United States Court of Appeals

FOR THE DISTRICT OF COLUMBIA CIRCUIT

Argued October 15, 2014 Decided December 2, 2014

No. 14-1018

PETER SIRIS,

PETITIONER

v.

SECURITIES AND EXCHANGE COMMISSION,

RESPONDENT

On Petition for Review of an Order of

 the Securities & Exchange Commission

M. William Munno argued the cause and filed the briefs for

petitioner.

Jacob R. Loshin, Senior Counsel, Securities and Exchange

Commission, argued the cause for respondent. With him on the

brief were Michael A. Conley, Deputy General Counsel, John W.

Avery, Deputy Solicitor, and Randall W. Quinn, Assistant

General Counsel. 

Before: ROGERS and WILKINS, Circuit Judges, and

RANDOLPH, Senior Circuit Judge.

Opinion for the Court filed by Circuit Judge ROGERS.

ROGERS, Circuit Judge: The Securities and Exchange
2

Commission filed a civil complaint against Peter Siris, alleging

he committed various securities law violations. Voluntarily

settling the suit, Siris agreed in a consent judgment that in any

related administrative proceeding before the Commission he

would not contest the allegations of the civil complaint. 

Thereafter, the Commission commenced a follow-on proceeding

against Siris to determine whether a remedial sanction was in the

public interest and ordered that Siris be permanently barred from

the securities industry and from participating in any offering of

penny stock. 

In Blinder, Robinson & Co. v. SEC, 837 F.2d 1099 (D.C.

Cir. 1988), the court emphasized that, in a follow-on sanctions

proceeding, the Commission must abide by a “clear distinction”

between the district court’s determination of a petitioner’s

liability under the securities laws and evidence about the

circumstances surrounding his misconduct “germane to the

[Commission] in exercising its judgment as to the nature and

scope of sanctions that are appropriate in the public interest.” 

Id. at 1109. As regards the appropriate sanction, the court

instructed that “evidence relevant to a party’s degree of

culpability must be considered in deciding that issue.” Id. But

the court explained that it was “in no way” suggesting that the

petitioner could, in a follow-on sanctions proceeding, relitigate

the factual issues “conclusively decided” in the underlying civil

suit. Id. 

Siris seeks vacatur of the Commission’s order imposing a

lifetime bar on the ground that the Commission contravened the

court’s instruction in Blinder by refusing to consider the entire

record and mitigating evidence he proffered regarding the

appropriate sanction. Review of the administrative record

indicates that Siris sought, in effect, “to relitigate the factual

question[s],” id., that he agreed in the consent judgment not to

challenge directly or indirectly. Although the factual allegations
3

in the complaint against Siris were not adjudicated after an

evidentiary hearing, the terms of the consent judgment rendered

those facts “conclusively decided,” id., for purposes of the

subsequent administrative proceeding. The Commission

considered the relevant record, including Siris’ evidence of the

circumstances surrounding his misconduct that did not, in effect,

seek to challenge the allegations of the complaint. For these

reasons, and consistent with the deference due to the

Commission’s choice of sanction, we deny the petition for

review. 

I.

Peter Siris founded and was a managing member of Guerilla

Capital Management, LLC, an investment adviser to two funds

Siris established that invest in Chinese companies listed on U.S.

stock exchanges. Siris also founded Hua Mei 21st Century,

LLC, a consulting firm. On July 30, 2012, the Securities and

Exchange Commission (“Commission”) filed a civil complaint

against Siris, Guerilla, and Hua Mei in federal district court,

alleging that they repeatedly engaged in insider trading and

other securities-related misconduct. Many of the allegations

involved Siris’ relationship with China Yingxia International,

Inc. (“China Yingxia”), a health food company with operations

in China. The complaint alleged:

• Siris sold China Yingxia stock in violation of the

holding period, registration, and other requirements for stock

resale set forth in Section 5 of the Securities Act, 15 U.S.C.

§§ 77e(a), (c). Compl. ¶¶ 32-47. 

