UNITED STATES SECURITIES AND EXCHANGE COMMISSION v. ONGKARUCK SRIPETCH
No. 24-3830
United States Court of Appeals, Ninth Circuit
September 3, 2025
FOR PUBLICATION
UNITED STATES COURT OF APPEALS
FOR THE NINTH CIRCUIT
UNITED STATES SECURITIES
AND EXCHANGE COMMISSION,
Plaintiff - Appellee,
v.
ONGKARUCK SRIPETCH,
Defendant - Appellant,
and
AMANDA FLORES, BREHNEN
KNIGHT, ANDREW MCALPINE,
ASHMIT PATEL, MICHAEL
WEXLER, DOMINIC WILLIAMS,
ADTRON INC., also known as
Stockpalooza.com, ATG INC.,
DOIT, LTD, DOJI CAPITAL, INC.,
KING MUTUAL SOLUTIONS
INC., OPTIMUS PRIME
FINANCIAL INC., ORCA BRIDGE,
REDLINE INTERNATIONAL,
UAIM CORPORATION,
Defendants.
No. 24-3830
D.C. No.
3:20-cv-01864-H-DTF
OPINION
2 U.S. SEC. &EXCH. COMM’N V. SRIPETCH
for the Southern District of California
Marilyn L. Huff, District Judge, Presiding
Argued and Submitted May 14, 2025
Pasadena, California
September 3, 2025
Before: John B. Owens, Mark J. Bennett, and Holly A.
Thomas, Circuit Judges.
Opinion by Judge H.A. Thomas
SUMMARY*
SEC / Disgorgement Award
The panel affirmed the district court’s disgorgement
award entered against Ongkaruck Sripetch under
by the Securities and Exchange Commission (SEC).
The SEC charged Sripetch with six counts of securities
fraud under the Securities Act of 1933 and the Securities
Exchange Act of 1934 and one count of selling unregistered
securities in violation of the Securities Act. The SEC
sought, among other remedies, an order requiring the
defendants “to disgorge all ill-gotten gains” obtained
* This summary constitutes no part of the opinion of the court. It has
been prepared by court staff for the convenience of the reader.
U.S. SEC. &EXCH. COMM’N V. SRIPETCH 3
because of the alleged violations. The district court ordered
disgorgement of net profits in the amount of $2,251,923.16,
along with prejudgment interest.
Sripetch argued that the district court abused its
discretion by ordering disgorgement because disgorgement
under
harm that the SEC failed to make. Agreeing with the First
Circuit, SEC v. Navellier & Associates, Inc., 108 F.4th 19
(1st Cir. 2024), the panel held that the SEC is not required to
show that investors suffered pecuniary harm as a
precondition to a disgorgement award under
COUNSEL
Kerry J. Dingle (argued), Senior Appellate Counsel; Daniel
Staroselsky, Assistant General Counsel; Tracy A. Hardin,
Solicitor; Megan Barbero, General Counsel; United States
Securities and Exchange Commission, Washington, D.C.;
Christopher J. Dunnigan, Special Trial Counsel, United
States Securities and Exchange Commission, New York,
New York; for Plaintiff-Appellee.
Tyler R. Creekmore (argued), Gregory T. Nolan, and
Kenneth P. White, Brown White & Osborn LLP, Los
Angeles, California, for Defendant-Appellant.
4 U.S. SEC. &EXCH. COMM’N V. SRIPETCH
OPINION
H.A. THOMAS, Circuit Judge:
In this civil enforcement action, the Securities and
Exchange Commission (Commission or SEC) sought, and
the district court granted, a disgorgement award against
defendant Ongkaruck Sripetch under
and
abused its discretion by ordering disgorgement because the
Commission failed to show that the investors defrauded by
his actions suffered pecuniary harm. Our sister circuits have
split on this question.
& Associates, Inc., 108 F.4th 19 (1st Cir. 2024), held that no
showing of pecuniary harm is required for an award of
disgorgement under
Second Circuit, in SEC v. Govil, 86 F.4th 89 (2d Cir. 2023),
reached the opposite conclusion. Consistent with Navellier,
we hold that an award of disgorgement does not require a
showing that investors experienced pecuniary harm. We
therefore affirm.
