Episode Details

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 prerequisite; (3) "Unjust enrichment" in the 2021 text carries a common-law meaning that never required proof of monetary loss.

Holding: The SEC may obtain a disgorgement award without proving investors suffered pecuniary loss. Traditional equitable principles tie the remedy to the defendant's wrongful gain from invading legally protected interests — not to any documented financial loss by the victim. Ninth Circuit affirmed.

Voting Breakdown: 9-0. Justice Gorsuch authored the majority opinion joined by Chief Justice Roberts and Justices Thomas, Sotomayor, Kagan, Barrett, Kavanaugh, and Jackson. Justice Thomas filed a concurring opinion. Ninth Circuit affirmed.

Opinion: Here

Majority Reasoning:

• (1) Traditional equitable principles — confirmed across centuries of case law and the Restatements — measure disgorgement by the defendant's wrongful gain, not the victim's financial loss; no pecuniary harm requirement ever existed in equity;
• (2) Liu's "for victims" requirement drew from traditional equitable principles; those principles define a victim as someone whose legally protected interests the wrongdoer invaded, not someone who documented a financial loss;
• (3) When a defendant enriched himself without leaving the plaintiff financially worse off, equity prefers stripping the wrongdoer of unjust gains over allowing him to benefit from misconduct.

Separate Opinions:

• Justice Thomas (concurring): Agreed with the outcome but argued Congress's 2021 amendments transformed disgorgement into a legal remedy; urged the Court to recognize, in a future case, that the Seventh Amendment requires a jury trial for SEC disgorgement actions.

Implications:

• (1) The SEC's multi-billion-dollar disgorgement toolkit survives intact — fraudsters cannot escape profit-stripping by structuring schemes so victims lose no documentable money;
• (2) The "nobody lost money" defense no longer shields securities violators from disgorgement;
• (3) Justice Thomas's concurrence invites a future Seventh Amendment jury-trial challenge to SEC disgorgement under the 2021 statute.

The Fine Print:

• 15 U.S.C. § 78u(d)(5): "In any action or proceeding brought or instituted