This is a penalty imposed by the SEC on profits made on insider trading. Although, in some cases it could be used for restiution to injured parties, its main purpose is to prevent profits on illegal stock transactions. In most cases, there is no known or provable injury to third parties, therefore no restitution. The government just keeps the money.

Defendants who settle SEC enforcement actions typically agree to pay disgorgement, civil penalties or both. <<<Disgorgement is the surrender of a defendant's "ill-gotten gains,">>> such as the profits made by a person who has engaged in insider trading. Civil penalties are additional fines imposed by the SEC. Using the insider trading example, a person settling an SEC action who made $100,000 in illegal profits would typically be required to pay an additional $100,000 as a "1X" civil penalty, i.e., one times the amount of the ill-gotten gains. Thus, the defendant would pay $100,000 in disgorgement plus a $100,000 civil penalty, for a total of $200,000.
http://slw.issproxy.com/securities_litigation_blo/2004/12/wh...


Disgorgement is a civil enforcement tool that enables courts to redress violations of the securities laws. In a disgorgement action, the SEC bears the ultimate burden of showing that the amount sought to be disgorged reasonably approximates the amount of unjust enrichment. Disgorgement must serve the purpose of preventing unjust enrichment. <<<The chief purpose of enforcing the ban against insider trading by ordering disgorgement is to make sure that wrongdoers do not profit from their wrongdoing>>>........
....Another case sheds some light on how the law may develop in this area. A court considered the SEC's request for an order allowing the recovery of <<both restitution and disgorgement>>> from several defendants who orchestrated a scheme to inflate share prices artificially. The SEC sought an order allowing recovery of both forms of relief, but only to the extent of the larger of the two amounts.
http://www.niclawgrp.com/memos/200003.html