Falcon Trading Group, Ltd. v. S.E.C., 96-1052
| Decision Date | 20 December 1996 |
| Docket Number | No. 96-1052,96-1052 |
| Citation | 102 F.3d 579 |
| Parties | , 65 USLW 2456 FALCON TRADING GROUP, LTD. and Glen T. Vittor, Petitioners v. SECURITIES AND EXCHANGE COMMISSION, Respondent. |
| Court | U.S. Court of Appeals — District of Columbia Circuit |
On Petition for Review of Orders of the Securities and Exchange Commission.
Thomas J. McGonigle, Washington, DC, argued the cause for the petitioners. Wallace L. Timmeny and Erica S. Palim, Washington, DC, were on brief.
Jacob H. Stillman, Associate General Counsel, Securities and Exchange Commission, Washington, DC, argued the cause for the respondent. Paul Gonson, Solicitor, Richard H. Walker, General Counsel, Randall W. Quinn, Senior Litigation Counsel, and Allan A. Capute, Special Counsel to the Solicitor, were on brief. Leslie E. Smith, Senior Litigation Counsel, Washington, DC, entered an appearance.
Before: EDWARDS, Chief Judge, SILBERMAN and HENDERSON, Circuit Judges.
Opinion for the court filed by Circuit Judge HENDERSON.
The petitioners challenge a decision of the Securities and Exchange Commission (SEC or Commission) imposing sanctions on them for violating the Rules of Fair Practice (Rules) of the National Association of Securities Dealers (NASD). Both petitioners contend that (1) they were deprived of their right to counsel because their lawyers were not afforded sufficient time to prepare for their NASD hearing and (2) the SEC's decision was unlawfully issued by less than a quorum of the Commission. We hold that the SEC acted within its discretion in denying the petitioners' motions for continuance and adjournment, without violating their right to counsel, and that its decision was lawfully rendered by a quorum of the Commission as defined by its regulations.
On February 22, 1994, after a substantial investigation, NASD's Market Surveillance Committee (MSC) filed a complaint charging Falcon Trading Group Ltd. (Falcon) and its president Glen T. Vittor with refusing to honor two commitments to purchase large blocks of stock in violation of article iii, section 1 of the NASD Rules. The MSC also charged Falcon and Vittor with allowing Philip Gurian, whose NASD registration had previously been revoked, to participate in trades on Falcon's behalf in violation of the same section and of NASD's interpretation of article v, section 1 of the NASD Rules. The complaint further charged Gurian with failing to appear as requested during the NASD investigation in violation of article iv, section 5 and article iii, section 1 of the NASD Rules.
On March 8, 1994, MSC issued a "Notice of Hearing" to be held on April 25, 1994 in Fort Lauderdale, Florida, the location requested by Leonard H. Bloom, counsel for the respondents below. On March 17, 1994 NASD wrote Bloom "to confirm ... conversations during the week of March 7, wherein you informed me of your availability for the hearing set to commence April 25, 1994." Joint Appendix (JA) 47.
Some six weeks before the hearing date, during settlement negotiations, Bloom determined that Falcon's interests were in conflict with Vittor's and Gurian's and that he therefore could not represent all three clients. On March 30, 1994, Ira Lee Sorkin notified MSC that he was assuming representation of the two individual respondents and requested an adjournment until July 11, 1994 because of scheduling conflicts and the "need for time to familiarize [him]self with the facts at issue." JA 56. By letter dated April 7, 1994 the NASD staff expressed opposition to any postponement and on April 11, 1994 Sorkin filed a motion for adjournment with the MSC hearing panel, again citing other commitments and the need for additional preparation time. By letter dated April 15, 1994, Sorkin was informed that the motion had been denied.
On April 18, 1994 Sorkin filed another motion for adjournment, this time until June 6, 1991, or, in the alternative, for 30 days to obtain new counsel for his clients, stating "I cannot adequately represent my clients in the absence of an adjournment for the simple fact that I will have no time to prepare." JA 92. The same day Bloom filed a motion for continuance or, alternatively, for 45 days to allow Falcon to retain new counsel, asserting he would be "unable to devote the time required during this week to prepare for the hearing now scheduled on April 25 and 26, 1994," because his wife had broken her leg the day before and because he himself was scheduled for surgery on April 23, 1994. JA 95. He further informed NASD that in the event of a denial his firm "w[ould] be unable to effectively represent its client and therefore [would have] no alternative but to withdraw." JA 95-96. Both motions were denied on April 19, 1994 and Bloom immediately withdrew with Falcon's consent.
