S.E.C. v. Youmans, 83-5054
| Decision Date | 08 March 1984 |
| Docket Number | No. 83-5054,83-5054 |
| Citation | 729 F.2d 413 |
| Parties | Fed. Sec. L. Rep. P 99,708 SECURITIES AND EXCHANGE COMMISSION, Plaintiff-Appellant, v. Neal Rountree YOUMANS, et al., Defendants, Thomas Wendell Holliday, Defendant-Appellee. |
| Court | U.S. Court of Appeals — Sixth Circuit |
Ira Paull (lead), Securities & Exchange Commission, Washington, D.C., Jacob H. Stillman, Barton S. Sacher, Securities & Exchange Commission, Atlanta Regional Office, Atlanta, Ga., Elisse B. Walter (argued), Robert Mills, Washington, D.C., for plaintiff-appellant.
James W. Gentry, Jr. (argued), Jeff Boehm, Chattanooga, Tenn., for defendant-appellee.
Before ENGEL and CONTIE, Circuit Judges, and PECK, Senior Circuit Judge.
The Securities and Exchange Commission (SEC) appeals from a district court order which declined to enjoin Holliday, the defendant, from violating certain provisions of the securities laws. Although the district court, 543 F.Supp. 1292, found that both Holliday and a co-defendant, Chepul, had violated section 17(a)(1), (2) and (3) of the Securities Act of 1933 and sections 10(b), 13(a) and 14(a) of the Securities Exchange Act of 1934, the court refused to impose an injunction against Holliday under either section 20 of the Securities Act or section 21 of the Securities Exchange Act. The court did enjoin Chepul from violating the securities laws in the future. We reverse the district court's decision not to impose injunctive relief against Holliday.
The district court opinion contains an excellent recitation of facts that will not be repeated here. This case essentially involves events transpiring prior to the bankruptcy of Hamilton Bancshares, Inc. (HBI) a bank holding company, and the failure of Hamilton National Bank (HNB), HBI's largest asset. It will suffice to say that the district court found that both Holliday and Chepul had responsibility in their respective jobs with HBI for filing reports required by the SEC. Both committed, with scienter, numerous and serious violations of the securities laws over a four-year period.
Before moving to the merits, two preliminary points must be considered. First, Holliday contends that the SEC's notice of appeal was untimely filed. Since another panel of this court has ruled that the SEC filed its appeal in timely fashion, this claim must be rejected under the law of the case doctrine. Second, Holliday argues that the district court improperly concluded that he violated the securities laws. He has not, however, cross-appealed on this point. Since filing a notice of cross-appeal is jurisdictional where an appellee wishes to attack part of a final judgment in order to enlarge his rights or to reduce those of his adversary, see Morley Construction Co. v. Maryland Casualty Co., 300 U.S. 185, 57 S.Ct. 325, 81 L.Ed. 593 (1937); Ford Motor Credit Co. v. Aetna Casualty & Surety Co., 717 F.2d 959, 962 (6th Cir.1983), this court will not consider Holliday's arguments concerning the findings of securities laws violations. The only issue properly before this court is whether the district court erred in declining to impose injunctive relief against Holliday.
The district court's decision is reviewable under an abuse of discretion standard. Securities and Exchange Commission v. Bonastia, 614 F.2d 908, 913 (3d Cir.1980); Securities and Exchange Commission v. Blatt, 583 F.2d 1325, 1334-35 (5th Cir.1978). In applying this standard, we note that injunctions based upon the securities laws are primarily intended to protect the investing public from future misconduct. See, e.g., Bonastia, 614 F.2d at 912. Since the basis for such injunctions is statutory rather than equitable, "the standards of the public interest not the requirements of private litigation measure the propriety and need for injunctive relief." Securities and Exchange Commission v. Management Dynamics, Inc., 515 F.2d 801, 808 (2d Cir.1975). Thus, proof of irreparable harm and inadequacy of legal remedies need not be shown. Id.
The test that the district court was required to apply was whether the SEC had shown a reasonable and substantial likelihood that Holliday, if not enjoined, would violate the securities laws in the future. See Securities and Exchange Commission v. Washington County Utility District, 676 F.2d 218, 227 (6th Cir.1982); Bonastia, 614 F.2d at 912; Blatt, 583 F.2d at 1334; Management Dynamics, 515 F.2d at 808. The following factors are relevant in determining the likelihood of future violations:
To continue reading
Request your trial
-
U.S. S.E.C. v. Sierra Brokerage Services Inc.
...occupation will present opportunities, or lack thereof, for future violations; and (7) defendant's age and health. SEC v. Youmans, 729 F.2d 413, 415 (6th Cir.1984). No one factor is dispositive and a court should weigh each factor in light of the surrounding circumstances of the violation. ......
-
U.S. v. Philip Morris Inc.
...the propensity for future violations based on the totality of circumstances." First City, 890 F.2d at 1228 (citing SEC v. Youmans, 729 F.2d 413, 415 (6th Cir.1984)). The Government has clearly and overwhelmingly satisfied each of the three First City factors. First, Defendants cannot possib......
-
U.S. Sec. & Exch. Comm'n v. John J. Bravata, Richard J. Trabulsy, Antonio M. Bravata, BBC Equities, LLC
...and substantial likelihood that [the defendant], if not enjoined, [will] violate the securities laws in the future.” SEC v. Youmans, 729 F.2d 413, 415 (6th Cir.1984) (citing SEC v. Washington County Utility District, 676 F.2d 218, 227 (6th Cir.1982)). The Sixth Circuit has held that the fac......
-
U.S. v. Philip Morris U.S. Inc.
...the propensity for future violations based on the totality of circumstances.” First City, 890 F.2d at 1228 (citing SEC v. Youmans, 729 F.2d 413, 415 (6th Cir.1984)).United States v. Philip Morris, Inc., 116 F.Supp.2d 131, 148 (D.D.C.2000). “In addition, the requisite ‘reasonable likelihood’......