I
A
Disgorgement is a profits-based remedy arising under
the law of restitution and unjust enrichment and grounded in
the principle that “[a] person is not permitted to profit by his
own wrong.” Restatement (Third) of Restitution and Unjust
Enrichment (“Restatement”) § 3 (A.L.I. 2011). Under the
common law, “[a] person who is unjustly enriched at the
expense of another is subject to liability in restitution.” Id.
§ 1. When a “conscious wrongdoer” is “enriched by
misconduct”—defined as “an actionable interference by the
U.S. SEC. &EXCH. COMM’N V. SRIPETCH 5
defendant with the claimant’s legally protected interests”—
“the unjust enrichment . . . is the net profit attributable to the
underlying wrong.” Id. § 51(1), (3), (4). “The object of
restitution in such cases is to eliminate profit from
wrongdoing while avoiding, so far as possible, the
imposition of a penalty.” Id. § 51(4). “Restitution remedies
that pursue this object are often called ‘disgorgement’ or
‘accounting.’” Id.; see id. cmt. a (“Restitution measured by
the defendant’s wrongful gain is frequently called
‘disgorgement.’ Other cases refer to an ‘accounting’ or an
‘accounting for profits.’ Whether or not these terms are
employed, the remedial issues in all cases of conscious
wrongdoing are the same.”).
“Initially, the only statutory remedy available to the SEC
in an enforcement action was an injunction barring future
violations of securities laws.” Kokesh v. SEC, 581 U.S. 455,
458 (2017). “In the absence of statutory authorization for
monetary remedies, the Commission urged courts to order
disgorgement as an exercise of their ‘inherent equity power
to grant relief ancillary to an injunction.’” Id. (quoting SEC
v. Tex. Gulf Sulphur Co., 312 F. Supp. 77, 91 (S.D.N.Y.
1970)). Courts responded favorably to these requests, and
“[b]eginning in the 1970’s, courts ordered disgorgement in
SEC enforcement proceedings in order to ‘deprive . . .
defendants of their profits in order to remove any monetary
reward for violating’ securities laws and to ‘protect the
investing public by providing an effective deterrent to future
violations.’” Id. at 459 (second alteration in original)
(quoting Tex. Gulf, 312 F. Supp. at 92). In SEC v. Clark, 915
F.2d 439 (9th Cir. 1990), for example, we stated that “[t]he
SEC’s power to obtain injunctive relief has been broadly
read to include disgorgement of profits realized from
6 U.S. SEC. &EXCH. COMM’N V. SRIPETCH
violations of the securities laws.” Id. at 453 (citing SEC v.
Randolph, 736 F.2d 525, 529 (9th Cir. 1984)).
The legal bases for ordering disgorgement in SEC civil
enforcement actions were strengthened in 2002, when
Congress granted the SEC express authority to seek “any
equitable relief” in civil enforcement actions. See Sarbanes-
Oxley Act of 2002, Pub. L. No. 107-204, § 305, 116 Stat.
745, 779 (2002). Congress adopted a new provision, codified
at
proceeding brought or instituted by the Commission under
any provision of the securities laws, the Commission may
seek, and any Federal court may grant, any equitable relief
that may be appropriate or necessary for the benefit of
investors.” Courts thereafter
statutory basis for awarding disgorgement in SEC civil
enforcement actions, treating disgorgement as a form of
“equitable relief” authorized by this new provision. E.g.,
SEC v. World Cap. Mkt., Inc., 864 F.3d 996, 1003 (9th Cir.
2017) (“In [SEC civil enforcement] actions, federal courts
may grant ‘any equitable relief that may be appropriate or
necessary for the benefit of investors,’
from securities law violations.”).
The Supreme Court, however, continued to leave
unanswered the question of whether disgorgement qualifies
as “equitable relief” authorized by
Court expressly reserved both that question—i.e., “whether
courts possess authority to order disgorgement in SEC
enforcement proceedings”—and the subsidiary question of
“whether courts have properly applied disgorgement
principles in this context.” Kokesh, 581 U.S. at 461 n.3.
