Opinion ID: 781344
Heading Depth: 3
Heading Rank: 1

Heading: Application for District Court Enforcement

Text: 22 Vittor contends that section 21(e)(1) does not permit the SEC to apply to the federal district court for enforcement of an SEC order affirming NASD sanctions. To support his contention, Vittor argues that the SEC's affirmance of NASD sanctions is not an order within the meaning of section 21(e)(1). Vittor asserts that the district court failed to consider the ordinary meaning of the word order. Moreover, Vittor contends that the SEC's order simply sustains the NASD's disciplinary action; the order does not command, direct, or instruct Vittor to do anything. 23 Vittor also argues that when the words of section 21(e)(1) are considered in context, that section clearly does not permit the SEC to file an application with the district court for enforcement of an SEC order affirming NASD sanctions. Section 21(e)(1) provides federal district courts with jurisdiction over SEC applications to enforce the provisions of this chapter, the rules, regulations, and orders thereunder, [or] the rules of a national securities exchange or registered securities association.... 15 U.S.C. § 78u(e)(1). In construing the term order, Vittor contends that the district court should have considered the phrase in which it appears. He argues that each term refers to statutes or rules of widespread applicability; they do not refer to a single decision in a specific case. Thus, the word order in this context has a meaning akin to rule or regulation. 24 Vittor urges us to decline to follow Lang v. French, 154 F.3d 217 (5th Cir.1998), upon which the district court relied, in construing the word order in section 21(e)(1). 25 After reviewing the record, and contrary to Vittor's arguments, we conclude that the SEC's order sustaining the NASD's disciplinary sanctions was unquestionably an order. An order is defined as [a] command, direction, or instruction; or [a] written direction or command delivered by a court or judge. Black's Law Dictionary (7th ed.1999). Section 19(e) requires the SEC to issue an order when it affirms a final disciplinary sanction imposed by a self-regulatory organization (SRO) such as the NASD. 15 U.S.C. § 78s(e) (stating that if, upon review of an SRO's final disciplinary sanction, the SEC confirms the SRO's findings of misconduct, the SEC by order, shall so declare and, as appropriate, affirm the sanction imposed by the self-regulatory organization.). Additionally, when Vittor petitioned the D.C. Circuit for review of the SEC's order, it was pursuant to section 25(a)(1), which applies exclusively to reviews of a final order of the Commission. Although the SEC order does not expressly command Vittor to pay the monetary sanctions, the order sustained the NASD's disciplinary action against Vittor and effectively commanded him to pay the restitution, fines, and costs. Thus, the SEC's order sustaining the NASD's disciplinary sanctions against Vittor was an order within the meaning of section 21(e)(1). 26 Moreover, we find the Fifth Circuit's decision in Lang persuasive. In Lang, a private litigant brought suit in federal district court seeking to enforce an NASD restitution order that the SEC affirmed. The court held that the plaintiff's reliance on the jurisdictional grant embodied in section 27 as the statutory basis for his private enforcement suit was misplaced. In so concluding, the court noted that [s]ection 21(e)(1),... expressly vests only the SEC with authority to apply to the district court for orders commanding compliance with the SEC's orders. Lang, 154 F.3d at 223. The plaintiff asked the court to infer from the language of section 27 a parallel authority for private litigants to apply to the district court for enforcement of SEC orders. The court found that [s]uch an inference is implicitly foreclosed, though, by the plain language of section 21(e)(1), which names the SEC as the only authorized applicant for judicial enforcement of SEC orders. Id. The court viewed section 21(e)(1) as manifesting a congressional intent to reserve exclusively to the SEC the authority to seek district court enforcement of such orders. Id. Thus, as the Lang court found, under the plain language of section 21(e)(1), the SEC may apply to the district court for an order enforcing the SEC's affirmance of NASD sanctions. See also SEC v. McCarthy, 322 F.3d 650 (9th Cir.2003). 27