SCOTUS Expands SEC Disgorgement: $4.1M Award Upheld Without Loss Proof

On June 4, 2026, the Supreme Court unanimously ruled in Sripetch v. SEC that the Commission need not prove investors suffered actual pecuniary losses to secure disgorgement in civil enforcement actions. The decision resolves a circuit split and significantly broadens the SEC’s equitable toolkit under 15 U.S.C. §78u(d)(5). The case originated from Ongkaruck Sripetch’s involvement in pump-and-dump schemes across at least 20 penny-stock companies, where the SEC sought more than $4.1 million after Sripetch consented to judgment on fraud and registration violations. Sripetch argued that Liu v. SEC (2020) required identifiable victims who suffered financial harm; the Court rejected that limitation, holding that interference with legally protected interests suffices. This builds directly on Kokesh v. SEC (2017), which imposed a five-year statute of limitations, and Liu, which cabined disgorgement to amounts awarded for victims. The ruling eliminates a defense previously available in the Second Circuit and aligns the First and Ninth Circuits’ more permissive approach nationwide. Justice Thomas’s concurrence flags an open Seventh Amendment question, suggesting disgorgement may constitute a legal remedy requiring jury trials in future cases. For securities practitioners, the decision lowers the evidentiary bar for the SEC in fraud actions, particularly those involving microcap schemes where tracing investor losses is difficult. Regulators gain leverage in settlement negotiations, as defendants can no longer credibly contest disgorgement solely on absence of proven harm. The opinion also signals continued judicial willingness to expand equitable remedies without explicit statutory authorization. Looking ahead, the Thomas concurrence may prompt new constitutional challenges, potentially reshaping how disgorgement is litigated and whether jury demands become routine. Enforcement actions involving complex or victimless-seeming frauds will likely increase, while compliance programs must now account for broader exposure even where investor accounts show no net loss. The decision reinforces the SEC’s role as a market integrity enforcer rather than solely a compensatory body.