- Pecuniary loss is not required for SEC disgorgement. The Supreme Court said unjust enrichment can exist even if investors are not financially worse off, and disgorgement can be ordered to strip wrongful gains tied to an interference with protected interests.
- The decision leaves significant ambiguity for future enforcement. The court did not define what qualifies as an “invasion” or a “legally protected interest,” raising questions about how the standard will apply in SEC cases that do not involve fraud, deception or abuse of a bargained-for arrangement.
- The equitable vs. legal remedy debate remains unresolved. The court assumed, without deciding, that disgorgement under Section 78u(d)(7) remains equitable. Justice Clarence Thomas’ concurrence flagged the possibility that disgorgement could be treated as a legal remedy, potentially implicating Seventh Amendment jury trial rights and teeing up further litigation.
Article
SCOTUS Leaves SEC Disgorgement Business Unfinished
New York Law Journal
July 10, 2026Estimated Read Time: 1 min
Key Takeaways
In a July 10, 2026, Law.com article, Sheppard partners Christopher Bosch and Jeff Kern analyze the U.S. Supreme Court’s June 4 decision in Sripetch v. SEC, which held the SEC does not need to prove investors suffered pecuniary loss to obtain disgorgement. Instead, the court said the SEC must show the defendant interfered with a legally protected interest, allowing disgorgement even where there is “no measurable loss.” The authors note the ruling resolves a key question but leaves major issues unanswered, including how the new standard applies outside fraud-based cases and whether disgorgement remains an equitable remedy after Congress expanded the SEC’s disgorgement authority in 2021.
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