here you're still there we wish we could see  a chance to file a twenty eight a response or did you and i missed it i you know what your honor i read the i read the case and i didn't have anything to restate to say in writing about it but i am happy to address it is it isn't sort of the simple and crux hard question why wouldn't we follow exactly that blueprint well i think the i think that the answer to that is that it's necessary to really look at co cash look at the traditional underpinning for f c c discouragement and to ask yourself whether because i don't think that d m is on really looked at it i don't think any court has yet has read didn't they just say when the supreme court explicitly cars out the question of authority right then that doesn't become a supreme court pronouncement that circuit laws wrong so that panel in a nd circuit said we have precedent were bound you can go all bach and are precedent like blatt would mean we're bound you could go all the scholars maybe pointing out what you articulated which is the logic of coke cashed the implications of it should mean you when button we may not have that freedom do agree or disagree well i i disagree i disagree in in this sense i would respectfully contend that the footnote three in co cash number one in that's what i'll the courts rely on in terms of saying that the supreme court didn't specifically address this authority question that i'm you know talking about in this case in that an as risen another case the supreme court's foot know in my view is in the court wouldn't put the footnote in its opinion were it not on the courts mind that this is a serious issue about whether there is a question now i'd knowledge that the question wasn't addressed in that case but what was address is what's critical and that is that the historical underpinning that se see discords i'm an is equitable and that it's or remedy the falls within the courts acco to build discretion in jurisdiction that's no longer the case it's a penalty and i acknowledge that in co cashed the core talked about penalty in the context of sacha limitations but i would submit that there is no ret reason to basis for coleen a penalty is a penalty if it's a penalty  the question arises well and that's what the court sets of their for that is what i think upsets all of this court's prior precedence and ole what i think to not point your mean do do agree that we have on point precedent from this chord sending v s e see has the authority to order to scorcher i agree with that so that puts us we're just a panel that puts us in a difficult position don't you think or impossible position one might say that we can't read tea leaves from the supreme court and use that as authority to overrule our own precedent i'm not i don't i don't think we have the authority to do that do we know but i do think there is a sufficient basis co cash for the court to revisit its prior precedent and what do our cases say about one panel not following another panel a prior panel and what justification would allow that it's whether the supreme court has made a pronouncement that is sufficiently concrete that would serve to provide a basis for this panel to revisit the prior and i think that's basically correcting the problem is that cocoa should firman of lead doesn't do that no except that it in fact is seeking and obtaining a penalty and the court talked about all the hallmarks for why that so the s e c is remedy in a public wrong it's punishing wrongdoers it's not the point is not to compensate victims it's not even illegal profits it's to punish the wrongdoer and so i think that everything the court had to say about that in co cash in my view and i understand i understand the difficulty in making the argument to go back and revisit precedent was the point you were making justices asked that led to pretty clear questions in their mind about whether discouragement as a penalty is authorized the problem was it wasn't specifically briefed and raised in coke as it wasn't it wasn't present d to the court for decision and so naturally as the supreme court is want to do didn't go there but did leave that very important footnote about don't read our opinion as suggesting that the way this is being done is correct code ca the enforcement action occurred in two thousand and fifteen right it did and then there was the consent that's sort of a two years before search granted and co catch but i noticed you reserve the statue of limitations was that because you anticipated it now i think and i apologize your honor i misunderstood such limitations issue came up in our case when it became apparent that cold cash was was pending it was going to be decided and so when the st motion for remedies was filed that's why we responded to new argument going further into cook ash would be it's down to zero it's is would it would be that it's now down to zero on that but that is an argument that we made in response to the f c c nd motion for remedies was to point out that once came out in one school securities laws to impose what the court like the nd circuit intimate are there any circuits that are looking at this on voc you know do you know of any because i i am aware i'm not aware of any that are looking at it on bond but what i am aware is i like that the f c c well we'll hear from them shortly but prop one expects or hopes their position is consistent with the one they're taking here but maybe not what it would i would expect but i think what it does also show and again i understand judge duncan your perspective about reading tea leaves but i do think there are all of these indicators that this is an issue that the supreme court's concerned about you know i didn't have