Full Breakdown
Supreme Court Upholds Broad SEC Disgorgement Authority
6/4/2026, 11:06:36 PM
Supreme Court Affirms SEC’s Power to Recoup Illegal Gains
On June 4, 2026, the Supreme Court ruled 9-0 that the SEC may seek disgorgement without proving investors suffered pecuniary loss. The decision resolved a challenge by Ongkaruck Sripetch, who was ordered to repay over $3 million plus interest for a pump-and-dump scheme involving penny stocks.
Legal Background of Disgorgement Authority
Disgorgement has long been recognized by federal courts and is codified in securities law. A 2024 Supreme Court ruling limited the SEC’s in-house enforcement, but left disgorgement intact, confirming that the remedy does not require proof of victim loss.
Key Figures in the Litigation
Justice Neil Gorsuch authored the opinion. Justice Department lawyers argued the SEC need not show loss. The Trump administration defended the agency. Ongkaruck Sripetch admitted the fraud and received a 21-month prison sentence. The SEC is the enforcing regulator.
Disgorgement Figures and Financial Impact
The SEC reported $1.4 billion in disgorgement for fiscal 2025, a figure that excludes other agency repayments and an $8 billion settlement. In fiscal 2024 the agency secured $6.1 billion, about three-quarters of its total penalties. Sripetch’s order totals $3 million.
Official Statements & Responses
Justice Department counsel emphasized that the statute authorizes return of ill-gotten profits without a loss showing. The Trump administration’s filing supported that view, citing market deterrence. The SEC’s data shows disgorgement use under both Republican and Democratic presidencies, highlighting its consistent enforcement role.
Criticism & Opposition
Sripetch’s challenge argued that disgorgement should require proof of investor harm, contending the agency’s broader reading exceeds statutory limits. The lower-court order was contested on the basis that the SEC had not demonstrated a direct price drop caused by the fraud.
Conflicting Reports & Gaps
The SEC’s $1.4 billion 2025 total omits certain repayments and an $8 billion settlement, creating a gap between headline and net figures. The ruling does not specify how disgorged funds will be allocated when direct restitution is impractical.
Implications for Securities Enforcement
The decision confirms the Court’s broad reading of the SEC’s authority, indicating that the agency may continue to seek disgorgement in cases where investor loss is not proven.
Verbatim Quotes
- “a showing of pecuniary loss is not required before an investor may qualify as a victim of an offender’s wrongdoing entitled to compensation.” — Justice Neil Gorsuch, Supreme Court Justice
- “Courts have long recognized this authority and Congress enshrined it in federal law.” — Reuters report
- “Justice Department lawyers during arguments before the justices in April said the SEC was not required to show that fraud inflicted financial, or "pecuniary," harm before pursuing repayment through the courts.” — Justice Department lawyers
- “4 billion in fiscal 2025, according to an agency tally that excluded certain sums.” — SEC, U.S. Securities and Exchange Commission
