirty clients, most of whom were pension
funds, school endowments, hospitals, and non-profit
organizations. The firm charged an annual advisory fee
ranging from eight to twenty basis points of each client’s
assets under management. Petitioners “managed over $800
million in investment assets, earning gross revenues of
$600,000 in 2009 and $830,000 in 2010.” Montford & Co.,
2014 WL 1744130, at *2.

     Montford advertised his firm as an “independent” and
“conflict-free” advisor that would provide “impartial” advice.
See id. at *2–*3. Commission rules required Montford
Associates, as a registered investment advisor, to file annually
Form ADV, a uniform registration form and disclosure
statement. The firm’s 2009 and 2010 forms described the
firm as an “independent investment advisor” that would
“[a]void any material misrepresentation in any…investment
recommendation” and “[d]isclose to clients…all matters that
reasonably could be expected to impair [the firm’s] ability to
make unbiased and objective recommendations.” Id. at *2.
The firm further claimed that it did “not accept any fees from
                             4
investment managers or mutual funds.” Id. at *3. Montford
Associates’ website linked to an article quoting Montford as
stating that clients “need a strategy they can trust, because
investments…should be based on merit, not…undisclosed
compensation.” Id.

     The Commission’s action against petitioners centers on
Montford’s relationship with Stanley Kowalewski, an
investment manager specializing in hedge funds. In 2003,
Montford began recommending Kowalewski (then owner and
operator of Phoenix Advisors, Inc.) as an investment manager
to his clients. In 2005, Kowalewski joined Columbia
Partners, LLC Investment Management (“Columbia”).
Montford subsequently advised his clients to transfer their
assets to Columbia and continued to recommend Kowalewski
as an investment manager. By 2009, ten of Montford’s clients
had followed Kowalewski to Columbia. Id. at *4.

     In June 2009, Kowalewski told Montford that he was
leaving Columbia to start his own investment management
firm, SJK Investment Management LLC (“SJK”). Montford
told Kowalewski that he would try to convince his clients to
transfer their Columbia investments to SJK and that he would
assist in administering the transfers. Over the following
months, Montford and his staff individually met with the ten
clients invested with Columbia to recommend that they
transfer their assets to SJK. In August 2009, Montford called
Kowalewski and told him, “I need to be paid for all this
work.” Id. Kowalewski agreed, but did not specify an
amount. In October 2009, Kowalewski agreed to give
petitioners an initial payment of $130,000.         Montford
maintained that he simply requested reimbursement for the
administrative costs his firm incurred in transferring client
investments from Columbia to SJK; Montford claimed that
Columbia was uncooperative and SJK was understaffed, so
                              5
his firm took on the bulk of the work. See id. at *15; Pet’rs’
Br. 7.

     In November 2009, having yet to receive the agreed upon
payment, Montford Associates sent SJK an invoice for
$130,000 for “Consulting Services for the SJK Investment
Management LLC Launch July 15th–October 30, 2009.”
Montford & Co., 2014 WL 1744130, at *5. Montford
Associates then sent a revised invoice, which, at
Kowalewski’s request, changed the description of the services
provided to “Marketing and Syndication Fee for SJK
Investment Management LLC Launch July 15th–November
30, 2009.” Id. On January 4, 2010, SJK paid petitioners
$130,000. In November 2010, Montford Associates requested
a second payment from SJK, sending an $80,000 invoice
which also described the payment as a “Marketing and
Syndication Fee.” Id. Later that month, SJK wired
petitioners $80,000.     In addition to these payments,
Kowalewski waived fees for Montford’s personal IRA, and
went on a three-day fishing trip with Montford, paying for
Montford’s transportation, food, and lodging. Id. at *8.

     Montford ultimately convinced nine of his clients to
transfer their investments to SJK; collectively, these clients
invested $80 million in SJK. Id. at *5. Montford did not
disclose to any of his clients that he had provided assistance
to SJK, or that he requested or received fees from
Kowalewski. Montford strongly encouraged his clients to
invest with Kowalewski and SJK, even when his clients
expressed reservations with Kowalewski’s investment
strategy, experience, and alleged misconduct. Id. at *6–*7.

    In January 2011, the Commission filed a civil
enforcement action against SJK and Kowalewski, charging
them with securities fraud. The complaint alleged that
                              6
Kowalewski had diverted to himself millions of dollars that
were invested in SJK. See SEC v. Kowalewski, Litigation
Release No. 21800, 2011 WL 52096 (Jan. 7, 2011). At this
time, the details of petitioners’ payment arrangement with
SJK came to light. Many of Montford Associates’ clients
terminated their business with the firm after learning of the
payments. See Montford & Co., 2014 WL 1744130, at *5.

