Filing Highlights Govil Case; Reaffirms Need for Case Precedent to Remain
NEW YORK, March 5, 2026 /PRNewswire/ — Ford O’Brien Landy LLP has filed an amicus curiae brief in the United States Supreme Court in Sripetch v. SEC, No. 25-466. In Sripetch, the Supreme Court granted certiorari to resolve a circuit split over whether the U.S. Securities and Exchange Commission (SEC) may seek equitable disgorgement without showing that investors suffered pecuniary harm.
The split resulted from SEC v. Govil, 86 F.4th 89 (2d Cir. 2023), in which the Second Circuit held that an investor must suffer monetary harm to qualify as a victim eligible to receive disgorgement. Ford O’Brien Landy partner Matthew A. Ford, counsel of record for the appellant in Govil, authored the amicus brief with Arthur Kutoroff.
“Given the decades of documented abuses by the SEC of its disgorgement powers, Sripetch provides an opportunity for the Supreme Court to adopt a limiting principal that blocks the SEC from seeking bloated disgorgement awards untethered to any loss suffered by any so-called victims of a securities violation,” stated Matthew A. Ford.
The brief explains how Govil aligns with recent Supreme Court precedent holding that disgorgement must adhere to equitable principles. These decisions converge upon three requirements for equitable disgorgement in SEC enforcement actions: (1) the investor suffered a pecuniary loss; (2) the wrongdoer received a net pecuniary gain of that amount; and (3) both the loss and gain resulted from the securities law violation.
The amicus brief was filed on behalf of our clients Kelly and Tim Kabilafkas who were ordered to pay more than $50 million in disgorgement and prejudgment interest notwithstanding the undisputed evidence that the “victims” in their case actually made millions of dollars in profit on their investments.
By requiring proof of pecuniary harm, the Second Circuit supplied an administrable limitation that gives effect to these principles. Were the SEC to obtain disgorgement in an amount greater than investors lost, it would either distribute the surplus to investors—conferring a windfall—or to the Treasury, which does not benefit investors.
The filing reflects the firm’s tradition of principled advocacy in its appellate practice. Additional information about Ford O’Brien Landy’s appellate practice is available [here].
Matthew A. Ford added, “In our amicus brief, we have proposed a simple three-part test that the SEC should have to satisfy before obtaining a disgorgement award. This framework gives form to the basic notion that if the SEC wants to seek a return of money to investors it claims lost money, it must show the investors actually lost money in the first place.”
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