SEC v. Bankosky

Defendant appealed from a post-judgment order barring him from acting as an officer or director of a public company for ten years, pursuant to section 21(d)(2) of the Securities Exchange Act of 1934, 15 U.S.C. 78u(d)(2). The SEC accused defendant of insider trading and, after the entry of a consent judgment, in which defendant neither admitted nor denied the allegations in the complaint, the SEC moved for an officer and director bar pursuant to section 21(d)(2). The court held that the district court did not err in relying on the six Patel factors in this case. The 2002 Amendment, by lowering the threshold of misconduct required to impose the officer and director bar, did not undermine the usefulness of the Patel factors, which indicated where evidence of unfitness might be found in a defendant's conduct. In light of the circumstances presented, the district court reasonably determined that a ten year ban was warranted and, therefore, did not abuse its discretion. Accordingly, the court affirmed the judgment. View "SEC v. Bankosky" on Justia Law