Document ID: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-ca10-95-01425/USCOURTS-ca10-95-01425-0/pdf.json

Parties Involved:
Gaye B. Knowles
Appellant
Securities and Exchange Commission
Appellee

Document Text:

Patrick J. Fisher, Jr. 

Clerk 

UNITED STATES COURT OF APPEALS 

Tenth Circuit 

Byron White United States Courthouse 

1823 Stout Street 

Denver, Colorado 80294 

(303) 844-3157 

June 28, 1996 

Elisabeth A. Shumaker 

Chief Deputy Clerk 

TO: ALL RECIPIENTS OF THE CAPTIONED OPINION 

RE: 95-1425 SEC v. Knowles 

June 20, 1996 by The Honorable Michael R. Murphy 

Please be advised of the following correction to the captioned decision: 

Due to formatting problems, the previously filed opinion is withdrawn and 

the accompanying opinion substituted. The content of the opinion has not 

changed. 

Please discard existing copies of the opinion and substitute the corrected 

verswn. 

encl. 

Very truly yours, 

Patrick Fisher, Clerk 

Beth Morris 

Deputy Clerk 

Appellate Case: 95-1425 Document: 01019279556 Date Filed: 06/20/1996 Page: 1 
PUBLISH 

UNITED STATES COURT OF APPEALS 

TENTH CIRCUIT 

In the Matter of an Application 

to Enforce Administrative Subpoenas 

Duces Tecum of the 

SECURITIES AND EXCHANGE 

COMMISSION, 

Applicant-Appellee, 

. FILED 

IJ1tltld it1fl8 Coan o1 Appcall 1'fnth Cfrcuft 

JUN 2 0 1996 

PATRICK FISHER 

Clerk 

No. 95-1425 

v. 

GA YE B. KNOWLES, 

Respondent-Appellant. 

Appeal from the United States District Court 

for the District of Colorado 

(D.C. No. 95-B-2036) 

Raymond L. Robin, Olle, Macaulay & Zorrilla, Miami, Florida, (David W. Stark, 

Amy J. Griffin, Otten, Johnson, Robinson, Neff & Ragonetti, P.C., Denver, 

Colorado, with him on the briefs), for Respondent-Appellant. 

Robert M. Fusfeld, Securities and Exchange Commission, Denver, Colorado, 

(Simon M. Lorne, General Counsel, Jacob H. Stillman, Associate General 

Counsel, Katherine B. Gresham, Assistant General Counsel, Catherine A. 

Appellate Case: 95-1425 Document: 01019279556 Date Filed: 06/20/1996 Page: 2 
Broderick, Counsel to the Assistant General Counsel, Securities and Exchange 

Commission, Washington, D.C., Paul Gonson, Solicitor, Of Counsel, on the 

brief), for Applicant-Appellee. 

Before SEYMOUR, BRORBY, and MURPHY, Circuit Judges. 

MURPHY, Circuit Judge. 

This case arises out of the enforcement by the district court against the 

appellant, a foreign national, of two administrative subpoenas duces tecum issued 

by the Securities and Exchange Commission. The appellant argues that the 

district court lacked personal jurisdiction to enforce the subpoenas. The district 

court held that it did not need personal jurisdiction over the appellant to do so. 

The question presented is whether the appellant has the requisite minimum 

contacts to justify the district court's exercise of personal jurisdiction over him. 

This court holds that he does and that the district court properly enforced the 

subpoenas. 

I. BACKGROUND AND PROCEDURAL SETTING 

On June 14, 1995, and again on June 30, 1995, the Securities and Exchange 

Commission (the "SEC") issued administrative subpoenas duces tecum in the 

name of the appellant, Gaye B. Knowles. The SEC served Knowles with the first 

subpoena by hand at LaGuardia Airport in New York City. It later served the 

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second on Knowles's counsel in Miami, Florida. These subpoenas were issued in 

connection with the Formal Order of Investigation in the nonpublic investigation 

conducted by the SEC out of its Denver, Colorado, office, In the Matter of the 

Rockies Fund, Inc., Redwood Microcap Fund, Inc., and Combined Penny Stock 

Fund, Inc., eta/. 1 The SEC issued these subpoenas pursuant to its authority under 

15 U.S.C. §§ 77s(b), 78u(b), and 80a-41(b). 

Knowles is presently a Bahamian citizen and resident and has been so since 

1951. He is an independent investment consultant and, at the times the subpoenas 

were served on him, was also the president of two Bahamian companies, Global 

Petrol Trading and Swiss EuroFund, Inc. 2 In the investigation, the SEC sought to 

determine whether bank accounts in the names of these two companies were used 

to bribe brokers in the United States to sell certain stock of American companies 

in violation of federal securities laws. The first subpoena directed Knowles to 

appear at a deposition and to produce certain personal documents and documents 

relating to the bank accounts of Global Petrol Trading. The second subpoena 

directed the same and called for Knowles to produce documents relating to the 

1 The Formal Order of Investigation is not a part of the record in this case; the 

SEC claims that it is a nonpublic document. The Formal Order was available to 

the district court for in camera inspection, but its scope and contents are in no 

way related to the issues here on appeal. 

2Since that time, Knowles has been advised that his employment with Global 

Petrol Trading and Swiss EuroFund, Inc., has been terminated. [App. at 66] 

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bank accounts of Swiss EuroFund, Inc. 

In response to the subpoenas, Knowles appeared for deposition in Miami, 

Florida, on July 12, 1995. Knowles produced certain corporate documents 

pursuant to the subpoenas but objected to producing monthly banking statements 

and other banking documents of the two companies. In order to enforce the 

subpoenas, the SEC applied to the district court in the judicial district where it is 

conducting the investigation, as authorized in 15 U.S.C. §§ 77v(b), 78u(c), and 

80a-41 (c). 

