The SEC can reclaim fraudsters' profits even without proving investors lost money.

Record source: CourtListener

(Slip Opinion) OCTOBER TERM, 2025 1 Syllabus NOTE: Where it is feasible, a syllabus (headnote) will be released, as is being done in connection with this case, at the time the opinion is issued. The syllabus constitutes no part of the opinion of the Court but has been prepared by the Reporter of Decisions for the convenience of the reader. See United States v. Detroit Timber & Lumber Co., 200 U. S. 321, 337. SUPREME COURT OF THE UNITED STATES Syllabus SRIPETCH v. SECURITIES AND EXCHANGE COMMISSION CERTIORARI TO THE UNITED STATES COURT OF APPEALS FOR THE NINTH CIRCUIT No. 25–466. Argued April 20, 2026—Decided June 4, 2026 Ongkaruck Sripetch engaged in numerous fraudulent schemes involving at least 20 penny-stock companies. On discovering the schemes, the Securities and Exchange Commission (SEC) brought a civil enforce- ment action against Mr. Sripetch, charging him with six counts of se- curities fraud and one count of selling unregistered securities. Mr. Sripetch consented to the entry of judgment against him and agreed that the court could order disgorgement. When the SEC proceeded to seek over $4.1 million in disgorgement, however, Mr. Sripetch ob- jected. He argued that the SEC’s request violated Liu v. SEC, 591 U. S. 71, because the SEC lacked evidence that his schemes caused investors to suffer any financial losses. On appeal, the Ninth Circuit rejected Mr. Sripetch’s argument, deepening a split among the Courts of Appeals. Held: A showing of pecuniary loss to investors is not required before the SEC may obtain a disgorgement award. Pp. 6–13. (a) The Court’s analysis begins with two statutory provisions, 15 U. S. C. §§78u(d)(5) and 78u(d)(7). Section 78u(d)(5) allows the SEC to obtain “any equitable relief that may be appropriate or necessary for the benefit of investors.” Liu held this provision permits a court to order disgorgement so long as the remedy adheres to traditional equi- table principles. 591 U. S., at 85. After Liu, Congress adopted §78u(d)(7), which expressly allows the SEC to seek disgorgement in enforcement proceedings. The Court need not decide whether or how §78u(d)(7) affects the scope of the SEC’s disgorgement powers. Even assuming that disgorgement under §78u(d)(7) remains an equitable 2 SRIPETCH v. SEC Syllabus remedy that must comply with traditional equitable rules, a showing of pecuniary loss to investors is not required before the SEC may ob- tain disgorgement. Pp. 6–8. (b) Courts sitting in equity have long issued remedies designed to “depriv[e] wrongdoers of their net profits from unlawful activity.” Liu, 591 U. S., at 79. Under traditional equitable principles, a person seek- ing that kind of remedy does not need to prove he has “suffered a cor- responding loss or,” indeed, “any loss.” Restatement (First) of Restitu- tion §1, Comment e. Rather, when a person “has suffered an interference with protected interests,” he may be entitled to “restitu- tion of [the defendant’s] wrongful gain” from that interference even when he has suffered “no measurable loss whatsoever.” Restatement (Third) of Restitution and Unjust Enrichment, §3, Reporter’s Note a. The point of the remedy is for “the defendant . . . to give to the plaintiff the amount by which he has been enriched” from the wrongful invasion of the plaintiff’s legally protected interests, not to compensate the plaintiff for a financial loss. Restatement (First) of Restitution §1, Comment e. Numerous cases illustrate this principle. See, e.g., Raven Red Ash Coal Co. v. Ball, 185 Va. 534, 39 S. E. 2d 231; Edwards v. Lee’s Adm’r, 265 Ky. 418, 96 S. W. 2d 1028. Pp. 8–11. (c) The Court rejects Mr. Sripetch’s arguments to the contrary. He contends that Liu announced a rule requiring the SEC to make a show- ing of pecuniary loss before securing disgorgement. It did not. While Liu held that disgorgement must be “awarded for victims,” 591 U. S., at 79, it drew this requirement from traditional equitable principles, and those principles do not demand a showing of pecuniary loss before a person may qualify as a “victim” entitled to an award of a wrong- doer’s profits. Mr. Sripetch submits that failing to require pecuniary loss would be inconsistent with Liu’s description of disgorgement as a remedy de- signed to “restor[e] the status quo.” Id., at 80. That is incorrect. In some instances, a defendant can unjustly enrich himself even without leaving a plaintiff worse off financially, and in those instances, a court must choose between two status quos: It can either restore the defend- ant to his prior position by stripping him of his unjust gains, or it can allow the defendant to benefit from his misconduct because the plain- tiff’s financial position has not changed. Equity traditionally prefers the first outcome, not the second. Mr. Sripetch expresses concern that, without a pecuniary loss re- quirement, the SEC might lose sight of traditional equitable principles and use §78u(d)(7) to seek penalties for the Treasury rather than com- pensation for victims. Should the SEC do so, that development would raise questions about whether and to what degree §78u(d)(7) permits deviation from equitable principles. But that does not mean this Court  Cite as: 608 U. S. ___ (2026) 3 Syllabus should hold that the SEC’s disgorgement remedy requires proof of pe- cuniary loss—a requirement foreign to Liu and to traditional equitable principles alike. Amici’s concern that the SEC might seek disgorgement even for se- curities-law violations that do not invade the legally protected inter- ests of investors is beside the point in this case, as Mr. Sripetch has not disputed that his victims suffered a violation of their legally pro- tected interests. Pp. 11–13. 154 F. 4th 980, affirmed. GORSUCH, J., delivered the opinion for a unanimous Court. THOMAS, J., filed a concurring opinion.  Cite as: 608 U. S. ____ (2026) 1 Opinion of the Court NOTICE: This opinion is subject to formal revision before publication in the United States Reports. Readers are requested to notify the Reporter of Decisions, Supreme Court of the United States, Washington, D. C. 20543, pio@supremecourt.gov, of any typographical or other formal errors. SUPREME COURT OF THE UNITED STATES _________________ No. 25–466 _________________ ONGKARUCK SRIPETCH, PETITIONER v. SECURITIES AND EXCHANGE COMMISSION ON WRIT OF CERTIORARI TO THE UNITED STATES COURT OF APPEALS FOR THE NINTH CIRCUIT [June 4, 2026] JUSTICE GORSUCH delivered the opinion of the Court. The Securities and Exchange Commission (SEC) may sometimes seek a court order directing those who violate federal securities laws to disgorge their ill-gotten gains to wronged investors. This case presents the question whether, as a condition of securing that relief, the SEC must prove victims of the securities-law violation have suf- fered pecuniary loss. I A The SEC’s disgorgement powers have a long and nuanced history. When Congress created the SEC in the 1930s, it did not authorize the Commission to seek monetary awards for

Official opinion source