U.S. SEC. &EXCH. COMM’N V. SRIPETCH 7
In 2020, the Court answered both questions in Liu v.
SEC, 591 U.S. 71 (2020). As to the first question reserved in
Kokesh, Liu ratified longstanding lower-court practice by
holding that disgorgement qualifies as “equitable relief”
under
fact that “[e]quity courts have routinely deprived
wrongdoers of their net profits from unlawful activity, even
though that remedy may have gone by different names.” Id.
at 79.
1With respect to Kokesh’s second reserved question, Liu
observed that the lower courts had occasionally erred by
granting disgorgement awards exceeding the remedy’s
“common-law limitations.” Id. at 85. The Court explained:
Over the years, . . . courts have occasionally
awarded disgorgement in three main ways
that test the bounds of equity practice: by
ordering the proceeds of fraud to be deposited
in Treasury funds instead of disbursing them
Notes
did not attempt to classify disgorgement as either “equitable” or “legal”
in nature. Any such classification would be difficult because “the
restitution remedy of disgorgement—stripping defendant’s gain or
profits—may be deemed either legal or equitable. It looks similar to a
money award, but its historical roots include the equitable remedy of
accounting for profits.” Dan Dobbs & Caprice Roberts, Law of
Remedies: Damages, Equity, Restitution § 4.1(1), at 376 (3d ed., West
Academic Publishing, 2017). As the Restatement explains, “[t]he status
of restitution as belonging to law or to equity has been ambiguous from
the outset. The answer is that restitution may be either or both.”
Restatement § 4 cmt. a. “Outside the simplest cases, both claim and
remedy in unjust enrichment will often contain elements that might be
referred to either tradition.” Id. cmt. d.
8 U.S. SEC. &EXCH. COMM’N V. SRIPETCH
to victims, imposing joint-and-several
disgorgement liability, and declining to
deduct even legitimate expenses from the
receipts of fraud. The SEC’s disgorgement
remedy in such incarnations is in
considerable tension with equity practices.
Id. (footnote omitted). The Court held that disgorgement
under
by “return[ing] a defendant’s gains to wronged investors”
when practical, id. at 88, refraining from “impos[ing]
disgorgement liability on a wrongdoer for benefits that
accrue to his affiliates . . . in a manner . . . at odds with the
common-law rule requiring individual liability for wrongful
profits,” id. at 90, and “restrict[ing] awards to net profits
from wrongdoing after deducting legitimate expenses,” id. at
84.
A year later, Congress created a second statutory basis
for awarding disgorgement in SEC civil enforcement
actions. See William M. (Mac) Thornberry National Defense
Authorization Act for Fiscal Year 2021, Pub. L. No. 116-
283, § 6501, 134 Stat. 3388, 4625–26 (2021). This
legislation added
any action or proceeding brought by the Commission under
any provision of the securities laws, the Commission may
seek, and any Federal court may order, disgorgement.”2 As
court to award, disgorgement under
Whenever it shall appear to the Commission that any
person has violated any provision of this chapter, the
rules or regulations thereunder, or a cease-and-desist
order entered by the Commission pursuant to section
U.S. SEC. &EXCH. COMM’N V. SRIPETCH 9
a result of this legislation, there are now two provisions
authorizing disgorgement awards in SEC civil enforcement
actions: subsection (d)(5) and subsection (d)(7).
