Supreme Court Rules for SEC on Disgorgement Awards
In a win for the U.S. Securities and Exchange Commission (“SEC”), the U.S. Supreme Court ruled today in Sripetch v. SEC, No. 25-466 (June 4, 2026) that an SEC disgorgement award does not require proof of pecuniary loss by investors. The case involved the new statutory disgorgement remedy (in Exchange Act Section 21(d)(7)) that Congress added in 2021, following the Supreme Court’s decisions in Kokesh and Liu, which together curtailed the SEC’s disgorgement remedy by subjecting it to statutory time limits and equitable constraints.
The practical result is that the SEC will have a somewhat easier time obtaining disgorgement awards in future enforcement cases. But the Supreme Court’s decision explicitly left open a number of interesting questions: whether the equitable constraints identified in Liu apply to the new statutory disgorgement remedy (the Court assumed here that they do), whether disgorgement is available when it is infeasible to distribute funds to investors, and whether the Seventh Amendment jury trial right under Jarkesy is implicated by the disgorgement remedy. How the SEC pursues disgorgement awards going forward may implicate all those questions and lead to future litigation. We’ll be watching closely.
SEC Rescinds Its Gag Rule Policy
The SEC yesterday rescinded its so-called gag rule policy prohibiting parties from denying the allegations in no admit/no deny settlements. The SEC also announced it would not enforce gag rule provisions in existing settlements (which it pointed out was not enforced previously). Even with this policy change, the SEC can still agree to no admit/no deny settlements, and it noted that it may continue to require admissions in some cases.
The practical effects of this policy change remain uncertain, but we can predict at least two possible consequences despite the fact that this will be a welcome change for some settling parties. First, the SEC staff may seek to include more detailed allegations in settled orders to make it more difficult for settling parties to deny the allegations. Second, some settling parties have viewed the gag rule as helpful because it constrained their public statements after a settlement. Without the ability to rely on the “no deny” language, those parties may now face pressure to say more, which could introduce new risks.
New U.S. SEC Enforcement Director David Woodcock Signals Continued “Back to Basics” Approach
New SEC Enforcement Director David Woodcock used his first public remarks to signal continuity with Chairman Paul Atkins’s “back to basics” agenda, emphasizing “quality over quantity” and a focus on cases involving real investor harm rather than technical violations. Woodcock identified key enforcement priorities and announced reinstitution of the Retail Fraud Working Group to focus specifically on protecting retail investors.
SEC Enforcement FY2025 Results Signal Shift in Priorities in Direct Critique of Prior Administration
On April 7, 2026, the SEC Division of Enforcement published its annual enforcement results for the 2025 fiscal year (October 2024 through September 2025). The Division reported 456 total enforcement actions, the lowest number in at least 20 years, including 303 “stand-alone” actions; 69 “follow-on” administrative proceedings arising from other civil, criminal, or administrative events; and 84 actions against delinquent filers. The SEC also reported approximately $17.9 billion in monetary relief.
FinCEN Postpones Effective Date of Anti-Money-Laundering Rule for Investment Advisers and Exempt Reporting Advisers
On July 21, 2025, the U.S. Department of the Treasury Financial Crimes Enforcement Network (FinCEN) announced that it intends to postpone the effective date of the final rule requiring anti-money-laundering (AML) programs for certain investment advisers (the IA AML Rule). The rule, previously scheduled to take effect on January 1, 2026, will now be delayed until January 1, 2028.
A Roadmap to Engagement With the U.S. SEC’s New Crypto Task Force
On February 4, 2025, in the first official statement (the Statement) from the Securities and Exchange Commission’s (SEC) newly established Crypto Task Force (Task Force), SEC Commissioner Hester Peirce provided a glimpse into the priorities and guidelines concerning “the crypto road trip” ahead for all industry participants in the crypto/digital assets space. (more…)
US SEC Division of Exams Announces 2025 Examination Priorities
On October 21, 2024, the U.S. Securities and Exchange Commission (SEC or Commission) Division of Examinations (Division) published its annual examination priorities (Priorities) outlining areas of perceived risk and topics that the Division plans to focus on in the new fiscal year. The Priorities were published just weeks before the U.S. presidential elections, and, while the SEC’s examination program does not change significantly with changes in administration, new leadership will undoubtedly announce their own priorities for the Commission. (more…)