• Siris acted as an unregistered broker in violation of

Section 15(a)(1) of the Securities Exchange Act, 15 U.S.C.

§ 78o(a)(1), by “raising over $2 million worth of investments

[for China Yingxia] in exchange for transaction-based
4

compensation.” Compl. ¶ 49. 

• In February and March 2009 Siris “with scienter,”

Compl. ¶¶ 140, 144, repeatedly engaged in insider trading in

China Yingxia stock, in violation of Section 10(b) of the

Securities Exchange Act, 15 U.S.C. § 78j(b), and Rule 10b-5, 17

C.F.R. § 240.10b5-1, promulgated thereunder. Compl. ¶¶ 73,

78-87, 90. During two episodes, Siris traded China Yingxia

stock after receiving from China Yingxia a letter and draft press

release containing material, nonpublic information about the

company. Compl. ¶¶ 78-82, 83-87. Siris knew he was not

permitted to trade the stock while in possession of such

information. Compl. ¶ 74.

• Siris made misrepresentations and omitted material

information in communications with his funds’ investors in

violation of Section 206(4) of the Investment Advisers Act, 15

U.S.C. § 80b-6(4), and Rule 206(4)-8, 17 C.F.R. § 275.206(4)-8,

promulgated thereunder. Compl. ¶¶ 6, 92-100. Siris’

communications about problems at China Yingxia omitted

mention of Siris’ own role in the company’s failings, and “gave

the false and misleading impression that others should be sued

for the very conduct in which Siris himself engaged.” Compl.

¶ 99. 

• Between July 2009 and December 2010 Siris engaged

in extensive insider trading in connection with ten confidential

securities offerings. Compl. ¶¶ 7, 101-27. In advance of each

offering, Siris or his firm was confidentially solicited by a

broker-dealer and given access to material, nonpublic

information after agreeing not to trade the security while in

possession of the information. Compl. ¶ 104. Siris then sold or

sold short the issuers’ securities prior to the public

announcement of the offerings, thus profiting from the

securities’ decline in value upon announcement. Compl. ¶¶ 7,
5

101-27. With respect to at least one of the ten offerings, Siris

also knowingly or recklessly made a materially false

representation in a securities purchase agreement. Compl. ¶¶ 8,

128-33, 139. 

• Siris violated Rule 105 of Regulation M, 17 C.F.R.

§ 242.105, by making short sales during the five business days

before pricing in two securities offerings in which he

participated. Compl. ¶¶ 9, 134-37.

 

The district court entered a final judgment permanently

enjoining Siris from violating the aforementioned securities laws 

and ordering him to pay disgorgement and a civil penalty. SEC

v. Siris, et al., No. 12 Civ. 5810 (S.D.N.Y. Sept. 18, 2012). 

Siris, who was represented by counsel, consented to entry of the

final judgment, signing the judgment and acknowledging his

signature before a notary public. Although the consent

judgment recited that Siris did not admit or deny the allegations

of the complaint (except as to the district court’s jurisdiction),

he agreed that “in any disciplinary proceeding before the

Commission based on the entry of the injunction in this action,

[he] underst[oo]d that [he] shall not be permitted to contest the

factual allegations of the complaint.” Consent J. ¶ 9. Siris also

agreed “not to take any action . . . denying, directly or indirectly,

any allegation in the complaint or creating the impression that

the complaint is without factual basis.” Id. ¶ 10. 

Ten days later, the Commission commenced an

administrative proceeding against Siris to determine whether a

remedial sanction was necessary to protect the public interest. 

