American Bio Medica->Terry admits participation in meetings to negotiate stock in exchange for promoting Central Resources, American Bio Medica, and Systems of Excellence.
1998 U.S. Dist. LEXIS 23211, *
SECURITIES AND EXCHANGE COMMISSION, Plaintiff, v. CHARLES O. HUTTOE, et al., Defendants and Relief Defendants.
Civil Action No. 96-2543 (GK)
UNITED STATES DISTRICT COURT FOR THE DISTRICT OF COLUMBIA
1998 U.S. Dist. LEXIS 23211
September 14, 1998, Decided
September 14, 1998, Filed
DISPOSITION: [*1] Plaintiff's Motion for Summary Judgment with respect to Defendants Terry and Dunbar Holdings granted; Plaintiff's Motion for Summary Judgment with respect to Defendant J.S. Holdings, Inc. denied; Defendants' Terry and Dunbar Holdings Motion for Summary Judgment [# 177] denied; Defendant J.S. Holdings' Cross-Motion to Lift Existing Injunctive Relief [# 175] granted; Defendants Shannon Terry and Dunbar Holdings, LTD permanently enjoined and restrained from violating, directly or indirectly, Section 17(a) of the Securities Act (15 U.S.C. § 77q(a)), Section 10(b) of the Exchange Act (15 U.S.C. § 78j(b) and Rule 10b-5 ( 17 C.F.R. § 240.10b-5).
CASE SUMMARY
PROCEDURAL POSTURE: Plaintiff Securities and Exchange Commission (SEC) and defendants, writer and shell corporation, filed cross motions for summary judgment in the SEC's action against the writer and the shell corporation for violations of § 17(a) and (b) of the Securities Act of 1933, 15 U.S.C.S. § 77q(a)-(b), § 10(b) of the Securities Exchange Act of 1934, 15 U.S.C.S. § 78j(b), and S.E.C. Rule 10b-5, 17 C.F.R. § 240.10(b)(5).
OVERVIEW: The writer was a paid contributor to a "high-risk aggressive growth" newsletter that profiled companies and made recommendation that concerned stock purchases. Profiled companies paid the writer for favorable articles. The court granted summary judgment to the SEC in regard to the writer and the shell corporation because the writer fraudulently made material statements scienter concerning corporate stocks and failed to disclaim his interest which violated 15 U.S.C.S. §§ 77q(a)(1), 78j(b), and S.E.C. Rule 10(b)(5). The writer omitted to state the material fact that he was personally interested in the stocks that he recommended in violation of 15 U.S.C.S. § 77q(a)(2) and engaged in a course of business that operated as a fraud upon the subscribers to the newsletter in violation of 15 U.S.C.S. § 77q(a)(3). The failure of the writer to inform the subscribers of the newsletter that he sold stocks through the shell corporation when he recommended that the subscribers buy constituted "scalping" and violated a duty of ordinary care pursuant to § 77q(a)(2)-(3) and evidenced scienter that violated §§ 77q(a)(1), 78j(b), and S.E.C. Rule 10(b)(5).
OUTCOME: The court granted the SEC's motion for summary judgment with respect to the writer and the shell corporation in the SEC's action for violations of the Securities Act and the Securities Exchange Act. The court denied the motion for summary judgment that was filed by the writer and the shell corporation and enjoined them from additional violations of the Securities Act.
CORE TERMS: stock, newsletter, subscribers, summary judgment, appearing, promoting, scienter, issuer, disclose, recommendation, disclaimer, scalping, selling, buy, Fifth Amendment, subscription, investor, misleading, personnel, adverse inference, promotional, admit, touting, deceit, indirectly, promotion, promoted, trading, Securities Act, uncontested
CORE CONCEPTS - Hide Concepts
Civil Procedure > Summary Judgment > Supporting Papers & Affidavits
Pursuant to U.S. Dist. Ct., D.D.C., R. 108(h), in determining a motion for summary judgment, the court may assume that facts identified by the moving party in its statement of material facts are admitted, unless such a fact is controverted in the statement of genuine issues filed in opposition to the motion.
