The Supreme Court just handed the SEC its most powerful enforcement win in years. In a unanimous ruling on June 4, the Court declared the agency can force securities law violators to hand over illegal profits without proving any specific investor lost money.
The case, Sripetch v. SEC, centered on Ongkaruck Sripetch involved in a penny-stock fraud scheme. Justice Neil Gorsuch, writing for all nine justices, affirmed that disgorgement does not require showing investor loss.
The ruling resolves a circuit split over disgorgement standards. The Second Circuit had required proof of victim harm, but the Supreme Court sided with the broader enforcement power argued by the Ninth and First Circuits.
This decision goes beyond penny stocks. In fiscal year 2024 alone, the SEC collected over $6.1 billion in disgorgement and prejudgment interest. The Trump administration defended the SEC in this case, highlighting bipartisan support for the agency's enforcement authority.
For crypto projects, the SEC no longer needs to track down every token buyer to prove individual losses. It can calculate issuer profits and seek to recover them directly. For institutional investors evaluating crypto exposure, future enforcement numbers could far exceed the $6.1 billion collected under the old framework.