US Asks Justices to Take SEC Enforcement Case Despite Appeal Win

The Trump administration wants the US Supreme Court to weigh in on the SEC’s power to recoup illicit profits in cases where investor harm can’t be quantified, asking the high court to take up a petition to review a Ninth Circuit ruling in the agency’s favor.

The government is willing to let the justices decide whether the Securities and Exchange Commission can seek disgorgement in enforcement actions without proof of investor harm, noting in a response brief Wednesday that the review could resolve a “recurring and important” question at the core of a split between the Ninth and Second circuits.

“Although the court of appeals correctly resolved the question presented, its decision warrants this Court’s review,” the government said in its brief. “This Court should therefore grant review to determine whether a showing of pecuniary harm is required.”

Ongkaruck Sripetch, a trader who was ordered to pay over $2 million in disgorgement to the SEC for his role in a pump-and-dump scheme, petitioned the Supreme Court in October in a challenge supported by industry groups.

A disgorgement award focuses on the enrichment of the defendant, rather than the loss to the victim, and the SEC should be able to recover that amount without needing to show investors suffered a loss, according to the brief signed by SEC counsel and Solicitor General D. John Sauer.

The US Court of Appeals for the Second Circuit in a 2023 ruling held that the SEC needed to show investors lost money in order to recoup a defendant’s ill-gotten gains. The appellate split is significant because the Second and Ninth circuits account for most securities litigation.

If the justices hold that showing pecuniary harm is required for disgorgement, the government seeks a remand back to the Ninth Circuit so that an appeals panel can determine whether Sripetch’s case shows that impact on investors.

An SEC unable to pursue disgorgement broadly may turn to civil penalties or other fines to deter wrongdoing or scale back its reliance on monetary forfeiture as an enforcement tool.

The agency obtained $6.1 billion in disgorgement and prejudgment interest in fiscal 2024, about triple the amount collected from civil penalties.

The Supreme Court declined to hear a similar case on disgorgement earlier this year, but the deepening circuit split and widespread support for taking up the petition may persuade the justices to take another look.

Haynes & Boone LLP and Brown White & Osborn LLPrepresent Sripetch.

The case is Sripetch v. SEC, U.S., No. 25-466, brief 12/17/25.