Civil Procedure > Summary Judgment > Supporting Papers & Affidavits
A party against whom a claim is asserted may, at any time, move with or without supporting affidavits for a summary judgment in the party's favor as to all or any part thereof. The judgment sought shall be rendered forthwith if the pleadings, depositions, answers to interrogatories, and admissions on file, together with the affidavits, if any, show that there is no genuine issue as to any material fact and that the moving party is entitled to judgment as a matter of law. Fed. R. Civ. P. 56(b), (c).
Civil Procedure > Summary Judgment > Burdens of Production & Proof
The party seeking summary judgment bears the initial burden of demonstrating an absence of a genuine issue of material fact. In determining whether the movant has met this burden, a court must consider all factual inferences in the light most favorable to the non-moving party. Once the moving party makes its initial showing, however, the nonmoving party must demonstrate specific facts showing that there is a genuine issue for trial.
Securities Law > Bases for Liability > Liability for Fraud
Section 17(a) of the Securities Act of 1933, 15 U.S.C.S. § 77q(a), provides that it shall be unlawful for any person in the offer or sale of any securities by the means or instruments of transportation or communication in interstate commerce of by the use of the mails, directly or indirectly (1) to employ a device, scheme, or artifice to defraud, or (2) to obtain money or property by means of any untrue statement of a material fact or any omission to state a material fact necessary in order to make the statements made, in the light of the circumstances under which they were made, not misleading, or (3) to engage in any transaction practice or course of business which operates or would operate as a fraud or deceit upon the purchaser.
Securities Law > Bases for Liability > Deceptive Devices
Section 10(b) of the Securities Exchange Act of 1934, 15 U.S.C.S. § 78j(b), makes it unlawful for any person, directly or indirectly, to use or employ, in connection with the purchase or sale of any security registered on a national securities exchange or any security not so registered, any manipulative or deceptive device or contrivance in contravention of such rules and regulations as the Securities Exchange Commission may prescribe as necessary or appropriate in the public interest or for the protection of investors.
Securities Law > Bases for Liability > Deceptive Devices
S.E.C. Rule 10b-5, 17 C.F.R. § 240.10(b)(5) provides that it shall be unlawful for any person, directly or indirectly, by the use of any means or instrumentality of interstate commerce, or of the mails, or of any facility of any national securities exchange, (1) to employ any device, scheme, or artifice to defraud, (2) to make any untrue statement of a material fact or to omit to state a material fact necessary in order to make the statements made, in the light of the circumstances under which they were made, not misleading, or (3) to engage in any act, practice, or course of business which operates or would operate as a fraud or deceit upon any person, in connection with the purchase or sale of any security.
Securities Law > Bases for Liability > Liability for Fraud
It is a fraud for any person to make any statement in connection with a securities transaction that is materially false or misleading. 15 U.S.C.S. § 77q(a); 15 U.S.C.S. § 78j(b); and 17 C.F.R. § 240.10(b)(5). A statement is made "in connection with" the sale of any security whenever it may reasonably be expected that a publicly disseminated document will cause reasonable investors to buy or sell securities in reliance thereon, regardless of the motive or existence of contemporaneous transactions by or on behalf of the violator. A statement is materially misleading if there is a substantial likelihood that a reasonable investor would consider an omitted fact significant in making his or her investment decision.
Securities Law > Bases for Liability > Liability for Fraud
Securities Law > Bases for Liability > Deceptive Devices
A material misstatement violates § 17(a)(1) of the Securities Act of 1933, § 10(b) of the Securities Exchange Act of 1934, and 17 C.F.R. § 240.10(b)(5) when made with scienter, and violates § 17(a)(2), (3) of the Securities Act of 1933 when made negligently. Scienter is a mental state embracing intent to deceive, manipulate, or defraud, as demonstrated by extreme recklessness. Extreme recklessness is an extreme departure from the standard of ordinary care, which presents a danger of misleading buyers or sellers that is either known to the defendant or is so obvious that the actor must have been aware of it.
Securities Law > Bases for Liability > Deceptive Devices
Suppression of information material to an evaluation of the disinterestedness of investment advice operates as a deceit on purchasers.
