NOT PRECEDENTIAL

UNITED STATES COURT OF APPEALS

FOR THE THIRD CIRCUIT

___________

No. 16-1629

___________

SECURITIES & EXCHANGE COMMISSION

v.

SHREYANS DESAI; SHREYSIDDH CAPITAL, LLC

SHREYANS DESAI,

 Appellant

____________________________________

On Appeal from the United States District Court

for the District of New Jersey

(D.C. Civil Action No. 2-11-cv-05597)

District Judge: Honorable William J. Martini

____________________________________

Submitted Pursuant to Third Circuit LAR 34.1(a)

November 18, 2016

Before: FISHER, RESTREPO and SCIRICA, Circuit Judges

(Opinion filed: December 1, 2016)

___________

OPINION*

___________

PER CURIAM

 

* This disposition is not an opinion of the full Court and pursuant to I.O.P. 5.7 does not 

constitute binding precedent.
2

Shreyans Desai appeals from orders of the United States District Court for the 

District of New Jersey, in a civil case brought against him by the Securities and Exchange 

Commission. We will affirm the District Court’s orders and final judgment.

The SEC’s amended complaint1 brought claims against Desai for violations of 

Section 17(a) of the Securities Act of 1933 (the “Securities Act”) [15 U.S.C. § 77q(a)]; 

Section 10(b) of the Securities Exchange Act of 1934 (the “Exchange Act”) [15 U.S.C. 

§ 78j(b)], and Rule 10b-5 promulgated thereunder [17 C.F.R. § 240.10b-5]; Section 15(a) 

of the Exchange Act [15 U.S.C. § 78o(a)]; and Sections 206(1) and 206(2) of the 

Investment Advisers Act of 1940 (the “Advisers Act”) [15 U.S.C. §§ 80b-6(1), 80b-6(2)]. 

The charges were based on fraudulent activity by Desai in connection with his company, 

SSC. In brief, Desai held himself out to be a securities broker licensed with the SEC. 

Investors provided him with more than $245,000, some of which he invested, and some 

of which he used to pay personal expenses and make donations. Desai guaranteed 

investors a return of at least 50%. He hid the fact that he was not making such returns, 

and provided investors with phony account statements.

 

1 The SEC’s original complaint also made charges against ShreySiddh Capital, LLC 

(“SSC”). On October 3, 2012, the District Court entered a default judgment against the 

corporation, as it failed to answer or respond to the complaint. To the extent Desai 

attempts to challenge that decision here, he may not do so because Desai, who is not an 

attorney, cannot represent the corporation on appeal. A corporation must be represented 

by a licensed attorney. Simbraw v. United States, 367 F.2d 373, 374 (3d Cir. 1966) (per 

curiam); Rowland v. California Men’s Colony, Unit II Men’s Advisory Council, 506 U.S. 

194, 202 (1993). In any event, we discern no abuse of discretion in the District Court’s 

entry of a default judgment, as it was based on this same issue, i.e., the failure of the 

corporation to secure counsel to represent it in the District Court. 
3

At the time it filed its initial complaint, the SEC also brought criminal charges 

against Desai. The District Court stayed the civil proceedings pending the outcome of 

the criminal case. On May 5, 2014, Desai pleaded guilty to two counts of wire fraud. 

The District Court then lifted the stay in the civil proceeding, and invited the SEC to file 

a motion for summary judgment by February 20, 2015. The SEC filed its motion on 

February 21, at 12:58 a.m., with a letter apologizing for the late filing, due to a computer 

outage.2 Desai filed three responses in opposition to the summary judgment motion, but 

he did not file a responsive statement of material facts. 

The District Court determined that there were no genuine issues of material fact. 

The District Court analyzed the elements of each of the civil violations charged in the 

SEC’s amended complaint, and determined that all of those elements had been clearly 

established through Desai’s guilty plea to the criminal charges, “and the SEC’s wellsupported motion.” The District Court granted the SEC’s request to impose injunctive 

relief, disgorgement in the amount of $167,229.39 (along with prejudgment interest), and 

civil penalties of $167,229.39. The District Court directed the SEC to submit a proposed 

judgment order, including its prejudgment interest calculations. On November 30, 2015, 

 

2 The assigned Magistrate Judge entered an order accepting the late filing and extending 

Desai’s deadline for a response. Dkt. #109. Although Desai complains that a summary 

judgment motion must be filed within 30 days after the close of discovery, and that the 

SEC’s summary judgment thus should not have been considered, Desai misreads the 

federal rule. Rule 56(b) provides: “Unless a different time is set by local rule or the 

court orders otherwise, a party may file a motion for summary judgment at any time until 

30 days after the close of all discovery.” Fed. R. Civ. P. 56(b) (emphasis added). The 

Court’s order here extended the time for the SEC’s filing, so the motion was properly 

considered.
4

the District Court entered final judgment against Desai, enjoining Desai from violating 

the various Acts, and incorporating the SEC’s damages figures. Desai moved to have the 

District Court reconsider the judgment, but the District Court denied his motion. Desai 

timely appealed. 

