The SEC’s favorite clawback tool is in the spotlight
The Supreme Court is set to hear arguments over whether the SEC can keep using disgorgement — basically forcing bad actors to give back ill-gotten gains. That’s the agency’s version of a “you can’t just keep the money and call it a day” rule.
What’s actually being argued?
The case centers on Ongkaruck Sripetch, who was ordered to repay more than $3 million tied to a fraud case. His argument: the SEC shouldn’t be allowed to demand disgorgement unless it proves victims suffered economic harm.
The SEC, meanwhile, is defending its broader authority, which Congress has already recognized in federal law. So this isn’t about whether the SEC can ever seek disgorgement — it’s about how hard the agency has to work to get it.
Why investors should care
If the court narrows the SEC’s power, it could make enforcement actions a little less punchy and potentially reduce one of the regulator’s biggest cash-collection tools. That matters because the SEC used disgorgement to collect about $1.4 billion in fiscal 2025, after pulling in $6.1 billion the year before under Biden.
Big picture: this is one of those high-court rulings that sounds nerdy until you realize it could change how aggressively Wall Street gets slapped when it crosses the line.