Securities Law > Investment Advisers > Prohibited Transactions & Material Misstatements
"Scalping," a known practice whereby the owner of shares of a security recommends that security for investment and then immediately sells it at a profit upon the rise in the market price which follows the recommendation, is a violation of the Investment Advisers Act.
Securities Law > Investment Advisers > Prohibited Transactions & Material Misstatements
Section 206 of the Investment Advisors Act provides that it shall be unlawful for any investment adviser to engage in any transaction, practice or course of business which operates as a fraud or deceit upon any client or prospective client. 15 U.S.C.S. § 80(b)(6)(2).
Securities Law > Bases for Liability > Liability for Fraud
By its terms, § 17(b) of the Securities Act of 1933, 15 U.S.C.S. § 77q(b), applies to any person who publishes any article which, though not purporting to offer a security for sale, describes such security for a consideration received, directly or indirectly, from an issuer without disclosing the consideration.
Securities Law > Bases for Liability > Liability for Fraud
Section 17(b) of the Securities Act proscribes a certain type of conduct, undisclosed touting of securities.
Constitutional Law > Fundamental Freedoms > Freedom of Speech > Scope of Freedom
Constitutional Law > Substantive Due Process > Scope of Protection
Speech relating to the purchase and sales of securities forms a distinct category of communications in which the government's power to regulate is at least as broad as with respect to the general rubric of commercial speech, and is therefore subject to rational basis scrutiny. In employing rational basis scrutiny, the court need only find a rational relationship between a substantial government interest and the behavior proscribed by § 17(b) of the Securities Act of 1933. The government has a substantial interest in the investing public knowing whether an apparently objective statement is motivated by the promise of payment.
Administrative Law > Separation & Delegation of Power > Constitutional Controls
Constitutional Law > Fundamental Freedoms > Freedom of Speech > Scope of Freedom
Regulations which turn solely on whether consideration was paid for publication of an article, and not the content of the article, are constitutionally permissible.
Constitutional Law > Fundamental Freedoms > Overbreadth & Vagueness
For a statute to be declared facially invalid, proponent must meet the extremely high burden of showing that there are virtually no instances where it could be constitutionally applied.
Securities Law > Bases for Liability > Liability for Fraud
Constitutional Law > Fundamental Freedoms > Freedom of Speech > Scope of Freedom
Section 17(b) of the Securities Act of 1933 does not facially violate the First Amendment.
Securities Law > Bases for Liability > Remedies
Upon a finding of violation of the securities laws, the court may permanently enjoin the defendants from further violations. The court considers whether the violation was (1) isolated or part of a pattern, (2) flagrant and deliberate or merely technical in nature, and (3) whether the defendant's business will present opportunities to violate the law in the future. The determination should focus on the propensity for future violations based on the totality of the circumstances.
Civil Procedure > Summary Judgment > Summary Judgment Standard
To prevail on a motion for summary judgment, a plaintiff must establish that there is no genuine issue of material fact with respect to each element of its prima facie case.
Estate, Gift & Trust Law > Trusts > Constructive & Resulting Trusts
In order to establish a constructive trust, a plaintiff must establish that (1) there is a wrongful act; (2) specific property acquired by the wrongdoer must be traceable to the wrongful act; and (3) there is some reason why the party holding the property should not, in good conscience, be permitted to keep the property.
Securities Law > Bases for Liability > Remedies
Where a securities fraud violator transfers fraudulently obtained proceeds to a third party, the federal courts are empowered to exercise traditional equitable remedies to recover the proceeds, even if the third party is not alleged to have violated the securities laws.
Constitutional Law > Procedural Due Process > Self-Incrimination Privilege
Evidence > Procedural Considerations > Inferences & Presumptions
The Fifth Amendment does not forbid adverse inferences against parties to civil actions when they refuse to testify in response to probative evidence offered against them. The court is not, however, required to draw an adverse inference based on an individual's exercise of his Fifth Amendment right not to testify. It is in the court's discretion whether to draw such an adverse inference.
Civil Procedure > Injunctions > Elements
In order for a court to extend the preliminary injunction, plaintiff must be able to demonstrate a substantial probability of success on the merits.