Following these developments, two circuit splits have
emerged regarding the proper scope of disgorgement in SEC
civil enforcement actions. First, the Second and Fifth
Circuits have disagreed about whether the common-law
limitations discussed in Liu apply only to disgorgement
under
396 (2d Cir. 2023) (“[W]e conclude that disgorgement under
limitations as recognized in Liu.”), with SEC v. Hallam, 42
F.4th 316, 339 (5th Cir. 2022) (holding that
“authorize[s] the sorts of disgorgement awards courts were
ordering before Liu”). Second, as relevant here, the Second
and First Circuits have disagreed about whether
disgorgement under
of pecuniary harm. Compare Govil, 86 F.4th at 106
(“‘Equitable relief’ requires that the relief be ‘awarded for
victims,’ and that in turn requires a finding of pecuniary
harm.” (citation omitted) (quoting Liu, 591 U.S. at 75)), with
Navellier, 108 F.4th at 41 n.14 (“Neither Liu nor our case
78u-3 of this title, other than by committing a violation
subject to a penalty pursuant to section 78u-1 of this
title, the Commission may bring an action in a United
States district court to seek, and the court shall have
jurisdiction to . . . require disgorgement under
paragraph (7) of any unjust enrichment by the person
who received such unjust enrichment as a result of
such violation.
10 U.S. SEC. &EXCH. COMM’N V. SRIPETCH
law . . . require investors to suffer pecuniary harm as a
precondition to a disgorgement award.”).
B
The Commission brought this civil enforcement action
against Sripetch and fourteen other defendants in 2020. The
Commission alleged that the defendants “worked in concert
to engage in numerous fraudulent schemes and other
violations of the federal securities laws, involving at least 20
penny stock companies,” and that they “obtained at least $6
million in illicit sale proceeds from this illegal conduct,
while harming retail investors who purchased shares during
the schemes.” The Commission charged Sripetch with six
counts of securities fraud under the Securities Act of 1933
and the Securities Exchange Act of 1934 and one count of
selling unregistered securities in violation of the Securities
Act. The Commission sought, among other remedies, an
order requiring the defendants “to disgorge all ill-gotten
gains” obtained because of the alleged violations.
In 2023, Sripetch consented to the entry of judgment
against him. In doing so, Sripetch agreed that “the Court
shall order disgorgement of ill-gotten gains [and]
prejudgment interest thereon” and that, “solely for the
purposes of [the SEC’s] motion [for disgorgement], the
allegations of the Complaint shall be accepted as and
deemed true by the Court.”
In its subsequent motion for remedies, the Commission
asked the district court to order Sripetch to disgorge
$4,115,365.88 in ill-gotten gains in accordance with
U.S. SEC. &EXCH. COMM’N V. SRIPETCH 11
interest.3 Sripetch opposed the Commission’s request for
disgorgement. Relying on the Second Circuit’s decision in
Govil, 86 F.4th at 103–04, Sripetch argued that
disgorgement under
suffered pecuniary harm” and that the Commission failed to
make this showing. In reply, the Commission urged the
district court to reject Govil. Alternatively, the Commission
argued that Sripetch’s victims suffered pecuniary harm.
Relying on
granted the Commission’s motion in part and ordered
disgorgement of net profits in the amount of $2,251,923.16,
along with prejudgment interest in the amount of
$1,051,353.77. SEC v. Sripetch, No. 20-cv-01864-H-BGS,
2024 WL 1546917, at *7 (S.D. Cal. Apr. 8, 2024). The court
assumed without deciding that a finding of pecuniary harm
was required and concluded that the Commission had made
the requisite showing. Id. at *5. Sripetch timely appealed.
II
“We review orders of disgorgement for an abuse of
discretion.” SEC v. Platforms Wireless Int’l Corp., 617 F.3d
1072, 1096 (9th Cir. 2010).
III
Sripetch argues that the district court abused its
discretion by ordering disgorgement. In his view,
disgorgement under
showing of pecuniary harm that the Commission failed to
make in this case. The Commission responds by arguing that
a finding of pecuniary harm is not required and, in the
criminal case, the Commission declined to seek a monetary civil penalty.
12 U.S. SEC. &EXCH. COMM’N V. SRIPETCH
alternative, that it made the required showing. We agree with
the Commission’s first argument and therefore do not reach
the second.4
A
The Second Circuit has held that a finding of pecuniary
harm is required for an award of disgorgement under
Circuit has held to the contrary, see Navellier, 108 F.4th at
41. For the reasons that follow, we reject the reasoning of the
Second Circuit and join the First Circuit in holding that a
finding of pecuniary harm is not required.