We have jurisdiction pursuant to 28 U.S.C. § 1291. We exercise plenary review 

over a decision granting summary judgment and we review the facts in the light most 

favorable to the nonmoving party. See Miller v. Am. Airlines, Inc., 632 F.3d 837, 844 

(3d Cir. 2011). But while the non-movant’s evidence “is to be believed, and all 

justifiable inferences are to be drawn in his favor in determining whether a genuine 

factual question exists,” summary judgment should be granted “unless there is sufficient 

evidence for a jury to reasonably find for the nonmovant.” Barefoot Architect, Inc. v. 

Bunge, 632 F.3d 822, 826 (3d Cir. 2011) (internal quotation marks omitted); see 

generally Fed. R. Civ. P. 56(a). “Material facts are those that could affect the outcome of 

the proceeding, and a dispute about a material fact is genuine if the evidence is sufficient 

to permit a reasonable jury to return a verdict for the nonmoving party.” Roth v. 

Norfalco LLC, 651 F.3d 367, 373 (3d Cir. 2011) (internal quotation marks omitted). 

Desai fails to point to any genuine disputes about material facts. For example, 

Desai argues that his business did not involve a Ponzi scheme and he disputes the number 

of victims involved. But he does not point to any facts3 whatsoever that would negate the 

 

3 Desai does argue that his business was exempt from licensing, but he does not provide 

any legal support for that proposition. He also argues that a purported letter from an SEC 
5

elements of the civil charges at issue here. See Chavarriaga v. N.J. Dep’t of Corr., 806 

F.3d 210, 218 (3d Cir. 2015) (party opposing summary judgment “must point to specific 

factual evidence showing that there is a genuine dispute on a material issue requiring 

resolution at trial”). Because there are no genuine issues of material fact as to the 

elements of the civil charges against Desai, the District Court properly granted the SEC’s 

summary judgment motion.4 

Although Desai’s brief states that he is appealing the order denying his motion 

for reconsideration, he does not explain why the District Court abused its discretion in 

denying his motion. See Max’s Seafood Café v. Quinteros, 176 F.3d 669, 673 (3d Cir. 

1999) (review of order denying motion for reconsideration is for abuse of discretion). A 

district court should be loath “to [revisit its earlier decisions] in the absence of 

extraordinary circumstances such as where the initial decision was clearly erroneous and 

would make a manifest injustice.” Lesende v. Borrero, 752 F.3d 324, 339 (3d Cir. 2014). 

Desai’s motion for reconsideration did not present any such extraordinary circumstances. 

The Court did not abuse its discretion in denying the motion. 

 

staff member informed him that his violations were not “severe,” and he argues that his 

company was allowed to raise capital before it was licensed. But he does not explain 

how these assertions challenge the holding that he violated the securities laws, as charged 

in the amended complaint.

4 Because Desai failed to file a response to the SEC’s statement of material facts, the 

District Court considered the SEC’s statement to be unopposed. But the District Court 

did consider all of the arguments in Desai’s three “responses” to the summary judgment 

motion.
6

Desai does point to a number of “irregularities” in the District Court 

proceedings, some of which he characterizes as due process violations. But we do not 

discern any error in the District Court proceedings. Although Desai complains that the 

District Court should have allowed the civil proceedings to conclude before the criminal 

proceedings commenced, he does not explain how this would have been of benefit to 

him. The District Court did not abuse its discretion in staying the civil proceedings, 

given the substantial overlap between the subject matter of the two proceedings. See

United States v. Kordel, 397 U.S. 1, 12 n. 27 (1970) (noting that courts may “defer[ ] 

civil proceedings pending the completion of parallel criminal prosecutions when the 

interests of justice seem[ ] to require such action”).5 And once the District Court decided 

that a stay was warranted, it was well within the District Court’s discretion to terminate 

all pending motions, without prejudice, until after the criminal proceedings had 

concluded, as it was not clear whether those motions would remain relevant. See Stich v. 

United States, 730 F.2d 115, 118 (3d Cir. 1984) (“The substantial discretion granted to 

trial courts on discovery motions should not be lightly disturbed.”). 

