SEC v. W. Anthony Huff, Sheri Huff, Relief , 455 F. App'x 882 ( 2012 )

[DO NOT PUBLISH]
IN THE UNITED STATES COURT OF APPEALS
FOR THE ELEVENTH CIRCUIT FILED
________________________ U.S. COURT OF APPEALS
ELEVENTH CIRCUIT
No. 11-10758 JANUARY 3, 2012
________________________ JOHN LEY
CLERK
D.C. Docket No. 0:08-cv-60315-RSR
SECURITIES & EXCHANGE COMMISSION,
llllllllllllllllllllllllllllllllllllllll Plaintiff - Appellee,
versus
W. ANTHONY HUFF,
SHERI HUFF, Relief Defendant,
MIDWEST MERGER MANAGEMENT, LLC, Relief Defendant,
llllllllllllllllllllllllllllllllllllllll Defendant -Appellants,
DANNY L. PIXLER, et al.,
Defendants.
________________________
Appeal from the United States District Court
for the Southern District of Florida
________________________
(January 3, 2012)
Before TJOFLAT, MARTIN and HILL, Circuit Judges.
PER CURIAM:
Defendant-Appellant Anthony Huff controlled a business scheme that
directed millions of dollars in proceeds from one company, Certified Services, Inc.
(“Certified”), to another company, Midwest Merger Management, LLC
(“Midwest”). The SEC filed this civil enforcement action against Huff, Sheri
Huff, and Midwest after Certified’s collapse. Following a bench trial at which
some of Huff’s former business partners testified as SEC witnesses, the district
court1 found Huff was “the moving force” behind numerous misrepresentations
and omissions in Certified’s SEC filings between November 2002 and November
2004, and hence liable for five counts of securities law violations. The court also
ordered Huff to disgorge $10.017 million, plus interest.
Huff argues on appeal that the factual findings underpinning the district
court’s liability determinations were clearly erroneous because of insufficient
evidence. He also claims that the court abused its discretion when it ordered
disgorgement because it relied on erroneous findings of fact and because it
improperly applied the law.
1
The parties consented to proceeding before the magistrate judge in accordance with 28
U.S.C. § 636(c). The magistrate judge’s decisions, which reflect capable work, will be referred
to as those of the district court.
2
This Court may not set aside the district court’s findings of fact unless they
are clearly erroneous. SEC v. Carriba Air, Inc., 681 F.2d 1318, 1323 (11th Cir.
1982). “Under clear error review, the district court’s determination must be
affirmed ‘so long as it is plausible in light of the record viewed in its entirety.’”
Commodity Futures Trading Comm’n v. Gibraltar Monetary Corp., Inc., 575 F.3d
1180, 1186 (11th Cir. 2009). We review “the district court’s findings regarding
the amount of ill-gotten gains to be disgorged for abuse of discretion.” SEC v.
Silverman, 328 F. App’x 601, 603 (11th Cir. 2009) (citing SEC v. Calvo, 378 F.3d
1211, 1217–18 (11th Cir. 2004)). “The SEC’s burden for showing the amount of
assets subject to disgorgement . . . is light: a reasonable approximation of a
defendant’s ill-gotten gains . . . Exactitude is not a requirement.” SEC v. ETS
Payphones, Inc., 408 F.3d 727, 735 (11th Cir. 2005) (quotation marks omitted).
Upon a thorough review of the briefs and the district court’s findings of
fact, and with the benefit of oral argument, we conclude that Huff has not carried
his heavy burden of showing either clear error or an abuse of discretion. In light
of the record viewed as a whole, the district court’s findings that Huff reviewed
and approved the SEC filings and was the moving force behind the filings’
misrepresentations and omissions is wholly plausible. Under clear error review,
we therefore must affirm Huff’s liability on Counts I–IV. See Gibraltar Monetary
3
Corp., Inc., 575 F.3d at 1186. Similarly, we hold that the district court did not
clearly err in finding that Huff “had the requisite power to directly or indirectly
control or influence the specific corporate policy which resulted” in the securities
law violations. Brown v. Enstar Group, Inc., 84 F.3d 393, 396 (11th Cir. 1996)
(quotation marks omitted). Accordingly, under Section 20(a) of the Securities
Exchange Act, we affirm Huff’s liability on Count V as a “controlling person” of
Certified. See 15 U.S.C. § 78t(a).
Finally, we hold that the district court’s approximation of Huff’s ill-gotten
gains was reasonable. The district court adequately supported its finding that the
material misrepresentations of fact and omissions of material fact in the SEC
filings played a critical role “in allowing Huff’s scheme to persist for as long as it
did and in permitting Huff to obtain improperly so many millions of dollars from
Certified.” Beyond this, in cases such as this one where the record shows the
fraud to have been “pervasive,” we cannot say it was an abuse of the district
court’s broad discretion to order that the profits associated with the fraudulent
scheme be disgorged. See Commodity Futures Trading Comm’n v. British Am.
Commodity Options Corp., 788 F.2d 92, 93–94 (2d Cir. 1986) (holding that where
fraud is “pervasive,” disgorgement of “all” profits is warranted). Huff attacks the
precise figure calculated by the district court, but in doing so, he forgets that
4
“[e]xactitude” in this context “is not a requirement.” ETS Payphones, 408 F.3d at
735. For this reason, we affirm the district court’s disgorgement order.
AFFIRMED.
5