WTFC v. SEC, No. 12-70681 (9th Cir. 2014)
Annotate this CaseWorld Trade petitioned for review of the Commission's Order Sustaining Disciplinary Action Taken by FINRA, which upheld a variety of fines and sanctions against petitioners for their violations of Sections 5(a) and 5(c) of the Securities Act of 1933, 15 U.S.C. 77e(a), 77(e)(a), 77e(c), which prohibited the sale or offer of sale of a security without filing a registration statement. The court concluded that substantial evidence supported the Commission's finding that World Trade violated Sections 5(a) and 5(c) of the Act, and the court held that World Trade did not meet their duty of inquiry necessary to claim the Section 4(4) broker's exemption; and the court deferred to the Commission's discretionary determination as to the appropriate fines and sanctions because they were within FINRA's guidelines and were supported by evidence in the record. Accordingly, the court denied the petition for review.
Court Description: Securities / Fines and Sanctions. The panel denied a petition for review of the Securities and Exchange Commission’s Order upholding a variety of fines and sanctions against petitioners for violating Sections 5(a) and 5(c) of the Securities Act of 1933, which prohibit the sale or offer of a security without filing a registration statement. The panel held that substantial evidence supported the Commission’s finding that petitioners violated Sections 5(a) and 5(c) of the 1933 Securities Act. The panel also held that petitioners did not meet their duty of inquiry necessary to claim the Section 4(4) brokers’ exemption. The panel deferred to the Commission’s discretionary determination as to the appropriate fines and sanctions because they were within the Financial Industry Regulatory Authority’s guidelines and were supported by the evidence in the record.
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