See 15 U.S.C. § 78o(b)(6)(A); id. § 80b-3(f). Siris filed an

answer setting forth his defenses and attached an affidavit

explaining corrective actions he had taken to prevent his

committing further securities violations. An administrative law

judge (“ALJ”), noting that “[a]ll material facts that concern the
6

activities for which Siris was enjoined were decided against him

in the civil case on which this proceeding is based,” and taking

as true “[a]ny other facts in [Siris’] pleadings” that did not

attempt to relitigate facts established in the civil case, granted

the Enforcement Division’s motion for summary disposition 

and permanently barred Siris from the securities industry and

from participating in any offering of penny stock. See In re

Peter Siris, SEC Rel. No. 477, 2012 WL 6738469, at *1, *5

(ALJ Dec. 31, 2012). 

Siris petitioned the Commission for review on the ground

that the ALJ erred by ignoring his proffered evidence about the

circumstances surrounding his alleged misconduct as well as

corrective efforts he had taken to prevent future violations.

The Commission denied Siris’ petition. Because it was

undisputed that, at the time of Siris’ alleged misconduct, he was

participating in an offer of penny stock (China Yingxia) and was

associated with an investment adviser (Guerilla Capital), the

threshold statutory requirements for the imposition of remedial

sanctions were satisfied. See 15 U.S.C. §§ 78o(b)(6)(A),

80b-3(f). The Commission was thus left to consider “whether,

and to what extent, sanctions [we]re in the public interest.” In

re Peter Siris, SEC Rel. No. 71068, 2013 WL 6528874, at *5

(Dec. 12, 2013). The Commission reiterated its

“well-established” policy that a respondent in a follow-on

administrative proceeding “may put forward mitigating evidence

concerning the circumstances surrounding his underlying

misconduct,” but emphasized that, where, as here, Siris

consented to an injunction, he could not contest the complaint’s

allegations. Id. at *8. In accord with that policy, the

Commission rejected most of Siris’ arguments on the ground

that they contradicted the complaint. 

Considering the entire relevant record and applying the
7

multifactor test set forth in Steadman v. SEC, 603 F.2d 1126,

1140 (5th Cir. 1979), aff’d on other grounds, 450 U.S. 91

(1981), the Commission concluded that an industry-wide bar

was in the public interest. The Commission explained that Siris’

conduct “included numerous instances of insider trading over

the course of almost two years” and “securities fraud through

material misrepresentations,” and “resulted in ill-gotten gains of

over half-a-million dollars.” In re Peter Siris, 2013 WL

6528874, at *6. Moreover, in light of Siris’ multiple insider

trading violations and the fact that he knew he could not trade

while in possession of material, nonpublic information, Siris’

misconduct was undertaken with scienter.

The Commission acknowledged the steps Siris had taken to

avoid future misconduct, such as ceasing to participate in

offerings, establishing trading compliance protocols, appointing

a chief compliance officer, and maintaining a list of restricted

securities. Id. But the Commission concluded that such

voluntary measures would not adequately guard against future

violations, and that “accepting the sincerity of Siris’s assurances

against future misconduct does not mean,” as he suggested, “that

‘there [was] no risk of future misconduct warranting a bar.’” Id.

The Commission likewise rejected Siris’ proposal that he be

subjected to sanctions short of industry-wide debarment –

namely, that he continue to refrain from participating in

offerings, accepting consulting assignments, or acting in certain

capacities – noting “the practical difficulties in enforcing

compliance with such a proposal,” id. at *6 n.43 (internal

quotation marks omitted), and emphasizing “the nature of

[Siris’] misconduct and the opportunity that continued

participation in the industry would present for future violations,”

id. In particular, Siris’ agreeing not to serve as a portfolio

manager or investment adviser to a managed account “does not

ensure the protection of investors, because the allegations

supporting the injunction involve a broad array of misconduct
8

not unique to service [in those positions].” Id. at *7 (internal

quotation marks omitted). The Commission also highlighted

“[t]he flagrant manner in which Siris . . . violated the terms of

his consent [judgment],” which gave the Commission “pause

about relying upon his assurances against future misconduct,

even accepting them as sincere.” Id. In addition, the

Commission made clear its view that, given Siris’ continued

argument that his conduct did not in fact amount to violations of

the securities laws, Siris had not meaningfully recognized the

wrongful nature of his conduct. Id. Siris petitions for review.

