The Supreme Court Told the SEC to Stop. It Didn't. Now the Court Has Another Chance.

As the Court prepares to rule on the agency's power to take money when no investor was harmed, three cases show how far the SEC has stretched this tool — and why ordinary Americans are paying the price.

FOR IMMEDIATE RELEASE March 3rd, 2026

WASHINGTON, D.C. — The Investor Choice Advocates Network (ICAN) today filed two amicus briefs with the United States Supreme Court in SEC v. Sripetch, urging the Court to impose meaningful constitutional limits on the SEC's use of disgorgement — a legal remedy the agency has transformed from a tool for repaying victims into a mechanism for bypassing the procedural safeguards Congress deliberately put in place.

The core argument is straightforward. When Congress determined that the SEC needed the power to punish wrongdoing, it gave the agency that power — carefully. Civil penalties come with caps, evidentiary standards, and in many cases, the right to a jury. Those guardrails were not an oversight. They were a deliberate check on government power.

Disgorgement sidesteps all of them. By reaching for disgorgement instead of penalties, the SEC can seek unlimited financial judgments from a judge alone, without proving harm to any specific person, without a jury, and without the limits Congress imposed on punishment. The tool was designed to return ill-gotten gains to victims. The agency has repurposed it to make enforcement faster, easier, and less constrained — and ordinary Americans are bearing the cost.

The Supreme Court addressed this directly in Liu v. SEC (2020), holding that disgorgement is permissible only to the extent it returns funds to actual victims—not to government coffers or based on presumed harm. The SEC has continued to test these limits since that ruling. Federal courts of appeals have divided on how far Liu's constraints actually reach — and Sripetch, out of the Ninth Circuit, is the Supreme Court's vehicle for resolving that split.

"Congress gave the SEC the tools it needs to hold bad actors accountable," said Nick Morgan, Founder and President of ICAN and a former SEC Senior Trial Counsel. "The problem is that the SEC has been reaching past those tools to avoid the work they require. The Supreme Court now has the opportunity to force the agency back inside the boundaries Congress drew — and the cases behind these briefs show exactly why that matters."

What Victimless Disgorgement Actually Looks Like

Everyone agrees that fraud should be punished. That shared conviction is exactly what makes Sripetch an imperfect vehicle for the question the Court actually needs to answer — and exactly why ICAN is before the Court with these briefs. When fraud is in the picture, public attention gravitates toward the merits of the underlying case rather than the legal tool being used to resolve it.

The three cases behind ICAN's briefs cut through that distraction. They are not edge cases. They are what unchecked government power looks like in practice — wielded through a remedy the SEC has no legitimate basis to use when there are no victims to repay.

They Harmed No One. The SEC Came After Them Anyway: The Cases Behind ICAN's Briefs.

Eric Cannon, Brenda Barry, and Caleb Moody are sales consultants who have spent over a decade fighting the SEC, charged only with registration violations, for transactions that occurred at the direction of their employer and the advice of its lawyers. The SEC brought no fraud claims. The investors they dealt with were projected to recover their full principal.

The Ninth Circuit upheld disgorgement against them anyway, holding that the "loss of the time value of money" constitutes pecuniary harm as a matter of law. Under that theory, loss is presumed and irrebuttable — no factual inquiry required, no actual victim necessary. Three people who harmed no one have spent over a decade fighting a judgment built on harm that was never proven.

The other defendants in the case (such as their former employer) have settled or been placed into receivership. Our clients don't have that option — the amounts the SEC is seeking are financially ruinous. When registration violations occur from conduct carried out at an employer's direction can leave individual employees facing judgments like these; the message to anyone considering working in this industry is clear. That chilling effect is precisely why guardrails matter.

Our clients in this case are represented with co-counsel at Paul Hastings LLP. 

J.D. Jordan, who passed away recently at the age of 80, spent the final years of his life fighting the SEC over a technical stock registration issue. Not fraud. Not deception. Not a single dollar of investor loss. He did what regulators tell people to do: he hired a reputable attorney, obtained a written legal opinion, and acted in good faith on that advice. The SEC later found that the attorney had failed to meet his professional obligations — and then went after Mr. Jordan anyway.