       B. Procedural Background

     After discovering Kowalewski’s fraud, the Commission
began investigating Montford and his firm. In March 2011,
the Commission issued to petitioners a “Wells notification,” a
letter in which Division of Enforcement staff advises the
target of an ongoing investigation of the nature of the
investigation and potential violations. See id. at *9 n.60. On
September 7, 2011, 187 days after issuing the Wells
notification, the Commission instituted administrative
proceedings against petitioners. See In re Montford & Co.,
Inc., Investment Advisors Act Release No. 3273, 2011 WL
3916057 (Sept. 7, 2011). The Commission’s Division of
Enforcement claimed that Montford received undisclosed fees
from SJK and Kowalewski for promoting SJK. Alleging that
Montford Associates’ promotional materials and regulatory
filings contained inaccuracies regarding the firm’s
independence, the Division charged that petitioners violated
the Investment Advisors Act’s reporting and antifraud
provisions, 15 U.S.C. §§ 80b-4, 80b-6(1)–(2), 80b-7, and
Advisors Act Rule 204-1(a)(2), 17 C.F.R. § 275.204-1(a)(2).

     Section 4E of the Exchange Act, 15 U.S.C. § 78d-5(a)(1),
provides that “[n]ot later than 180 days after the date on
which Commission staff provide a written Wells notification
to any person, the Commission staff shall either file an action
against such person or provide notice to the Director of the
                               7
Division of Enforcement of its intent to not file an action.”
Petitioners filed a motion to dismiss the proceeding as time-
barred under Section 4E because the Division failed to
institute the action within 180 days after issuing a Wells
notice. In response, the Division submitted a declaration that
the Director had extended the deadline under 15 U.S.C.
§ 78d-5(a)(2), which allows the Director to extend the
deadline “for certain complex actions.” The presiding
Administrative Law Judge (ALJ) denied petitioner’s motion
to dismiss for lack of jurisdiction, accepting the
Commission’s assertion that the deadline was properly
extended. See In re Montford & Co, Inc., Investment
Advisors Act Release No. 457, 2012 WL 1377372, at *11
(Apr. 20, 2012).

     After a hearing, the ALJ issued an initial decision that
petitioners violated Sections 204, 206, and 207 of the
Advisors Act, 15 U.S.C. §§ 80b-4, 80b-6(1)–(2), 80b-7, and
Advisors Act Rule 204-1(a)(2), 17 C.F.R. § 275.204-1(a)(2).
See id. at *12–*15. The ALJ again rejected petitioners’
jurisdictional argument, concluding that because “the Director
extended the deadline…one can deduce that he/she made the
[complexity] determination” required by the statute. Id. at
*11. The ALJ barred Montford from the securities industry;
ordered petitioners to cease and desist from future violations;
ordered disgorgement of $210,000; and ordered Montford to
pay $150,000 and Montford Associates to pay $500,000 in
civil penalties. See id. at *22. Petitioners appealed to the full
Commission, which conducted an independent review of the
record.

    The Commission affirmed the ALJ’s findings and
sanctions. See Montford & Co., 2014 WL 1744130. The
Commission rejected petitioners’ argument that Section 4E
barred the action. The Commission, construing Section 4E in
                               8
“the first instance,” id. at *10, found that “dismissal of an
action is not the appropriate remedy when the time periods set
forth in Section 4E are exceeded,” id. at *12. The statute
says nothing about the consequence for noncompliance, and
courts have been hesitant to infer a jurisdictional consequence
for failure to comply with an internal deadline for federal
agency action. Id. at *11.

     The Commission also rejected Montford’s challenge to
the disgorgement order and civil penalties. Petitioners argued
that they should not disgorge the $210,000 in payments
received from SJK “because ‘receipt of the money itself was
[not] wrongful’ under the securities laws.” Id. at *22 (quoting
Reply Br.). The Commission disagreed, determining that
there was a connection between the nondisclosure violations
and the $210,000, as the payments from SJK were predicated
on not disclosing those payments. Id. The Commission
further found that third-tier civil penalties were appropriate,
as petitioners’ misconduct “involved fraud, deceit,
manipulation, or deliberate or reckless disregard of a
regulatory requirement” and “resulted in substantial pecuniary
gain.” Id. at *24.

