Blue Brief 2025-2026

Caley Petrucci

Associate Professor of Law; Director, Center for Corporate and Securities Law

Unanimous Win for the SEC in Preserving One of Its Most Significant Remedial Tools in Sripetch v. SEC VII.

I n Sripetch v. SEC , the Supreme Court unanimously resolved a circuit split by protecting the Securities and Exchange Commission’s (SEC’s) ability to pursue disgorgement without the need to show that investors suffered pecuniary harm. Disgorgement — a remedy designed to take away a wrongdoer’s unjust gains — is one of the SEC’s most powerful tools. Following several decisions that narrowed the SEC’s ability to seek disgorgement, the case represents a rare win for the SEC in the current era. The Sripetch case arose in the wake of Ongkaruck Sripetch’s fraudulent schemes involving at least 20 penny-stock companies. Among these schemes were classic “pump and dump” market manipulation operations, where Sripetch and his co-conspirators obtained shares of penny-stock companies, promoted the companies to increase the share price, and then promptly sold the stock when the price increased.

The SEC brought a civil enforcement action against Sripetch after discovering this scheme, charging him with six counts of securities fraud and one count of selling unregistered securities. Sripetch consented to the entry of judgment against him and agreed that the court could order disgorgement. However, when the SEC sought more than $4.1 million in disgorgement, Sripetch objected. He argued that because disgorgement must be “awarded for victims” of securities violations, the SEC must show that his schemes caused investors to suffer financial losses. Without this showing, Sripetch argued, there were no “victims.” While the district court did not resolve the question of whether the Commission must show pecuniary harm, it found in favor of the SEC, concluding that the SEC had nonetheless demonstrated such harm. Sripetch appealed. On appeal, the Ninth Circuit rejected Sripetch’s argument, joining the First Circuit in holding that the SEC may obtain disgorgement without

UNIVERSITY OF SAN DIEGO SCHOOL OF LAW | Faculty Review of 2025-2026 U.S. Supreme Court Term | Page 23