SEC v. Novinger, No. 21-10985 (5th Cir. 2022)
Annotate this Case
Defendants settled a civil enforcement action that the Securities and Exchange Commission (“SEC”) brought against them for alleged securities violations. The SEC barred Defendants from denying that they engaged in the charged conduct as a condition of settlement (the “no-deny policy”). The parties executed consent agreements containing provisions to that effect and submitted them to the district court, which entered final judgments. Five years later, Defendants filed a motion under Rule 60(b)(4) and 60(b)(5) seeking relief from the final judgments to the extent that they incorporated the no-deny policy. They argued that the no-deny policy violates their First Amendment and due process rights. The district court denied the motion, and Defendants appealed.
The Fifth Circuit affirmed the district court’s ruling holding that Defendants are not entitled to relief based on any alleged First Amendment Violations. Defendants argue that, in denying their motion for Rule 60(b)(4) relief, the district court adopted a cribbed view of Espinosa that the Fifth Circuit rejected in Brumfield. The court wrote that Defendants read Brumfield too broadly. That decision expressly recognized that “a judgment is void under Rule 60(b)(4) only if the court lacked jurisdiction of the subject matter, or of the parties, ‘or it acted in a manner inconsistent with due process of law.’”
Next, Defendants asserted that the judgments here should “be set aside as violating the public interest under Rule 60(b)(5).” They argue that retaining the no-deny policy in the judgments harms the public interest. The court explained that Defendants failed to meet their burden of establishing that changed circumstances warrant relief.
Some case metadata and case summaries were written with the help of AI, which can produce inaccuracies. You should read the full case before relying on it for legal research purposes.
This site is protected by reCAPTCHA and the Google Privacy Policy and Terms of Service apply.