The SEC filed an Ex Parte Application for an Order to Show Cause and 

Application for an Order Compelling Compliance with Administrative Subpoenas 

Duces Tecum. The United States District Court for the District of Colorado 

subsequently issued an Order to Show Cause. Thereafter, the SEC served 

Knowles with the Order to Show Cause outside his home in Nassau, Bahamas. 

Knowles responded to the Order to Show Cause and moved the district court to 

dismiss the SEC's application for lack of personal jurisdiction over him. 

In an Amended Memorandum Order and Opinion, the district court held 

that it did not need personal jurisdiction over Knowles in order to enforce the 

subpoenas against him. It held, instead, that judicial enforcement of an 

administrative subpoena may be had where the agency can show that: ( 1) the 

inquiry is conducted pursuant to a lawfully authorized, legitimate purpose; (2) it 

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is reasonably relevant to an investigation which the agency has authority to 

conduct; and (3) all administrative prerequisites have been met. See United States 

v. Powell, 379 U.S. 48, 57-58 (1964); SEC v. Blackfoot Bituminous, Inc., 622 F.2d 

512, 514 (lOth Cir.), cert. denied, 449 U.S. 955 ( 1980). The district court 

determined that the SEC met this three-pronged burden and that Knowles had 

adduced no evidence to the contrary. It therefore ordered Knowles to comply 

with the subpoenas within ten days. This court subsequently granted Knowles's 

Motion to Stay the Amended Memorandum Order and Opinion pending appeal. 

This appeal followed. 

On appeal, Knowles argues that the district court erred when it determined 

it did not need personal jurisdiction over him in order to enforce the subpoenas. 

He also argues that the district court could not properly exercise jurisdiction over 

him because of his lack of personal contacts with the United States. In response, 

the SEC maintains that the district court had personal jurisdiction over Knowles 

based upon sufficient minimum contacts with the United States in relation to: ( 1) 

the subpoenas; (2) the matters under investigation by the SEC; and (3) his general 

business. In the alternative, the SEC argues that the minimum contacts analysis is 

not required because the district court had personal jurisdiction over Knowles 

based upon the SEC's service of the subpoenas on Knowles within the territorial 

limits of the United States. The SEC does not argue that personal jurisdiction is 

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not reGuired in order to enforce the subpoenas, as the district court held. 

II. JURISDICTION 

This court has jurisdiction to review the Amended Memorandum Order and 

Opinion under 28 U.S.C. § 1291. The district court's ruling on personal 

jurisdiction involves a question of law that is reviewed de novo. Taylor v. 

Phelan, 912 F.2d 429, 431 (lOth Cir. 1990), cert. denied, 498 U.S. 1068 (1991). 

The issue here is a narrow one: whether the district court had personal 

jurisdiction over Knowles to enforce the administrative subpoenas duces tecum. 

The court notes at the outset that Knowles does not contend the SEC lacked the 

authority to issue the subpoenas under the tripartite test set out in Powell and 

Blackfoot. He does not challenge the methods or places of service of process 

employed in serving either the subpoenas or the Order to Show Cause. Moreover, 

Knowles does not seriously contend that he lacked capacity to produce corporate 

records in his possession or that the SEC could only secure production of the 

documents through service of subpoenas on Knowles's former corporate 

employers. 3 Therefore, we do not address these issues and limit this opinion to 

3

0ver the course of this enforcement action, Knowles has hinted at possible 

problems or objections he may have with the scope of the subpoenas. For 

instance, at his deposition, Knowles conceded that some of the documents 

requested in the subpoenas were in his possession, control, and custody and would 

be found at his residence, which also functioned as his office. But Knowles has 

also noted that since he was terminated as president, he has been instructed to 

return all the documents belonging to Global Petrol Trading and Swiss EuroFund, 

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Appellate Case: 95-1425 Document: 01019279556 Date Filed: 06/20/1996 Page: 7 
the question of the jurisdiction of the district court, based upon the extraterritorial 

service of the Order to Show Cause, to enforce the SEC's subpoenas duces tecum 

Inc. Furthermore, Knowles's counsel stated at Knowles's deposition that the 

objection to the request for corporate documents was based on the fact that these 

were "private documents in a corporation." He explained the subpoenas reflected 

that the corporations were not under investigation and that he thus believed the 

corporations were "outside the scope of the subpoena[s] issued by the SEC to 

compel documents from a Bahamian bank." He therefore asserted a general 

privacy interest in "proprietary private information." Knowles also indicated that 

he chose not to produce the requested documents because he was not a signatory 

on the bank accounts requested in the subpoenas and thus had no control over 

them. 

Knowles, however, indicated in his testimony that some of the subpoenaed 

banking documents of which he was not the signatory were in his possession. He 

did not produce these documents. In his appellate filings before this court, 

Knowles does not elaborate on either the documents that are still in his possession 

or the "privilege" asserted in his deposition colloquy. Instead, Knowles only 

employs the alleged differences between his personal capacity and the corporate 

capacities of both Global Petrol Trading and Swiss EuroFund, Inc., in order to 

make the argument that the corporate contacts are not his own personal contacts. 

We discuss this issue below. 

Furthermore, the district court did not address the issue of what Knowles 

must produce or his general claims of corporate "privilege."' Although Knowles's 

"privilege" arguments are somewhat oblique, as we discern them they fail. We 

note that a corporation possesses no right to exercise a privilege against selfincrimination and that a corporate officer cannot refuse to produce corporate 

documents on the ground of self-incrimination. United States v. Rice, 52 F.3d 

843, 846 (lOth'Cir. 1995); United States v. Hansen Niederhauser Co., 522 F.2d 

1037, 1039 (lOth Cir. 1975). To the extent that Knowles asserts that the SEC 

lacks the power to require production of documents stored outside the territorial 

boundaries of the United States, this issue has also been decided against his 

position. Commodity Futures Trading Comm 'n v. Nahas, 738 F.2d 487, 492 & 

n.ll (D.C. Cir. 1984) (citing cases). 

