Supreme Court Upholds SEC Authority to Obtain Disgorgement Without Actual Loss But Leaves Important Questions Unanswered
The Supreme Court’s decision in Sripetch v. SEC gives the SEC a meaningful win, holding that the agency may seek disgorgement of ill-gotten gains without proving that investors suffered financial losses.
But the Court stopped short of resolving the broader questions that could prove even more consequential. It left open whether statutory disgorgement remains an equitable remedy subject to Liu’s limitations and whether defendants are entitled to a jury trial when the SEC seeks disgorgement under the Exchange Act.
Our latest blog post examines what Sripetch decided, the critical issues it left unanswered, and why those unresolved questions are likely to shape the next wave of SEC enforcement litigation.
The End of the Independent Agency: Supreme Court Overrules Humphrey′s Executor
On June 29, 2026, the Supreme Court issued one of the most consequential administrative law decisions in nearly a century. In Trump v. Slaughter, a 6–3 majority overruled Humphrey’s Executor v. United States, the 1935 decision that allowed Congress to shield certain independent agency commissioners from at-will presidential removal. Chief Justice John Roberts, writing for the Court, held that for-cause removal protections for the heads of agencies exercising executive power violate the Constitution’s separation of powers. The decision gives the President broad authority to remove commissioners serving on agencies that exercise executive power.
Supreme Court Limits Enforcement of Appellate Waivers in Cases Involving Miscarriages of Justice
On June 18, 2026, the U.S. Supreme Court held in Hunter v. United States that appellate waivers in plea agreements are not enforceable when doing so would result in a “miscarriage of justice.” The Court rejected arguments that knowing and voluntary appeal waivers must always be enforced, recognizing instead a narrow exception for sentences tainted by obvious and egregious errors that threaten public confidence in the judiciary.
The decision resolves a longstanding circuit split and underscores the judiciary’s independent role in safeguarding the integrity of the criminal justice system. Although appellate waivers remain generally enforceable, Hunter creates a limited pathway for defendants to challenge certain unlawful sentences notwithstanding a waiver provision in a plea agreement.
The case also produced a notable concurrence from Justice Gorsuch, joined by Justices Sotomayor and Jackson, questioning the modern plea-bargaining system and the leverage prosecutors wield in securing guilty pleas and appellate waivers. Read more in this blog post.
Challenging Executive Order on DEI, States Say It Gets FCA Materiality Wrong
On June 10, 2026, nineteen states and the District of Columbia filed suit challenging President Trump’s Executive Order No. 14398, which seeks to eliminate diversity, equity, and inclusion (DEI) initiatives among federal contractors and expressly links DEI-related conduct to potential False Claims Act (FCA) liability. The lawsuit, brought under the Administrative Procedure Act, targets the Order’s anti-DEI contracting provisions and the federal government’s efforts to implement them.
The states argue that the Executive Order’s attempt to designate compliance with its anti-DEI requirements as “material” to government payment decisions conflicts with the Supreme Court’s FCA materiality standard articulated in Universal Health Services v. Escobar. The complaint also challenges the Order on broader administrative law grounds, arguing that key terms are impermissibly vague and that agencies have failed to justify the Order’s underlying policy assumptions.
Read the full post for a closer look at the states’ materiality arguments and the potential implications for federal contractors facing increased FCA scrutiny of DEI-related practices.
Sidley Secures Unanimous Supreme Court Victory Reinforcing Constitutional Venue Protections
Sidley secured a significant victory in the U.S. Supreme Court for Ahmad Abouammo in a case addressing the constitutional limits on where federal criminal prosecutions may be brought. In a unanimous opinion, the Supreme Court held that Mr. Abouammo should not have been charged and tried in the Northern District of California for crimes which occurred elsewhere. The case is one of the most important recent decisions regarding venue: the Court’s ruling reinforces the Constitution’s venue protections and limits the government’s ability to prosecute defendants in forums disconnected from their alleged conduct.
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.
Sidley’s Loss-Eaton Making Supreme Court Debut in Saudi Spy Case
Sidley partner Tobias Loss-Eaton is set to argue his first case before the U.S. Supreme Court, representing a former Twitter employee convicted of spying for Saudi Arabia. The case centers on whether federal prosecutors brought an obstruction charge in the proper venue, raising broader constitutional questions about where criminal cases can be tried. Loss-Eaton, who helped bring the case to the Court through Northwestern’s Supreme Court clinic, now prepares to make his debut at the lectern in a closely watched dispute over the limits of federal venue law.