BC court unfreezes funds for defendants fighting SEC disgorgement order
The regulator has already won in the United States. On June 20, 2024, a US court held two of the defendants jointly and severally liable for disgorgement of US$42,503,547. The US Court of Appeals for the First Circuit upheld that judgment on February 19, 2026, and a seven-judge panel refused to reconsider it on May 1, 2026.
Now the two men want to petition the US Supreme Court for a writ of certiorari – roughly the American equivalent of seeking leave to appeal – and to defend related US criminal charges that are not currently active. Because their assets are frozen, they asked the BC court to release funds for both, after exhausting other sources.
Timing shaped the outcome. On June 4, 2026, the US Supreme Court issued a decision, Sripetch, that closed off one of their planned arguments – that the SEC must prove investors lost money before disgorgement can be ordered. After the ruling, one defendant cut his certiorari fee request in half, to US$22,500.
What remained was a narrower fight over whether disgorgement can be imposed jointly and severally rather than tied to each person’s own gain. The judge set a “very low” bar for whether that appeal was arguable, agreed with the SEC that the odds were long, but found the point was still worth putting to the court.
The SEC had urged the court not to let the defendants drain frozen funds on petitions it said were unlikely to succeed, arguing any release had to be a reasonable amount. The court released US$22,500 and US$37,500 for the certiorari petitions and US$50,000 for each defendant’s criminal defence – well below the six-figure retainers their US lawyers had floated. The judge accepted sworn evidence, reviewed in a sealed hearing, that neither man could pay from unfrozen assets.