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Appellate Case: 95-1425 Document: 01019279556 Date Filed: 06/20/1996 Page: 8 
against Knowles. 4 

A. Minimum Contacts 

Under the due process clause of the Fifth Amendment, personal jurisdiction 

over a party does not exist unless that party has sufficient "minimum contacts" 

with the jurisdiction. International Shoe Co. v. Washington, 326 U.S. 310, 316 

(1945). 5 The exercise of jurisdiction must not "offend 'traditional notions of fair 

play and substantial justice."' !d. (quoting Milliken v. Meyer, 311 U.S. 457,463 

( 1940)). Furthermore, the party's activities within the jurisdiction must render it 

4

Nor do we consider the issue of whether the district court acquired personal 

jurisdiction over Knowles as a result of his attendance at the scheduled deposition 

pursuant to the subpoenas. The SEC does not contend that Knowles's attendance 

and production of some responsive documents waived his objections to the 

personal jurisdiction of the district court to enforce the subpoenas. Therefore, 

this court will not address the issue of waiver. 

5

The SEC argues, in the alternative, that the minimum contacts analysis of 

International Shoe is unnecessary because the SEC served the administrative 

subpoenas on Knowles within the boundaries of the United States. See Burnham 

v. Superior Court, 495 U.S. 604 (1990). Although language in decisions of other 

circuits arguably provides some support for the SEC's theory, we have no need to 

consider the issue and whether Burnham, which involved service of a summons in 

the forum state, controls. See Mark Rich & Co. v. United States (In reMark Rich 

& Co.), 707 F.2d 663, 668 (2d Cir.), cert. denied, 463 U.S. 1215 (1983); FTC v. 

Compagnie de Saint-Gobain-Pont-a-Mousson, 636 F.2d 1300, 1324 (D.C. Cir. 

1980). Therefore, we express no opinion on whether an administrative agency, 

which must apply to a court in order to enforce its subpoenas, may itself secure 

personal jurisdiction over a person solely through service of subpoenas within the 

United States and then may rely upon that jurisdiction to enforce compliance with 

those subpoenas in a district court. Rather, we hold that Knowles independently 

has sufficient minimum contacts with the United States to support the district 

court's exercise of personal jurisdiction enforcing the subpoenas. 

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foreseeable that the party should reasonably anticipate being haled into the forum 

court. World-Wide Volkswagen Corp. v. Woodson, 444 U.S. 286, 297 (1980). 

Under Federal Rule of Civil Procedure 4(k)(2), the service of a summons 

with respect to a claim under federal law in which Congress has authorized 

worldwide service establishes personal jurisdiction over the defendant, subject to 

constitutional limits. The Securities Exchange Act permits the exercise of 

personal jurisdiction to the limits of the Due Process Clause of the Fifth 

Amendment. SEC v. Unifund SAL, 910 F.2d 1028, 1033 (2d Cir. 1990). Congress 

has provided for worldwide service of process in cases of the enforcement of 

subpoenas issued by the SEC. 15 U.S.C. § 77v(a). The language of§ 77v(a) 

authorizes the service of process on a defendant in any district "of which the 

defendant is an inhabitant or wherever the defendant may be found." !d.; see also 

15 U.S. C. § § 7 8u( c), 80a-41 (c) (employing language to permit service "wherever 

[the defendant] may be found"); accord 15 U.S.C. § 78aa. Under§ 80a-41(c), the 

SEC is entitled to invoke the aid of the district court in which it is conducting its 

investigation. 

Knowles was served by the SEC with the Order to Show Cause outside his 

home in Nassau, Bahamas. When the personal jurisdiction of a federal court is 

invoked based upon a federal statute providing for extraterritorial service, the 

relevant inquiry is whether the respondent has had sufficient minimum contacts 

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• 

with the United States. See, e.g., Busch v. Buchman, Buchman & 0 'Brien, 11 

F.3d 1255, 1258 (5th Cir. 1994) (worldwide service under 15 U.S.C. § 78aa); 

accord United Liberty Life Ins. v. Ryan, 985 F.2d 1320, 1330 (6th Cir. 1993); cf 

United Elec. Workers v. 163 Pleasant St. Corp., 960 F.2d 1080, 1085 (1st Cir. 

1992) (nationwide service under 29 U.S.C. § 1132(e)(2)); Go-Video, Inc. v. Akai 

Elec. Co., 885 F.2d 1406, 1414-16 (9th Cir. 1989) (worldwide service under 15 

U.S.C. § 22). Specific contacts with the district in which enforcement is sought, 

in this case Colorado, are unnecessary. 

The question then before this court is whether Knowles has sufficient 

minimum contacts with the United States to enable the district court to exercise 

personal jurisdiction over.him consistent with the Due Process Clause of the Fifth 

Amendment. We thus look to the constitutional sufficiency of the contacts with 

the United States which Knowles concedes. Knowles acknowledges the following 

contacts: (1) that he visited the United States "on a number of occasions" for 

purposes of meeting with investment clients; (2) that during his visits to Florida 

to meet with the sole shareholder6 of Global Petrol Trading and Swiss EuroFund, 

Inc., "he signed a handful of letters and checks"; and (3) he opened a brokerage 

6

The SEC's affidavit evidence establishes that there is indeed only one 

shareholder of Global Petrol Trading and Swiss EuroFund, Inc. Knowles refers 

only to "the shareholder" of these corporations. Employing the SEC's term 

"sole" thus clarifies the issue and is not inconsistent with either the import or the 

phraseology of Knowles's concession. 

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• 

trading account for Global Petrol Trading during one of his trips to Florida. 

Here the SEC has produced affidavits outlining more extensive contacts 

between Knowles and the United States, mainly in the forms of active trading 

through additional American brokerage accounts and the wiring of proceeds from 

stock sales to Bahamian banks. Knowles, however, generally contests these 

alleged contacts. He argues that they are based on hearsay and expert opinions 

concerning securities industry practices and handwriting identification which are 

without foundation. He contends that his actions on behalf of Global Petrol 

Trading and Swiss EuroFund, Inc., are limited to those he has admitted. 

