Securities & Exchange Commission v. Gerald Levine
462 F. App'x 717
9th Cir.2011Background
- This is an appeal from a district court’s summary judgment in an SEC enforcement action against the Levines.
- The district court held the Levines engaged in misrepresentations and omissions in the sale of securities.
- The Barcelona boiler room operated to initiate sales, with some sales consummated in Nevada.
- Marie Levine received completed stock purchase agreements and payments, closing the actual sales in Nevada.
- The Levines waived extraterritoriality arguments by not raising them below, but the court treated the argument as waived or resolved under Morrison.
- The district court’s disgorgement calculation was upheld as a reasonable approximation of unjust enrichment.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Do securities laws apply to the sales here? | Leviness argued extraterritorial scope; subject to securities laws per Morrison. | Sales outside the US not covered; Argued lack of territorial nexus. | Securities Act governs the sales; Nevada closing satisfies coverage. |
| Was Gerald Levine personally involved in misrepresentations? | Gerald directly engaged in material misrepresentations and omissions. | No credible denial of his involvement beyond impeachment attempts. | No reasonable jury could dispute Gerald’s direct involvement. |
| Did Marie Levine consummate the sales and omit disclosures? | Marie consummated the sales and failed to disclose material facts. | Credibility of deponent is contested; impeachment insufficient to create issues. | Marie consummated and undisclosed material information; no genuine issue. |
| Is the impeachment evidence enough to defeat summary judgment? | Deponent’s credibility should raise issues of fact. | Impeachment evidence does not create a genuine issue; credibility arguments waived. | Impeachment alone insufficient; issue waived or unresolved in plaintiff’s favor. |
| Is the disgorgement amount properly calculated? | SEC’s revenue-based calculation reasonably approximates unjust enrichment. | Levines offered no rebuttal evidence to SEC’s figure. | District court’s disgorgement calculation affirmed as reasonable. |
Key Cases Cited
- Abogados v. AT&T, Inc., 223 F.3d 932 (9th Cir. 2000) (waiver of argument when not raised below)
- Morrison v. National Australia Bank, Ltd., 130 S. Ct. 2869 (S. Ct. 2010) (extraterritorial reach of securities laws)
- In re Oracle Corp. Sec. Litig., 627 F.3d 376 (9th Cir. 2010) (direct involvement standard for misrepresentations)
- Grupo Gigante S.A. De C.V. v. Dallo & Co., Inc., 391 F.3d 1088 (9th Cir. 2004) (impeachment evidence not alone creating genuine issue)
- SEC v. Platforms Wireless Intern. Corp., 617 F.3d 1072 (9th Cir. 2010) (disgorgement must reasonably approximate unjust enrichment)