Securities & Exchange Commission v. Gerald Levine

FILED
NOT FOR PUBLICATION DEC 21 2011
MOLLY C. DWYER, CLERK
UNITED STATES COURT OF APPEALS U .S. C O U R T OF APPE ALS
FOR THE NINTH CIRCUIT
SECURITIES AND EXCHANGE No. 10-16238
COMMISSION,
D.C. No. 2:07-cv-00506-LDG-RJJ
Plaintiff - Appellee,
v. MEMORANDUM *
GERALD LEVINE and MARIE LEVINE,
Defendants - Appellants,
and
WIRE TO WIRE, INC.; et al.,
Defendants.
Appeal from the United States District Court
for the District of Nevada
Lloyd D. George, Senior District Judge, Presiding
Submitted December 6, 2011 **
San Francisco, California
*
This disposition is not appropriate for publication and is not precedent
except as provided by 9th Cir. R. 36-3.
**
The panel unanimously concludes this case is suitable for decision
without oral argument. See Fed. R. App. P. 34(a)(2).
Before: TROTT and BEA, Circuit Judges, and PALLMEYER, District Judge.***
This is an appeal from a motion for summary judgment; the facts are not
repeated as the parties are familiar with them. We affirm.
The Levines waived the argument that their fraudulent conduct outside the
United States is not covered by the securities laws, as the Levines never brought
this argument before the district court such that the district court could rule on it.
Abogados v. AT&T, Inc., 223 F.3d 932, 937 (9th Cir. 2000). Even were this
argument not waived, the Securities Act governs the Levines’ sales because the
actual sales closed in Nevada when Marie Levine received completed stock
purchase agreements and payments. Morrison v. National Australia Bank, Ltd.,
130 S. Ct. 2869 (2010).
No reasonable jury could find otherwise than that Gerald Levine was
directly and personally involved in the material misrepresentations and omissions
in connection with the sales of securities occurring in the Barcelona boiler room.
See In re Oracle Corp. Sec. Litig., 627 F.3d 376, 383 (9th Cir. 2010). Similarly,
there is no evidence to contradict that Marie Levine consummated the sales
initiated in the Barcelona boiler room and that she failed to make material
***
The Honorable Rebecca R. Pallmeyer, District Judge for the U.S.
District Court for Northern Illinois, sitting by designation.
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disclosures to the buyers of securities. While the Levines argue that one deponent
is not credible because he had previously pleaded guilty to securities fraud, the
Levines did not argue below that this deponent’s previous conviction affected his
credibility—the Levines instead argued below that his previous conviction was
irrelevant. Therefore, because their argument that the deponent’s evidence lacked
credibility was not raised before the district court, it is waived. Abogados, 223
F.3d at 937. In any case, the Levines do not present evidence contrary to that
presented by the government. Impeachment evidence as to such deponent alone is
not sufficient to create a genuine issue of material fact. See Grupo Gigante SA De
CV v. Dallo & Co., Inc., 391 F.3d 1088, 1099 (9th Cir. 2004) (“One survey that is
impeachable, but still good enough to get to a jury, weighed against no survey
evidence at all on the other side, along with all the other evidence in the record,
does not necessarily add up to a genuine issue of fact.”). Therefore, the district
court correctly granted summary judgment.
Finally, the district court did not err in its calculation of disgorgement. The
SEC offered evidence of the revenue generated by the sales of JRS and Nu Star
stock, meeting its initial burden to present a disgorgement figure that “reasonably
approximates the amount of unjust enrichment.” SEC v. Platforms Wireless Intern.
Corp., 617 F.3d 1072, 1096 (9th Cir. 2010) (internal quotation marks omitted).
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Total proceeds are a “reasonable approximation of the profits obtained from the
unlawful sales.” Id. After the SEC presented a reasonable approximation, the
burden shifted to the Levines to rebut this figure, and they offered no evidence to
do so. Id.AFFIRMED.
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