The district court did not resolve these disputed jurisdictional facts. As a 

result, this court is hesitant to consider the evidence of contacts presented by the 

SEC. Based only on the contacts Knowles admits, however, we hold that the 

district court does have personal jurisdiction over him. 

B. Analysis 

The source of a federal district court's jurisdiction may be twofold: 

specific and general jurisdiction. Specific jurisdiction may be exercised where 

the defendant has "purposefully directed" its activities toward the forum 

jurisdiction and where the underlying action is based upon activities that arise out 

of or relate to the defendant's contacts with the forum. Burger King, 471 U.S. at 

472; Helicopteros Nacionales, 466 U.S. at 414 & n.8. A nonresident defendant 

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• 

may be subjected to the forum's general jurisdiction even where the alleged 

activities of the defendant upon which the claims are based are unrelated to his 

contacts with the forum. Doe, 974 F.2d at 147. The forum court's general 

jurisdiction may be invoked over the defendant on any matter if the defendant's 

unrelated contacts are sufficiently '"continuous and systematic"' that the exercise 

of jurisdiction is '"reasonable and just."' Helicopteros Nacionales, 466 U.S. at 

415 (quoting Perkins v. Benguet Consol. Mining Co., 342 U.S. 437, 438, 445 

(1952)). Our focus here is on specific jurisdiction. 

In this case, all of Knowles's admitted contacts with the United States 

concern his activities as the former president of Global Petrol Trading and Swiss 

EuroFund, Inc. Those contacts involve activities that are the very source of the 

SEC's interest in the two corporations. The underlying investigation and this 

subpoena enforcement action arise out of Knowles's contacts with the United 

States and thus support the exercise of specific jurisdiction in order to secure 

enforcement. 

Knowles, however, contends that the contacts of the two corporations 

cannot be factored into the analysis of whether he has minimum contacts with the 

United States. His argument is that the jurisdiction of the district court based 

upon these corporate contacts does not extend to him. Knowles is mistaken. As 

the Supreme Court held in Calder v. Jones, employees of a corporation that is 

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.. 

subject to the personal jurisdiction of the courts of the forum may themselves be 

subject to jurisdiction if those employees were primary participants in the 

activities forming the basis of jurisdiction over the corporation. Calder v. Jones, 

465 U.S. 783, 790 (1984). That the subpoenas were served on Knowles without 

explicit reference to his former capacity as president of the two corporations has 

no bearing on whether the district court has jurisdiction over him with regard to 

the corporate activities in which Knowles was a primary participant. Personal 

jurisdiction over him would extend at least as far as matters relating to the 

activities of the two corporations in the forum in which he was a primary 

participant. See Calder, 465 U.S. at 790; Perkins, 342 U.S. at 445-46. 

Knowles has purposefully directed his activities on behalf of Global Petrol 

Trading and Swiss EuroFund, Inc., toward the United States. See Burger King, 

471 U.S. at 472. Moreover, those activities are directly related to matters in the 

underlying SEC investigation. As Knowles concedes, he was the individual who 

took the actions on behalf of the two corporations that are the basis of 

jurisdiction. Knowles was then a primary participant in these activities. See 

Calder, 465 U.S. at 789-90. Based upon his admitted contacts, the exercise of 

specific jurisdiction over him is reasonable and just and satisfies traditional 

notions of fair play. See Perkins, 342 U.S. at 445; International Shoe, 326 U.S. at 

316. 

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.. 

Even a single purposeful contact may be sufficient to meet the minimum 

contacts standard when the underlying proceeding is directly related to that 

contact. See McGee v. International Life Ins. Co., 355 U.S. 220, 223 (1957). 

Those contacts admitted by Knowles involve an ongoing business relationship and 

a brokerage account. They are sufficient to support the exercise of specific 

personal jurisdiction because the underlying SEC investigation concerns these 

admitted contacts. See SEC v. Gilbert, 82 F.R.D. 723, 725-26 (S.D.N.Y. 1979) 

(exercising personal jurisdiction over a Swiss bank whose only contacts with the 

United States were four brokerage accounts maintained at three securities 

dealers); see also Unifund SAL, 910 F.2d at 1033 (upholding personal jurisdiction 

over foreign investors alleged to have conducted insider trading in purchasing 

securities of a United States corporation traded on a United States exchange); 

Perez-Rubio v. Wyckoff, 718 F. Supp. 217, 229-31 (S.D.N.Y. 1989) (upholding 

personal jurisdiction over a foreign investment house and its individual officers 

because the purpose of the corporation was to purchase United States securities 

on United States exchanges, in part for United States citizens). 

Knowles's contacts involve trading activities on behalf of an American 

shareholder of the corporations that employed him as president, through an 

American brokerage firm, that were "purposefully directed" toward the United 

States. See Burger King, 471 U.S. at 472. Moreover, they represent a deliberate 

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• 

affiliation with the forum that renders foreseeable the possibility of being haled 

into court in the United States at least as to those specific contacts. See id. at 

478-82; World-Wide Volkswagen, 444 U.S. at 297. The actions Knowles took on 

behalf of Global Petrol Trading and Swiss EuroFund, Inc., indicate that Knowles, 

through the corporations, purposefully availed himself of the benefits and 

protections ofthe laws ofthe United States. See Hanson v. Denckla, 357 U.S. 

235, 253 ( 1958). 

From these contacts, Knowles and the two corporations enjoyed the 

privileges of conducting activities within the United States and he could 

reasonably anticipate being subject to the jurisdiction of the United States. See 

World-Wide Volkswagen, 444 U.S. at 297. Knowles's continuing investment 

contacts with United States citizens, companies, and brokerage accounts were not 

random, fortuitous, or attenuated. See Keeton v. Hustler Magazine, Inc., 465 U.S. 

