The term disgorgement means:

• A. To give up one's meal after eating
• B. To return profits earned illegally
• C. To return ill-gotten gains
• D. To give up one's board position after a fraud incident

Answer: (C)

Disgorgement means taking back the profits or benefits someone gained from improper or illegal conduct so they cannot keep the rewards of wrongdoing. In ethical accounting and corporate governance, regulators use this remedy to restore fairness and deter misconduct by ensuring the wrongdoer does not benefit from their acts. The key phrase is ill-gotten gains, which signals that the profits or advantages came from improper acts and should be surrendered. Returning ill-gotten gains best captures the idea, because it covers all forms of gain derived from wrongdoing, not just profits in a narrow sense. The other options don’t fit: a meal has nothing to do with wrongdoing, and a board position is unrelated to the concept of forfeiting gains from misconduct; returning profits earned illegally is close but narrower than the broader notion of ill-gotten gains.