Following the U.S. Supreme Court’s unanimous decision in Sripetch v. SEC, CM Law Partner Jonathan Scott spoke with Global Investigations Review reporter Dan Novak for his article, “Supreme Court Ruling Bolsters SEC’s Biggest Money-Recovery Tool. The article discusses the Supreme Court’s ruling that the agency can collect ill-gotten gains from defendants, even if it cannot demonstrate that victims suffered a pecuniary loss. The ruling resolves a split between federal appeals courts and significantly limits future legal challenges to the SEC’s authority to seek disgorgement in enforcement actions.
Scott, who served as a supervisor and investigator in the SEC ‘s Division of Enforcement for 15 years, emphasized that the decision preserves the status quo rather than expanding enforcement authority. As he explained, the ruling “allows them to keep doing what they’ve been doing,” while substantially narrowing the pathway for future challenges to disgorgement itself. Scott also highlighted the broader impact for investors and victims of fraud, noting that the decision “gives them more likelihood of getting money back.”
While the Court left unresolved questions about whether the SEC must identify specific victims in all disgorgement cases, practitioners expect continued litigation in complex matters such as insider trading, where harm may be widely dispersed. Overall, the decision reinforces disgorgement as a durable and central feature of SEC enforcement strategy, particularly in high-value fraud cases.
If you have questions about the impact of the Court’s decision or other SEC matters, please reach out to Jonathan directly at jscott@cm.law.
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