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A federal judge in New York has ordered the founder of industrial manufacturer Cemtrex to pay nearly $9.7 million following renewed enforcement action by the U.S. Securities and Exchange Commission, after an appeals court sent the case back for reconsideration.

The U.S. Securities and Exchange Commission has won a revised judgment against Aron Govil, the founder of Cemtrex Inc., requiring him to pay approximately $6.6 million in disgorgement and $3 million in prejudgment interest. The ruling follows a remand from the U.S. Court of Appeals for the Second Circuit, which previously vacated an earlier disgorgement order.

U.S. District Judge J. Paul Oetken ruled that renewed disgorgement was warranted after finding that both Cemtrex and its investors suffered measurable financial harm from Govil’s conduct. The court concluded that Govil improperly diverted millions of dollars raised in securities offerings to personal accounts and unrelated ventures.

The case stems from allegations that between 2016 and 2017, Cemtrex raised roughly $13 million from investors through three securities offerings, claiming the funds would be used for corporate purposes such as acquisitions, debt repayment, and working capital. Regulators allege that more than $7.3 million was instead misused by Govil.

Govil previously entered into a settlement with the SEC in which he agreed to surrender certain Cemtrex securities and pay $1.5 million through a secured promissory note. The SEC later sought additional disgorgement, arguing that the settlement did not fully compensate harmed parties.

In 2023, the Second Circuit ruled that the district court failed to properly credit the value of the surrendered securities and questioned whether investor harm had been adequately established. The appellate court ordered the lower court to reassess the disgorgement calculation.

On remand, the SEC presented expert testimony concluding that the surrendered securities were worth significantly less than Govil claimed. The court accepted the SEC’s valuation, determining that most of the shares surrendered had little to no market value. As a result, Judge Oetken reduced the requested disgorgement amount by roughly $664,000 and imposed the revised $6.6 million figure.

The court also upheld the SEC’s request for $3 million in prejudgment interest, which was not contested.

Govil’s attorney criticized the ruling and signaled that further litigation is likely. The SEC declined to comment on the decision.

The case highlights continued scrutiny by regulators of alleged fraud involving special purpose acquisition companies and public offerings, particularly where investor funds are diverted for personal use.