Ussec v. Inteligentry, Ltd

• Court: Court of Appeals for the Ninth Circuit
• Decided: January 30, 2019
• Docket: 17-16644
• Status: Unpublished

Opinion

NOT FOR PUBLICATION FILED UNITED STATES COURT OF APPEALS JAN 30 2019 MOLLY C. DWYER, CLERK U.S. COURT OF APPEALS FOR THE NINTH CIRCUIT

U.S. SECURITIES & EXCHANGE No. 17-16644 COMMISSION, D.C. No. 2:13-cv-00344-RFB-NJK Plaintiff-Appellee,

v. MEMORANDUM*

INTELIGENTRY, LTD; et al.,

Defendants,

and

JOHN P. ROHNER,

Defendant-Appellant.

Appeal from the United States District Court for the District of Nevada Richard F. Boulware, II, District Judge, Presiding

Submitted January 28, 2019**

Before: TROTT, SILVERMAN, and TALLMAN, Circuit Judges.

John P. Rohner appeals pro se from the district court’s summary judgment in

* This disposition is not appropriate for publication and is not precedent except as provided by Ninth Circuit Rule 36-3. ** The panel unanimously concludes this case is suitable for decision without oral argument. See Fed. R. App. P. 34(a)(2). a civil enforcement action brought by the Securities and Exchange Commission

(“SEC”) alleging violations of federal securities laws. We have jurisdiction under

28 U.S.C. § 1291. We review de novo. SEC v. CMKM Diamonds, Inc., 729 F.3d

1248, 1255 (9th Cir. 2013). We affirm.

The district court properly granted summary judgment on the SEC’s claims

under § 5(a) and (c) of the Securities Act of 1933 (“Securities Act”) because there

is no genuine dispute of material fact as to whether Rohner sold unregistered

securities in interstate commerce. Also, Rohner failed to show that the securities

were exempt from registration. See 15 U.S.C. § 77e(a), (c) (prohibiting the offer or

sale of an unregistered security in interstate commerce); CMKM Diamonds, 729

F.3d at 1255 (elements of a prima facie case for a violation of § 5).

The district court properly granted summary judgment on the SEC’s claims

under § 17(a)(1) of the Securities Act, § 10(b) of the Securities Exchange Act of

1934, and Rule 10b–5 because the SEC demonstrated that Rohner knowingly or

recklessly made material misstatements or omissions in connection with the offer

or sale of securities in interstate commerce. See 15 U.S.C. § 77q(a)(1) (prohibiting

the use of “any device, scheme, or artifice to defraud” in connection with the offer

or sale of any security); 15 U.S.C. § 78j(b) (prohibiting any deceptive practice in

connection with the purchase or sale of any security); 17 C.F.R. § 240.10b–5(b)

(prohibiting material misrepresentations in connection with the purchase or sale of

2 17-16644 a security); SEC v. Phan, 500 F.3d 895, 907–08 (9th Cir. 2007) (elements of

§ 17(a), § 10(b), and Rule 10b–5 violations); see also SEC v. Dain Rauscher, 254

F.3d 852, 856 (9th Cir. 2001) (“Scienter is satisfied by recklessness.” (citation

omitted)).

The district court correctly exercised its discretion in granting a permanent

injunction against Rohner because the evidence patently showed “a reasonable

likelihood of future violations of the securities laws.” SEC v. Murphy, 626 F.2d

633, 655 (9th Cir. 1980); see also SEC v. Fehn, 97 F.3d 1276, 1295–96 (9th Cir.

1996) (setting forth standard of review and factors relevant to “predicting the

likelihood of future violations” including “the degree of scienter involved” and

“the defendant’s recognition of the wrongful nature of his conduct” (citation

The district court correctly exercised its discretion in adopting the SEC’s

disgorgement figure because the SEC met its initial burden to show that the figure

“reasonably approximates the amount of unjust enrichment” and Rohner failed to

bear his burden to show otherwise. SEC v. Platforms Wireless Intern. Corp., 617

F.3d 1072, 1096 (9th Cir. 2010) (further noting that a “district court has broad

equity powers to order the disgorgement of ill-gotten gains obtained through the

violation of the securities laws.” (citation omitted)).

Rohner’s challenges to the district court’s preliminary injunction are moot

3 17-16644 because Rohner does not challenge any provision incorporated into the district

court’s permanent injunction. See Burbank–Glendale–Pasadena Airport Auth. v.

City of Los Angeles, 979 F.2d 1338, 1340 n.1 (9th Cir. 1992) (“Once an order of

permanent injunction is entered, the preliminary injunction merges with it and

appeal may be had only from the order of permanent injunction.”).

The district court correctly exercised its discretion by invoking its inherent

equitable power to appoint a receiver. See SEC v. Capital Consultants, LLC, 397

F.3d 733, 738 (9th Cir. 2005) (standard of review); SEC v. Wencke, 622 F.2d 1363,

1369 (9th Cir. 1980) (discussing federal court’s authority to appoint a receiver in

SEC actions to enforce federal securities laws).

We reject as without merit Rohner’s contentions that he was entitled to a

jury trial. See In re Slatkin, 525 F.3d 805, 811 (9th Cir. 2008) (“[A] summary

judgment proceeding does not deprive the losing party of its Seventh Amendment

right to a jury trial.”).

We do not consider issues or arguments not specifically and distinctly raised

and argued in the opening brief, or arguments and allegations raised for the first

time on appeal. See Padgett v. Wright, 587 F.3d 983, 985 n.2 (9th Cir. 2009).

AFFIRMED.

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