COUNSEL: For SECURITIES AND EXCHANGE COMMISSION, plaintiff: Nancy Roberts Grunberg, SECURITIES & EXCHANGE COMMISSION, Washington, DC.
For CHARLES O. HUTTOE, KAREN PURVIS, TAMMY JO PERKINS, JOSEPHINE BROOKS, defendants: John Michael Fedders, Washington, DC.
For SGA GOLDSTAR RESEARCH INC., THEODORE R. MELCHER, JR., ALPHA SECURITIES LTD., defendants: Larry R. Williams, Nashville, TN.
For SHANNON B. TERRY, DUNBAR HOLDINGS LTD., defendants: Hamilton Phillips Fox, III, [*2] Howard Peter Slomka, SUTHERLAND, ASBILL & BRENNAN, L.L.P., Washington, DC.
For SHANNON B. TERRY, DUNBAR HOLDINGS LTD., defendants: S. Lawrence Polk, Atlanta, GA.
For SYSTEMS OF EXCELLENCE, INC., defendant: Michael J. Pollack, ARTER & HADDEN, L.L.P., Washington, DC.
For LYNDA LOU KANE, defendant: Paul J. Bazil, PICKARD & DJINIS, Washington, DC.
For LYNDA LOU KANE, defendant: Martin H. Kaplan, GUSRAE KAPLAN & BRUNO, New York, NY.
For MARY JANE HUBBARD, defendant: Mark F. Raymond, TEW, BEASLEY, L.L.P., Miami, FL.
For NANCY ELLIS, WILLIAM DAW, SONYA DAW, defendants: Steven Carl Tabackman, OBLON, SPIVAK, MCCLELLAND, MAIER & NEUSTADT, Arlington, VA.
For ADOBE GALLERIES INC., JACK WEINSTEIN, NANCY WEINSTEIN, defendants: Larry Stuart Gondelman, Esquire, AKIN, GUMP, STRAUSS, HAUER & FELD, L.L.P., Washington, DC.
For LORETTA DAVIS, BARCLAY DAVIS, defendants: Jeffrey Stuart Rosen, DEMARTINO, FINKELSTEIN, ROSEN & VIRGA, Washington, DC.
For UNITED STATES OF AMERICA, movant: Steve Korotash, SECURITIES & EXCHANGE COMMISSION, Washington, DC.
For RICHARD A. COCCOLA, JOHN SZWECH, MARY ELLEN KNIGHT, C. PETER BELER, RODOLFO L. RAMOS, KATSURO SAKOH, KENJI [*3] TANAKA, EDWARD ZAPTIN, movants: Noland MacKenzie Canter, III, COPILEVITZ & CANTER, LLC, Washington, DC.
JUDGES: GLADYS KESSLER, U.S. District Judge.
OPINIONBY: GLADYS KESSLER
OPINION: MEMORANDUM OPINION
The Securities and Exchange Commission ("SEC") brings this action against Defendant Shannon B. Terry ("Terry") and his wholly-owned Bahamian corporate shell, Dunbar Holdings, Ltd. ("Dunbar Holdings"), charging violation of sections 17(a) and 17(b) of the Securities Act of 1933, 15 U.S.C. §§ 77q(a) and 77q(b) ("SA § 17(a)" and "SA § 17(b)", respectively), section 10(b) of the Securities Exchange Act of 1934, 15 U.S.C. § 77j(b) ("SEA § 10(b)"), and Rule 10b-5 thereunder, 17 C.F.R. § 240.10b-5 ("Rule 10b-5"). The SEC also charges that Relief Defendant J.S. Holdings, Inc. ("J.S. Holdings"), a holding company, is holding $ 255,000 in illegal proceeds for the benefit of Defendant Charles O. Huttoe.
This matter comes before the Court on Plaintiff's Motion for Summary Judgment or in the Alternative, Preliminary Injunction as to Defendants Terry, Dunbar Holdings and J.S. Holdings [# 156]. Defendants Terry and Dunbar [*4] Holdings jointly filed a motion for summary judgment [# 177] in which they argue that SA § 17(b), if applied against Terry, would violate the First Amendment's guarantee of free expression and the Fifth Amendment's guarantee of due process of law.
