Supreme Court Backs SEC Disgorgement Authority
The U.S. Supreme Court ruled 9-0 that the Securities and Exchange Commission can recover illegal profits through disgorgement without proving specific financial harm to victims. This decision reinforces the agency's ability to seek repayment in fraud cases, such as the pump-and-dump scheme involving Ongkaruck Sripetch.
The United States Supreme Court upheld the Securities and Exchange Commission's broad authority to recover illegal profits through disgorgement in a unanimous 9-0 ruling. The decision confirms the regulator can seize ill-gotten gains without proving that victims suffered specific financial harm. This ruling protects a primary enforcement tool that generated $6.1 billion through disgorgement during the prior fiscal year under President Joe Biden.
### High Court Rejects Victim-Harm Requirement Justice Neil Gorsuch wrote for the court that the SEC does not need to show pecuniary loss before an investor qualifies as a victim entitled to compensation. The ruling stems from a challenge by Ongkaruck Sripetch, who was ordered to repay $3 million following a pump-and-dump scheme involving penny stocks. Sripetch argued the SEC failed to prove his actions caused stock prices to drop or directly harmed investors.
