Summary
The U.S. Supreme Court issued a 9-0 ruling on Thursday that supports the Securities and Exchange Commission’s authority to recover unlawful profits through disgorgement. Justices affirmed a lower court’s interpretation that permits the SEC to pursue broad disgorgement remedies, rejecting the challenge mounted by defendant Ongkaruck Sripetch.
Background and legal question
The dispute did not contest the SEC’s baseline authority to ask courts for disgorgement. Federal courts have long recognized the remedy, and Congress has included it in federal statutes. The narrow legal issue before the high court concerned whether the SEC must demonstrate that investors or other victims suffered economic harm before the agency can obtain a surrender of ill-gotten gains.
Case specifics
The case arose after a California federal court ordered Sripetch to repay more than $3 million in illegal gains plus interest at the request of the SEC. The agency had sought disgorgement for proceeds linked to fraudulent conduct, including a 2020 pump-and-dump scheme in which penny stock prices were artificially inflated and then sold for profit.
Sripetch admitted to violating securities laws and received a 21-month prison sentence in a related criminal proceeding. He challenged the lower court’s disgorgement order, arguing that the SEC had not shown his actions caused stock prices to decline or that investors had suffered financial losses.
Procedural posture and counsel
A California federal judge adopted the SEC’s broader reading of disgorgement, and the San Francisco-based 9th U.S. Circuit Court of Appeals upheld that ruling last year. During oral arguments in April, Justice Department attorneys told the Supreme Court that the SEC is not required to prove that fraud inflicted financial harm before seeking repayment through the courts. The Trump administration defended the agency’s position in the case.
Enforcement context
The SEC continues to obtain substantial sums through disgorgement. Agency figures show roughly $1.4 billion secured in disgorgement in fiscal 2025 under the Trump administration, excluding certain amounts. In the prior year under President Joe Biden, the SEC obtained $6.1 billion through disgorgement, which the agency reported represented almost three-fourths of its total financial penalties.
What the decision means
The unanimous ruling affirms judicial and statutory precedent supporting disgorgement as a remedy the SEC may seek in court. It also leaves in place the lower-court orders at issue in this case, including the repayment obligation tied to Sripetch’s fraudulent trading and the related criminal sentence he received. The opinion resolves the specific procedural question presented but does not add new statutory language or alter the fact findings made in the underlying proceedings.
Note: The article reflects the facts and legal posture as presented in the case and reported publicly; it does not introduce claims beyond those set out in the litigation and enforcement records.