Securities and Exchange Commission v. Dishinger
1:22-cv-03258
N.D. Ga.Apr 3, 2023Background
- SEC sued Ann Dishinger alleging she learned of Equifax’s nonpublic 2017 data breach while working for a PR firm retained by Equifax, tipped her boyfriend L. Palmer, and he (and downstream recipients) bought put options that later profited when Equifax’s stock fell.
- Dishinger did not trade herself; SEC seeks injunction, disgorgement, and civil penalties for insider trading.
- Dishinger moved to dismiss under Rule 12(b)(6) (challenging scienter and alleged benefit), and alternatively argued improper venue and lack of personal jurisdiction (seeking transfer to N.D. Ill.).
- The court treated personal jurisdiction as a difficult question and considered venue/transfer under 28 U.S.C. § 1404(a) instead of definitively resolving jurisdiction.
- The court found venue in the Northern District of Georgia improper because the substantial events occurred in Illinois and ordered transfer to the Northern District of Illinois.
- The court denied the motion to dismiss (declining to address the Rule 12(b)(6) merits because it transferred the case).
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Personal jurisdiction | SEC: court has jurisdiction; Dishinger hasn’t shown litigation in N.D. Ga. is unreasonable | Dishinger: all relevant contacts (knowledge, disclosure, trades) occurred in Illinois; jurisdiction would offend fair play | Court did not resolve jurisdictional sufficiency; proceeded to venue/transfer analysis instead |
| Venue (28 U.S.C. § 1391) | SEC: venue proper in N.D. Ga. because Equifax HQ is in Atlanta and related acts occurred there | Dishinger: substantial part of events occurred in Illinois; only Georgia connection is Equifax HQ | Court: SEC failed to show a substantial part of events occurred in Georgia; venue improper in N.D. Ga. |
| Transfer (28 U.S.C. § 1404(a)) | SEC: transfer shifts inconvenience to SEC; some Equifax witnesses/documents are in Atlanta | Dishinger: convenience of witnesses, documents, parties, and locus of operative facts favor N.D. Ill. | Court: balanced §1404(a) factors and granted transfer to N.D. Ill. |
| Failure to state a claim (Rule 12(b)(6)) | SEC: complaint adequately pleads scienter and required elements | Dishinger: complaint fails to plead scienter or any personal benefit | Motion to dismiss denied; court declined to reach merits because it transferred the case |
Key Cases Cited
- Ashcroft v. Iqbal, 556 U.S. 662 (establishes plausibility standard for Rule 12(b)(6))
- Bell Atl. Corp. v. Twombly, 550 U.S. 544 (pleading must contain plausible claim to survive dismissal)
- Jenkins Brick Co. v. Bremer, 321 F.3d 1366 (venue: substantial part of events/omissions test)
- Manuel v. Convergys Corp., 430 F.3d 1132 (factors for § 1404(a) transfer analysis)
- Republic of Panama v. BCCI Holdings (Luxembourg) S.A., 119 F.3d 935 (courts should address jurisdiction before merits; discussion of jurisdictional sequencing)
- United States ex rel. v. Mortgage Invs. Corp., 987 F.3d 1340 (plaintiff’s burden to establish prima facie personal jurisdiction)
- Stubbs v. Wyndham Nassau Resort & Crystal Palace Casino, 447 F.3d 1357 (burden shifts when defendant submits affidavits opposing jurisdiction)
- U.S. S.E.C. v. Carrillo, 115 F.3d 1540 (due process minimum contacts standard in SEC enforcement context)