The SEC's approach in this case makes the problem concrete. The agency has not retained a single expert to establish that Mr. Jordan's alleged registration violations caused any investor to lose money. More tellingly, the SEC has advised the court that it will not seek penalties or injunctive relief — leaving disgorgement as the sole remaining claim, resting on no evidentiary foundation at all.

If the funds are collected from Mr. Jordan's estate, they will not go to any investors. They will go to the Treasury. 

The estate of Joseph Jordan is represented by ICAN with co-counsel John Zach at Boies Schiller Flexner LLP.

Jamie Quick has never been accused of wrongdoing. Not once, in any filing the SEC has made.

She is a relief defendant in SEC v. Padilla — a legal designation for someone who holds funds that may be subject to a judgment, even though they are not themselves alleged to have violated the law. The violations at issue arose from her ex-husband's conduct. The SEC had a straightforward path: pursue the person who did wrong.

Instead, the SEC told the district court that it had identified thirty-four specific victims and sought a disgorgement award of $44,159 against Ms. Quick. The court later found that the representation was unfounded — the SEC had identified no specific victims. The disgorgement award nevertheless remains in force. The SEC has garnished Ms. Quick's bank accounts. If those funds are ultimately collected, they will go to the Treasury. There are no victims to receive them.

A woman who did nothing wrong, who was never charged with anything, had her bank accounts seized by the federal government — based on a victim list that did not hold up in court. That is the SEC's disgorgement practice, stripped of abstraction.

Ms. Quick is represented by ICAN with co-counsel Jacob Frenkel at Dickinson Wright PLLC.

Two Briefs, Two Perspectives — from Both Sides of the Enforcement Table

ICAN made the strategic decision to file two distinct briefs, each providing the Court with non-overlapping perspectives on why the Ninth Circuit’s standard must be reversed.

In one brief, ICAN appears as amicus curiae in its own right, drawing on its own clients’ experiences to show how the rule operates on the ground. Quinn Emanuel, including ICAN advisory board member Sarah Concannon and her partner Rachel Frank Quinton, acted as the counsel of record.  

In the other, ICAN serves as counsel of record representing the perspective of former SEC attorneys. In this brief, former SEC insiders argue that disgorgement untethered from investor harm is a civil penalty in disguise — one that triggers Seventh Amendment jury-trial rights and allows the Commission to bypass the statutory framework Congress built specifically for gain-stripping without victims, complete with the guardrails the agency is now evading. 

Together, the filings present the Court with a view from the courtroom and from within the agency itself.

A Pattern, Not an Anomaly

These cases are not outliers — and the SEC's own Agency Financial Reports confirm it. At the close of fiscal year 2025, the Commission held $5.12 billion in collected disgorgement and penalties that had not been distributed to harmed investors — more than triple the balance at the time Liu was decided. In fiscal year 2024 alone, the SEC obtained $8.2 billion in financial remedies and distributed $345 million. Four percent.

That gap is not an accounting problem. It is the predictable result of an agency collecting money without first identifying who was harmed, how much they lost, or whether anyone was harmed at all. A pecuniary harm requirement — the one Liu was meant to impose — would close it, by forcing the SEC to identify victims, quantify losses, and prove causation before collecting disgorgement.

Without that requirement, the people on the other end of these cases — people like Jamie Quick, like Eric Cannon and Brenda Barry and Caleb Moody, like J.D. Jordan's family — have no protection from a government agency that can take their money, hand it to the Treasury, and never have to prove that anyone was harmed in the first place.

The Supreme Court drew a line in Liu. The SEC has spent five years testing it. Sripetch is the Court's opportunity to make it hold.

View Court Filings Here

For more information about ICAN's work, visit www.icanlaw.org or contact: info@icanlaw.org

About ICAN: The Investor Choice Advocates Network (ICAN) is a nonprofit organization dedicated to breaking down barriers to entry to capital markets and pushing back against regulatory overreach. ICAN advocates for fair and transparent regulatory practices, ensuring all individuals have equal access to investment opportunities and due process in the financial markets.

Contact Information: Investor Choice Advocates Network (ICAN) Email: info@icanlaw.org Website: www.icanlaw.org