Supreme Court SEC Disgorgement Case Highlights Challenge of Distributing Assets Back to Investors

SEC Win on Core Enforcement Tool Would Still Leave Payback Gaps

The SEC appears likely to retain its power to recover money snatched by fraudsters in a case before the US Supreme Court, but there’s still a wide gap between what the Wall Street regulator collects and what it can return to any investors who end up on the losing end.

The specifics of how that money is actually clawed back and doled out to investors drew sharp questioning at oral arguments.

A “reasonably good collection agent” would make a concerted effort to get more money back in victims’ pockets instead of a Treasury account, Justice Neil Gorsuch said, taking issue with the discrepancies he perceived in the Securities and Exchange Commission’s annual disgorgement order amounts compared to distributions.

The task of distributing disgorged assets back to investors isn’t straightforward, however, often requiring complex calculations, receivership structures, and time to locate eligible fraud victims, former SEC attorneys said.

“There are numerous scenarios where it is simply not feasible to take disgorged funds from a defendant and distribute them to an identifiable group of victims,” said Mark L. Williams, a founding partner at Williams & Serio LLC and former SEC senior trial attorney.

The dispute central to last month’s high court arguments go to the heart of the market cop’s enforcement strategy.

Why Almost Everyone Loses—Except a Few Sharks—on Prediction Markets

Kalshi and its competitor Polymarket advertise themselves as life-changing tools for regular people—implying everyone has a fair chance to score. “I was about to be unable to pay my rent, but I got two years of rent through Kalshi’s predictions,” gushed one woman in a Kalshi ad on TikTok.

But for most users the reality is nothing like that.

Instead, casual traders are bleeding cash while a small number of sophisticated pros—including trading firms with access to vast streams of data—eat their lunch, according to a Journal analysis of platform data and interviews with traders.

On Polymarket, the Journal found, 67% of profits go to just 0.1% of accounts. That means less than 2,000 accounts netted a total of nearly half a billion dollars. The Journal analyzed 1.6 million Polymarket accounts that have traded since November 2022. There are at least 2.3 million total accounts on the site.

SEC Litigation Enforcement Should Give Firms Their Day in Court

… If the SEC truly wants to encourage fairness and meaningful judicial review, it must reconsider how the bad-actor provisions operate.

Several reforms are available. Automatic disqualifications could be limited primarily to individuals rather than corporations and their affiliated entities. Corporate disqualifications could be triggered only by misconduct involving senior executives.

The rules could be restricted to violations involving fraudulent intent. Disqualifications could be tied more closely to the specific business activity involved—for example, only specified misconduct in managing mutual funds might trigger restrictions on the management of mutual mutuals.

The SEC also could adopt bright-line, judicially enforceable criteria that entitle companies to waivers as a matter of right when certain conditions are satisfied, reducing reliance on discretionary judgments.

Congress itself could play a role. Many corporate disqualifications embedded in the securities laws would make sense as court-imposed remedies after the SEC proves they’re warranted. They make far less sense as automatic penalties triggered by almost any violation. Congress could amend these provisions to require the SEC to demonstrate that corporate disqualification is justified based on specific conduct.

Any of these reforms would help restore balance between regulators and the regulated. More importantly, they would strengthen the adversarial process, encourage principled enforcement decisions, and improve the administration of the nation’s securities laws.

What Explains the Rise in CEO Age?

CEO age has risen sharply over the past several decades. In a recent NBER working paper, we document this striking trend, examine associated trends in career profiles and discuss potential explanations. The evidence suggests that changes in demographics, education, or tenure cannot by themselves account for the age increase. What can? Our results point to firms placing more value on diversified managerial experience in response to operating environments that have become increasingly uncertain and complex. We also establish that prospective CEOs broaden their skill portfolios as demand for generalist skills rises.

Crypto is at the bottom of U.S. voters’ priorities heading into the midterm, CoinDesk survey shows

U.S. voters placed cryptocurrencies toward the bottom of a list of their highest priorities for the upcoming midterm election.

Just 1% of respondents said they ranked crypto as their top concern, according to a survey of 1,000 randomly selected registered U.S. voters, though other responses revealed a wider view of the technology as an important political issue.

The survey was conducted near the end of April by Public Opinion Strategies on CoinDesk’s behalf, as part of CoinDesk’s coverage of the 2026 U.S. midterm election. The survey was evenly split between Republican and Democrat respondents (41% of respondents identified with each party to some degree), with a credibility interval of plus or minus 3.53%.