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by Mike Caswell

The Supreme Court of the United States has upheld the $3.3-million disgorgement award that the U.S. Securities and Exchange Commission won against Ongkaruck Sripetch, the Washington State stock tout known as "King Richards." (All figures are in U.S. dollars.) The SEC claimed that Mr. Sripetch helped to boost VMS Rehab Systems Inc., an Ottawa company that supposedly made orthopedic seat cushions. Mr. Sripetch and three Canadians realized at least $6.6-million in illegal gains as paid tout sheets said the stock would be "soaring by over 200%."

The loss for Mr. Sripetch is contained in a decision that the Supreme Court released on Thursday, June 4. The court has upheld an April 17, 2024, judgment that ordered Mr. Sripetch to disgorge $2.25-million in gains, plus interest (making it a $3.3-million judgment at the time). The Supreme Court's decision, which represents the last step in a lengthy appeal process, was a unanimous one.

For securities law enthusiasts, the appeal resolved a long-outstanding legal issue -- the ability of the SEC to collect ill-gotten gains without proving that any victims suffered a loss. Mr. Sripetch had complained that the SEC did not provide any evidence that investors were harmed, nor did it identify any victims or set out their losses. For its part, the SEC said that it was not required to show that any victims suffered a loss. It only needed to show that a violator realized a gain from his actions.

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