When Stolen Money Isn’t Technically a “Loss”
It’s a story you’ve probably heard before, maybe from a neighbor or a relative. Someone with a little bit of savings, not a Wall Street wizard but a regular person, decides to take a chance.
They hear about a “can’t-miss” opportunity in a small, up-and-coming company—a penny stock, they call it—and they invest, dreaming of a little extra security for retirement or a college fund for the kids. Then, the bottom drops out. The stock is worthless, the company vanishes, and the money is just… gone.
For the retail investors caught in the schemes of Ongkaruck Sripetch (thank god I’m not turning this article into an explainer video because I haven’t the foggiest how to pronounce his name) and his associates, this story was all too real. They were the targets of a sprawling fraud, a coordinated effort that manipulated at least 20 different penny stock companies to generate more than $6 million in illegal profits for the scammers.
But when the law finally caught up with Sripetch, his defense raised a truly audacious question: If you can’t prove exactly how much these people lost, did I really steal anything at all?
The $6 Million Question
Here’s how the scheme worked. Sripetch and fourteen others allegedly worked as a team.
They would target these tiny, thinly traded companies and, through a series of fraudulent actions, trick the market. Everyday investors, seeing what looked like a hot stock, would pour their money in. Once the price was high enough, Sripetch and his crew would cash out, leaving those investors holding the bag as the stock price collapsed.
The Securities and Exchange Commission (SEC), the cops of the financial world, eventually brought the hammer down.
They charged Sripetch with six counts of securities fraud and one count of selling unregistered securities. Sripetch, facing the evidence, agreed to a judgment against him. The court ordered him to “disgorge”—a fancy legal term for “give back”—the more than $2.2 million in net profits he personally made from the scheme, plus another $1 million in interest.
But Sripetch fought back on that order. His argument was a piece of legal jujitsu. He claimed the SEC couldn’t force him to return his profits unless they could prove his victims suffered a specific, dollar-for-dollar “pecuniary harm”.
In other words, if an investor bought a manipulated stock for $1 and it was really worth 50 cents, but they later sold it for 60 cents, did they really lose money? Hmmm??? It’s a cynical argument that attempts to hide a massive theft behind the chaotic reality of the stock market. He was hoping to keep the money he made by exploiting a legal loophole.
A Path to Accountability
This timeline maps the key legal moments in holding Ongkaruck Sripetch accountable for the securities fraud scheme.
| Date | Event |
| 2020 | The U.S. Securities and Exchange Commission (SEC) files a civil enforcement action against Sripetch and 14 other defendants for fraudulent penny stock schemes. |
| 2023 | Sripetch consents to the entry of a judgment against him, agreeing that the court will order disgorgement of his ill-gotten gains. |
| April 8, 2024 | The U.S. District Court orders Sripetch to disgorge over $2.2 million in net profits and pay over $1 million in prejudgment interest. |
| May 14, 2025 | Sripetch’s appeal is argued before the Ninth Circuit Court of Appeals, where he claims disgorgement is improper without proof of investors’ financial loss. |
| September 3, 2025 | The Ninth Circuit Court of Appeals issues its opinion, affirming the disgorgement order and rejecting Sripetch’s argument. The court holds that the SEC is not required to prove investors suffered pecuniary harm. |
| This is the end | of the table ^.^ |
A System on Trial
This wasn’t just about Ongkaruck Sripetch anymore. His case exposed a deep and unsettling question about our financial system. Does the law protect the profits of a wrongdoer if the victim’s loss is hard to calculate? Is justice about compensating the victim, or is it about making sure crime doesn’t pay?
For years, the SEC has operated on a simple principle grounded in common sense: you are not allowed to profit from your own wrongdoing. The entire point of disgorgement is to remove the financial incentive for fraud. The SEC’s decision was ultimately about discouraging future shitty acts like this. It’s about stripping the unjust enrichment from the person who broke the law.
If fraudsters know they can keep their winnings by muddying the waters about their victims’ exact losses, what’s to stop them doing so?
Sripetch’s lawyers were banking on a recent court decision from the Second Circuit that supported their view. But the SEC pushed back, arguing that a scam is a scam, and stolen profits are stolen profits, regardless of the victim’s final balance sheet. To them, being a “victim” means having your legally protected rights violated—like the right to a fair and transparent market—not just having a negative entry in your bank account.
The Verdict: Crime Doesn’t Pay After All
Ultimately, the Ninth Circuit Court of Appeals sided with common sense. In a clear and forceful opinion, the court stated that the SEC does not need to show investors suffered a specific pecuniary harm to force a fraudster to give back their ill-gotten gains.
The court dismantled Sripetch’s argument piece by piece. They clarified that disgorgement is about the wrongdoer’s profits, not the victim’s losses. It’s a remedy designed to restore the status quo by taking away the money that should never have been made in the first place. To let Sripetch keep his millions would be a reward for a crime that was too messy to neatly untangle. It would, as one court put it, “ensure that wrongdoers could profit from their unlawful acts”.
Sripetch was already sentenced to 21 months in a related criminal case. Now, he has to pay back the money, too. The court affirmed that the system’s primary goal in these cases is to make one thing crystal clear to anyone thinking of running a similar scam: you will not profit from it.
What Real Justice Looks Like
Sripetch’s case is a victory for every small-time investor who has ever been burned by a stock market scheme. It reinforces the power of our regulators to pursue justice that is practical and effective. Real justice isn’t always a perfectly balanced scale where every penny lost is returned. Sometimes, justice is simply taking the money out of the thief’s hands.
This ruling should hopefully send a powerfully deterrent message. It tells future scammers that they can’t hide behind complex accounting or the inherent volatility of the market.
If you lie, if you cheat, and if you steal from the public, the law will not only punish you—it will take back every single cent you made while doing it. The best way to protect investors is to make sure there is no reward for defrauding them.
All factual claims in this article are sourced from the court document UNITED STATES SECURITIES AND EXCHANGE COMMISSION V. SRIPETCH, No. 24-3830 (9th Cir. 2025).
Here is a press release from the SEC’s website about this scam: https://www.sec.gov/enforcement-litigation/litigation-releases/lr-26332
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