SEC Win on Core Enforcement Tool Would Still Leave Payback Gaps

The SEC appears likely to retain its power to recover money snatched by fraudsters in a case before the US Supreme Court, but there’s still a wide gap between what the Wall Street regulator collects and what it can return to any investors who end up on the losing end.

The specifics of how that money is actually clawed back and doled out to investors drew sharp questioning at oral arguments.

A “reasonably good collection agent” would make a concerted effort to get more money back in victims’ pockets instead of a Treasury account, Justice Neil Gorsuch said, taking ...