Articles Posted in US Court of Appeals for the District of Columbia Circuit

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Petitioner challenged the Commission's decision to sustain FINRA's decision to permanently bar him from membership and from working with any of its affiliated members. The DC Circuit held that the Commission reasonably grounded its decision in the record, which extensively evidenced petitioner's acts of misappropriation, his prolonged efforts to cover his tracks through falsehoods, and his repeated and deliberate obstruction of investigators. The court remanded with respect to the permanent bar on petitioner's registration with FINRA and affiliation with its members for the Commission to determine in the first instance whether Kokesh v. SEC, 137 S. Ct. 1635 (2017), has any bearing on his case. View "Saad v. SEC" on Justia Law

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After the SEC determined that petitioner's conduct violated various securities-fraud provisions, the DC Circuit upheld the Commission's findings that the statements in petitioner's emails were false or misleading and that he possessed the requisite intent. However, the court held that petitioner did not "make" false statements for purposes of Rule 10b-5(b) of the Securities Act of 1934, 15 U.S.C. 78j, because petitioner's boss, and not petitioner himself, retained "ultimate authority" over the statements. The court reasoned that, while petitioner's boss was the "maker" of the false statements, petitioner played an active role in perpetrating the fraud by folding the statements into emails he sent directly to investors in his capacity as director of investment banking, and by doing so with an intent to deceive. Therefore, petitioner's conduct infringed the other securities-fraud provisions he was charged with violating. The court set aside sanctions and remanded for the Commission to reassess the appropriate remedies. Accordingly, the court granted the petition for review in part, vacated the sanctions, and remanded. View "Lorenzo v. SEC" on Justia Law

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OCC, a clearing agency that facilitates trades in options and other financial instruments, developed a Capital Plan in an attempt to boost its capital reserves and to alter how fees and refunds were calculated. The DC Circuit remanded to the SEC, which approved OCC's proposed change to its rules, for further proceedings. In this case, the change was subject to approval by the SEC, which granted approval without itself making the findings and determinations prescribed by the Securities Exchange Act of 1934. The court held that, because the SEC effectively abdicated its responsibility to OCC, this did not represent the kind of reasoned decisionmaking required by either the Exchange Act or the Administrative Procedure Act. View "Susquehanna International Group v. SEC" on Justia Law