TREVOR SALIBA V. USSEC, No. 21-71114 (9th Cir. 2022)Annotate this Case
NMS Capital Group, LLC, which was wholly owned by Petitioner purchased MCA Securities, LLC, and changed its name to NMS Capital Securities. MCA, now NMS Securities, was a member of FINRA, a securities industry self-regulatory organization registered with the SEC. NMS Securities submitted a Continuing Member Application (“CMA”) to request approval of the change in ownership. FINRA discovered that NMS Securities had failed to disclose that another registered investment advisor owned by Petitioner, NMS Capital Asset Management, was being investigated by the SEC for deficiencies in its compliance with securities laws. FINRA imposed Interim Restrictions on NMS Securities. While the Interim Restrictions were in effect, Petitioner signed agreements with investment banking clients on behalf of NMS Securities and engaged in other activities. FINRA began an investigation into whether Petitioner had violated the Interim Restrictions, and a FINRA panel found that Petitioner had violated FINRA.
The Ninth Circuit denied in part and dismissed in part Petitioner’s challenge to the SEC’s determination. The panel held that because the court could review only a “final order” of the SEC under 15 U.S.C. Section 78y(a), there was no jurisdiction to review whether the SEC had substantial evidence to find that Petitioner violated FINRA Rules 8210 and 2010 by failing to produce and testify truthfully about his computers because the sanction for this violation was still pending before FINRA. However, the panel further held that the SEC’s determinations concerning the sanction of two industry bars did constitute a final order for the purposes of establishing jurisdiction. The panel denied Petitioner’s petition for review of the SEC’s decision to affirm those two sanctions.