Supreme Court to Consider SEC’s Power to Win Funds for Cheated Investors

Disgorgement case is latest challenge to agency’s enforcement tactics

WASHINGTON—The Supreme Court on Tuesday will weigh arguments in a case that could build new barriers to regulators’ ability to win back money for fleeced investors.

The appeal is one of the biggest challenges so far to the Securities and Exchange Commission’s enforcement division, whose oversight tactics have been under attack for years at the high court. The case turns on the claim that courts for decades have ordered defendants in SEC cases to give back money earned illegally despite lacking authority from Congress to order...