II.

 Siris contends that the Commission “erred as a matter of

law, acted arbitrarily and capriciously, and grossly abused its

discretion” by “failing to consider the entire record” and by

“asserting that Siris was precluded by the consent judgment

from asking the Commission to weigh the entire record in

determining whether a bar was necessary to protect the public

interest.” Pet’r’s Br. 45 (emphases in original). In his view, a

lifetime bar was unnecessary to protect the public interest in

light of his corrective efforts and demonstrated willingness to

accept more modest remedial sanctions. 

The court has jurisdiction over Siris’ petition under Section

25(a)(1) of the Securities Exchange Act, 15 U.S.C. § 78y(a)(1),

and Section 213(a) of the Investment Advisers Act, id.

§ 80b-13(a). Pursuant to that authority, the court may “affirm or

modify and enforce or . . . set aside the [Commission’s] order in

whole or in part.” 15 U.S.C. § 78y(a)(3); accord id.

§ 80b-13(a). In reviewing the Commission’s decision imposing

on Siris an industry-wide lifetime bar, the court’s review is

limited to determining whether the sanction was “‘arbitrary,

capricious, an abuse of discretion, or otherwise not in

accordance with law.’” KPMG, LLP v. SEC, 289 F.3d 109, 121
9

(D.C. Cir. 2002) (quoting 5 U.S.C. § 706(2)(A)). Further, “[t]he

Supreme Court has long instructed that the Commission’s choice

of sanction shall not be disturbed by the court unless the

sanction is either ‘unwarranted in law or is without justification

in fact.’” Id. (quoting Am. Power & Light Co. v. SEC, 329 U.S.

90, 112-13 (1946)). Our review is deferential: “‘It is a

fundamental principle . . . that where Congress has entrusted an

administrative agency with the responsibility of selecting the

means of achieving the statutory policy the relation of remedy

to policy is peculiarly a matter for administrative competence.’” 

Kornman v. SEC, 592 F.3d 173, 186 (D.C. Cir. 2010) (quoting

Am. Power & Light, 329 U.S. at 112). “Because of the

Commission’s ‘accumulated experience and knowledge[,] . . .

[i]ts judgment is entitled to the greatest weight.’” Id.

(alterations in original) (quoting Am. Power & Light, 329 U.S.

at 112).

Granting due deference to the Commission’s choice of

sanction, we conclude that the Commission did not abuse its

discretion in imposing on Siris a lifetime bar. The Commission

justifiably rebuffed Siris’ proffered evidence contradicting the

allegations of the complaint, which he voluntarily agreed not to

contest. The Commission gave sufficient attention to any

mitigating evidence. Siris has not shown that the Commission’s

imposition of a lifetime bar was unwarranted as a matter of law

or unjustified in fact.

A.

In an administrative proceeding following an injunctive

action, the petitioner may not relitigate those factual questions

conclusively decided in the underlying civil suit, but the

Commission must consider mitigating evidence proffered by the

petitioner about the circumstances surrounding his misconduct. 

Blinder, 837 F.2d at 1109-10; see also Kornman, 592 F.3d at

187-88. Our opinion in Blinder, 837 F.2d 1099, illustrates how
10

the Commission should apply this principle. In that case, the

district court in a civil suit rejected the petitioner’s argument

that, in undertaking a course of alleged misconduct, he had

relied in good faith on counsel’s advice; the court thus found

that he violated various securities laws. Id. at 1109. This court

held that the petitioner was entitled, in the Commission’s

follow-on administrative proceeding, to proffer mitigating

evidence, such as why he rejected counsel’s advice, which

attorney’s advice he rejected, and whether the advice he

received was absolute or equivocal. Id. at 1110. But the court

emphasized that it was “in no way suggesting” that the petitioner

was free to contend that he had relied on counsel, because the

district court, in the underlying proceeding, had found to the

contrary. Id. at 1109.

