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Second Circuit — SEC: SEC v. Bankosky

U.S. Court of Appeals for the Second Circuit


Barring Officer or Director of Public Company — Patel Factors

SEC v. Bankosky
Judges Walker, Chin and Restani

Background: The SEC accused the defendant of engaging in insider trading in violation of the Securities Exchange Act. After an entry of a consent judgment, in which the defendant neither admitted nor denied the allegations in the complaint, the SEC moved to bar the defendant pursuant to section 21(d)(2) of the Exchange Act. The district court found the defendant unfit and barred him from acting as an officer or director of a public company for 10 years.

Ruling: The Second Circuit affirmed. The court found that no error was committed in relying on the factors outlined in SEC v. Patel, 61 F.3d 137 (2nd Circ. 1995) in finding the defendant unfit to serve as a fiduciary.

Allan A. Capute of the Securities and Exchange Commission for the plaintiff-appellee; Robert G. Heim of Meyers & Heim for the defendant-appellant

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