Disgorgement Is Not Supposed to Be Punishment — The CFTC Forgot That
What Liu v. SEC Actually Requires
In Liu v. SEC, 591 U.S. 71 (2020), the Supreme Court held that disgorgement is a permissible equitable remedy, but only within strict limits:
- Disgorgement must be limited to net profits — not gross revenue
- Disgorgement cannot be used as a penalty
- Disgorgement should be returned to harmed investors — where none exist, the equitable basis is weakened
Apply those three requirements to the $209 million judgment in my case:
| Liu Requirement | Application to CFTC v. Ikkurty |
|---|---|
| Limited to net profits | $209M calculated on gross fund flows, not net profits |
| Cannot be punitive | Zero investor losses — no unjust enrichment at investors' expense |
| Must be returned to harmed investors | No harmed investors exist to receive the funds |
The Numbers the CFTC Does Not Want You to Focus On
- $5.9 million invested by 69 investors
- $29.3 million returned to those investors
- 397% return on investment
- $0 in investor losses
- 0 investor complaints
- 32 investors who formally asked the court to stop the case
The CFTC's own expert witness — retained and paid by the agency — testified that it was not a Ponzi scheme.
The Seventh Circuit's Decision
Appeal No. 24-2684 is now pending before the United States Court of Appeals for the Seventh Circuit. The question: whether the $209 million disgorgement award is consistent with Liu v. SEC, given that there are no harmed investors to receive the funds.
The Supreme Court in Liu was trying to prevent exactly what happened in this case: the use of disgorgement as a mechanism for punishment rather than restoration. When there are no investor losses, a $209 million disgorgement award is not a remedy. It is a penalty — and the law does not permit it.
Full case record: https://cftcsucks.com/262
Case No. 1:22-cv-02465 (N.D. Ill.) | Appeal No. 24-2684 | Liu v. SEC, 591 U.S. 71 (2020)