Document ID: ./input/supremecourt_opinions/opinions/19pdf/18-1501_8n5a.pdf
Page Number: 18

Cite as:  591 U. S. ____ (2020) 

15 

Opinion of the Court 

Stat. 1844.  The statute provides that these sums may be
used to pay whistleblowers reporting securities fraud and 
to fund the activities of the Inspector General.  Ibid.  Here, 
the  SEC  has  not  returned  the  bulk  of  funds  to  victims, 
largely, it contends, because the Government has been un-
able to collect them.4 

The statute provides limited guidance as to whether the
practice of depositing a defendant’s gains with the Treasury
satisfies the statute’s command that any remedy be “appro-
priate or necessary for the benefit of investors.”  The equi-
table  nature  of  the  profits  remedy  generally  requires  the
SEC to return a defendant’s gains to wronged investors for 
their benefit.  After all, the Government has pointed to no
analogous  common-law  remedy  permitting  a  wrongdoer’s
profits to be withheld from a victim indefinitely without be-
ing disbursed to known victims.  Cf. Root, 105 U. S., at 214– 
215 (comparing the accounting remedy to a breach-of-trust 
action,  where  a  court  would  require  the  defendant  to  “re-
fund  the  amount  of  profit  which  they  have  actually  real-
ized”).

The  Government  maintains,  however,  that  the  primary
function of depriving wrongdoers of profits is to deny them
the fruits of their ill-gotten gains, not to return the funds to 
victims as a kind of restitution.  See, e.g., SEC, Report Pur-
suant to Section 308(C) of the Sarbanes Oxley Act of 2002,
p.  3,  n. 2  (2003)  (taking  the  position  that  disgorgement  is
not intended to make investors whole, but rather to deprive
wrongdoers of ill-gotten gains); see also 6 T. Hazen, Law of 
Securities Regulation §16.18, p. 8 (rev. 7th ed. 2016) (con-
cluding that the remedial nature of the disgorgement rem-
edy does not mean that it is essentially compensatory and 

—————— 

4  According  to  the  Government,  petitioners  “transferred  the  bulk  of
their misappropriated funds to China, defied the district court’s order to 
repatriate those funds, and fled the United States.”  Brief for Respondent 
36.