770, 774 (1984); World-Wide Volkswagen, 444 U.S. at 299. Rather, they were 

purposeful, continuous, and systematic. See Burger King, 471 U.S. at 472; 

Perkins, 342 U.S. at 446-48. The district court's exercise of specific personal 

jurisdiction over him thus comported with '"traditional notions of fair play and 

substantial justice."' See International Shoe, 326 U.S. at 316 (quoting Milliken, 

311 U.S. at 463). 

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' 

For the foregoing reasons, the district court's order to Knowles to comply 

with the SEC's administrative subpoenas duces tecum is AFFIRMED. 

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PUBLISH 

UNITED STATES COURT OF APPEALS 

TENTH CIRCUIT 

In the Matter of an Application 

to Enforce Administrative Subpoenas 

Duces Tecum of the 

SECURITIES AND EXCHANGE 

COMMISSION, 

Applicant-Appellee, 

FILED 

llaitecl Statet Court of Appeals TtnCh Circuit 

JUN 2 0 1996 

PATRICK FISHER 

Clerk 

No. 95-1425 

v. 

GA YE B. KNOWLES, 

Respondent-Appellant. 

Appeal from the United States District Court 

for the District of Colorado 

(D.C. No. 95-B-2036) 

Raymond L. Robin, Olle, Macaulay & Zorrilla, Miami, Florida, (David W. Stark, 

Amy J. Griffin, Otten, Johnson, Robinson, Neff & Ragonetti, P.C., Denver, 

Colorado, with him on the briefs), for Respondent-Appellant. 

Robert M. Fusfeld, Securities and Exchange Commission, Denver, Colorado, 

(Simon M. Lorne, General Counsel, Jacob H. Stillman, Associate General 

Counsel, Katharine B. Gresham, Assistant General Counsel, Catherine A. 

Appellate Case: 95-1425 Document: 01019279556 Date Filed: 06/20/1996 Page: 18 
Broderick, Counsel to the Assistant General Counsel, Securities and Exchange 

Commission, Washington, D.C., Paul Gonson, Solicitor, Of Counsel, on the 

brief), for Applicant-Appellee. 

Before SEYMOUR, BRORBY, and MURPHY, Circuit Judges. 

MURPHY, Circuit Judge. 

This case arises out of the enforcement by the district court against the 

appellant, a foreign national, of two administrative subpoenas duces tecum issued 

by the Securities and Exchange Commission. The appellant argues that the 

district court lacked personal jurisdiction to enforce the subpoenas. The district 

court held that it did not need personal jurisdiction over the appellant to do so. 

The question presented is whether the appellant has the requisite minimum 

contacts to justify the district court's exercise of personal jurisdiction over him. 

This court holds that he does and that the district court properly enforced the 

subpoenas. 

I. BACKGROUND AND PROCEDURAL SETTING 

On June 14, 1995, and again on June 30, 1995, the Securities and 

Exchange Commission (the "SEC") issued administrative subpoenas duces tecum 

in the name of the appellant, Gaye B. Knowles. The SEC served Knowles with 

the first subpoena by hand at LaGuardia Airport in New York City. It later 

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served the second on Knowles's counsel in Miami, Florida. These subpoenas 

were issued in connection with the Formal Order of Investigation in the 

nonpublic investigation conducted by the SEC out of its Denver, Colorado, 

office, In the Matter of the Rockies Fund, Inc., Redwood Microcap Fund, Inc., 

and Combined Penny Stock Fund, Inc., et a/. 1 The SEC issued these subpoenas 

pursuant to its authority under 15 U.S. C. §§ 77s(b), 78u(b), and 80a-41(b). 

Knowles is presently a Bahamian citizen and resident and has been so since 

1951. He is an independent investment consultant and, at the times the 

subpoenas were served on him, was also the president of two Bahamian 

companies, Global Petrol Trading and Swiss EuroFund, Inc. 2 In the investigation, 

the SEC sought to determine whether bank accounts in the names of these two 

companies were used to bribe brokers in the United States to sell certain stock of 

American companies in violation of federal securities laws. The first subpoena 

directed Knowles to appear at a deposition and to produce certain personal 

documents and documents relating to the bank accounts of Global Petrol Trading. 

The second subpoena directed the same and called for Knowles to produce 

1

The Formal Order of Investigation is not a part of the record in this case; the 

SEC claims that it is a nonpublic document. The Formal Order was available to 

the district court for in camera inspection, but its scope and contents are in no 

way related to the issues here on appeal. 

2

Since that time, Knowles has been advised that his employment with Global 

Petrol Trading and Swiss EuroFund, Inc., has been terminated. [App. at 66] 

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documents relating to the bank accounts of Swiss EuroFund, Inc. 

In response to the subpoenas, Knowles appeared for deposition in Miami, 

Florida, on July 12, 1995. Knowles produced certain corporate documents 

pursuant to the subpoenas but objected to producing monthly banking statements 

and other banking documents of the two companies. In order to enforce the 

subpoenas, the SEC applied to the district court in the judicial district where it is 

conducting the investigation, as authorized in 15 U.S.C. §§ 77v(b), 78u(c), and 

80a-41(c). 

The SEC filed an Ex Parte Application for an Order to Show Cause and 

Application for an Order Compelling Compliance with Administrative Subpoenas 

Duces Tecum. The United States District Court for the District of Colorado 

subsequently issued an Order to Show Cause. Thereafter, the SEC served 

Knowles with the Order to Show Cause outside his home in Nassau, Bahamas. 

Knowles responded to the Order to Show Cause and moved the district court to 

dismiss the SEC's application for lack of personal jurisdiction over him. 

