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Sripetch v. Securities and Exchange Commission
Opinion: https://www.supremecourt.gov/opinions/25pdf/25-466_5i26.pdf
Case background
Ongkaruck Sripetch engaged in numerous fraudulent schemes involving at least
20 penny-stock companies. After discovering the schemes, the Securities and
Exchange Commission brought a civil enforcement action against him, charging
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. When the SEC then sought over
$4.1 million in disgorgement, Sripetch objected, arguing that the request
violated Liu v. SEC, 591 U. S. 71, because the SEC lacked evidence that his
schemes caused investors to suffer any financial losses and so left no
victims for whom disgorgement could be awarded. The district court found that
the SEC had shown pecuniary loss, but on appeal the Ninth Circuit took a
different path, holding that a finding of pecuniary harm is not required at
all before a court may order disgorgement. That ruling deepened a split among
the Courts of Appeals.
Questions Presented
Holding
A showing of pecuniary loss to investors is not required before the SEC may
obtain a disgorgement award. Even assuming that disgorgement under
Section 78u(d)(7) remains an equitable remedy that must comply with
traditional equitable rules — including the rule that disgorgement be awarded
for victims — those principles do not demand proof of pecuniary loss. Courts
sitting in equity have long deprived wrongdoers of the net profits of their
unlawful activity, and a person whose legally protected interests have been
invaded may recover the defendant’s wrongful gain even when he has suffered
no measurable loss whatsoever. Because traditional equitable principles do
not require a showing of pecuniary loss, and nothing in Liu teaches
otherwise, the judgment of the Ninth Circuit is affirmed.
The Court
Justice Gorsuch delivered the opinion for a unanimous Court. Justice Thomas
filed a concurring opinion.
What this episode contains
This episode is an AI-narrated reading of the majority opinion in
Sripetch v. Securities and Exchange Commission, written by Justice Gorsuch.
AI disclosure: The voice in this episode is AI-generated, using a machine
learning model styled to loosely resemble the authoring justice. Tone,
inflection, pacing, and emphasis are artifacts of the model and should not be
attributed to Justice Gorsuch. The text being read is the Court’s published
majority opinion, lightly adapted to improve readability for the spoken format.
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By So OrderedOpinion: https://www.supremecourt.gov/opinions/25pdf/25-466_5i26.pdf
Case background
Ongkaruck Sripetch engaged in numerous fraudulent schemes involving at least
20 penny-stock companies. After discovering the schemes, the Securities and
Exchange Commission brought a civil enforcement action against him, charging
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. When the SEC then sought over
$4.1 million in disgorgement, Sripetch objected, arguing that the request
violated Liu v. SEC, 591 U. S. 71, because the SEC lacked evidence that his
schemes caused investors to suffer any financial losses and so left no
victims for whom disgorgement could be awarded. The district court found that
the SEC had shown pecuniary loss, but on appeal the Ninth Circuit took a
different path, holding that a finding of pecuniary harm is not required at
all before a court may order disgorgement. That ruling deepened a split among
the Courts of Appeals.
Questions Presented
Holding
A showing of pecuniary loss to investors is not required before the SEC may
obtain a disgorgement award. Even assuming that disgorgement under
Section 78u(d)(7) remains an equitable remedy that must comply with
traditional equitable rules — including the rule that disgorgement be awarded
for victims — those principles do not demand proof of pecuniary loss. Courts
sitting in equity have long deprived wrongdoers of the net profits of their
unlawful activity, and a person whose legally protected interests have been
invaded may recover the defendant’s wrongful gain even when he has suffered
no measurable loss whatsoever. Because traditional equitable principles do
not require a showing of pecuniary loss, and nothing in Liu teaches
otherwise, the judgment of the Ninth Circuit is affirmed.
The Court
Justice Gorsuch delivered the opinion for a unanimous Court. Justice Thomas
filed a concurring opinion.
What this episode contains
This episode is an AI-narrated reading of the majority opinion in
Sripetch v. Securities and Exchange Commission, written by Justice Gorsuch.
AI disclosure: The voice in this episode is AI-generated, using a machine
learning model styled to loosely resemble the authoring justice. Tone,
inflection, pacing, and emphasis are artifacts of the model and should not be
attributed to Justice Gorsuch. The text being read is the Court’s published
majority opinion, lightly adapted to improve readability for the spoken format.