Overview
- The Supreme Court heard arguments Monday, April 20, in Sripetch v. SEC over whether the agency must prove investor losses to obtain disgorgement.
- Several justices questioned a strict investor-harm rule and pointed to the 2021 statute that authorizes disgorgement for unjust enrichment.
- The Court is expected to rule by late June or early July, resolving a split in which the Second Circuit requires proof of losses and other circuits do not.
- The case stems from a Ninth Circuit decision upholding a $2.25 million disgorgement order without evidence of investor harm.
- The outcome could reshape SEC enforcement, since disgorgement made up more than half of the agency’s $2.7 billion in monetary remedies in fiscal 2025.