Between August 2013 and December 2017, securities trader Ongkaruck Sripetch orchestrated a series of pump-and-dump schemes involving at least twenty penny-stock companies, a form of fraud in which insiders inflate a stock’s price before selling to buyers at the peak. Working with a network of co-conspirators, Sripetch artificially inflated stock prices and sold shares to unwitting investors, pocketing over $2.25 million in illicit profits.

In response, the Securities Exchange Commission (SEC) brought a civil enforcement action, and the U.S. District Court for the Southern District of California ordered Sripetch to disgorge, or surrender to the court, $2,251,923 in profits plus $1,051,353 in prejudgment interest. The fraud was undisputed, but on appeal, Sripetch raised a question that has divided the federal circuits: can the SEC obtain disgorgement when it has not shown that any specific investor suffered financial harm?