     Montford and Montford Associates petition this court for
review of the Commission’s order. We will deny that petition
for the reasons stated below.

                        II. ANALYSIS

     “The findings of the Commission as to the facts, if
supported by substantial evidence, shall be conclusive.” 15
U.S.C. § 80b-13(a). The “interpretation of the ambiguous
text” of a federal securities statute, “in the context of formal
adjudication, is entitled to deference if it is reasonable.” SEC
v. Zandford, 535 U.S. 813, 819–20 (2002). Our “review of
                               9
the Commission’s remedial decisions is deferential.”
Kornman v. SEC, 592 F.3d 173, 176 (D.C. Cir. 2010).

       A. Petitioners’ Challenge to the Timeliness of the
          Enforcement Action

     Section 4E of the Exchange Act directs that “[n]ot later
than 180 days after the date on which Commission staff
provide a written Wells notification to any person, the
Commission staff shall either file an action against such
person or provide notice to the Director of the Division of
Enforcement of its intent to not file an action.” 15 U.S.C.
§ 78d-5(a)(1). The section also contains a procedure for
extending the deadline for “certain complex actions.” Id.
§ 78d-5(a)(2). The Commission brought an enforcement
action against Montford and Montford Associates 187 days
after issuing a Wells notice to petitioners. In a later
declaration, an attorney with the Division of Enforcement
attested that the Director of the Division had extended the
deadline. Petitioners argue that the Commission lacked
jurisdiction to bring an enforcement action, as the
Commission brought the action too late and did not follow the
procedures for extending the deadline. We do not agree. We
hold that the Commission’s interpretation of Section 4E, as
not imposing a jurisdictional bar, is reasonable and entitled to
deference. We thus do not need to address the Commission’s
alternative argument that it had properly extended the
deadline.

    We defer to the Commission’s reasonable interpretation
of Section 4E. “The Commission’s interpretation of its
authorizing statutes is entitled to deference under the familiar
two-pronged test set forth in Chevron, U.S.A., Inc. v. Natural
Res. Def. Council, Inc., 467 U.S. 837 (1984).” Kornman, 592
F.3d at 181. “When a court reviews an agency’s construction
                               10
of the statute which it administers, it is confronted with two
questions.” Chevron, 467 U.S. at 842. First, the court must
determine “whether Congress has directly spoken to the
precise question at issue. If the intent of Congress is clear,
that is the end of the matter; for the court, as well as the
agency, must give effect to the unambiguously expressed
intent of Congress.” Id. at 842–43. But “if the statute is silent
or ambiguous with respect to the specific issue, the question
for the court is whether the agency’s answer is based on a
permissible construction of the statute.” Id. at 843.

     We do not owe the Commission’s interpretation any less
deference because the Commission interprets the scope of its
own jurisdiction. As the Supreme Court recently held, “a
court need not pause to puzzle over whether the interpretive
question presented is ‘jurisdictional.’ If ‘the agency’s answer
is based on a permissible construction of the statute,’ that is
the end of the matter.” City of Arlington v. FCC, 133 S. Ct.
1863, 1874–75 (2013) (quoting Chevron, 467 U.S. at 842).
Nor is it relevant that the Commission’s interpretation is the
result of adjudication, rather than notice-and-comment
rulemaking. “Within traditional agencies,” such as the SEC,
“adjudication operates as an appropriate mechanism…for the
exercise of delegated lawmaking powers, including
lawmaking by interpretation.” Martin v. Occupational Safety
& Health Rev. Com’n, 499 U.S. 144, 152 (1991) (citing SEC
v. Chenery Corp., 332 U.S. 201–03 (1947)); see also Teicher
v. SEC, 177 F.3d 1016, 1019 (D.C. Cir. 1999) (extending
Chevron deference to Commission’s interpretation, expressed
in an adjudicatory order, of the Investment Advisors Act of
1940, 15 U.S.C. § 80b-3f).

