The Scheme: Twenty Stocks, Six Million Dollars, Zero Remorse

Ongkaruck Sripetch did not work alone. According to the SEC’s complaint, he and fourteen other defendants “worked in concert to engage in numerous fraudulent schemes and other violations of the federal securities laws, involving at least 20 penny stock companies.” Penny stocks are the dark alleys of the investment world: low-priced, thinly traded shares that are extremely easy to manipulate and extremely hard for ordinary investors to evaluate.

The SEC charged Sripetch with six counts of securities fraud under the Securities Act of 1933 and the Securities Exchange Act of 1934, plus one count of selling unregistered securities. Together, the defendants “obtained at least $6 million ($6,000,000 — enough to pay the annual salaries of over 100 public school teachers) in illicit sale proceeds from this illegal conduct, while harming retail investors who purchased shares during the schemes.”

Sripetch also received a 21-month sentence of incarceration in a related criminal case. The SEC, citing that sentence, declined to pursue additional monetary civil penalties on top of the disgorgement order. This means the only financial consequence the civil court handed down was the order to return what he stole — which he immediately tried to fight.

He Already Went to Prison. Then He Tried to Keep the Money Anyway.

In 2023, Sripetch consented to the entry of judgment against him. As part of that agreement, he agreed that the court would order “disgorgement of ill-gotten gains” and that the allegations of the SEC’s complaint would be “accepted as and deemed true by the Court.” Then, almost immediately, he turned around and fought the disgorgement order anyway — arguing on a legal technicality that the SEC had not proven his victims suffered measurable financial losses.

The SEC originally requested that Sripetch return $4,115,365.88 ($4,115,365.88 — roughly what a median American household would earn across 70 full years of work) in ill-gotten gains. The district court ordered the lesser amount of $2,251,923.16 (enough to cover a year’s rent for about 625 average American renter households) in net profits, along with $1,051,353.77 (enough to pay for approximately 175 children’s full four-year public university educations) in prejudgment interest.

The Non-Financial Ledger: What This Fraud Actually Cost People

The Investor Who Did Everything Right and Still Got Burned

The people who bought penny stocks in Sripetch’s schemes were not reckless speculators with millions to burn. Penny stocks attract everyday people chasing a small opportunity in a market that has never really been designed for them. These are the folks who saved up a few hundred or a few thousand dollars, saw what looked like a legitimate opportunity, and trusted that the market’s rules applied equally to everyone. They did not know that the prices they were paying were artificially inflated by a coordinated fraudulent scheme running across at least twenty companies simultaneously.

The Dignity of Being Told Your Harm Doesn’t Count

Sripetch’s core legal argument was breathtaking in its audacity: because his victims could not prove, in the precise way his lawyers demanded, that they lost money on paper, they were not legally “victims” at all. Think about what that means in plain English. A group of people trusted a market that had been secretly rigged against them, handed over their money, and then stood in court while the man who rigged it argued that they had no claim because the rigging was too sophisticated to leave a clean paper trail of losses. The court system was the only place they could turn, and even there, a well-funded legal team tried to argue them out of the room.

The Second Circuit Court of Appeals — which covers New York, the financial capital of the world — had already ruled in favor of this exact argument in a different case (SEC v. Govil). That ruling, which the Ninth Circuit specifically rejected here, said that an investor who “suffered no pecuniary harm as a result of the fraud is not a victim.” Under that logic, a fraudster who runs a sophisticated enough scheme — one where the damage is diffuse, hard to trace, or absorbed by market fluctuations — gets to keep every dollar he made from running it.

Twenty Companies. Coordinated. Industrial-Scale Betrayal.

The scope of what Sripetch and his co-defendants built deserves to be said out loud. This was not a single bad trade or one impulsive moment of greed. Fifteen defendants worked together across at least twenty separate penny stock companies to run “numerous fraudulent schemes.” That is a coordinated, sustained, industrial-scale operation designed to extract money from retail investors — ordinary people, not hedge funds or institutional traders — over an extended period. The SEC’s complaint describes them “harming retail investors who purchased shares during the schemes,” language that represents hundreds or thousands of individual moments when a real person handed over real money based on a lie.

