The U.S. Court of Appeals for the Ninth Circuit handed down an order on Aug. 6 “reversing and remanding a $15.5 million judgment,” Law360 reported, in favor of Larson O’Brien’s clients.
Partners Stephen G. Larson and Hilary Potashner are representing the defendants in SEC v. Yang et al., an SEC enforcement action that began in 2015 over an alleged EB-5 visa scam. After the defendants “entered into a consent agreement with the SEC acknowledging their liability for the scheme,” the SEC asked U.S. District Judge Stephen V. Wilson “to slap [the defendants] with civil penalties of $6.06 million each and order the defendants to disgorge the funds they’re alleged to have fraudulently transferred,” the article reported.
“Judge Wilson granted the $15.5 million judgment the SEC sought, leading [the defendants] to appeal in March 2019, arguing that the lower court failed to exercise discretion in setting the amount of civil penalties and instead rubber-stamped the SEC’s requests.”
Law360’s coverage of the order on Aug. 6 stated, “The appellate panel asked [Judge Wilson] take another look at the judgment…saying the lower court didn’t explain why it imposed the $6 million penalties against [the defendants]…The order also noted that the U.S. Supreme Court’s June 22 ruling in Liu v. SEC, which required the securities regulator to only seek disgorgement that ‘does not exceed a wrongdoer’s net profits and is awarded for victims,’ created new parameters that may not have been considered” at the time of the judgment.
Read the full article by Dean Seal of Law360 covering the order here.