USSEC v. Schooler, No. 16-55167 (9th Cir. 2018)
Annotate this Case
The Ninth Circuit affirmed the district court's holding that the general partnership interests at issue qualified as securities under federal law and that defendant violated federal securities law by selling unregistered securities and defrauding his investors. In this case, the general partnership interests at issue were stripped of the hallmarks of a general partnership and marketed as passive investments.
The panel held that, in light of defendant's death during the pendency of the appeal and the executor replaced as the name party, as well as intervening Supreme Court precedent, several aspects of the district court's judgment require vacatur and remand. Therefore, the panel vacated the civil penalty order and the disgorgement order, remanding for further proceedings.
Court Description: Securities Law. The panel affirmed in part, and vacated in part, the district court’s judgment in favor of the U.S Securities & Exchange Commission (“SEC”) in a civil enforcement action alleging federal securities law violations brought against Louis Schooler and his company Western Financial Planning Corporation. The panel affirmed the district court’s core holding that the general partnership interests at issue were investment contracts and qualified as securities under federal law, and that Louis Schooler violated federal securities law by selling unregistered securities and defrauding his investors. Louis Schooler died during the pendency of the appeal, and E. Andrew Schooler (as executor of the estate) replaced him as the named party on appeal. The panel vacated the civil penalty ordered by the district court in light of Louis ** The Honorable Stephen M. McNamee, Senior United States District Judge for the District of Arizona, sitting by designation. USSEC V. SCHOOLER 3 Schooler’s death. The panel also vacated and remanded the disgorgement order for reconsideration in light of the Supreme Court’s decision in Kokesh v. SEC, 137 S. Ct. 1635 (2017), which altered the analysis for determining the limitations period applicable to disgorgement. The panel affirmed the district court’s judgment in all other aspects. The panel affirmed entry of summary judgment for the SEC on its claims under Section 17(a) of the Securities Act of 1933, Section 10(b) of the Securities and Exchange Act of 1934, and Rule 10b-5 thereunder.
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.