Court Opinion

ID: 4248476
Source: CourtListenerOpinion
Date Created: 2018-02-27 15:00:38.244024+00
Date Added: 2024-06-11T07:48:10.405855
License: Public Domain

17-1416-cv
Securities and Exchange Commission v. Hansen

                                   UNITED STATES COURT OF APPEALS
                                       FOR THE SECOND CIRCUIT

                                               SUMMARY ORDER

RULINGS BY SUMMARY ORDER DO NOT HAVE PRECEDENTIAL EFFECT. CITATION TO A
SUMMARY ORDER FILED ON OR AFTER JANUARY 1, 2007, IS PERMITTED AND IS GOVERNED
BY FEDERAL RULE OF APPELLATE PROCEDURE 32.1 AND THIS COURT’S LOCAL RULE 32.1.1.
WHEN CITING A SUMMARY ORDER IN A DOCUMENT FILED WITH THIS COURT, A PARTY
MUST CITE EITHER THE FEDERAL APPENDIX OR AN ELECTRONIC DATABASE (WITH THE
NOTATION “SUMMARY ORDER”). A PARTY CITING A SUMMARY ORDER MUST SERVE A COPY
OF IT ON ANY PARTY NOT REPRESENTED BY COUNSEL.

        At a stated Term of the United States Court of Appeals for the Second Circuit, held at the
Thurgood Marshall United States Courthouse, 40 Foley Square, in the City of New York on the
27th day of February, two thousand eighteen.

Present:    ROSEMARY S. POOLER,
            ROBERT D. SACK,
            SUSAN L. CARNEY,
                        Circuit Judges.
_____________________________________________________

UNITED STATES SECURITIES AND EXCHANGE
COMMISSION,

                                      Plaintiff-Appellee,

                             v.                                                              17-1416-cv

RANDAL KENT HANSEN,

                        Defendant-Appellant.1
_____________________________________________________

Appearing for Appellant:              Randal Kent Hansen, pro se, Duluth, MN.

Appearing for Appellee:               Robert B. Stebbins, John W. Avery, Sarah R. Prins, Securities and
                                      Exchange Commission, Washington, D.C.

Appeal from the United States District Court for the Southern District of New York (Broderick,
J.).

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    The Clerk of Court is respectfully directed to amend the official caption to conform with the above.
     ON CONSIDERATION WHEREOF, IT IS HEREBY ORDERED, ADJUDGED,
AND DECREED that the judgment of said District Court be and it hereby is AFFIRMED.

        Randal Kent Hansen, proceeding pro se, appeals from the district court’s grant of
summary judgment to the Securities and Exchange Commission in its civil enforcement action
against him. The SEC had alleged that Hansen violated numerous securities laws in connection
with a Ponzi scheme and requested injunctive relief and disgorgement of his ill-gotten gains.
Hansen was also criminally convicted of, inter alia, conspiracy to commit mail and wire fraud
based on the same underlying facts, and barred through an administrative proceeding from
further participating in the securities industry. We assume the parties’ familiarity with the
underlying facts, the procedural history of the case, and the issues on appeal.

         We review orders granting summary judgment de novo and focus on whether the district
court properly concluded that there was no genuine dispute as to any material fact and the
moving party was entitled to judgment as a matter of law. Sotomayor v. City of N.Y., 713 F.3d
163, 164 (2d Cir. 2013). We review a district court’s disgorgement order and grant of injunctive
relief for abuse of discretion. SEC v. Lorin, 76 F.3d 458, 461-62 (2d Cir. 1996).

        We affirm the grant of summary judgment to the SEC for substantially the reasons set
forth in the district court’s opinion of March 31, 2017. The district court correctly ruled that
Hansen’s criminal conviction and the administrative decision established the elements of the
charged violations. The court did not exceed the permissible bounds of its discretion in imposing
remedies because Hansen failed to submit any evidence to rebut the SEC’s reasonable
approximation of the amount to be disgorged.

        Hansen first argues that because he was concurrently engaged in a pending bankruptcy
action, this action and the resulting judgment should have been stayed. His argument is without
merit. The filing of a bankruptcy petition does not operate as a stay against SEC enforcement
actions and the SEC may prosecute an action through and including the entry of a money
judgment against a debtor. See 11 U.S.C. § 362(b)(4); SEC v. Brennan, 230 F.3d 65, 71 (2d Cir.
2000). The district court could therefore properly hear the SEC’s action against Hansen.
Moreover, Hansen’s pending 28 U.S.C. § 2255 motion does not warrant a stay: his assertion that
a decision on the motion will result in the vacatur of his criminal conviction is entirely
speculative.

        Hansen’s reliance on Honeycutt v. United States, 137 S. Ct. 1626 (2017), is misplaced.
In Honeycutt, the Supreme Court held that “[f]orfeiture pursuant to [21 U.S.C.] § 853(a)(1) is
limited to property the defendant himself actually acquired as a result of the crime.” Id. at 1635.
Honeycutt is silent on the issue of disgorgement, and Hansen’s judgment was not imposed jointly
and severally. Accordingly, Honeycutt is inapplicable to this case. Moreover, Hansen’s
disgorgement judgment did not violate double jeopardy. We have held that disgorgement under
15 U.S.C. § 77v(a) and 15 U.S.C. § 78aa is a nonpunitive remedy, in part because it is designed
to “ensure that the defendant not profit from his illegal acts,” and thus, the Double Jeopardy
Clause does not apply to disgorgement orders. SEC v. Palmisano, 135 F.3d 860, 866 (2d Cir.
1998).

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       Finally, because this is a civil action, Hansen had no right to counsel. See Berrios v.
N.Y.C. Hous. Auth., 564 F.3d 130, 134 (2d Cir. 2009).

       We have considered the remainder of Hansen’s arguments and find them to be without
merit. Accordingly, the judgmentof the district court hereby is AFFIRMED.

                                              FOR THE COURT:
                                              Catherine O’Hagan Wolfe, Clerk

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