SEC v. W Financial Group, L.L.C. ( 2011 )


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  •      Case: 10-10273     Document: 00511519693          Page: 1    Date Filed: 06/24/2011
    IN THE UNITED STATES COURT OF APPEALS
    FOR THE FIFTH CIRCUIT  United States Court of Appeals
    Fifth Circuit
    FILED
    June 24, 2011
    No. 10-10273                         Lyle W. Cayce
    Clerk
    SECURITIES AND EXCHANGE COMMISSION,
    Plaintiff-Appellee
    v.
    ADLEY H. ABDULWAHAB, also known as Adley Wahab,
    Defendant-Appellant
    v.
    VERNON T. JONES, JR.,
    Appellee
    Appeal from the United States District Court
    for the Northern District of Texas
    USDC No. 3:08-CV-499
    Before KING, WIENER, and CLEMENT, Circuit Judges.
    PER CURIAM:*
    Defendant-Appellant Adley H. Abdulwahab was an officer and employee
    of W. Financial Group, LLC. Plaintiff-Appellee, the Securities and Exchange
    Commission (the “SEC”), filed a complaint in 2008 against the W. Financial
    *
    Pursuant to 5TH CIR . R. 47.5, the court has determined that this opinion should not
    be published and is not precedent except under the limited circumstances set forth in 5TH CIR .
    R. 47.5.4.
    Case: 10-10273       Document: 00511519693         Page: 2     Date Filed: 06/24/2011
    No. 10-10273
    Group, Abdulwahab, and his former business partners, alleging various counts
    of securities fraud. Ultimately, the district court granted the SEC’s motion for
    summary judgment.           Abdulwahab appeals the district court’s summary
    judgment as well as a contempt order issued against him, and its denial of
    additional fees to an accounting firm hired to provide an accounting of one of W.
    Financial Group’s accounts.         We affirm the summary judgment and reject
    Abdulwahab’s two other issues on appeal which present serious justiciability
    problems.
    In the course of the district court proceeding, Abdulwahab consented to the
    entry of an interlocutory judgment which specified, inter alia, that he would “be
    precluded from arguing that the federal securities laws were not violated as
    alleged in the [SEC’s] complaint.” He now asserts that the language of the
    interlocutory judgment allows him to “argue” that he was not personally liable
    for the violations of securities law and that the district court therefore erred in
    relying on the interlocutory judgment as a basis for summary judgment. As the
    interlocutory judgment explicitly incorporates as true the allegations in the
    SEC’s complaint — including allegations that Abdulwahab was directly
    responsible for the securities violations — we conclude that the district court did
    not err when it granted summary judgment in favor of the SEC.
    Because of Abdulwahab’s repeated failures to comply with its orders
    regarding his assets, the district court ultimately held Abdulwahab in civil
    contempt.     He challenges that contempt order in the instant appeal.                   His
    challenge, however, raises an issue of justiciability. As we have noted before,
    “[g]enerally, the discharge of a civil contempt order by the person held in
    contempt moots any appeal of the contempt judgment.”1 Because we hold that
    the contempt order in the instant case is civil and accept the parties’
    1
    In re Hunt, 
    754 F.2d 1290
    , 1293 (5th Cir. 1985) (citing Thyssen, Inc. v. S/S Chuen On,
    
    693 F.2d 1171
    , 1173 n.3 (5th Cir. 1982)).
    2
    Case: 10-10273        Document: 00511519693          Page: 3     Date Filed: 06/24/2011
    No. 10-10273
    representations that Abdulwahab has discharged all of his obligations, we
    conclude that his appeal on this issue is moot.
    Finally, Abdulwahab challenges the district court’s decision to deny
    payment of additional fees from the receivership to Max M. Wayman &
    Associates (“MWA”), an accounting firm responsible for preparing a report to
    assist the district court in understanding the flow of the funds of W. Financial
    Group. Abdulwahab, however, lacks standing to pursue this appeal because he
    cannot demonstrate an injury-in-fact to himself stemming from the denial of
    MWA’s fees, at least not one that rises above a speculative level. “[A] party
    generally may not appeal a district court's order to champion the rights of
    another, and even ‘[a]n indirect financial stake in another party's claims is
    insufficient to create standing on appeal.’” 2
    As the district court correctly relied on the interlocutory judgment when
    it granted summary judgment to the SEC, we affirm that judgment.
    Additionally, we dismiss Abdulwahab’s appeal of the contempt order and the
    denial of fees to MWA because the former is moot and Adbulwahab lacks
    standing to appeal the latter.
    AFFIRMED in part; DISMISSED in part.3
    2
    Rohm & Hass Tex., Inc. v. Ortiz Bros. Insulation, Inc., 
    32 F.3d 205
    , 208 (5th Cir. 1994)
    (alteration in original) (quoting Morrison-Knudsen Co. v. CHG Int’l, Inc., 
    811 F.2d 1209
    , 1214
    (9th Cir. 1987)).
    3
    Abdulwahab shall bear the costs of this appeal.
    3