Leonard Sands (defendant) was chairman, CEO, and corporate counsel of First Pacific Bancorp (Bancorp) (defendant). Sands was also CEO of PacVen Inc. (PacVen) (defendant), a shell corporation. Bancorp was failing and in desperate need of funds. Bancorp issued an all-or-nothing public offering, under which if Bancorp did not reach a certain level of investment, the offering would be cancelled and the funds returned to the investors. The offering raised $188,000 from outside investors. Around the same time, PacVen also issued a public offering that raised $500,000. Sands fraudulently diverted these funds into the Bancorp offering, but the $688,000 was still below the required investment to sustain the Bancorp offering. Nevertheless, Bancorp did not return the funds to the investors as the prospectus stated it would if it did not reach the threshold. Rather, Sands invested his own money to meet the threshold, albeit after the stated deadline. Sands took a substantial salary and benefits from Bancorp throughout the relevant period. The Securities and Exchange Commission (SEC) (plaintiff) brought a civil enforcement action against the defendants, alleging various violations of securities law. The SEC sought disgorgement of the $688,000 obtained through the public offerings. The district court found Sands, Bancorp, and PacVen jointly and severally liable for disgorgement of the fraudulently unreturned $688,000. The district court also permanently barred Sands from serving as an officer or director of a public company. Sands, Bancorp, and PacVen appealed. Sands argued that he had obtained no personal benefit from the offerings.