The US Supreme Court just handed the SEC its clearest win in years. In a unanimous decision issued on June 4, the Court ruled that the agency can force defendants to surrender illegal profits without first proving that specific investors suffered financial losses.
The decision in Sripetch v. SEC resolves a long-running disagreement among federal appeals courts and gives the SEC a streamlined path to one of its most powerful enforcement tools: disgorgement.
What the Court actually decided
Justice Neil Gorsuch, writing for all nine justices, laid out a straightforward principle. The SEC doesn’t need to show that a specific person lost money. It only needs to show that the defendant profited from breaking the law.
The ruling does come with a guardrail. Disgorgement must be limited to the defendant’s net profits from the illegal conduct, not gross revenue or some inflated estimate.
