The U.S. Supreme Court on June 4 unanimously rejected a challenge to the U.S. Securities and Exchange Commission’s (SEC’s) broad authority to recover illegal profits through the disgorgement process.
Disgorgement is a process in which a person or company is made to give up profits gained from illegal or unethical acts.
The Supreme Court ruled that the SEC may recover ill-gotten gains even if the agency cannot show that investors experienced a financial loss.
Justice Neil Gorsuch wrote the court’s 9–0 opinion. No justices dissented. Justice Clarence Thomas filed a separate concurring opinion.
The justices ruled against the petitioner, Ongkaruck Sripetch, who received a 21-month prison term after pleading guilty in 2022 to selling unregistered securities involving penny-stock companies. He was also charged with several counts of securities fraud, but he did not plead guilty to them and was not convicted of those offenses. Those charges were dismissed as a result of a plea agreement….