The Commission was entitled to rely on the allegations of

the complaint in deciding whether or not imposition of a lifetime

bar on Siris was in the public interest. A consent judgment is a

judgment of the court, “a judicial decree that is subject to the

rules generally applicable to other judgments and decrees.” 

Rufo v. Inmates of Suffolk Cnty. Jail, 502 U.S. 367, 378 (1992). 

By virtue of the consent judgment, Siris was ordered “not . . . to

contest the factual allegations of the complaint” in “any

disciplinary proceeding before the Commission based on the

entry of the injunction in this action.” Consent J. ¶ 9. The

consent judgment stated he “underst[oo]d” that bar, id., but even

if he did not, it is still enforceable as part of the judgment. 

Likewise, Siris was ordered “not to take any action . . . denying,

directly or indirectly, any allegation in the complaint or creating

the impression that the complaint is without factual basis.” Id.

¶ 10. Whether or not issues established in the consent judgment

were “actually litigated” for purposes of estoppel, the

Commission’s application of factual preclusion in the follow-on

proceeding was appropriate because the judgment

unambiguously barred Siris from making any future challenge
11

to the allegations in the complaint. See Amador Cnty. v.

Salazar, 640 F.3d 373, 384 (D.C. Cir. 2011); see also SEC v.

Citigroup Global Mkts., Inc., 752 F.3d 285, 295 (2d Cir. 2014);

Elliott v. SEC, 36 F.3d 86, 87 (11th Cir. 1994) (per curiam). 

It was also permissible for the Commission to reject Siris’

purported mitigation evidence that, in reality, constituted a

collateral attack on the consent judgment. Kornman, 592 F.3d

at 186-87; Blinder, 837 F.2d at 1109-10. For instance, the

Commission could properly refuse to credit Siris’ assertions that

he did not make trades based on any information in a letter and

draft press release he received from China Yingxia, and that the

correspondence did not disclose material, nonpublic

information, because those assertions directly contradict

allegations in the complaint. See Compl. ¶¶ 4, 73, 80-81, 83, 87. 

Siris also maintains that the Commission “made improper

credibility determinations and discounted [his mitigating]

evidence from the record as ‘self-serving.’” Pet’r’s Br. 48

(quoting In re Peter Siris, 2013 WL 6528874, at *9 n.60). But

the evidence the Commission described as “self-serving” was

proffered by Siris to show that he did not commit insider trading

with scienter or possess material, nonpublic information. As

such, that evidence constituted an impermissible collateral

attack on the consent judgment, and the Commission could

properly refuse to consider it. 

B.

The Commission likewise did not abuse its discretion in

concluding that a lifetime bar was necessary to protect the public

interest. See 15 U.S.C. § 78o(b)(6)(A); id. § 80b-3(f). Taken

together, the complaint’s allegations and the record evidence

that does not conflict with the consent judgment make clear that

the Commission’s choice of sanction was well within its broad

discretion. See Kornman, 592 F.3d at 186.
12

As a preliminary matter, Siris maintains that the

Commission automatically imposed a lifetime bar in light of his

settlement of the injunctive action. But the Commission

expressly confirmed that “it is not [the Commission’s] view that

[Siris’] consenting to an antifraud injunction in the district court

automatically means a bar is appropriate.” In re Peter Siris,

2013 WL 6528874, at *11 n.71 (internal quotation marks

omitted). Rather, the Commission considered the entire relevant

record, addressed Siris’ arguments against the lifetime bar, and

cogently applied Steadman’s multifactor test, 603 F.2d at 1140. 

See PAZ Secs., Inc. v. SEC, 566 F.3d 1172, 1175 (D.C. Cir.

2009). 

As the Commission explained, Siris’ conduct was egregious

and recurrent, not isolated. See Steadman, 603 F.2d at 1140-41. 