The Second Circuit began its analysis by pointing out
that disgorgement requires one or more victims. See Govil,
86 F.4th at 98. We agree with this premise.
authorizes “any equitable relief that may be appropriate or
necessary for the benefit of investors.”
And disgorgement under the common law requires a
claimant whose “legally protected interests” have been
interfered with. Restatement § 51(1). A victim is therefore
required.
of pecuniary harm, we note that the Commission’s contention that the
investors suffered pecuniary harm merely because they paid artificially
inflated prices for securities is in tension with Dura Pharmaceuticals,
Inc. v. Broudo, 544 U.S. 336, 342–43 (2005).
awarded for victims from both the statutory language and common-law
principles. See Liu, 591 U.S. at 87–90.
U.S. SEC. &EXCH. COMM’N V. SRIPETCH 13
We disagree, however, with the Second Circuit’s
conclusion that “victim” is narrowly defined as an individual
or entity that has suffered pecuniary harm. See Govil, 86
F.4th at 98 (“An investor who suffered no pecuniary harm as
a result of the fraud is not a victim.”); id. at 102 (“We . . .
hold that a ‘victim’ for purposes of
suffers pecuniary harm from the securities fraud.”). The
Second Circuit’s analysis fails to persuade for two reasons.
First, the Second Circuit’s approach is contrary to the
common law. As Liu makes clear, disgorgement under
“traditional equity practice.” Liu, 591 U.S. at 85, 87; see also
Kousisis v. United States, 145 S. Ct. 1382, 1392 (2025)
(“When Congress uses a term with origins in the common
law, we generally presume that the term ‘brings the old soil
with it.’” (quoting Sekhar v. United States, 570 U.S. 729, 733
(2013))). Under these principles, disgorgement does not
require a showing of pecuniary harm. At common law, a
claimant seeking disgorgement need only show “an
actionable interference by the defendant with the claimant’s
legally protected interests.” Restatement § 51(1).6 But the
claimant need not show any loss whatsoever, let alone a
pecuniary loss. See id. § 1 cmt. a (“While the paradigm case
of unjust enrichment is one in which the benefit on one side
of the transaction corresponds to an observable loss on the
other, the consecrated formula ‘at the expense of another’
can also mean ‘in violation of the other’s legally protected
rights,’ without the need to show that the claimant has
suffered a loss.”); id. reporter’s note d (noting that restitution
requires no loss “other than a violation of the claimant’s
their legally protected interests. We therefore do not address that issue.
14 U.S. SEC. &EXCH. COMM’N V. SRIPETCH
rights”); id. § 3 cmt. b (noting that disgorgement may be
awarded in “cases in which a property owner may have
suffered no quantifiable injury from the defendant’s
unlawful interference”); id. reporter’s note a (“[T]here can
be restitution of wrongful gain in cases where the plaintiff
has suffered an interference with protected interests but no
measurable loss whatsoever.”); id. § 51 cmt. d (“So long as
benefits wrongfully obtained have an ascertainable market
value, that value is the minimum measure of the wrongdoing
defendant’s unjust enrichment, even if the transaction
produces no ascertainable injury to the claimant and no
ascertainable benefit to the defendant.”); Maier Brewing Co.
v. Fleischmann Distilling Corp., 390 F.2d 117, 120–24 (9th
Cir. 1968) (affirming a disgorgement order where the
plaintiffs “have shown no injury to themselves, no diversion
of sales from them to the appellants, no direct competition
from which injury may be inferable, and no palming off or
fraudulent conduct”); Pender v. Bank of Am. Corp., 788 F.3d
354, 366 (4th Cir. 2015) (“It is blackletter law that a plaintiff
seeking an accounting for profits need not suffer a financial
loss. Requiring a financial loss for disgorgement claims
would effectively ensure that wrongdoers could profit from
their unlawful acts as long as the wronged party suffers no
financial loss. We reject that notion.” (citations omitted));
Edmonson v. Lincoln Nat’l Life Ins. Co., 725 F.3d 406, 415
(3d Cir. 2013) (“[T]he nature of disgorgement claims
suggest that a financial loss is not required for standing, as a
loss is not an element of a disgorgement claim.”).
