Supreme Court to consider major securities-law questions this week, legal forums urge attention

The U.S. Supreme Court enters this week with one securities case already argued and at least one more securities petition still moving through the docket. Legal commentators on May 17-19 pointed readers to the Court’s calendar and case filings as they tracked questions about how far the Securities and Exchange Commission can go when it seeks monetary remedies in federal court. The live issue on the merits docket is Sripetch v. SEC, argued on April 20. A separate petition, Powell v. SEC, remains pending, with the government’s response due May 20. ### Which Supreme Court securities case is actually in play right now? Sripetch v. Securities and Exchange Commission, docketed as No. 25-466, is the active merits case that legal forums have been watching. The justices granted review on January 9, set the case for argument on February 11, and heard oral argument on April 20, according to the Court’s docket. (supremecourt.gov) Ongkaruck Sripetch asked the Court to decide whether the SEC may seek equitable disgorgement without showing that investors suffered pecuniary harm. The petition says the Ninth Circuit allowed disgorgement even though investors were treated as “victims” despite no economic loss, and it says that holding conflicts with the Second Circuit. ### What exactly is the justices’ question in Sripetch? (supremecourt.gov) The question presented in Sripetch is whether “a showing that investors suffered pecuniary harm is a prerequisite to an award of disgorgement in a civil action brought by the Securities and Exchange Commission.” That wording appears in the merits briefing filed by the U.S. solicitor general. (supremecourt.gov) The SEC sought more than $6 million from Sripetch in a separate civil enforcement action after he pleaded guilty to selling unregistered securities, SCOTUSblog’s case preview said. Ronald Mann wrote that the dispute is the latest chapter in the Court’s continuing examination of SEC remedies after earlier decisions including Liu v. SEC. (supremecourt.gov) ### What happened at argument? April 21 coverage from SCOTUSblog said “most if not all” of the justices appeared comfortable with the SEC’s position at oral argument. Ronald Mann wrote that the Court seemed receptive to allowing disgorgement without a separate showing that customers suffered direct economic harm. (scotusblog.com) The argument transcript shows petitioner’s counsel told the Court that the SEC “cannot seek disgorgement without showing investors suffered economic harm.” That framing captured the core fight: whether disgorgement in SEC cases must track traditional restitution principles more tightly than the government says. ### Why are lawyers tying this to earlier SEC cases? (scotusblog.com) Liu v. SEC, decided in 2020, held that the SEC may seek equitable disgorgement if the award does not exceed a wrongdoer’s net profits and is awarded for victims. Sripetch’s petition argues that language limits the agency more than the Ninth Circuit allowed. SEC v. Jarkesy, decided in 2024, separately held that defendants are entitled to a jury trial when the SEC seeks civil penalties for securities fraud. (supremecourt.gov) Together, those cases have kept the Court involved in defining the procedural and remedial boundaries of SEC enforcement. ### Are there other securities petitions behind it? Powell v. SEC, docketed March 19 as No. 25-1100, is one of the newer securities petitions now pending at the Court. (supremecourt.gov) The docket shows Justice Elena Kagan extended the filing deadline in January, the petition was filed on March 16, and the SEC’s response deadline was extended to May 20. (supremecourt.gov) The Powell docket also shows a heavy amicus response, including briefs from the U.S. Chamber of Commerce, the Institute for Justice, the Goldwater Institute, former SEC attorneys and former SEC targets. The Court has not yet acted on the petition. ### What should readers watch this week? May 21 is the next scheduled opinion day on SCOTUSblog’s live calendar, and the Supreme Court says courtroom sessions may begin with the announcement of opinions. (supremecourt.gov) Sripetch was argued a month ago, but the Court has not yet released a decision. May 20 is the next concrete securities docket date because the SEC’s response in Powell is due then. If the filing arrives, the next public trail will be the Supreme Court docket, followed by any distribution for conference on the Court’s orders pages. (supremecourt.gov) (scotusblog.com)