in my remaining time i would like to address two issues the grant of summary judgment on the fraud claim and the award of just scorch men after coke cash i will begin with the fraud claim as the court is aware from the papers three different theories of fraud have been advanced against mr weaver throughout the course of this litigation the first is the theory on in that summary judgment papers before the district court the second is the theory articulated in the district court's order district court the securities and exchange commission argued that the straight path financing agreement was a sham transaction and for that created liability under rules ten b five a so to prevail on that theory the f c c had to prove that the straight path financing agreement was completely devoid of economic substance and an entirely illegitimate transaction and that's under simpson v a under theory one theory two is the district court's order which the district court ruled that the straight path financing agreement became deceptive when coupled disclosures regarding the straight path financing agreement so this puts us in it it's not clear if the district court was ruling that the transaction was only deceptive due to it with the disclosures of jam and java which under simpson be a o l again is not a valid basis for liability when a transaction is only deceptive when paired with the statements of another that's insufficient paired with home stores financial disclosures regarding those transactions to the extent the district court was promising mr rivers liability solely on omissions mr weaver cannot be liable for those because he is neither the maker nor the disseminator of those statements so and the parties since the parties brief the issue of liability for the misstatement of another it's been significantly clarified  which the securities and exchange commission submitted as supplemental authority and mr weaver also commented on holds that to be liable for the misstatement of another under rules ten b five a and c scheme liability a defendant has to either make or disseminate the false statement mr weaver did neither here the record is undisputed on that so that brings us to the third so those are the facts and the principles on the courts terry that brings us to the third theory that's been advance against mr weaver here which is the as he sees new arguments on appeal that the court did ask me to address how these differ in fact and in legal principles we do argue in the briefs and i would put before the court very briefly just that this has been waived under reiki gonzalez arguments not not rates below are waived on appeal there are some exceptions to that rule however they clearly do not apply in this instance these are quintessentially fact based arguments that were not even offered below much less proven  whether to apply cologne or not then at that point it seems to me that at least in your briefing you ought to tell me why it's distinguishable from this case and i couldn't find it so i guess i'm allowing you to decided that they would take the fifth amendment and the district judge was free in that particular case to draw adverse inferences against that person they couldn't suggest that they were guilty or that somehow they had some problem with what they were saying or doing but they applied the same if you will standard or a view that the court applied in this case so why penalties in such cases the only inference the court may not draw is an inference of guilty however other than that nothing all we need to have is some evidence in addition to an adverse inference to support the court's ruling that's all of this recorded here there was no evidence the question turned on whether there was additional evidence and that's what we have here respectfully your honor i disagree well what evidence is there which would suggest that well what why do you suggest there is no additional evidence the sides if you will the district cords applying its discretion in making an adverse inference f i mean it seems to me in this particular case we had the barrier or excuse me the beret declaration the weaver burling your email chain both of those are were no facts on your particular side that would on do the facts in the barrack declaration and the weaver barreling your email chain and especially if one would give the district court's inference we would come out the same but i guess i couldn't find where the evidence even if i didn't give the district court same for and so as to taking the light most favorable to the f why wouldn't come out the same way well your honor the facts that were in dispute on summary judgment the theory that was articulated was only regarding the straight path financing agreement and whether or not it was a sham transaction separate statement of facts specifically paragraphs twenty seven to thirty three those facts were not even proffered as undisputed much less undisputed mr weaver also made an evidentiary objection to that that evidentiary objection was not appealed because the claims for which the bare declaration were offered were only relating to claims that evidence only related to claims that mr weaver did not appeal to section five in the section thirteen d violation to consider this type of factual evidence for the first time on appeal as to these new claims is inappropriate some of the facts weren't even proffered as undisputed and those that were proffered as undisputed were only proffered in support of claims that are not on appeal and were the subject to an evidentiary objection that's not on because what the f c c is argument with respect to the straight path financing agreement was that it was a sham transaction that creates scheme liability under simpson the i o l a transaction has to be completely devoid of economic substance and entirely illegitimate there are factual disputes as to the legitimacy of the straight path agreement in particularly because the funding that was contemplated for under the agreement was paid and those funds were then used for operating purposes as contemplated by the agreement in simpson v a o l the facts of that case demonstrate that when it when and transaction has economic substance because it is kurz in the way that its conflict contemplated to occur it cannot be a scheme liability sham transaction as a matter of law in simpson be a o l there were third party triangular transactions essentially round tripping transactions that were to bribe provide advertising in exchange for money and in that case the plaintiffs alleged that the defendants intentionally additionally facilitated in in hiding the true nature of