    We hold that Section 4E is ambiguous under Chevron
Step 1.   By not specifying any consequence for the
Commission’s failure to bring an enforcement action within
                               11
180 days after issuing a Wells notification, Congress has not
“directly spoken to the precise question at issue.” Chevron,
467 U.S. at 842. Petitioners argue that Section 4E’s
“language, structure, purpose, and legislative history all
establish that the deadline is mandatory and jurisdictional.”
Pet’rs’ Br. 13. Petitioners point to the statute’s use of “shall,”
the inclusion of a detailed extension process for complex
cases, “which would be pointless if the deadline had no
force,” id., and the provision’s purpose of spurring the
Commission to act promptly so that recipients of Wells
notices do not have the cloud of an investigation hanging over
them, id. at 14. While these arguments demonstrate that it
might be reasonable to interpret Section 4E as having a
jurisdictional consequence, these arguments do not show that
the statute forecloses other interpretations. Since the “statute
is silent...with respect to the specific issue,” we turn to the
question of “whether the agency’s answer is based on a
permissible construction of the statute.” Chevron, 467 U.S. at
843.

     We further hold that the Commission’s interpretation of
Section 4E is reasonable under Chevron Step 2. The
Commission stated, “Based on the text and legislative history
of Section 4E and Supreme Court precedent interpreting
similar statutes, we find that the provision is intended to
operate as an internal-timing directive, designed to compel
our staff to complete investigations, examinations, and
inspections in a timely manner and not as a statute of
limitations.” Montford & Co., 2014 WL 1744130, at *12.
The Commission’s interpretation of Section 4E relied on
precedent holding “that congressional enactments that
prescribe internal time periods for federal agency action
without specifying any consequences for noncompliance do
not necessitate dismissal of the action if the agency does not
act within the time prescribed.” Id. at *11. The Commission
                               12
discussed Brock v. Pierce County, 476 U.S. 253 (1986), and
United States v. James Daniel Good Real Property, 510 U.S.
43 (1993). In Brock, the Court held that the Secretary of
Labor’s failure to act by a 120-day deadline did not foreclose
subsequent action, where the statute did not identify a
consequence for missing the deadline. 476 U.S. at 259. The
Court held that the statute’s use of “shall,” together with an
express deadline “does not, standing alone, divest the
[agency] of jurisdiction to act after [the deadline.]” Id. at 266.
In James Daniel Good, the Court held that when “a statute
does not specify a consequence for noncompliance with
statutory timing provisions, the federal courts will not in the
ordinary course impose their own coercive sanction.” 510
U.S. at 63–64. The Commission found that Section 4E was
similar to the deadlines in Brock and James Daniel Good, and
determined that it did not lack jurisdiction to bring an
enforcement action after the 180-day deadline passed.

     The Commission’s analysis of Supreme Court precedent,
and its application of that precedent to Section 4E, is sound.
As the Supreme Court recently reminded us, time limitations
for filings in statutes are presumptively non-jurisdictional.
See United States v. Kwai Fun Wong, 135 S. Ct. 1625, 1634–
35 (2015). Nothing in the text or structure of Section 4E
overcomes the strong presumption that, where Congress has
not stated that an internal deadline shall act as a statute of
limitations, courts will not infer such a result. Cf. Barnhart v.
Peabody Coal Co., 537 U.S. 149, 158 (2003) (“Nor, since
Brock, have we ever construed a provision that the
Government ‘shall’ act within a specified time, without more,
as a jurisdictional limit precluding action later.”). As in
Brock, “[t]here is simply no indication in the statute or its
legislative history that Congress intended to remove the
[Commission’s] enforcement powers if” Commission staff
fails to file an action within 180 days of issuing a Wells
                               13
notification. 476 U.S. at 266. At most, petitioners’
arguments to the contrary demonstrate that Section 4E is
ambiguous; petitioners have not shown that the Commission’s
interpretation is unreasonable. Accordingly, we defer to the
Commission’s reasonable interpretation of the statute it
administers. See City of Arlington, 133 S. Ct. at 1874–75.

     Because we hold that the 180-day time period is not
jurisdictional, we need not decide whether the Director of the
Division of Enforcement properly extended the deadline per
the statutorily prescribed procedures. See 15 U.S.C. § 78d-
5(a)(2).

       B. Petitioners’ Challenge to the Disgorgement Order
          and Civil Fines

     In this petition, “Montford recognizes his wrongdoing,
and he does not dispute that the bar order, cease-and-desist
order, and some financial penalty are appropriate.” Pet’rs’ Br.
39.     However, Montford contends that even if the
Commission had jurisdiction to bring an enforcement action,
“the disgorgement order is unlawful and the civil penalties are
entirely disproportionate and arbitrary.” Id. We disagree and
affirm the Commission’s imposition of sanctions.

