Supreme Court to Hear SEC Disgorgement Case Amid Circuit Split

The Supreme Court will hear Sripetch v. SEC on April 20, 2026, addressing SEC disgorgement limits.

The Supreme Court’s agreement to hear Sripetch v. SEC marks a pivotal moment for securities enforcement. At issue is whether the Securities and Exchange Commission (SEC) can obtain disgorgement—forcing wrongdoers to surrender ill-gotten gains—without demonstrating investors suffered concrete financial losses.

• On January 9, 2026, the Court granted certiorari in Sripetch v. SEC to resolve conflicting lower court interpretations on disgorgement’s legal boundaries.
• The Ninth Circuit previously upheld a $2.2 million disgorgement penalty against Ongkaruck Sripetch even though the SEC did not prove investor pecuniary harm. This diverges from the Second Circuit’s stance in SEC v. Govil, which mandates such proof, and aligns with the First Circuit’s position in SEC v. Navellier that pecuniary harm isn’t necessary.
• The issue stems from the Supreme Court’s 2020 Liu v. SEC decision, which limited disgorgement to net profits and for the benefit of victims but left gray areas concerning the need to show investor harm.
• Legal experts underscore the stakes for compliance. As Zac Morgan, WLF Senior Litigation Counsel, observed: “Disgorgement is a limited remedy to take from the thief and give back to the fleeced. When nobody’s fleeced, the SEC can’t use disgorgement.” (WLF statement)

The Supreme Court’s ruling is expected to provide much-needed clarity on the SEC’s enforcement arsenal, directly affecting how companies and counsel gauge and address regulatory risk.

What's next: The Supreme Court's decision in Sripetch v. SEC, expected after April 20, 2026, could recalibrate SEC enforcement strategy nationwide.