Second, in defining a victim narrowly as one who has
suffered pecuniary harm, the Second Circuit
misapprehended the meaning of certain language in Liu,
certain language in the Restatement, and the relationship
U.S. SEC. &EXCH. COMM’N V. SRIPETCH 15
between private securities actions and SEC civil
enforcement actions.
To begin, the Second Circuit erred by gleaning a
pecuniary harm requirement from Liu’s observation that
disgorgement “restores the status quo.” Liu, 591 U.S. at 80
(alteration omitted) (quoting Tull v. United States, 481 U.S.
412, 424 (1987)). The Second Circuit concluded that this
language supports a pecuniary harm requirement because it
suggests that a victim’s recovery through disgorgement
should be limited to her actual losses:
If we were to understand “victim” as
including defrauded investors who suffered
no pecuniary harm—and thus to allow those
investors to receive the proceeds of
disgorgement—we would not be restoring
the status quo for those investors. We would
be conferring a windfall on those who
received the benefit of the bargain.
Govil, 86 F.4th at 103.
But this suggestion ignores the fundamental distinction
between compensatory damages, which are designed to
compensate the victim for her losses, and restitution, which
is designed to deprive the wrongdoer of his ill-gotten gains.
As the First Circuit explained in Navellier:
Disgorgement is a “profit-based measure of
unjust enrichment” which reflects the
foundational principle that “it would be
inequitable that [a wrongdoer] should make a
profit out of [their] own wrong.” Liu, 591
U.S. at 79–80 (alteration omitted) (first
16 U.S. SEC. &EXCH. COMM’N V. SRIPETCH
alteration in original). Disgorgement is thus
“tethered to a wrongdoer’s net unlawful
profits.” Id. at 80 (emphasis added).
Consistent with this understanding, we have
recognized the distinction between
disgorgement, which is limited to “the
amount with interest by which the defendant
profited from his wrongdoing,” and other
forms of equitable relief which may “include[
] total losses suffered by the victims.” CFTC
v. JBW Cap., 812 F.3d 98, 111 (1st Cir.
2016).
108 F.4th at 41 (alterations in original); see also SCA
Hygiene Prods. Aktiebolag v. First Quality Baby Prods.,
LLC, 580 U.S. 328, 341 (2017) (“The equitable remedy of
an accounting . . . [i]s not the same as damages. The remedy
of damages seeks to compensate the victim for its loss,
whereas the remedy of an accounting . . . s[eeks]
disgorgement of ill-gotten profits.”); Restatement § 3
reporter’s note a (“[The Restatement is worded] to avoid any
implication that the defendant’s wrongful gain must
correspond to a loss on the part of the plaintiff. . . . On the
contrary, it is clear not only that there can be restitution of
wrongful gain exceeding the plaintiff’s loss, but that there
can be restitution of wrongful gain in cases where the
plaintiff has suffered an interference with protected interests
but no measurable loss whatsoever.”); id. § 51 cmt. a
(“[Disgorgement] is measured by the defendant’s profits,
where the object of restitution is to strip the defendant of a
U.S. SEC. &EXCH. COMM’N V. SRIPETCH 17
wrongful gain . . . . Recovery so measured may potentially
exceed any loss to the claimant.”).7
The Second Circuit also placed great weight on Liu’s
statement that “[t]he equitable nature of the profits remedy
generally requires the SEC to return a defendant’s gains to
wronged investors for their benefit.” Liu, 591 U.S. at 88
(emphasis added). The Second Circuit reasoned that “[f]unds
cannot be returned if there was no deprivation in the first
place.” Govil, 86 F.4th at 103. In the cited passage, however,
the Court held only that disgorged profits generally must be
disbursed to victims rather than deposited into the Treasury.
See Liu, 591 U.S. at 87–90. The Court neither adopted a
pecuniary harm requirement nor discarded the common
law’s definition of victim.