In an Amended Memorandum Order and Opinion, the district court held 

that it did not need personal jurisdiction over Knowles in order to enforce the 

subpoenas against him. It held, instead, that judicial enforcement of an 

administrative subpoena may be had where the agency can show that: (1) the 

inquiry is conducted pursuant to a lawfully authorized, legitimate purpose; (2) it 

is reasonably relevant to an investigation which the agency has authority to 

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conduct; and (3) all administrative prerequisites have been met. See United 

States v. Powell, 379 U.S. 48, 57-58 (1964); SEC v. Blackfoot Bituminous, Inc., 

622 F.2d 512, 514 (lOth Cir.), cert. denied, 449 U.S. 955 (1980). The district 

court determined that the SEC met this three-pronged burden and that Knowles 

had adduced no evidence to the contrary. It therefore ordered Knowles to comply 

with the subpoenas within ten days. This court subsequently granted Knowles's 

Motion to Stay the Amended Memorandum Order and Opinion pending appeal. 

This appeal followed. 

On appeal, Knowles argues that the district court erred when it determined 

it did not need personal jurisdiction over him in order to enforce the subpoenas. 

He also argues that the district court could not properly exercise jurisdiction over 

him because of his lack of personal contacts with the United States. In response, 

the SEC maintains that the district court had personal jurisdiction over Knowles 

based upon sufficient minimum contacts with the United States in relation to: (1) 

the subpoenas; (2) the matters under investigation by the SEC; and (3) his general 

business. In the alternative, the SEC argues that the minimum contacts analysis 

is not required because the district court had personal jurisdiction over Knowles 

based upon the SEC's service of the subpoenas on Knowles within the territorial 

limits of the United States. The SEC does not argue that personal jurisdiction is 

not required in order to enforce the subpoenas, as the district court held. 

II. WRISDICTION 

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This court has jurisdiction to review the Amended Memorandum Order and 

Opinion under 28 U.S. C. § 1291. The district court's ruling on personal 

jurisdiction involves a question of law that is reviewed de novo. Taylor v. 

Phelan, 912 F.2d 429, 431 (lOth Cir. 1990), cert. denied, 498 U.S. 1068 (1991). 

The issue here is a narrow one: whether the district court had personal 

jurisdiction over Knowles to enforce the administrative subpoenas duces tecum. 

The court notes at the outset that Knowles does not contend the SEC lacked the 

authority to issue the subpoenas under the tripartite test set out in Powell and 

Blackfoot. He does not challenge the methods or places of service of process 

employed in serving either the subpoenas or the Order to Show Cause. 

Moreover, Knowles does not seriously contend that he lacked capacity to produce 

corporate records in his possession or that the SEC could only secure production 

of the documents through service of subpoenas on Knowles's former corporate 

employers. 3 Therefore, we do not address these issues and limit this opinion to 

3

0ver the course of this enforcement action, Knowles has hinted at possible 

problems or objections he may have with the scope of the subpoenas. For 

instance, at his deposition, Knowles conceded that some of the documents 

requested in the subpoenas were in his possession, control, and custody and 

would be found at his residence, which also functioned as his office. But 

Knowles has 

also noted that since he was terminated as president, he has been instructed to 

return all the documents belonging to Global Petrol Trading and Swiss EuroFund, 

Inc. Furthermore, Knowles's counsel stated at Knowles's deposition that the 

objection to the request for corporate documents was based on the fact that these 

were "private documents in a corporation." He explained the subpoenas reflected 

that the corporations were not under investigation and that he thus believed the 

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the question of the jurisdiction of the district court, based upon the 

extraterritorial service of the Order to Show Cause, to enforce the SEC's 

subpoenas duces tecum against Knowles. 4 

corporations were "outside the scope of the subpoena[s] issued by the SEC to 

compel documents from a Bahamian bank." He therefore asserted a general 

privacy interest in "proprietary private information." Knowles also indicated that 

he chose not to produce the requested documents because he was not a signatory 

on the bank accounts requested in the subpoenas and thus had no control over 

them. 

Knowles, however, indicated in his testimony that some of the subpoenaed 

banking documents of which he was not the signatory were in his possession. He 

did not produce these documents. In his appellate filings before this court, 

Knowles does not elaborate on either the documents that are still in his 

possession or the "privilege" asserted in his deposition colloquy. Instead, 

Knowles only employs the alleged differences between his personal capacity and 

the corporate capacities of both Global Petrol Trading and Swiss EuroFund, Inc., 

in order to make the argument that the corporate contacts are not his own 

personal contacts. We discuss this issue below. 

Furthermore, the district court did not address the issue of what Knowles 

must produce or his general claims of corporate "privilege." Although Knowles's 

"privilege" arguments are somewhat oblique, as we discern them they fail. We 

note that a corporation possesses no right to exercise a privilege against selfincrimination and that a corporate officer cannot refuse to produce corporate 

documents on the ground of self-incrimination. United States v. Rice, 52 F.3d 

843, 846 (lOth Cir. 1995); United States v. Hansen Niederhauser Co., 522 F.2d 

1037, 1039 (1Oth Cir. 1975). To the extent that Knowles asserts that the SEC 

lacks the power to require production of documents stored outside the territorial 

boundaries of the United States, this issue has also been decided against his 

position. Commodity Futures Trading Comm 'n v. Nahas, 738 F.2d 487, 492 & 

n.ll (D.C. Cir. 1984) (citing cases). 

4

Nor do we consider the issue of whether the district court acquired personal 

jurisdiction over Knowles as a result of his attendance at the scheduled 

deposition pursuant to the subpoenas. The SEC does not contend that Knowles's 

attendance and production of some responsive documents waived his objections 

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' I 1 I 

A. Minimum Contacts 

Under the due process clause of the Fifth Amendment, personal jurisdiction 

over a party does not exist unless that party has sufficient "minimum contacts" 

with the jurisdiction. International Shoe Co. v. Washington, 326 U.S. 310, 316 

(1945). 5 The exercise of jurisdiction must not "offend 'traditional notions of fair 

play and substantial justice."' Id. (quoting Milliken v. Meyer, 311 U.S. 457,463 

(1940)). Furthermore, the party's activities within the jurisdiction must render it 

foreseeable that the party should reasonably anticipate being haled into the forum 

court. World-Wide Volkswagen Corp. v. Woodson, 444 U.S. 286, 297 (1980). 

