SEC v. Crawford, No. 16-1405 (8th Cir. 2017)
Annotate this CaseThe SEC filed suit against Crawford for acting as unregistered brokers in violation of section 15(a) of the Securities Exchange Act of 1934, 15 U.S.C. 78o(a). The district court granted the SEC summary judgment, permanently enjoined Crawford, and ordered disgorgement. The Supreme Court announced in Kokesh v. SEC, No. 16-529, slip op. at 11 (U.S. June 5, 2017), that disgorgement, as it is applied in SEC enforcement proceedings, operates as a penalty under 28 U.S.C. 2462. Because any claim for disgorgement in an SEC enforcement action must be commenced within five years of the date the claim accrued, the SEC concedes that section 2462 barred it from seeking disgorgement. Therefore, the Eighth Circuit vacated the disgorgement order. The court also held that the district court did not err in finding section 2462 did not bar the SEC's suit for the injunction, and the district court did not err in rejecting Crawford's finder exception or finder defense. Accordingly, the court affirmed in all other respects.
Court Description: Benton, Author, with Shepherd, Circuit Judge, and Strand, District Judge] Civil case - Securities and Exchange Act. In an action by the SEC alleging defendants acted as unregistered brokers and seeking a permanent injunction and disgorgement, the claim for disgorgement was time barred under the Supreme court's June 5, 2017 decision in No. 16-529 Kokesh v. SEC, and the district court's disgorgement order is vacated; under the facts of this case, the district court's injunctive relief is not a penalty and the request for injunctive relief was not time-barred by 28 U.S.C. Sec. 2462; the SEC did not err in determining that defendant Crawford was acting as an unregistered broker rather than as a "finder," and the district court did not err in rejecting his finder exception or finder defense.
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