to request a response doesn't mean it's going to grant cert it could very well deny but certainly there's some there's something thoughtful consideration  that the supreme court has put into it based on the th circuit decision you know i don't i don't think i mean believe me i don't think this is a frivolous issue and all i'm asking about our authority is a panel based on the supreme court of teasingly not reaching an issue i fully accept that it's only justice is mine i can imagine them sitting there thinking what are the ramifications in other areas for finding that this discourse is a penalty for statue of limitations purposes but then deciding not to go there and i'm just asking myself and you know what are authorities i guess i would just ultimately sum it up by pointing to things that the footnote but then also more importantly like i said the broad pronouncement in discussion assume it's scholars that are the ones saying the logic of coke makes it imperative that it reach other areas right you did you cite the scholarship you think is the most perceptive so the scott there was an article that came the next important issue for you my question is the case that i'll mispronounce k long line it looks to me that that's again binding on us that an s e c violator can't offset with expenses if that's binding authority what discovery would you have gotten that would have been relevant to iran or at my response to to the case which of course crime is or is an obstacle is that it was again it was decided pretty cold cash but not only that also i think it's important kalen cited and referenced the black decision and all of these cases from from this court have recognized and i think as well and i think that the problem is is that the the court has never directly wrestled with what legitimate business expenses are capable of being deducted when it comes to an i c c discouragement request and so but what we do know is that cases like blat talk about how the even under this court's precedents the amount is by which the defendant profited there's also the haleigh case which is cited at page thirty one dollars of our brief talks about how it 's a reasonable approximation of profits so there there are these indicators in this court's precedents that the focus penalty or not regardless of the application of coke hash you have to look at the extent to which the defendants profit and there isn't any case from this court that actually examined in the context of the facts that we have here where we have as it made it in the the s e c zone complaint there were these expenses that are referenced right in the complaint that related to then you know we want the opportunity at the hearing that we reserved in the consents to present evidence with respect to these legitimate expenses so i think it's it's less about the discovery and it's more about the hearing that that we reserved as part of the consent and that i think when you language at the outset that you agreed to it was at the discretion of the district court yeah your honor i would agree that there is some discretion in terms of generally when a hearing is required when it comes to  this sort of a determination but again this was part of the consent that was specifically reserved and it wasn't it wasn't so much that i don't think the hearing reference specifically was discretional the knowledge that the consents could have been maybe a little bit more clear on this point but more importantly it's where you have amounts that are this significant you had the amounts were supported by essentially a spread sheet and there were there was not any taking into account of any of these expenses and although we didn't file a formal motion for a hearing request for a hearing was made a number of times and was to spread sheets just every dime an investor gave everything that came in and you don't dispute that we don't we did not dispute in the district court the the pure mathematical computation of the amounts that came it i wish district court opinion but we did cite it in the brief it's the griffin case from two thousand and nineteen and it's it was a situation where the kinds of expenditures that i'm talking about that go to the cost of setting up oil and gas wells that you know as here  represents the commission do you happen to know do we get a little private insider irad in our coming and i don't think that would be appropriate ok so the f c c is position here to us is we lack authority whatever coke ashes implications might be  a simplified version of your argument that we can't deviate from our precedent i mean that's certainly part of it the court is bound by its precedent and the court just on can you refer to the court standard for finding intervening change in the law to require departure you need an unequivocal change it's not enough that the panel thinks that the prior decisions are flawed it's not enough that the court thinks that there might be a hint that change coming you really unequivocal change and i think for all the reasons the court talked about during my friend's argument cannot provide that unequivocal change but i do want to give the court or do you want to try to give the courts and com fort that you know even if this were before the court on a blank slate which it's not of course but even if it for the discourse matter is appropriate and i think really the key to this is whether  e appropriate as a remedy is simply a question of statutory construction and it's resolved here because congress has expressly referred to discourse in judicial actions time and time again we talk about those statutes page twenty pages twenty four and thirty two of our brief but i think it might be helpful if i