In the 1923 case of Cunningham, Trustee of Ponzi v. Brown et al., the US Supreme Court dealt with a dispute arising from Charles Ponzi's infamous fraudulent investment scheme. The trustee for Ponzi's bankruptcy estate sought to recover payments made by Ponzi to certain investors before his fraud was discovered, arguing that these were "preferential transfers" under bankruptcy law and should be returned for distribution among all creditors. However, the court ruled in favor of the investors who had received their principal back before the scheme collapsed. The justices held that since those particular individuals did not have any knowledge about Ponzi’s fraudulent activities at time they invested or when they received their money back, they could keep what they had withdrawn from their investments prior to bankruptcy proceedings being initiated against Mr.Ponzi.

In the dissenting opinion for Cunningham, Trustee of Ponzi, v. Brown et al., Justice Holmes argued that the majority's decision to allow certain investors to keep their profits from Charles Ponzi's fraudulent scheme was inconsistent with previous rulings and unfair to other victims. He believed that all money obtained through fraud should be returned and distributed evenly among those who were defrauded. According to him, it is unjust for some individuals who happened to withdraw their investments early on in a fraudulent scheme should not benefit at the expense of others who did not have such opportunity or foresight. The principle of equity demands that all victims share equally in whatever assets can be recovered from a fraudster’s estate.