The Second Circuit further purported to find support for
a pecuniary harm requirement in the Restatement itself. The
court construed a reporter’s note as requiring a claimant to
demonstrate “impoverishment,” which the court appears to
have equated with pecuniary harm. See Govil, 86 F.4th at
103 n.15 (citing Restatement § 1 reporter’s note d). The
reporter’s note in question, however, makes clear that only
“a violation of the claimant’s rights” is required, not
impoverishment; indeed, the note describes impoverishment
with compensatory damages. Different remedies can restore the status
quo in different ways. Suppose, for example, a thief takes plaintiff’s $30
watch and sells it for $40. The $40 the plaintiff receives in restitution can
be understood as restoring the status quo “because the fund of $40 is
perceived as a gain produced by plaintiff’s property, a gain plaintiff was
entitled to make. . . . [A] [p]laintiff entitled to recover the watch is
equally entitled to recover whatever is produced by or substituted for the
watch,” even if this recovery is “far superior to compensatory damages.”
Dobbs, supra, § 4.1(1), at 374.
18 U.S. SEC. &EXCH. COMM’N V. SRIPETCH
as “too narrow” a term. See Restatement § 1 reporter’s note
d.8 The reporter’s commentary thus rejects the Second
Circuit’s view rather than supports it.
Finally, the Second Circuit found support for a pecuniary
harm requirement by comparing private securities actions,
which require a showing of economic loss, and
disgorgement under
Circuit’s view should include a comparable requirement:
[T]he investors whom Govil defrauded could
not pursue individual fraud claims against
him without showing a pecuniary loss. Were
we to call those investors “victims” without a
similar showing, we would allow the SEC to
forward proceeds of disgorgement to such
investors and circumvent the limitations on
There is an understandable temptation to limit the far-
reaching notion of unjust enrichment within the
manageable confines of a checklist, but the attempt
usually leads to trouble. See . . . LaSalle Nat’l Bank v.
Perelman, 82 F. Supp. 2d 279, 294–295 (D. Del. 2000)
(“The elements of unjust enrichment are: 1) an
enrichment, 2) an impoverishment, 3) a relation
between the enrichment and the impoverishment,
4) the absence of justification and 5) the absence of a
remedy provided by law”). The first four elements of
this list might make a plausible definition, though the
reference to “impoverishment” is too narrow: there is
often no “impoverishment” other than a violation of
the claimant’s rights. The fifth element is plainly
erroneous, since so much of unjust enrichment is legal
in origin.
Restatement § 1 reporter’s note d.
U.S. SEC. &EXCH. COMM’N V. SRIPETCH 19
private claims under
law.
Govil, 86 F.4th at 104–05.9 But this asymmetry between
private securities actions and SEC civil enforcement actions
is by design. Congress imposed an economic loss
requirement in private securities actions to address “abusive
litigation by private parties.” Tellabs, Inc. v. Makor Issues &
Rts., Ltd., 551 U.S. 308, 313 (2007). But as SEC civil
enforcement actions are not subject to abusive litigation by
private parties, Congress did not extend the economic loss
requirement to such actions. See Gebhart v. SEC, 595 F.3d
1034, 1040 n.8 (9th Cir. 2010). Reading an economic loss
requirement into
effectuate, the statutory scheme.
B
Neither party argues, and there is no reason to suppose,
that the disgorgement remedy authorized by subsection
(d)(7) is narrower than the one available under subsection
(d)(5). Our holding that pecuniary harm is not required under
subsection (d)(5) thus also means that it is not required under
subsection (d)(7).
IV
In sum, we join the First Circuit in holding that the SEC
is not required to show that investors suffered pecuniary
harm as a precondition to a disgorgement award under
under Section 10(b) of the Securities Exchange Act. See Dura Pharms.,
544 U.S. at 341–42. Congress imposed the economic loss requirement,
codified at
Litigation Reform Act of 1995, Pub. L. No. 104-67, § 101, 109 Stat. 737,
747 (1995).
20 U.S. SEC. &EXCH. COMM’N V. SRIPETCH
The judgment of the district court is therefore AFFIRMED.