The Supreme Court unanimously held in Sripetch v. SEC that the SEC need not prove pecuniary harm to obtain disgorgement, preserving the Commission’s principal monetary remedy, but Justice Thomas’s concurrence signals an imminent challenge contending that disgorgement is a legal—not equitable—remedy requiring a jury trial.

To the surprise of very few, the U.S. Supreme Court has ruled in Sripetch v. SEC that the Securities and Exchange Commission (the "SEC" or the "Commission") need not prove that investors suffered pecuniary harm to obtain disgorgement of the ill-gotten gains from a securities fraud violation.^[1] The unanimous ruling presents a near-term win for the SEC, which obtains disgorgement in the billions of dollars each year in investigations and enforcement actions.  But the Sripetch opinion, authored by Justice Gorsuch, sidestepped broader questions about the limits of the disgorgement remedy.  And a concurring opinion authored by Justice Thomas sets up the next contested ground for the disgorgement remedy, inviting challenges that could leave the Commission powerless to obtain monetary relief of any kind in its own administrative proceedings.  

What the Court Held

As we wrote about previously, Sripetch arrived at the Court against the backdrop of a widening split among the courts of appeal over the contours of the SEC's disgorgement power.  In Liu v. SEC, the Court held that the Exchange Act's authorization of "equitable relief" under § 78u(d)(5) required that disgorgement obtained under that provision "not exceed a wrongdoer's net profits" and be "awarded for victims."^[2]  Soon after Liu, Congress amended the Exchange Act to authorize the remedy of "disgorgement" under § 78u(d)(7). The question before the Court in Sripetch was narrow: whether the SEC must show that investors suffered financial loss in order to obtain disgorgement under either provision. 

The Court held that a showing of pecuniary loss to investors is not required before the SEC may obtain a disgorgement award.  The Court reasoned that, under traditional equitable principles, a victim seeking disgorgement of a defendant's unlawful gains does not need to prove he has "suffered a corresponding loss or, indeed, any loss." Instead, courts sitting in equity have long issued remedies designed to deprive wrongdoers of their net profits from unlawful activity, and the final award is not measured by the plaintiff's financial loss but by the defendant's gain attributable to his "wrongful invasion of the plaintiff's legally protected interests." The Court rejected the argument that Liu had announced a rule requiring a showing of pecuniary loss, explaining that while Liu held disgorgement must be "awarded for victims," that requirement was drawn from traditional equitable principles, and those principles do not require pecuniary loss to qualify as a "victim."  Likewise, the Court declined to locate a pecuniary loss requirement in Liu's description of disgorgement as a remedy designed to "restore the status quo," reasoning that where a defendant unjustly enriches himself without leaving the plaintiff worse off financially, equity traditionally prefers stripping the defendant of his unjust gains, rather than allowing him to benefit from his misconduct.

The Court's holding is significant for the SEC. Disgorgement has become the Commission’s dominant monetary remedy, and a contrary ruling could have sharply curtailed its usefulness in cases where investor harm is real but difficult to measure in conventional damages terms. By clarifying that disgorgement does not require proof of “any loss,” Sripetch confirms that the remedy turns on a wrongdoer’s unjust gains—not measurable investor harm—and therefore remains available even where losses are diffuse, difficult to quantify, or not readily traceable.

What the Court Left Open — and What Justice Thomas Signaled

The Court expressly left unresolved the larger statutory question that had attracted substantial attention going into the case. Rather than deciding whether Congress’s enactment of § 78u(d)(7) transformed disgorgement into a statutory remedy untethered from traditional equitable constraints, the Court assumed without deciding that disgorgement under that provision remains an equitable remedy and held that, even on that assumption, pecuniary harm is not required. That move allowed the Court to resolve the circuit split before it while leaving untouched the debate over whether post-Liu disgorgement under § 78u(d)(7) is equitable at all.

Justice Thomas’s concurrence highlights that unresolved question directly.  He agreed that the SEC can seek disgorgement without showing victims suffered pecuniary harm, but argued that, in a future case, the Court should recognize that disgorgement is now a legal remedy for which the Seventh Amendment requires a jury trial.  This argument rests on Congress’s 2021 amendments to the Exchange Act, which expressly carved out disgorgement as a distinct remedy in § 78u(d)(7)—with its own statute of limitations—separate from the broader authorization for equitable relief in § 78u(d)(5), as discussed in our prior alert. As Justice Thomas observed, the statute now "twice distinguishes between disgorgement and equitable remedies," and "the obvious implication is that disgorgement is not equitable relief." Because equity historically supplied relief only where legal remedies were unavailable or inadequate, Justice Thomas reasoned that “explicitly authorizing a remedy in a statute’s text” is generally “inconsistent with that remedy’s being rooted in equity”—and § 78u(d)(7), which expressly authorizes disgorgement, therefore suggests that the remedy is no longer filling a traditional equitable gap.

Justice Thomas also argued that modern SEC disgorgement resembles legal restitution rather than traditional equitable relief. He emphasized that the SEC does not ordinarily seek to recover particular funds belonging to victims, and that disgorged amounts are often paid to the government rather than returned to injured investors. He pointed to the SEC’s recent practice of obtaining billions in disgorgement orders while returning only a fraction of those sums to victims, describing that model as difficult to distinguish from a "fines regime."

By contrast, Justice Gorsuch’s opinion expressly reserved that question and acknowledged that if the SEC were to use § 78u(d)(7) to seek penalties untethered from traditional equitable principles, that development would raise additional questions, including under Jarkesy.  That caveat is significant. Since Jarkesy, the SEC has been unable to obtain civil penalties in administrative proceedings because those claims must be tried to a jury.^[3]  If disgorgement under § 78u(d)(7) is likewise deemed a legal remedy, and not an equitable one, the same logic would likely prevent the SEC from seeking disgorgement in administrative actions as well.

The next defendant facing disgorgement—especially in an administrative proceeding—can be expected to argue that Congress’s post-Liu amendments confirmed disgorgement’s legal, non-equitable character and therefore triggered the Seventh Amendment.  If that argument succeeds, it would further narrow the SEC’s administrative toolkit by taking away the agency’s most important remaining monetary remedy in that forum, just as Jarkesy took away civil penalties.

Implications for Market Participants

For now, Sripetch is a meaningful win for the SEC.  The Commission can continue to seek disgorgement without proving pecuniary harm, and defendants cannot avoid the remedy simply because investor losses are uncertain or difficult to quantify.  But the opinion’s narrow framing, and Justice Thomas’s concurrence in particular, make clear that the broader dispute over the nature of SEC disgorgement is not over. Sripetch resolves one question, but it also points directly toward the next one—not whether disgorgement is available, but whether it is the sort of monetary remedy the SEC can continue to pursue without triggering a Seventh Amendment jury right.

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_{^[1] No. 25-466, slip op. (U.S. June 4, 2026).}

_{^[2] 591 U.S. 71 (2020).}

_{^[3] See SEC v. Jarkesy, 144 S. Ct. 2117 (2024).}