The non-financial cost of that kind of betrayal compounds. People who get burned in investment fraud do not just lose money. They lose trust — in markets, in institutions, in the idea that the rules protect them. Many stop investing entirely, which locks them out of the primary legal wealth-building tool available to working people in the United States. Others double down trying to recover losses, which exposes them to more risk. The psychological literature on fraud victimization consistently documents shame, self-blame, and social isolation — feelings that Sripetch’s legal argument, which essentially told these people their harm did not count, would only amplify.

There is also something corrosive that happens to public trust when a convicted fraudster — a man already sentenced to 21 months in prison — is allowed to stand before a federal court and argue that his victims were not victims. Even if the argument fails, as it did here, the fact that it is a viable legal strategy tells every future fraudster exactly what loophole to aim for. The Ninth Circuit’s ruling closes that loophole in its jurisdiction. But the Second Circuit’s ruling, covering Wall Street itself, still leaves it wide open. That split is not just a legal technicality. It is a map of where fraud can still pay.

Legal Receipts: The Court’s Own Words, Verbatim

On What Disgorgement Actually Means

“A person is not permitted to profit by his own wrong… When a ‘conscious wrongdoer’ is ‘enriched by misconduct’—defined as ‘an actionable interference by the defendant with the claimant’s legally protected interests’—’the unjust enrichment… is the net profit attributable to the underlying wrong.’ ‘The object of restitution in such cases is to eliminate profit from wrongdoing while avoiding, so far as possible, the imposition of a penalty.'” Restatement (Third) of Restitution and Unjust Enrichment §§ 3, 51 — as cited by the Ninth Circuit in this opinion

On Why Victims Don’t Need to Prove a Dollar Loss

“While the paradigm case of unjust enrichment is one in which the benefit on one side of the transaction corresponds to an observable loss on the other, the consecrated formula ‘at the expense of another’ can also mean ‘in violation of the other’s legally protected rights,’ without the need to show that the claimant has suffered a loss.” Restatement (Third) of Restitution and Unjust Enrichment § 1 cmt. a — as cited by the Ninth Circuit in this opinion

“It is blackletter law that a plaintiff seeking an accounting for profits need not suffer a financial loss. Requiring a financial loss for disgorgement claims would effectively ensure that wrongdoers could profit from their unlawful acts as long as the wronged party suffers no financial loss. We reject that notion.” Pender v. Bank of America Corp., 788 F.3d 354, 366 (4th Cir. 2015) — as cited by the Ninth Circuit in this opinion

On Why Congress Deliberately Treated SEC Cases Differently from Private Lawsuits

“Congress imposed an economic loss requirement in private securities actions to address ‘abusive litigation by private parties.’ But as SEC civil enforcement actions are not subject to abusive litigation by private parties, Congress did not extend the economic loss requirement to such actions. Reading an economic loss requirement into § 78u(d)(5) would undermine, rather than effectuate, the statutory scheme.” Ninth Circuit Court of Appeals, United States SEC v. Sripetch, No. 24-3830 (September 3, 2025)

The Footnote About the Watch — and What It Actually Means for Fraud Victims

“Suppose, for example, a thief takes plaintiff’s $30 watch and sells it for $40. The $40 the plaintiff receives in restitution can be understood as restoring the status quo ‘because the fund of $40 is perceived as a gain produced by plaintiff’s property, a gain plaintiff was entitled to make… [A] [p]laintiff entitled to recover the watch is equally entitled to recover whatever is produced by or substituted for the watch,’ even if this recovery is ‘far superior to compensatory damages.'” Dobbs & Roberts, Law of Remedies — as cited in Footnote 7 of the Ninth Circuit’s opinion in United States SEC v. Sripetch

Societal Impact Mapping

Economic Inequality: How Fraud Loopholes Are a Rich Person’s Tool

Penny stock fraud is not random. It targets the bottom rungs of the investor ladder — people who cannot afford the diversified portfolios and financial advisors that protect wealthy investors from this kind of manipulation. The retail investors who bought shares in Sripetch’s twenty fabricated or manipulated companies were not Goldman Sachs portfolio managers running risk models. They were individuals who saw an opportunity in a corner of the market that wealthy, sophisticated investors largely avoid because they have better options. Fraud in the penny stock space is, structurally, a transfer of wealth from working people to those willing to exploit them.

