Here’s the intro from this Cooley blog penned by Luke Cadigan, Tejal Shah, Elizabeth Skey and Samantha Kirby:
“On June 4, 2026, the US Supreme Court held that the Securities and Exchange Commission (SEC) need not prove that investors suffered actual financial loss to obtain disgorgement in a civil action. In a unanimous opinion authored by Justice Neil Gorsuch, Sripetch v. SEC, the Court reached this conclusion by relying on “traditional equitable principles,” which “do not require a showing of pecuniary loss before a court may issue an award of unjust profits.”
This ruling creates uniformity nationwide on an issue that had split the circuits, with the US Court of Appeals for the Second Circuit previously holding that pecuniary loss was required to obtain disgorgement, and the First and Ninth Circuits holding it was not. The SEC’s ability to continue seeking disgorgement without showing pecuniary loss is meaningful, given the SEC obtained orders for $10.8 billion in disgorgement of ill-gotten gains and prejudgment interest in fiscal year 2025.[1]
Sripetch marks the third time in 10 years that SCOTUS has addressed SEC disgorgement – and the issue may be back for a fourth round soon. The Court’s opinion resolved the pecuniary loss question, but Justice Clarence Thomas’s concurrence raised another – whether SEC disgorgement is a legal rather than equitable remedy, a determination that would give defendants a Seventh Amendment jury trial right. While that question is not yet before SCOTUS, Justice Thomas noted that a circuit split has developed on the issue, signaling it may be ripe for review.”
Authored by
Broc Romanek