Securities and Exchange Commission v. Fowler
United States Court of Appeals for the Second Circuit
6 F.4th 255 (2021)
- Written by David Bloom, JD
Facts
The Securities and Exchange Commission (SEC) (plaintiff) commenced an enforcement action against Donald Fowler (defendant), a registered representative, accusing Fowler of defrauding customers, recommending an unsuitable investment strategy that involved excessive trading, and making unauthorized trades. The SEC claimed that Fowler specifically targeted 13 customers who were not sophisticated in investing. The excessive trading resulted in exorbitant fees and costs charged to the customers, canceling out any investment gains. Fowler’s misconduct continued even after he received complaints from other customers. After a jury found that Fowler violated federal securities laws in the handling of all 13 customer accounts, the district court ordered Fowler to disgorge over $132,000 in profits and imposed a civil penalty of $150,000 for each of the 13 impacted customers, for a total of $1,950,0000 in penalties. Fowler appealed, arguing that the civil penalties were excessive.
Rule of Law
Issue
Holding and Reasoning (Lohier, J.)
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