Under Federal Rule of Civil Procedure 4(k)(2), the service of a summons 

to the personal jurisdiction of the district court to enforce the subpoenas. 

Therefore, this court will not address the issue of waiver. 

5

The SEC argues, in the alternative, that the minimum contacts analysis of 

International Shoe is unnecessary because the SEC served the administrative 

subpoenas on Knowles within the boundaries of the United States. See Burnham 

v. Superior Court, 495 U.S. 604 (1990). Although language in decisions of other 

circuits arguably provides some support for the SEC's theory, we have no need to 

consider the issue and whether Burnham, which involved service of a summons in 

the forum state, controls. See Mark Rich & Co. v. United States (In re Mark Rich 

& Co.), 707 F.2d 663, 668 (2d Cir.), cert. denied, 463 U.S. 1215 (1983); FTC v. 

Compagnie de Saint-Gobain-Pont-a-Mousson, 636 F.2d 1300, 1324 (D.C. Cir. 

1980). Therefore, we express no opinion on whether an administrative agency, 

which must apply to a court in order to enforce its subpoenas, may itself secure 

personal jurisdiction over a person solely through service of subpoenas within the 

United States and then may rely upon that jurisdiction to enforce compliance with 

those subpoenas in a district court. Rather, we hold that Knowles independently 

has sufficient minimum contacts with the United States to support the district 

court's exercise of personal jurisdiction enforcing the subpoenas. 

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with respect to a claim under federal law in which Congress has authorized 

worldwide service establishes personal jurisdiction over the defendant, subject to 

constitutional limits. The Securities Exchange Act permits the exercise of 

personal jurisdiction to the limits of the Due Process Clause of the Fifth 

Amendment. SEC v. Unifund SAL, 910 F.2d 1028, 1033 (2d Cir. 1990). 

Congress has provided for worldwide service of process in cases of the 

enforcement of subpoenas issued by the SEC. 15 U.S. C. § 77v(a). The language 

of§ 77v(a) authorizes the service of process on a defendant in any district "of 

which the defendant is an inhabitant or wherever the defendant may be found." 

!d.; see also 15 U.S.C. §§ 78u(c), 80a-41(c) (employing language to permit 

service "wherever [the defendant] may be found"); accord 15 U.S.C. § 78aa. 

Under § 80a-41(c), the SEC is entitled to invoke the aid of the district court in 

which it is conducting its investigation. 

Knowles was served by the SEC with the Order to Show Cause outside his 

home in Nassau, Bahamas. When the personal jurisdiction of a federal court is 

invoked based upon a federal statute providing for extraterritorial service, the 

relevant inquiry is whether the respondent has had sufficient minimum contacts 

with the United States. See, e.g., Busch v. Buchman, Buchman & 0 'Brien, 11 

F.3d 1255, 1258 (5th Cir. 1994) (worldwide service under 15 U.S.C. § 78aa); 

accord United Liberty Life Ins. v. Ryan, 985 F.2d 1320, 1330 (6th Cir. 1993); cf 

United Elec. Workers v. 163 Pleasant St. Corp., 960 F.2d 1080, 1085 (1st Cir. 

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. . ) ' 

1992) (nationwide service under 29 U.S.C. § 1132(e)(2)); Go-Video, Inc. v. Akai 

Elec. Co., 885 F.2d 1406, 1414-16 (9th Cir. 1989) (worldwide service under 15 

U.S. C. § 22). Specific contacts with the district in which enforcement is sought, 

in this case Colorado, are unnecessary. 

The question then before this court is whether Knowles has sufficient 

minimum contacts with the United States to enable the district court to exercise 

personal jurisdiction over him consistent with the Due Process Clause of the Fifth 

Amendment. We thus look to the constitutional sufficiency of the contacts with 

the United States which Knowles concedes. Knowles acknowledges the 

following contacts: (1) that he visited the United States "on a number of 

occasions" for purposes of meeting with investment clients; (2) that during his 

visits to Florida to meet with the sole shareholder6 of Global Petrol Trading and 

Swiss EuroFund, Inc., "he signed a handful of letters and checks"; and (3) he 

opened a brokerage trading account for Global Petrol Trading during one of his 

trips to Florida. Here the SEC has produced affidavits outlining more extensive 

contacts between Knowles and the United States, mainly in the forms of active 

trading through additional American brokerage accounts and the wiring of 

6

The SEC's affidavit evidence establishes that there is indeed only one 

shareholder of Global Petrol Trading and Swiss EuroFund, Inc. Knowles refers 

only to "the shareholder" of these corporations. Employing the SEC's term 

"sole" thus clarifies the issue and is not inconsistent with either the import or the 

phraseology of Knowles's concession. 

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- " l ' 

proceeds from stock sales to Bahamian banks. Knowles, however, generally 

contests these alleged contacts. He argues that they are based on hearsay and 

expert opinions concerning securities industry practices and handwriting 

identification which are without foundation. He contends that his actions on 

behalf of Global Petrol Trading and Swiss EuroFund, Inc., are limited to those he 

has admitted. 

The district court did not resolve these disputed jurisdictional facts. As a 

result, this court is hesitant to consider the evidence of contacts presented by the 

SEC. Based only on the contacts Knowles admits, however, we hold that the 

district court does have personal jurisdiction over him. 