To the extent Desai argues that he was not allowed to add parties to the case, his 

argument is without merit, as he did not renew any of his pre-stay motions that requested 

the addition of parties. And the SEC was not required to sue Desai’s business partner in 

its complaint. See Baer v. United States, 722 F.3d 168, 174 (3d Cir. 2013) (SEC has 

 

5

Indeed, it is generally the criminal defendant who seeks to stay the civil proceedings, in 

order to avoid difficulties with providing answers in the civil proceedings that might 

implicate his Fifth Amendment right not to incriminate himself. See, e.g., Louis Vuitton 
7

discretionary authority to determine timing, manner, and scope of SEC investigations). 

Because joint and several liability is available in SEC cases, see, e.g., SEC v. Whitmore, 

659 F.3d 1, 10-11 (D.C. Cir. 2011), the SEC could rationally decide to bring charges only 

against Desai.

Desai also complains that three of his motions, filed after the stay was lifted, 

“remain pending.” While the District Court did not explicitly reference the docket 

numbers or titles of those motions in its dispositive opinions and orders, the Court clearly 

resolved the motions. The motion docketed at #118 sought “permission to contact Mr. 

Nirav Patel,” and stated that the “main reason why I am initiating this request is because 

there is No Written Statement, No Affidavit, No Declaration, No Deposition, and No 

Cross-examination of Mr. Nirav Patel anywhere.” The District Court noted in its 

decision granting summary judgment that “the only individual that Desai was not allowed 

to contact was Mr. Siddharth Patel,” and that “even this restriction was lifted” by the 

judge in the criminal proceeding. Dkt. #125 at 5. The Court noted that “Desai does not 

demonstrate how he was prohibited from taking the necessary depositions or contacting 

the relevant individuals with connections to this case.” Id. Similarly, the motion 

docketed at #120 sought discovery from another non-party individual. The District Court 

correctly noted that Rule 33 of the Federal Rules of Civil Procedure only provides for 

sending interrogatories to another party in the lawsuit. Id.

 

Malletier S.A. v. LY USA, Inc., 676 F.3d 83, 97-98 (2d Cir. 2012).
8

Desai’s third “pending” motion, docketed at #119, sought sanctions in the 

amount of over $15,000 against the SEC for “forcefully clos[ing] down Two Forex 

Accounts,” because, he argued, the “SEC does not have Jurisdiction of Forex.” He 

similarly argued in “Part C” of his summary judgment opposition, Dkt. #117, that the 

SEC lacked jurisdiction over the Forex accounts, which involved trading in foreign 

currency. The District Court addressed this argument, noting that “[t]he funds Desai 

received from his investors were transferred into the Forex accounts,” and that “the sums 

in these accounts thus originated from Desai’s fraudulent investment scheme, which is 

the basis of both Desai’s plea agreement in the parallel criminal action and the complaint 

in the instant civil proceeding.” Dkt. #125 at 10. The Court concluded that the funds 

were not exempt from regulation under federal securities law simply because Desai 

transferred them to Forex accounts. Id. We agree. Indeed, Section 22 of the Securities 

Act, 15 U.S.C. §77v(c), provides that federal district courts have jurisdiction to hear 

actions brought by the SEC involving “(1) conduct within the United States that 

constitutes significant steps in furtherance of the violation, even if the securities 

transaction occurs outside the United States and involves only foreign investors; or (2) 

conduct occurring outside the United States that has a foreseeable substantial effect 

within the United States.” Thus, because the funds were involved in Desai’s fraudulent 

scheme, the fact that some of the funds were used to purchase foreign currencies does not 

bring them outside the District Court’s, or the SEC’s, jurisdiction.
9

Finally, in his reply brief, Desai argues that the “SEC’s math is wrong,” and that 

he only lost investors $121,260, not $167,229, a difference of $45,969. Reply Br. at 5. 

Absent extraordinary circumstances, “[w]e will not consider arguments raised on appeal 

for the first time in a reply brief.” Gambino v. Morris, 134 F.3d 156, 161 n.10 (3d Cir. 

1998) (internal quotation marks omitted). Further, Desai did not raise this issue in the 

District Court. See Dist. Ct. Op., Dkt. #125 at 10 (“Desai does not contest these amounts 

[totaling $167,229.39], but instead argues that a portion of the sums the SEC seeks to 

disgorge are in . . . [Forex] accounts . . . outside the SEC’s jurisdiction.”). We generally 

do not address arguments that were not raised in the District Court, particularly if those 

arguments involve factual issues. Ziccardi v. City of Philadelphia, 288 F.3d 57, 65 (3d 

Cir. 2002). We thus decline to reconsider the District Court’s calculation of damages 

here.

For the foregoing reasons, and those given by the District Court, we will affirm 

the District Court’s judgment.