Siris maintains that “none of [his] trades remotely resembled

insider trading that merits a lifetime bar” and that he “did not

seek inside information and did nothing to obtain material

nonpublic information.” Pet’r’s Br. 56. Insofar as Siris sought

to collaterally attack the consent judgment, essentially taking

issue with the allegations he was ordered not to challenge, the

Commission was justified in refusing to consider Siris’

contention. To the extent Siris is arguing that his actions were

not egregious, in light of the serious and repeated wrongdoings

set forth in the complaint, the Commission did not abuse its

discretion in rejecting that argument.

Siris further maintains that the Commission ignored the

purportedly mitigating evidence that the resignation of China

Yingxia directors, which was made public before the offering of

China Yingxia stock, also impacted China Yingxia’s stock price. 

Even assuming these facts are true, Siris does not assert that he

actually decided to trade based on this public information

instead of his insider knowledge, which might be relevant to his

“degree of culpability.” Blinder, 837 F.2d at 1109. Rather,
13

Siris’ suggestion that the Commission should have considered

the public information’s impact on share price contradicts the

complaint’s allegation that all of his ill-gotten gains from the

sale of China Yingxia shares were caused by his trading in

nonpublic information. Compl. ¶¶ 82, 89, 91. Moreover, even

if Siris had traded based on the public information his

culpability would be only minimally diminished because he still

violated the securities laws, see 17 C.F.R. § 240.10b5-1, and he

knew that he was not permitted to trade while in possession of

material, nonpublic information, Compl. ¶ 74. Likewise, even

if Siris is correct that his funds invested only a small portion of

their money in China Yingxia and that he disclosed information

about China Yingxia’s problems to his investors, the

Commission explained that those facts do not negate Siris’

culpability, particularly because he “failed to reveal his own role

in China Yingxia and ‘gave the false and misleading impression

that others should be sued for the very conduct in which Siris

himself engaged.’” In re Peter Siris, 2013 WL 6528874, at *9

n.59 (quoting Compl. ¶ 99).

The record also supports the Commission’s conclusion that

Siris’ misconduct involved scienter. The complaint alleged that

many of Siris’ violations were intentional or reckless, he

repeatedly violated the securities laws, and he knew he could not

trade while in possession of material, nonpublic information

about an offering. See Compl. ¶¶ 127, 133, 139-40, 144. With

respect to those violations that did not require scienter, Siris’

conduct was replete with fraud and deception. See, e.g., Compl.

¶¶ 40-41, 60-62. Likewise, the Commission justifiably

concluded that Siris had not meaningfully recognized the

wrongful nature of his conduct. The Commission observed, for

instance, that Siris continued to contest the factual bases for the

securities law violations alleged in the complaint, with

“flagrant” disregard for the consent judgment. In re Peter Siris,

2013 WL 6528874, at *7. The Commission also acknowledged
14

the steps Siris had taken to avoid future wrongdoing, but in its

judgment determined that if Siris were permitted to return to the

securities industry, there still would be a meaningful risk that he

would commit future violations, given the nature of his

misconduct and his ongoing attempts to contest the facts set

forth in the complaint. Id. at *6-7.

Siris nonetheless faults the Commission for rejecting his

offer to voluntarily submit to certain lesser sanctions. Because

permanent debarment “is not the only remedy at the

Commission’s disposal that acts as a deterrent,” the Fifth Circuit

Court of Appeals concluded in Steadman that “[t]he

Commission should articulate why a lesser sanction would not

sufficiently discourage others from engaging in the unlawful

conduct it seeks to avoid.” 603 F.2d at 1142. This Court,

however, has “quoted Steadman only for the well-established

rule that an agency must adequately explain its decisions,” and

has not required the Commission to analyze all potential

alternative sanctions. PAZ Secs., 566 F.3d at 1176; see also

Kornman, 592 F.3d at 188. As discussed, the Commission gave

adequate reasons for concluding that Siris’ permanent and

industry-wide debarment was in the public interest, and the

Commission did not abuse its discretion in refusing Siris’ offer

to submit to various alternative sanctions.

Accordingly, we deny the petition for review.