The Supreme Court on Thursday upheld a broad reading of the authority of the Securities and Exchange Commission to recoup ill-gotten gains from people who engage in securities fraud.
The justices ruled unanimously against Ongkaruck Sripetch, who was sentenced to 21 months in prison after pleading guilty to selling unregistered securities as part of a scheme involving high-risk penny stocks. The Los Angeles resident had challenged a court order to repay more than $3 million, including interest.
The issue in the case was whether the SEC had to prove that individual investors lost money as a result of buying the stocks. The Supreme Court ruled it did not.
It was enough to show that Sriptech turned a profit from illegal transactions and that “an investor may qualify as a victim of an offender's wrongdoing entitled to compensation,” Justice Neil Gorsuch wrote for the court.
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