just ran the court through a couple of those and i cannot emphasize enough the absolutely critical provision here is in the sar authorized we know this for two reasons number one when congress and the fact that this provision it was doing it against the backdrop of a settled and mature body of precedent in the circuit courts holding that discourse meant is an equitable remedy and it's a very well settled principle of construction that congress is understood to incorporate that term nd to the extent that you had any doubt about that it's removed by other provisions in the sarbanes oxley act that expressly referred to the sc the securities laws and i'll skip over some things if in those actions the commission obtains a civil penalty the penalty amount shall be added to and become part of a discourse meant fund nd congress amended the  ministered of order for any and that it cites penalty restitution ery payment and expressly to score judgment payment shall not be discharged in bankruptcy so the clear implication of that is congress understands that  moment is available and i could kind of go on and on with these provisions but i don't want to trust the court's patience with that or what i would like to hear response in part was cash has changed the playing field and in fact congress now has bills pending to give the authority back so the negative inference from that is congress knows it doesn't exist at the moment you know i think the courts traditionally are pretty reluctant to draw meaning from an act that statute is but to respond to your honor's point about change the meaning of it i don't think it did whatsoever and the reason is when congress refers to equitable relief in two thousand and two it's not referring to in the body of case law it's not you know for instance like the antitrust laws which say look unreasonable restraints of trade are prohibited and then gives courts the authority to figure out what that means at the time congress understood very well that discouragement was available and i think just to pull back here the reason all of these and accidents are meaningful are is not only that they show that congress understands the remedy exists but i think it addresses the poor concern that the supreme court has talked about in its modern equities jurisprudence which is that courts have to police the line between what is properly equitable on the one hand and legal on the other and the reason for that is you don't want courts simply invoking the term equity to have ward relief that maybe congress has not provided for maybe congress has expressly chosen to limit and on that point this court can have absolute and after multiple provisions that logically presuppose the existence of the remedy and the other side would ask this court to simply render all of those provisions meaningless superfluous and that cannot be every principle of statutory construction the book says you have to give those provisions a fact the only potential way to treat all those statutes as an inkblot essentially would be if if the violated some constitutional command but nobody statutory authority to conclude the issue or did it just say footnote three means we're going to stay out of the nd circuit just referred to footnote three the nd circuit i should say in prior decisions has talked about the structure  case which we cite in our brief here but i just and my reason i mean i do look i do think that footnote three is sufficient but i'm just trying to give the court comfort that even if you were to approach this issue afresh the case forward to squirm and s e c proceedings has if anything become much stronger since blot because we're no longer relying on the kind of just inherent authority congress has blessed the remedy and i do the court actual point is that the supreme court is telling courts be cautious using this hammer of equity and we have cold cash then then wouldn't we want a much more searching inquiry into the exact dollar amounts this is getting to their point no discovery no hearing and possibly legitimate expenses i think both before and after cold cash courts should have been and and work careful in holding the c c to its burden we have to show a causal connection between the violations and the fraud we have to show a reasonable approximation we there's no double counting there's no profits on profit so if the defendants here took the stolen money and invested it in amazon and i see all that you did was deduct payments that had already been made you didn't offer the same and to any offsets that might have been and so is your theory that they stipulated to an entirely fraudulent scheme or is your theory that our loss as offsets can't exist or is it both you know inappropriate case offsets can exist and i think the smith case that the court was referring to is one potential illustration of that that was an insider trading case  and and the question and that's pretty coke ash right but the court is holding the commission to its burden appropriately and it's saying look you know there's just too much of a dispute here about the cost of the options you should go work that out but in this case what they stipulated to was an entirely fraudulent enterprise they lurd in main street investors with the representation that you should invest in this scheme to dig oil wells but  the revenue generated by these oil wells at all ever it was all bogus it's all bogus i mean well i asked a company if the revenue was there any revenue obtained from any of the oil platforms i mean i'm not aware of any revenue obtained the of course the court was referring to we did deduct the amounts that went back to investors but i'm not maybe i'm not being clear i would have it i