Opinion ID: 2977710
Heading Depth: 3
Heading Rank: 2

Heading: analysis

Text: Gibson argues that, applying the Steadman factors to this case and considering the substantial mitigating evidence favoring Gibson, a lifetime bar is an excessive disciplinary sanction that should be reversed. We find that the Commission appropriately considered each of the Steadman factors, as well as the mitigating evidence submitted by Gibson, before affirming the ALJ’s imposition of remedial sanctions. First, the Commission found that Gibson’s No. 08-3377 Gibson v. SEC Page 10 conduct was egregious, because he misappropriated approximately $450,000 from a group of investors, many of whom were clients to whom he owed a fiduciary duty, all the while sending the investors “lulling communications.” The Commission next found that the infractions were recurrent and ongoing and that they involved several different types of misconduct and a large number of clients. Third, the Commission found that Gibson’s actions demonstrated a high degree of scienter, that he took actions to disguise his conduct, and that he failed to discontinue the conduct until the Division filed a complaint in district court. As to the fourth and fifth factors, the Commission stated that “[w]hile we do not dispute Gibson’s assertions regarding his acknowledgment of wrongdoing and his assurances against future misconduct, those assertions do not overcome the other factors that indicate the gravity of the threat to investors that Gibson would present if he were permitted to remain in the securities industry.” (J.A. at 241.) Finally, the Commission found that if Gibson were not barred, he would be presented with further opportunities to engage in misconduct, and that his breach of fiduciary duty as an investment adviser demonstrated a lack of fitness to remain in the industry. The Commission has held that “the fact that a person has been enjoined from violating antifraud provisions ‘has especially serious implications for the public interest.’” In re Michael T. Struder, Exchange Act Rel. No. 50411, 83 SEC Docket 2853, 2861 (Sept. 20, 2004); see also In re Marshall E. Melton, Advisers Act Rel. No. 2151, 56 SEC Docket 695, 713 (July 25, 2003) (“Based on our experience enforcing federal securities laws, we believe that ordinarily, and in absence of evidence to the contrary, it will be in the public interest to . . . suspend or bar from participation in the securities industry . . . a respondent who is enjoined from violating the antifraud provisions.”) In light of this precedent and the Commission’s analysis of the Steadman factors, we conclude that the Commission did not grossly abuse its discretion in determining that Gibson’s lifetime bar was necessary to serve the public interest. No. 08-3377 Gibson v. SEC Page 11