On April 20, 1994 Vittor as Falcon's president filed an "emergency motion" on its behalf, seeking a 45-day adjournment because of Bloom's withdrawal and its need to find new counsel. JA 101. The same day Sorkin, through his associate Philip Raible, filed a motion for an "emergency continuance" until June 6 or, alternatively, for time for his clients to retain new counsel, citing his previous motions and supporting materials. The motion also asserted: "In the event this matter is not settled, this firm cannot adequately represent its clients for the simple fact that there has been no time to prepare." JA 111. On April 25, 1994, NASD's "National Business Conduct Committee" (NBCC) denied Sorkin's motion "as interlocutory." JA 155. Apparently, no official action was taken on Falcon's motion.
The hearing began, as scheduled, on April 25. Raible, Sorkin's associate, attended and immediately requested a continuance "for a short period of time to enable us to prepare for and attend a hearing which will result in a full and fair disclosure of the facts, and at which principles of due process will obtain." JA 171. The MSC hearing panel denied the motion on the ground that "the respondents and others involved have had plenty of opportunity to prepare," given the "fairly straightforward" nature of the evidence and the "timely" denial of the earlier motions. JA 175-76. Raible then asked for "a minute to pack up," consulted briefly with his clients and left. JA 176. The hearing proceeded with none of the respondents represented by counsel.
On June 27, MSC issued a decision finding the three respondents had violated the NASD Rules as charged in the complaint and sanctioning Falcon and Vittor with censures, suspensions and fines. The decision also explained that MSC's "determination to proceed" with the April 25 hearing was "the result of [its] consideration of the unjustifiable aspects of Respondents' requests in the context of the (i) serious and repetitive nature of the violations alleged, (ii) the relative simplicity of the issues involved, (iii) the prior confirmations of the hearing date, (iv) the ample notice provided to Respondents, and (v) the potential for precedent contrary to the public interest." JA 908. All three respondents below appealed MSC's decision to NBCC. On March 1, 1995, NBCC affirmed the findings of rule violations in their entirety but reduced the sanctions. Falcon and Vittor appealed to the SEC. By opinion and order issued December 21, 1995 the SEC, with only two Commissioners then in office, sustained the NBCC decision in all respects. Vittor and Falcon have petitioned the court for review of the SEC's decision on two grounds.
First, the petitioners argue they were deprived of the right to counsel by NASD's denial, upheld by the SEC, of the motions for adjournment and continuance. We find no such deprivation.
The SEC, like a trial judge, enjoys broad discretion in deciding whether to grant a continuance. Markowski v. SEC, 34 F.3d 99, 105 (2d Cir.1994) (citing Morris v. Slappy, 461 U.S. 1, 12, 103 S.Ct. 1610, 1616-17, 75 L.Ed.2d 610 (1983)); Richard W. Suter, 47 S.E.C. 951, 963 (1983). Therefore, " 'only an unreasoning and arbitrary insistence upon expeditiousness in the face of a justifiable request for delay violates the right to the assistance of counsel.' " Suter, 47 S.E.C. at 963 (quoting Morris v. Slappy, 461 U.S. at 11, 103 S.Ct. at 1616). That was not the case here. NASD had good reason to proceed with the hearing. To accommodate the...
To continue reading
Request your trial
-
Northeastern Land Services, Ltd. v. N.L.R.B.
...sufficient. Id. at 123. Further, courts have upheld analogous approaches by other administrative agencies. See Falcon Trading Group, Ltd. v. SEC, 102 F.3d 579, 582 (D.C.Cir.1996) (upholding SEC's promulgation of a new quorum rule to allow it to continue to operate in the face of multiple va......
-
New Process Steel, L.P. v. N.L.R.B.
...in other court decisions allowing administrative agencies to operate with a quorum of remaining members. See Falcon Trading Group, Ltd. v. SEC, 102 F.3d 579, 582 (D.C.Cir.1996) (SEC allowed to create quorum rules permitting the commission to operate with only two of five members); Railroad ......
-
Laurel Baye Healthcare of Lake Lanier v. N.L.R.B.
...cites to two cases from this court: Railroad Yardmasters of America v. Harris, 721 F.2d 1332 (D.C.Cir.1983), and Falcon Trading Group, Ltd. v. SEC, 102 F.3d 579 (D.C.Cir.1996). In Yardmasters, we held that the two sitting members of the National Mediation Board (NMB) could properly delegate......
-
Jolley v. Merit Sys. Prot. Bd., 2015-3187
...unfilled. We see no reason to find lack of legal authorization for the rule under which the Board acted. See Falcon Trading Grp., Ltd. v. SEC, 102 F.3d 579, 582 (D.C. Cir. 1996); LaPeyre v. FTC, 366 F.2d 117, 122 (5th Cir. 1966).CONCLUSION For the foregoing reasons, we affirm the Board's ju......