the round tripping transactions from the auditors under that case because that transactions and sells advertising and money were exchanged they were not shams as a matter of law situation given that coelho will allow such adverse inference the district court as i understood it just suggested that what it was going to do is take the evidence in the light most favorable to the s e c rather than taking the evidence like most favorable to your client your client presented some evidence but really as i reviewed it not much evidence on the very fact situations which were worried about here even if we had the evidence without an inference my worry was there was no evidence against it so tell me what  out of time go ahead i mean he he will stop you if you need to be stopped otherwise answer my question because i think that's something you've got to tell me if this is not permissible under an abuse of discretion analysis that the evidence withheld would be negative would be would be bad for mr weaver that's the articulation of the adverse inference in the circuit it doesn't permit the court to turn the summary judgment standard on its head and i cite several cases in which the defendant took the fifth on summary judgment and the normal summary judgment standard applies but those cases were just a court cases were they not they were not i don't we have we are charge colo and your client had the opportunity to rebut the government's evidence but didn't took the fifth and is in this were although in artfully particular fact that the adverse inference should be applied and here although mr weaver took the fifth that doesn't prevent him from just puting the evidence in the record with other evidence in the record the adver inference doesn't doesn't prevent mr weaver or his counsel from pointing to the other facts or other witnesses from depositions from documents that show that factual disputes exist here and mr weaver did that he demonstrated there are factual c put inhabitants showing that we were had put together this straight path financing is a phony transaction right yes what do you do with the evidence of the german jabbers c e o who testified that the company had a legitimate purpose in entering the straight path financing and that he had never met or talked to weaver does not raise an issue of fact light most favorable to the government no your honor there's there is no evidence on the other side mr truong testifies as your honor referred that he thinks the purpose of the agreement is legitimate but the only reason he does that pulling all the levers it would be very bizarre to allow you to escape liability simply because there's other actors involved in the scheme but i do want to point to two undisputed facts that here as a matter of law and i want to say from the very outset that we agree with the district court that there may be a lot of deception here but you don't need to look any further than the facts that the district court identified as a st bushing that mr weaver engaged in fraud because he disguised of the nature and the source of the financing provided under the so called straight path agreement he did this in two ways number one as the court said he personally sent money to g m in java under the guise that it's coming from straight path and independent institutional investor and number two st pat's doesn't even exist at the time and mr weaver knows it so he instructs in the sosia to created after the fact to make it appear that it was in existence both of these facts are undisputed and they're clearly deceptive because so far as the investing public is aware jim in job which is this fledgling company it has one thousand and thirty seven dollars of revenue in revenue as the fiscal year two thousand and eleven for all the investing public knows it has received financing from an institutional investor that suggests that there is some independent party who believes in the company who is buying into it and yet the un skewed a fax show that there is no such company what you have is mr weaver creating this quote unquote straight path but when he creates it it's not as if he creates an institutional investor he creates a shell with no bank account no funds to provide to anyone who whether he created isn't there an issue liable for the deception that he engages in personally i don't think you know yes he testifies that he doesn't know or he hasn't met mr weaver but we don't have to show that mr weaver is responsible for every aspect of the fraud it's sufficient to show that in connection with the purchase or sale of securities acting with c an't or mr weaver engaged in deceptive conduct or you public investors because just take a step back here what mr weaver is doing while he's providing these this quote unquote financing if he's secretly acquiring massive blocks of chairman java shares from a company insider and then is dumping those shares on unsuspecting investors and he makes tens of millions of dollars in profit as a result of this conduct and you know he's never disputed that he acted with c enter with the intent to deceive in fact this does deceive so no reasonable fact finder a could rule for him on these undisputed fact let me ask you another question the idea of the notion of the should take the facts in the light most favorable to the moving part in the region somewhat unusual your honor i stumbled over that aspect of the district court order when i read it as well and i mean to be clear that is not how we understand the inference that's not the articulation that we argued for but in fact your argument is that the court exceeded the bounds of discretion but it's harmless ferrite i don't even know that it rises to the level of harmless error here i think that is one way of thinking about it but ultimately this case is before this court under novo review and what you're reviewing is the judgment and you have to make an independent just terminations whether the undisputed facts support the judgment what are the elements for an f e c in s c c action under ten b five hundred the under the charges you brought do we need to have reliance here no your honor why reliance  has instructed its not been undergoing under decided vs deutsche bank securities this is an action by private party we would have reliance but you are the f c c so i have a case rainer research would suggest no reliance in that particular kind of an action but that was only a ten b five b action and were not under five b so what case do i go to t actions and the reason i mean i think this is really cuts to the very heart of this case reliance is the common thread that holds together the decision