NOT FOR PUBLICATION
UNITED STATES COURT OF APPEALS
FOR THE NINTH CIRCUIT

U.S. SECURITIES & EXCHANGE COMMISSION,

Plaintiff

- Appellee,

v. ROBERT YANG; et al.,

Defendants

- Appellants,

v. CELTIC BANK,

Third

- party

- defendant,

______________________________ STEPHEN J. DONELL,

Receiver. No. 19

- 55289
D.C. No. 5:15

- cv - 02387

- SVW

- KK

MEMORANDUM *

Appeal from the United States District Court for the Central District of California Stephen V. Wilson, District Judge, Presiding Submitted May 15, 2020 * *

* This disposition is not appropriate for publication and is not precedent except as provided by Ninth Circuit Rule 36

- 3.

** The panel unanimously concludes this case is suitable for decision without oral argument. See Fed. R. App. P. 34(a)(2). 

# FILED

AUG 6 2020
MOLLY C. DWYER, CLERK U.S. COURT OF APPEALS2 Pasadena, California Before: EBEL, ** * WARDLAW, and HUNSAKER, Circuit Judges.
Defendants Robert Yang, Claudia Kano, Yanrob Medical, Inc., HealthPro Capital Partners, LL C, and Suncor Care, Inc. ( collectively Defendants) appeal the
district court’s remedial order issued after Defendants entered into consent agreements with the Securities and Exchange Commission ( SEC ) acknowledging liability for their unlawful scheme to rai se money from foreign investors. We have jurisdiction under 28 U.S.C. § 1291

. W e reverse and remand with instructions for
the district court to conduct further proceedings consistent with this decision.
1. Defendants did not waive their right to appeal the remedial order under
the ir consent agreements with the SEC

. We construe consent agreements de novo.
Blair v. Shanahan , 38 F.3d 1514, 1521 (9th Cir. 1994)

. In the Defendants ’ consent agreements they a cknowledged their liability but did not consent to the amount of disgorgement, prejudgment interest, or civil penalties. Instead, the agreements provided that any monetary remedies would be “ determined by the C ourt ” upon a
motion from the SEC. Moreover, Defendants waived only their right to appe al entry of the Judgment which occurred before the district court resolved the SEC’s remedy
motion

. Thus, Defendants’ appeal of the district court’s remedial order i s beyond the

*** The Honorable David M. Ebel, Senior United States Circuit Judge for the U.S. Court of Appeals for the Tenth Circuit, sitting by designation.3

scope of the ir appeal waiver. See Garza v. Idaho , 139 S. Ct. 738, 744 (2019).
2. Civil penalties are intended to punish the wrongdoer and deter future
securities violations. See Gabelli v. SEC , 568 U.S. 442, 451

– 52 (2013). C ourts determine the amount of civil penalties awarded “in light of the facts and
circumstances” of the ca se. 15 U.S.C. § 78u(d)(3)(B)(i). The parties agree that determining the appropriate amount of penalty is discretion ary with the court. They also agree that , in exercising this discretion, courts routinely consider the factors set
out in SEC v. Murphy , 626 F.2d 633 (9th Cir. 1980)

. See, e.g. , SEC v. CMKM Diamonds, Inc. , 635 F. Supp. 2d 1185, 1192 (D. Nev. 2009) (noting same).

D efendants argue the district court failed to exercise discretion in setting the
amount of civil penalties and instead rubber

- stamped the SEC’s request s. On the record presented, w e find no error in the district court’s imposition of third

- tier penalties under 15 U.S.C. § 78u(d)(3)(B)( ii i) , n or do we find error in its rejection of

many of Defendants’ argument s as inconsist ent with admissions made in the consent
agreement s
. Nonetheless, because the district court granted the SEC’s requests for civil penalties without discussing the Murphy factors or otherwise explaining its
rationale , we are unable to meaningfully review whether the district court considered the statutory purposes for imposing civil penalties or exercised any discretion i n4

setting the penalty amounts. 1 See United States v. $11,500.00 in U.S. Currency , 710 F.3d 1006, 10 11 (9th Cir. 2013) ( “A district court abuses its discretion if it . . . fails
to consider the factors relevant to the exercise of its discretion.”) (internal quotation marks and citation omitted); see also Hayes v. Heckler , 785 F.2d 1455, 1457 ( 9th
Cir. 19 86) (“It is impossible here to determine whether the district court abused its discretion when the order below contains no information or explanation concerning the basis for the district court’s decision.”). Therefore, we reverse the district court’s impo si tion of civil penalties and remand for further proceedings for the district court

to consider all the “facts and circumstances” of the case, including the factors
relevant to its exercise of discretion

. 15 U.S.C. § 78u(d)(3)(B)(i).
3. The Supreme Court recently held that ordering disgorgement in an

amount that “does not exceed a wrongdoer’s net profits and [that] is awarded for
victims ” is permissible under the equitable authority granted in 15 U.S.C. § 78u(d)(5). Liu v. SEC , 140 S. Ct. 1936, 194 0 (2020). Because this power arises under equity, disgorgement orders must be c rafted so that the ir effect is r estitutionary only , not punitive, reaching beyond the consequences of the specific wrongdoer’s
actions. Id. at 1943 , 1947

– 50

. Here, de spite making numerous arguments against imposition of monetary

1 The court ordered Yang to disgorge $2,014,050 with $237,032 prejudgment interest , totaling $2,251,082. This amount is $200 less than th at requested by the SEC. Because we remand, we need not address this discrepancy.5

remedies, Defendants did not challenge the SEC’s calculation or supporting evidence establishing the amo unt of gains D efendants received from their unlawful
conduct , which was their burden to do if they believed the government’s calculation

was wrong
. SEC v. Platforms Wireless Int ’l Corp. , 617 F.3d 1072, 1096 (9th Cir. 2010). However, it is unclear whether the district court limited its disgorgement
order s imposed ag ainst the two individual defendants to their specific conduct
where , for example, it made them both jointly and severally liable for the disgorgement amounts ordered against the entity d efendants

. See Liu , 140 S. Ct. at 1945, 1949

. Likewise, it is unclear that the disgorgement amounts ordered are “appropriate and necessary for the benefit of investors.” 15 U.S.C. § 78u(d)(5); see
Liu , 140 S. Ct. at 1948

– 49

. Therefore, on remand we further direct the district court

to determine , consistent with the terms of the consent agreement s , whether its disgorgement orders comply with the Supreme Court ’s decision in Liu

. REVERSED and REMANDED with instructions
.