SEC v. Patel case brief summary
61 F.3d 137 (1995)
CASE FACTS
Plaintiff Securities and Exchange Commission brought an action against defendant director for violations of federal securities laws, which resulted in defendant being permanently enjoined from future violations, ordered to disgorge illegal profits, and barred from serving as an officer or director of any public company. Defendant appealed. The court affirmed that portion of the judgment enjoining future violations and ordering the disgorgement of avoided losses. As disgorgement of profits acquired through securities fraud was an equitable remedy it needed only to be a reasonable approximation of profits causally connected to the violation.
DISCUSSION
CONCLUSION
The court affirmed that portion of the judgment enjoining future federal securities law violations and ordering the disgorgement of illegal profits made by defendant director as the result of his sales of stock prior to making required disclosures. The court reversed that portion of the judgment imposing a lifetime ban on defendant's services as an officer or director of any public company and remanded the matter for further consideration.
Suggested Study Aids For Securities Regulation Law
Securities Regulation in a Nutshell, 10th (Nutshell Series)
Securities Regulation: Examples & Explanations, 5th Edition
Securities Regulations: The Essentials
61 F.3d 137 (1995)
CASE SYNOPSIS
Defendant director appealed from a
judgment by the United States District Court for the Southern
District of New York, which permanently enjoined him from future
violations of federal securities laws, ordered him to disgorge
illegal profits, and barred him from serving as an officer or
director of any public company as a result of an action brought by
plaintiff Securities and Exchange Commission for violations of
federal securities laws.CASE FACTS
Plaintiff Securities and Exchange Commission brought an action against defendant director for violations of federal securities laws, which resulted in defendant being permanently enjoined from future violations, ordered to disgorge illegal profits, and barred from serving as an officer or director of any public company. Defendant appealed. The court affirmed that portion of the judgment enjoining future violations and ordering the disgorgement of avoided losses. As disgorgement of profits acquired through securities fraud was an equitable remedy it needed only to be a reasonable approximation of profits causally connected to the violation.
DISCUSSION
- The court held that the district court did not abuse its discretion in calculating defendant's avoided losses because there was a rational basis for the market assumptions it made and the dates it chose.
- The court disagreed with the finding regarding the likelihood of future misconduct as a justification for the imposition of a lifetime ban.
- The court reversed so much of the judgment as imposed a lifetime injunction on defendant's services as an officer or director and remanded the matter for further consideration.
CONCLUSION
The court affirmed that portion of the judgment enjoining future federal securities law violations and ordering the disgorgement of illegal profits made by defendant director as the result of his sales of stock prior to making required disclosures. The court reversed that portion of the judgment imposing a lifetime ban on defendant's services as an officer or director of any public company and remanded the matter for further consideration.
Suggested Study Aids For Securities Regulation Law
Securities Regulation in a Nutshell, 10th (Nutshell Series)
Securities Regulation: Examples & Explanations, 5th Edition
Securities Regulations: The Essentials
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