and starting from central bank stone  so and reliance isn't in the text of section ten b a rule ten b five it's judicial gloss on those on the statute and the rule and what it does it provides the requisite causal link between the defendant's deception and the victim's harm but is what not but isn't that really the question the judge has been ask you about because he's really going to if the if the man who's generally in charge of this doesn't even know about it how could he rely so i think reliance is actually a wonderful way of thinking about this case because the reason that reliance isn't required here is required in private actions is to provide this causal link but nobody thinks it's ok to engage in deceptive conduct behind the scenes so it's undisclosed to anyone the government can still act in those circumstances because it's still wrong to engage in deception regardless of what whether someone else ultimately relies on it or not and the supreme court just emphasize this in in iran's ok's so in public in public rather than the private right of action is implied and the court has said well look we're going to give a narrow dimension to a right that congress didn't explicitly provide but when the government suits in its sovereign capacity isn't force or the securities laws the court reads section ten b and rule to be five as the sole court just said and lorenzo expansively to fully effectuate the congressional congressional purpose in rooting out all fraud in the securities industry know reliance it's not and b it's not an a or c it's nowhere in the text it's really just dishful gloss and you don't impose that judicial gloss on the right of action that congress explicitly created and let's move then to the yes your honor so you know as this court recognized in the loo decision which we submitted a supplemental of authority for purposes of the panel the law is very clear you have forty euros the president you have literally dozens of twenty four sixty two and therefore the statute of limitations lies just said we're not addressing this question any further do we need to dress this question since expressly says it's a penalty one focus explicitly also calls a form of restitution those well and i think the lesson is as this court record this court already recognized in the crawl decision that of the substance of question of whether it's remedial or punitive and that makes sense because the inquiry is fundamentally different you know the principle that's always cited in these twenty four sixty two cases it goes back to chief justice marshall's statement and adams against woods where she just marshall said in a country where not even treason can be prosecuted after three years it would be utterly repugnant to the genius of our laws to allow a person to be forever liable for a peculiarity forfeiture that's just not the analysis when you're trying to figure out whether an equity is equitable meaning that it's within the court's authority to awar but i think you know fundamentally when a lot of cases come before the court where the court is trying to draw a line as to what is properly what a ball or not and really what the court is doing is it's ensuring that course don't just use the label of equity to perhaps circumvent a legislative scheme that congress has created and to award relief that congress didn't authorize and a lot of cases come before the court where it's hard to make that determination but this case isn't then because we know that congress has blessed discoursing that there are multiple statutes as we point out in our brief where the congress has an act of legislation that logically  presupposes the existence of the distortion and run it and so you just don't have this conflict of equity evading law and you know there are multiple provisions i'd like to just point out the i think our best example of that which is in the sarbanes oxley act of two thousand and two up until that point discordant had been authorized you know consistent with this court's precedent as ancillary to an injunction under section twenty one d one of the exchange act well and there's a uniform line of precedent recognizing that so sarbanes oxley comes along in two thousand and two and it does two things one is it order equitable relief in commission actions and we can presume that congress knows of the discordant remedy and number two in the very same act it directs the commission to study how it collects and distributes discourse and it talks or the only real way to read these statues is reflected in the congressional understanding that discourse is awarded as an equitable remedy your comment about just one of one follow up and that is i don't think anybody makes the argument that the just saying the court had no with already to do anything about it they want zero they want zero and under this court's precedent you know they could have come in and they could have said there should have been an equitable deduction such and such funds should've aren't properly counted  discourse and actually you know they did make certain arguments because we originally requested more than twenty six million dollars the court using its equitable discretion cut it down to what it thought represented the bills just results on the facts of this case credibility isn't there or they say that it's not  with you if you want to go into discord and go ahead ok well i don't i don't want to disregard the carcass question so i i will give me one give me your best one so i'm sure what i only the holdings of higher court decisions but also their mode of analysis and if the reasoning or theory of prior circuit or party is clearly irreconcilable with the reasoning or theory of intervening higher authority a three judge panel has to apply the reasoning and theory of the intervening supreme court decision here coke cash directly answers the question before this court he cashed guys because and i quote nothing in this opinion is the statute of limitations for discouragement the court had to answer that question it was the question the parties put before it in defining a statute of limitations for discourse meant the as you see sorry this supreme court was concerned that people might new word document and you could take that analysis and change the last sentence of the holding as you see discouragement bears all the hallmarks of a penalty therefore it cannot be awarded pursuant to th court's inherent applicable powers the analysis is directly on point one sentence of the holding needs to change and i don't think that a faithful reading a footnote three in that context is what is proffered by the i c c and what