B. Analysis 

The source of a federal district court's jurisdiction may be twofold: 

specific and general jurisdiction. Specific jurisdiction may be exercised where 

the defendant has "purposefully directed" its activities toward the forum 

jurisdiction and where the underlying action is based upon activities that arise out 

of or relate to the defendant's contacts with the forum. Burger King, 471 U.S. at 

472; Helicopteros Nacionales, 466 U.S. at 414 & n.8. A nonresident defendant 

may be subjected to the forum's general jurisdiction even where the alleged 

activities of the defendant upon which the claims are based are unrelated to his 

contacts with the forum. Doe, 974 F.2d at 147. The forum court's general 

jurisdiction may be invoked over the defendant on any matter if the defendant's 

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.. . " ( 

unrelated contacts are sufficiently "'continuous and systematic"' that the exercise 

of jurisdiction is '"reasonable and just."' Helicopteros Nacionales, 466 U.S. at 

415 (quoting Perkins v. Benguet Consol. Mining Co., 342 U.S. 437, 438, 445 

(1952)). Our focus here is on specific jurisdiction. 

In this case, all of Knowles's admitted contacts with the United States 

concern his activities as the former president of Global Petrol Trading and Swiss 

EuroFund, Inc. Those contacts involve activities that are the very source of the 

SEC's interest in the two corporations. The underlying investigation and this 

subpoena enforcement action arise out of Knowles's contacts with the United 

States and thus support the exercise of specific jurisdiction in order to secure 

enforcement. 

Knowles, however, contends that the contacts of the two corporations 

cannot be factored into the analysis of whether he has minimum contacts with the 

United States. His argument is that the jurisdiction of the district court based 

upon these corporate contacts does not extend to him. Knowles is mistaken. As 

the Supreme Court held in Calder v. Jones, employees of a corporation that is 

subject to the personal jurisdiction of the courts of the forum may themselves be 

subject to jurisdiction if those employees were primary participants in the 

activities forming the basis of jurisdiction over the corporation. Calder v. Jones, 

465 U.S. 783, 790 (1984). That the subpoenas were served on Knowles without 

explicit reference to his former capacity as president of the two corporations has 

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. . . 

no bearing on whether the district court has jurisdiction over him with regard to 

the corporate activities in which Knowles was a primary participant. Personal 

jurisdiction over him would extend at least as far as matters relating to the 

activities of the two corporations in the forum in which he was a primary 

participant. See Calder, 465 U.S. at 790; Perkins, 342 U.S. at 445-46. 

Knowles has purposefully directed his activities on behalf of Global Petrol 

Trading and Swiss EuroFund, Inc., toward the United States. See Burger King, 

471 U.S. at 472. Moreover, those activities are directly related to matters in the 

underlying SEC investigation. As Knowles concedes, he was the individual who 

took the actions on behalf of the two corporations that are the basis of 

jurisdiction. Knowles was then a primary participant in these activities. See 

Calder, 465 U.S. at 789-90. Based upon his admitted contacts, the exercise of 

specific jurisdiction over him is reasonable and just and satisfies traditional 

notions of fair play. See Perkins, 342 U.S. at 445; International Shoe, 326 U.S. 

at 316. 

Even a single purposeful contact may be sufficient to meet the minimum 

contacts standard when the underlying proceeding is directly related to that 

contact. See McGee v. International Life Ins. Co., 355 U.S. 220, 223 (1957). 

Those contacts admitted by Knowles involve an ongoing business relationship 

and a brokerage account. They are sufficient to support the exercise of specific 

personal jurisdiction because the underlying SEC investigation concerns these 

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admitted contacts. See SEC v. Gilbert, 82 F.R.D. 723, 725-26 (S.D.N. Y. 1979) 

(exercising personal jurisdiction over a Swiss bank whose only contacts with the 

United States were four brokerage accounts maintained at three securities 

dealers); see also Unifund SAL, 910 F.2d at 1033 (upholding personal jurisdiction 

over foreign investors alleged to have conducted insider trading in purchasing 

securities of a United States corporation traded on a United States exchange); 

Perez-Rubio v. Wyckoff, 718 F. Supp. 217,229-31 (S.D.N.Y. 1989) (upholding 

personal jurisdiction over a foreign investment house and its individual officers 

because the purpose of the corporation was to purchase United States securities 

on United States exchanges, in part for United States citizens). 

Knowles's contacts involve trading activities on behalf of an American 

shareholder of the corporations that employed him as president, through an 

American brokerage firm, that were "purposefully directed" toward the United 

States. See Burger King, 471 U.S. at 472. Moreover, they represent a deliberate 

affiliation with the forum that renders foreseeable the possibility of being haled 

into court in the United States at least as to those specific contacts. See id. at 

478-82; World-Wide Volkswagen, 444 U.S. at 297. The actions Knowles took on 

behalf of Global Petrol Trading and Swiss EuroFund, Inc., indicate that Knowles, 

through the corporations, purposefully availed himself of the benefits and 

protections of the laws of the United States. See Hanson v. Denckla, 357 U.S. 

235, 253 (1958). 

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.. .. . ' 

From these contacts, Knowles and the two corporations enjoyed the 

privileges of conducting activities within the United States and he could 

reasonably anticipate being subject to the jurisdiction of the United States. See 

World-Wide Volkswagen, 444 U.S. at 297. Knowles's continuing investment 

contacts with United States citizens, companies, and brokerage accounts were not 

random, fortuitous, or attenuated. See Keeton v. Hustler Magazine, Inc., 465 

U.S. 770, 774 (1984); World-Wide Volkswagen, 444 U.S. at 299. Rather, they 

were purposeful, continuous, and systematic. See Burger King, 471 U.S. at 472; 

Perkins, 342 U.S. at 446-48. The district court's exercise of specific personal 

jurisdiction over him thus comported with "'traditional notions of fair play and 

substantial justice."' See International Shoe, 326 U.S. at 316 (quoting Milliken, 

311 U.S. at 463). 

For the foregoing reasons, the district court's order to Knowles to comply 

with the SEC's administrative subpoenas duces tecum is AFFIRMED. 

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