     Petitioners argue that the disgorgement order is unlawful
because there must be a causal connection between the
misconduct and the funds to be disgorged. “Disgorgement
deprives wrongdoers of the profits obtained from their
violations.” Zacharias v. SEC, 569 F.3d 458, 472 (D.C. Cir.
2009). Thus, “[t]he touchstone of a disgorgement calculation
is identifying a causal link between the illegal activity and the
profit sought to be disgorged.” SEC v. UNIOIL, 951 F.2d
1304, 1306 (D.C. Cir. 1991) (per curiam) (Edwards, J.,
concurring). The violations in this case, petitioners maintain,
                              14
“arose not from Montford’s receipt of the payments from
SJK, but rather from his failure to disclose those payments.”
Pet’rs’ Br. 41. Petitioners thus contend that there is no causal
connection, as the payments from Kowalewski cannot have
been caused by petitioners’ subsequent failure to disclose
those payments; “it is impossible for the violations to have
caused the payments because the latter preceded the former.”
Id. at 40.

     We are not persuaded by this argument.                 The
Commission has flexibility in ordering disgorgement, as it is
“an equitable remedy designed to deprive a wrongdoer of his
unjust enrichment and to deter others from violating the
securities laws.” SEC v. First City Fin. Corp., 890 F.2d 1215,
1230 (D.C. Cir. 1989). When calculating disgorgement,
“separating legal from illegal profits exactly may at times be a
near-impossible task.” Id. at 1231. Thus, “disgorgement
need only be a reasonable approximation of profits causally
connected to the violation.” Id. Under this standard, the
Commission identified a sufficient causal connection between
the payments from SJK and the petitioners’ violations. The
Commission found that SJK paid Montford in part to
persuade clients to invest with SJK. Montford & Co., 2014
WL 1744130, at *15 (“Montford twice admitted that SJK paid
him, at least in part, to convince clients to stay with SJK.”).
The Commission further determined that “[c]lient testimony
demonstrated that, absent [petitioners’] deception and failure
to disclose the conflict, SJK would not have paid [petitioners]
the $210,000 because the clients would not have retained
[petitioners] as their advisers and would not have invested in
SJK.” Id. at *22. These conclusions are reasonable and
supported by substantial evidence. We will thus uphold the
Commission’s disgorgement order.
                             15
     Petitioners argue that the Commission erred when it
imposed third-tier civil penalties, as the Commission did not
make the required determination that petitioners’ conduct
“resulted in substantial pecuniary gain.” 15 U.S.C. § 80b-
3(i)(2)(C). Petitioners contend that their conduct did not
result in substantial pecuniary gain for the same reason that
the disgorgement order was unlawful: “the disclosure
violations followed, and thus could not have caused, the
undisclosed payments from SJK. Accordingly, the violations
cannot have ‘resulted in’ Montford’s receipt of the
payments.” Pet’rs’ Br. 43 (citation omitted). For the same
reasons that we rejected petitioners’ disgorgement argument,
we reject this argument. The petitioners further argue that
“the penalties imposed by the Commission exceed its
discretion because they are unsupported by the record and do
not adequately account for mitigating facts.” Id. at 44. We
reject this argument as well. The Commission considered and
discussed the appropriate statutory factors in reaching its
decision. See Montford & Co., 2014 WL 1744130, at *24–
*25 (discussing 15 U.S.C. § 80b-3(i)(3)). It acknowledged
Montford’s mitigation arguments, finding them unconvincing
or “outweighed by the other public interest factors supporting
a significant civil monetary penalty.” Id. at *24. Given that
we owe “great deference to the SEC’s decisions as to the
choice of sanction,” Seghers v. SEC, 548 F.3d 129, 135 (D.C.
Cir. 2008), we will affirm the Commission’s imposition of
civil monetary penalties.

                      III. CONCLUSION

    While Section 4E of the Securities Exchange Act of
1940, 15 U.S.C. § 78d-5, directs the Securities and Exchange
Commission to bring an enforcement action “[n]ot later than
180 days after the date on which Commission staff provide[s]
a written Wells notification to any person,” we defer to the
                              16
Commission’s interpretation that this provision does not
deprive it of jurisdiction to bring an enforcement action
brought more than 180 days after issuing a Wells notification.
We further hold that the Commission established the required
causal connection to order the disgorgement of the $210,000
in payments made by Kowalewski to petitioners, and that the
Commission did not abuse its discretion or otherwise exceed
its authority in imposing a total of $650,000 in civil monetary
penalties on petitioners. Thus, we deny the petition for
review.
                                                    So ordered.