Upon consideration of the motions, oppositions, replies and the entire record herein, for the reasons set forth below, Plaintiff's Motion for Summary Judgment [# 156] is granted in part and denied in part, and Defendants' Motion for Summary Judgment [# 177] is denied.
I. BACKGROUND n1
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n1 Pursuant to Local Rule 108(h), "in determining a motion for summary judgment, the Court may assume that facts identified by the moving party in its statement of material facts are admitted, unless such a fact is controverted in the statement of genuine issues filed in opposition to the motion." The Court thus recites uncontroverted facts from the Plaintiff's Statement of Material Uncontested Facts.
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The SEC brought charges against named Defendant Charles O. Huttoe, [*5] Chairman of the Board and Chief Executive Officer of Systems of Excellence, Inc. ("SOE") for fraud in connection with the registration and sale of SOE common stock. n2 The SEC also named several co-defendants in its complaint, including Defendants Terry and Dunbar Holdings, alleging that these individuals and entities fraudulently promoted SOE stock or illegally received unregistered SOE shares or proceeds from the sale of such shares.
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n2 A final judgment was entered, under seal, against Defendant Huttoe in November 1997.
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The present motion relates only to Defendants Terry and Dunbar Holdings, and Relief Defendant J.S. Holdings. The SEC alleges that Terry, directly and through the Dunbar Holdings entity, was a paid participant in Huttoe's fraud. Terry is also charged with the fraudulent promotion of stocks in a number of companies unrelated to Huttoe. Relief Defendant J.S. Holdings, though not charged with violation of the securities laws, is alleged to be a repository of funds fraudulently earned by Defendant [*6] Huttoe.
A. Shannon Terry & Dunbar Holdings
Shannon Terry, age 28, was an independent contractor employed by SGA Goldstar Research, Inc. ("SGA") from August 1993 until November 1996. His prior education and training included a degree in Finance and Economics, earned in June 1992, two months of unspecified work at SGA in June and July 1992, and one year of employment by a bank as a credit analyst.
SGA published the SGA Goldstar Whisper Stocks newsletter ("Whisper Newsletter"). Theodore Melcher, the sole shareholder of SGA, n3 was also publisher and editor of the Whisper Newsletter. SGA did business out of Melcher's home, where the Newsletter was prepared using desktop publishing equipment. Terry and Melcher were the only two people working at SGA during most of Terry's tenure.
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n3 SGA Goldstar Research, Inc. and Theodore Melcher are also named Defendants in the SEC's original complaint against named Defendant Charles Huttoe.
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The Whisper Newsletter was a "high-risk aggressive growth" newsletter containing [*7] profiles of companies and making recommendations regarding the purchase of stock in those companies. Each edition typically featured promotion of largely unknown and untested penny stock or small capitalization companies. The Newsletter was available through direct subscription, as well as indirectly through several news provider services. SGA subscribers received the Whisper Newsletter by facsimile each evening or downloaded a copy by logging into SGA's Internet web page. Each evening's edition was post-dated to the following day. In 1996, there were approximately 280 subscribers to the Whisper Newsletter. In addition to its subscription revenue, SGA received compensation from companies publicized in the Whisper Newsletter.
Terry performed a range of tasks including bookkeeping, word processing, and answering phones. One of his main responsibilities was selling subscriptions to new and existing clients. Terry also assisted in the production and distribution of the Newsletter, reviewing press release information about companies profiled by the Whisper Newsletter and writing articles and commentaries about some of these same companies. During his employment, Terry wrote an increasing [*8] number of articles, and at times wrote as many as half of all of the articles in the Newsletter.
