U.S. Securities & Exchange Commission v. Bellwether Venture Capital Fund I, Inc. ( 2015 )

FILED
NOT FOR PUBLICATION JUL 02 2015
MOLLY C. DWYER, CLERK
UNITED STATES COURT OF APPEALS U.S. COURT OF APPEALS
FOR THE NINTH CIRCUIT
U.S. SECURITIES & EXCHANGE No. 12-56753
COMMISSION, agent of Timothy S.
McCole, D.C. No. 8:10-cv-01632-JVS-FFM
Plaintiff - Appellee,
MEMORANDUM*
v.
BELLWETHER VENTURE CAPITAL
FUND I, INC.; STRATEGY PARTNERS,
LLC,
Defendants,
and
OMAR A. RIZVI,
Defendant - Appellant.
Appeal from the United States District Court
for the Central District of California
James V. Selna, District Judge, Presiding
*
This disposition is not appropriate for publication and is not precedent
except as provided by 9th Cir. R. 36-3.
Submitted June 22, 2015**
Before: HAWKINS, GRABER, and W. FLETCHER, Circuit Judges.
Suspended California attorney Omar A. Rizvi appeals pro se from the
district court’s summary judgment in the Securities & Exchange Commission’s
(“SEC”) civil enforcement action alleging that Rizvi violated various federal
securities laws. We have jurisdiction under 28 U.S.C. § 1291. We review de
novo, SEC v. Platforms Wireless Int’l Corp., 617 F.3d 1072, 1085 (9th Cir. 2010),
and we affirm.
The district court properly granted summary judgment against Rizvi on the
SEC’s claims under §§ 5(a), (c) of the Securities Act of 1933 (“Securities Act”)
because Rizvi failed to rebut the SEC’s evidence that Rizvi sold or offered for sale
securities without prior registration with the SEC, and no exemption from
registration applied. See 15 U.S.C. §§ 77e(a), (c) (prohibiting the offer or sale of
an unregistered security in interstate commerce); SEC v. CMKM Diamonds, Inc.,
729 F.3d 1248, 1255 (9th Cir. 2013) (elements of a prima facie case for a violation
of § 5); SEC v. Murphy, 626 F.2d 633, 645-46 (9th Cir. 1980) (concluding that
offerings of limited partnership sales should be integrated for the purposes of
**
The panel unanimously concludes this case is suitable for decision
without oral argument. See Fed. R. App. P. 34(a)(2). Accordingly, Rizvi’s request
for oral argument, set forth in his reply brief, is denied.
2 12-56753
determining whether the offering was exempt from registration).
The district court properly granted summary judgment on the SEC’s claims
under §§ 17(a)(2), (3) of the Securities Act because Rizvi failed to rebut the SEC’s
evidence that he negligently misrepresented material information concerning
Bellwether Venture Capital Fund I, Inc.’s election to operate as a business
development company. See 15 U.S.C. § 77q(a)(2-3) (prohibiting material
misstatements and practices that would operate as a fraud or deceit upon the
investor in connection with the offer or sale of any securities in interstate
commerce); SEC v. Phan, 500 F.3d 895, 908 (9th Cir. 2007) (establishing a
violation of §§ 17(a)(2) and (3) requires a showing of negligence).
The district court properly granted summary judgment on the SEC’s claims
under § 17(a)(1) of the Securities Act, §10(b) and Rule 10b-5 of the Securities
Exchange Act of 1934 (“Securities Exchange Act”) because Rizvi failed to rebut
the SEC’s evidence that he recklessly misrepresented the composition of the
management board of Strategy Partners, LLC in an offering circular. See 15
U.S.C. § 77q(a)(1) (prohibiting a person in the offer or sale of a security “to
employ any device, scheme, or artifice to defraud”); 15 U.S.C. § 78j(b)
(prohibiting any deceptive practice in connection with the purchase or sale of any
security); 17 C.F.R. § 240.10b-5(b) (prohibiting material misrepresentations in
3 12-56753
connection with the purchase or sale of a security); Phan, 500 F.3d at 907-08
(elements of § 17(a), § 10(b), and Rule 10b-5 violations); see also Gebhart v. SEC,
595 F.3d 1034, 1041-42 (9th Cir. 2010) (scienter requirement of § 10(b) and Rule
10b-5 may be established by “recklessness,” which is “an extreme departure from
the standards of ordinary care, . . . which presents a danger of misleading buyers
or sellers that is either known to the defendant or is so obvious that the actor must
have been aware of it” (citation and internal quotation marks omitted)).
We do not consider issues or arguments not specifically and distinctly raised
and argued in the opening brief, or arguments and allegations raised for the first
time on appeal. See Padgett v. Wright, 587 F.3d 983, 985 n.2 (9th Cir. 2009) (per
curiam).
Rizvi’s motion to file a late reply brief, filed on April 15, 2014, is granted.
The Clerk shall file the reply brief received on April 15, 2014.
The SEC’s motion to file a late opposition, filed on May 16, 2014, is
granted.
All other pending motions are denied.
AFFIRMED.
4 12-56753