US Supreme Court Rules SEC Can Seek Disgorgement of Ill-Gotten Gains Without Proving Investor Pecuniary Loss, Resolving Circuit Split

The US Supreme Court has ruled that the SEC (Securities and Exchange Commission) can seek disgorgement (the repayment of profits made through wrongdoing) as an equitable remedy without first demonstrating that investors suffered a measurable pecuniary loss. The decision preserves the Court's earlier holding in *Liu* that disgorgement is subject to traditional equitable principles and must be awarded 'for victims' — but clarifies that those equitable principles do not require a showing of pecuniary loss before a person qualifies as a 'victim' entitled to an award of a wrongdoer's profits. The ruling resolves a longstanding split between the US circuit courts of appeal: the Ninth and First Circuits had not required a showing of pecuniary loss for the SEC to seek disgorgement, while the Second Circuit had imposed that additional burden. The case involved a defendant named Sripetch, who argued that the SEC needed to demonstrate investor pecuniary loss as a precondition. The Court rejected that argument, focusing instead on whether the defendant's conduct constituted actionable interference with legally protected interests. For UK practitioners, the ruling is significant context for comparative securities enforcement: the FCA (Financial Conduct Authority) operates its own disgorgement regime under UK financial regulation, and the doctrinal debate about whether enforcement agencies must prove investor loss to recover wrongful profits is not unique to the US.