cautious and restrained view that you're telling me now i was might have thought that r k on decision was binding that offsets can occur for securities violators but you're telling me no  it is more of a nuanced judgement you look to whether the scheme was entirely fraudulent or not and if you're here it was and with respect to the court's question about discovery well the discovery is a everybody understands the way that these consent agreement is work they chose not to do anything about it and i don't think it's proper to essentially sandbag the district court to say look we were prepared to go received by receipt and then  court with just one final thought and i think it goes to judge duncan's point about with the spear radical change in the law if the court were to take away discourse on it and i think on that point not only would it be a radical change in the law but i think it's appropriate for the court to consider the real world consequences of that determination discoursing that is used in cases ranging from ponzi cases to major accounting frauds this case where the defendants persuaded main street investors to invest their retirement savings in this obvious fraud and if you take away discourse in that what you're going to do is you're going to incentivize fraud further and that will make it harder that will undermine investor confidence in the securities markets and it's going to make it harder for honest companies to raise the capital that they need to operate and to innovate and unless the court has any further questions we ask the court to affirm understand what your response to the government's point that there is offsets may sometimes be considered not in this case because what we have here is an entirely different scheme my response to that would be that the c's own complaint demonstrates that the allegations that they made shows that that's not the case the f c c is complaining knowledge is that there were investigations that received payments in response to their investments the allegations were that these securities were not registered there were misleading statements made about expectations there were missed misstatements made about what was going on with respect to the wells but these were all wells that were as the s e c zone allegation show were in fact acquired set up drilled geologists were hired surveys were hired some some of the investors did get some money back not of course to their expectations as alleged but the that is what makes i think this case different than any other case including the j t wallenberg case that the f c c has placed so much emphasis on and we discuss that case in detail both in our principle brief as well as in our reply brief so i would take issue with the characterization based on the s c c own complain of the nature of these investments it may well be as alleged that these investments were ill advised that there  were misrepresentations made about expectations and that the investors were led to think that things were otherwise but they were real investments and there were real expenses associated there this wasn't a this wasn't some you know the civil case right as the ponzi scheme it's where money is tak in and it's used to fund other businesses it's used to fund discretionary expenses that's not what we're talking about here we're talking about expenses that the investors would have expected their money was going to be used to pay for it which was getting these these wells up and running if i could go back for just a moment and talk about the reference to the various statutory provisions where congress uses the term discouragement of course again the historical understanding which i think you know under this this notion of when congress enacts statutes that in a post a case law assumes that it takes the case law into effect well the case law has always been that you have discouragement is equitable in nature and so and we discussed that in our reply brief so i think that's the essential answer to the reference to all the statute the vision says it's talking about a kind of discouragement that was not it was understood differently cash i think the best evidence of what the statutory provisions allow is when you look at the remedies that are provided under the securities laws so the remedies are you know there are three of them you have injunctive relief is available we know that that section twenty of the securities act section twenty one dollars of the exchange you have civil monetary penalties so congress already authorizes a penalty and then you have equitable relief that is appropriate or necessary for the benefit of investors that was a provision that was added later so when you look at these these remedies that are set forth in the securities laws none of those remedies even come close to encompassing the sort of discouragement penalty that we're talking about here and that is in this case we not only did it not take into account any of these legitimate business expenses but then it essentially duplicated the penalty in the statute that congress did authorize and so i think that the proper focus is in sort of trying to determine what congress may have been thinking by these references to discordant which i think are consistent with the historical understanding the point after cold cash is where in the securities laws is their authority to seek anything other than the civil monitored penalty that is expressed they provided for there is nothing in there that allows for a discouragement penalty which is what the f c c typically seeks and what certainly it's sought in obtained here and so if the court doesn't have any other questions appreciate your time and consideration thank you both