Opinion Summary: Sripetch v. SEC | Victimless Fraudsters Can't Keep Profits

About this episode

The Supreme Court ruled that the SEC can seek disgorgement without proving that investors suffered financial losses.

Sripetch v. Securities and Exchange Commission | Case No. 25-466 | Docket Link: Here | Argued: April 20, 2026 | Decided: June 4, 2026 Overview: The Supreme Court resolves a circuit split over whether the SEC must prove investors lost money before ordering disgorgement — preserving billions in annual securities enforcement power. Question Presented: Whether the SEC may seek disgorgement without proving investors suffered pecuniary harm. Posture: Ninth Circuit affirmed disgorgement without pecuniary harm; Supreme Court granted certiorari to resolve circuit split. Main Arguments: Sripetch: (1) Disgorgement without pecuniary harm functions as an unlawful penalty, not equitable relief; (2) Congress's 2021 amendments ratified Liu 's disgorgement definition, requiring restoration of funds to actual victims; (3) SEC's reading creates statutory anomalies and lets the agency circumvent jury-trial and procedural safeguards attached to civil penalties. SEC: (1) Disgorgement targets the wrongdoer's gain, not the victim's loss — no loss showing required; (2) Congress deliberately omitted the "for the benefit of investors" language from the 2021 statute, eliminating any pecuniary-harm…

Topics covered

• SEC
• disgorgement
• pecuniary harm
• Supreme Court
• securities enforcement
• circuit split

Keywords

• disgorgement
• SEC
• pecuniary harm
• Supreme Court
• Sripetch v. SEC
• circuit split
• securities enforcement

Mentioned in this episode

Organizations: Securities and Exchange Commission

Books & works: Liu

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