Plain-English summary
Court to decide limits on SEC's ability to seek disgorgement in civil enforcement
Ongkaruck Sripetch v. SEC asks whether and how the SEC may obtain disgorgement—repayment of ill-gotten gains—under the standards set in Liu v. SEC (2020). The case presents a split in the courts about what counts as allowable disgorgement and how to calculate and limit it.
Why this matters
The decision will shape how the SEC enforces securities laws and how much money wrongdoers can be forced to pay back. A broad ruling for the SEC could let the agency seek larger payments and use disgorgement widely; a narrow ruling could restrict disgorgement, limiting remedies for investors and changing the deterrent effect of civil enforcement.
Who may feel it
- Investors and investors’ victims in securities fraud cases
- Broker-dealers, corporate officers, and other enforcement targets
- The SEC and other enforcement agencies
- Defense lawyers and securities compliance professionals
- Lower courts that must apply the Court’s rule
Key questions
- What measures of profit and offsets must be used when awarding disgorgement under Liu v. SEC?
- Must disgorgement be reduced by legitimate business expenses or only by costs directly tied to generating the wrongful gains?