The legal argument Sripetch made — that his victims must prove a specific, measurable pecuniary loss before he has to give the money back — is precisely the kind of argument that only benefits the party with superior legal resources. Victims of diffuse, coordinated securities fraud rarely have the financial records, legal expertise, or individual standing to document their losses with the precision that argument demands. Sophisticated fraudsters, by contrast, can design their schemes to obscure that paper trail. The Second Circuit’s rule (which the Ninth Circuit rejected here) rewarded that sophistication. It created a legal safe harbor that was, in practical terms, accessible only to the most coordinated and well-advised financial criminals.

The Ninth Circuit’s ruling establishes that the SEC can force fraudsters to disgorge profits based on what the fraudster gained — not on the victims’ ability to document their own losses. This is a fundamentally more equitable standard for people who were targeted precisely because they lack the resources to prove harm in granular financial detail. The $2,251,923.16 ($2,251,923.16 — enough to provide a year of emergency housing for over 300 families) ordered in this case represents money that flows back toward victims rather than remaining in the pocket of the man who extracted it through fraud.

Public Health: The Hidden Toll of Financial Trauma

The source material documents that Sripetch’s operation harmed “retail investors who purchased shares during the schemes” across at least twenty companies. While the court documents frame this in financial terms, the documented public health consequences of investment fraud extend well beyond lost dollars. Research on financial trauma consistently links fraud victimization to elevated rates of depression, anxiety, chronic stress-related illness, and in severe cases, suicidal ideation. People who lose money they cannot afford to lose — in schemes that specifically target people operating with thin financial margins — carry that loss in their bodies as well as their bank accounts.

The legal battle in this case added another layer of harm. The years between the 2020 filing of the SEC’s complaint and the 2025 appellate ruling represent a period during which victims knew a fraudster was fighting to keep the profits from their exploitation. That sustained uncertainty — watching the legal system entertain arguments that your harm did not legally exist — is its own form of injury that no disgorgement order can fully address.

The “Cost of a Life” Metric

What Now? Here’s What You Can Actually Do

The People Responsible, By Role

The named defendants in this case include:

• Ongkaruck Sripetch — primary appellant; already sentenced to 21 months incarceration in a related criminal case; now ordered to repay $2,251,923.16 plus $1,051,353.77 in interest.
• Amanda Flores, Brehnen Knight, Andrew McAlpine, Ashmit Patel, Michael Wexler, Dominic Williams — named co-defendants in the SEC complaint.
• Corporate entities named: Adtron Inc. (also known as Stockpalooza.com), ATG Inc., DOIT Ltd., Doji Capital Inc., King Mutual Solutions Inc., Optimus Prime Financial Inc., Orca Bridge, Redline International, UAIM Corporation.

Watchlist: Agencies That Need to Hear From You

• U.S. Securities and Exchange Commission (SEC) — file complaints about securities fraud at investor.gov or SEC.gov/tcr
• Financial Industry Regulatory Authority (FINRA) — reports penny stock manipulation at finra.org
• FBI Internet Crime Complaint Center (IC3) — financial fraud reports at ic3.gov
• Consumer Financial Protection Bureau (CFPB) — broader financial fraud complaints at consumerfinance.gov/complaint
• State Securities Regulators — every state has one; find yours at nasaa.org

The Circuit Split Still Standing

The Ninth Circuit rejected the Second Circuit’s rule in this case — but the Second Circuit’s rule still governs Wall Street. In states covered by the Second Circuit (New York, Connecticut, Vermont), the legal standard for disgorgement still effectively requires fraud victims to prove measurable pecuniary harm. That split needs congressional action to close permanently. Contact your federal representatives and demand a uniform national standard that removes the pecuniary harm requirement from SEC disgorgement proceedings across all circuits.

Mutual Aid and Local Organizing

Securities fraud targeting retail investors is a community issue, and community defense is a real option. Connect with local investor protection groups, mutual aid networks that assist fraud victims, and legal aid organizations that offer free consultations to people who have lost money in investment schemes. The AARP Fraud Watch Network, the National Center for Victims of Crime, and state-level legal aid societies are starting points. Sharing verified information about fraud schemes within your community — especially in communities where English is not the primary language, where financial literacy resources are scarce, and where penny stock fraud specifically concentrates — is direct, meaningful action.