SEC Seeks Supreme Court Review of Victimless Disgorgement: SEC Roundup
Welcome to SEC Roundup, a bimonthly video series by former Securities and Exchange Commission senior trial counsels Nick Morgan and Tom Zaccaro, founders of the nonprofit advocacy group Investor Choice Advocates Network.
In a surprising move, the SEC has asked the U.S. Supreme Court to review a Ninth Circuit ruling that upheld the agency’s use of disgorgement, even when no investors were harmed. The case, SEC v. Sripetch, highlights a growing split among federal appellate courts: Some circuits require proof of actual victim losses to justify disgorgement, while others — including the Ninth and First Circuits — do not.
In this episode, Morgan and Zaccaro are joined by Kari Axel, a former SEC enforcement attorney and assistant U.S. attorney. The trio explore the legal and policy implications of this possible Supreme Court showdown.
Axel also discusses her amicus briefs filed on behalf of CalALTs (California Alternative Investments Association), a nonprofit advocating for innovation in emerging asset classes like crypto and life settlements.
Key themes discussed:
• How the Supreme Court has handled disgorgement in prior rulings like Kokesh, Liu and Cochran
• The risk of SEC remedies evolving into punitive tools without congressional authorization
• Why a victimless disgorgement standard may chill financial innovation and penalize good-faith actors
• How this case compares to SEC v. Barry, another pending challenge involving registration violations and no alleged fraud
As the Supreme Court decides whether to take up the case, this episode offers an in-depth look at what’s at stake for investors, innovators and the future of SEC enforcement.
© Touchpoint Markets, All Rights Reserved. Request academic re-use from www.copyright.com. All other uses, submit a request to [email protected]. For more information visit Asset & Logo Licensing.
