Opinion ID: 754112
Heading Depth: 2
Heading Rank: 2

Heading: officer and director bar

Text: 26 Sands earnestly argues that he should not have been permanently and unconditionally prohibited from acting as an officer or director of any issuer required to file reports pursuant to Sections 12(b), 12(g) or 15(d) of the Securities Exchange Act of 1934 [15 U.S.C. §§ 781(b), (g) or 780(d) ]. We have listened carefully to his monody, but we agree with the district court that protection of the public justifies the bar. In addition to the conduct we have detailed in the Background portion of this Opinion, Sands helped to orchestrate transactions involving Residual Interest Wrap Notes and Liberian Certificates of Deposit, which greatly and artificially inflated the value of the Bank. 7 27 The district court has broad equitable powers to fashion appropriate relief for violations of the federal securities laws, which include the power to order an officer and director bar. See Posner, 16 F.3d at 521; see also SEC v. Patel, 61 F.3d 137, 141 (2d Cir.1995) (a district court has substantial discretion in deciding whether to impose an officer and director bar). In addition to the court's inherent equitable powers, the Securities Enforcement Remedies and Penny Stock Reform Act of 1990 (Remedies Act) authorizes the court to order an officer and director bar if the person's conduct demonstrates substantial unfitness to serve as an officer or director. 15 U.S.C. § 78u(d)(2). 8 In determining whether to order the bar, a court may consider: (1) the 'egregiousness' of the underlying securities law violation; (2) the defendant's 'repeat offender' status; (3) the defendant's 'role' or position when he engaged in the fraud; (4) the defendant's degree of scienter; (5) the defendant's economic stake in the violation; and (6) the likelihood that misconduct will recur. Patel, 61 F.3d at 141. 28 The district court considered those factors, and found that Sands' securities violations are egregious; he caused the collapse of a federally insured bank; he attempted to stymie banking regulators from doing their jobs; he is a recidivist; and the fraudulent conduct he committed occurred while serving in a corporate or fiduciary capacity. The district court also found that Sands had a high level of scienter, that he engaged in ongoing and recurrent violations, that he had failed to assume any responsibility for his violations of law, that he utterly failed to recognize the wrongful nature of his conduct, and that there was a strong likelihood of future violations. We see no error in those detailed findings. Indeed, they describe Sands' actions perfectly and are sufficient to support the court's discretionary decision to protect the public interest by barring Sands from serving as an officer or director of a public company. We think we need only briefly comment on his audacious argument that the officer and director bar is against the public interest because it will interfere with his active involvement in charitable activities. Perhaps he is right that charities will not want to place him in positions of high visibility and prestige. If so, and if Sands does have a genuine interest in doing charitable works, we are certain that he can continue his charitable involvement in a less prestigious, but just as worthy, capacity. We touch on this argument because it underscores the purblindness of Sands and the perspicacity of the district court.