For his work, Terry received a base compensation of $ 25,000 per year and 12.5 percent of all new and renewal subscriptions. In addition, companies paid SGA with stock in exchange for articles promoting their stock in the Whisper Newsletter, and SGA would in turn give Terry stock for companies he promoted in the articles he wrote. Thus, although the stock was not directly given to Terry by the issuing company, it came from the issuing company to SGA and then directly to Terry for the articles he wrote about those stocks. Terry admits to being present at some of the meetings where the stock payments were negotiated, but denies being a decision maker or negotiator in these meetings. n4 Between October 1994 and September 1996, Terry received stock in 18 companies which were then promoted in the Whisper Newsletter. n5 The ultimate value of all stocks he received from his allegedly illegal activities was $ 828,448. n6
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n4 Terry admits participation in meetings to negotiate stock in exchange for promoting Central Resources, American Bio Medica, and Systems of Excellence. (See Pls. Stmt. of Material Uncontested Facts at P 5; Defs. Response to Stmt of Material Uncontested Facts at P 5.) [*9]
n5 The table that follows is a graphic representation of the stocks received by Defendants Terry and Dunbar Holdings. Some of the information is not complete because the SEC did not having access to all of the Newsletters:
Stock Shares Dates Dates Dates Shares
Issuer Rec'd Rec'd Promoted Sold Sold Proceeds
Affinity Tele. 85,000 7/14/95;
7/21/95;
8/8/95 $ 57,625
Aimrite Holdings 51,750 2/22/96
5/31/96 $ 20,530.50
American Bio 20,000 7/15/96 7/15/96- 7/17/96 7,500
8/30/96 7/19/96 2,500
7/25/96 2,500
7/26/96 2,500
7/29/96 2,500
9/04/96 2,500 $ 116,250
Ameriquest 2,500 2/3/95 3/31/95- 4/05/95 2,500 $ 7,187.50
4/3/95
Century Tech. 75,000 1/8/96 1/19/96 1/19/96 12,000
5/10/96 63,000 $ 31,402.50
Chancellor Group 2,500 6/11/96 6/11/96- 7/11/96- 1,000
2,500 6/26/96 7/25/96 8/5/96 1,500 $ 20,937.50
Dragon Envir. 37,500 6/13/96 6/13/96 6/17/96 5,000
16,500 10/30/96 6/17/96 6/18/96 10,000
9/18/96 3,000
9/30/96 3,000 $ 58,031.10
Essential Res. 40,000 7/12/96 7/30/96 8/9/96 2,000
5,000 9/13/96 9/19/96 8/12/96 1,500
8/15/96 1,500 $ 49,375
Fidelity Med. 15,000 5/10/95 $ 6,555
Garcis USA (Buys) 20,000 4/3/95 4/4/95- 4/12/95 2,500
3,000 5/4/95 4/17/95 4/17/95-
4/28/95 17,500
(Free) 5/5/95 3,000 $ 7,717.50
Insulpro Indus. 15,000 3/13/95 3/15/95- 4/12/95-
(Buys) 5,000 3/13/95 4/3/95 5/3/95 20,000 $ 10,740
Int'l Std. Group 50,000 3/14/96 $ 47,509.10
NVID Int'l 225,000 2/15/96 $ 53,375
Silent Radio 10,000 10/21/94 $ 22,874.50
[*10]
n6 For purposes of summary judgment, the SEC reduced its disgorgement request from $ 851,322.50 to $ 828,448 in its Reply Memo in response to Defendant Terry's denial that he received stock valued at $ 22,874.50 in exchange for promoting Silent Radio, Inc. (Pl's Reply at 3, n.3; see also Pl's Stmt of Mat. Uncontested Facts, P 34; Terry Response, P 34.)
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Terry is the sole owner of Dunbar Holdings, a corporate shell that is located in Grand Turks, Bahamas. Terry maintains and directs a trading account in the name of Dunbar Holdings with a Canadian brokerage firm. Stocks that Terry received for his commentaries in the Whisper Newsletter were placed into the Canadian trading account of Dunbar Holdings.
As the table in footnote 5 demonstrates, Terry's trading of stocks either coincided with the publication of stories about these same stocks in the Whisper Newsletter or took place shortly after publications of the stories. Terry wrote some of the articles and co-authored others with Melcher who always retained final editorial control over articles appearing in the Whisper Newsletter. These stories [*11] would recommend that the subscribers buy the stocks in the companies promoted. However, after some of the stories were printed in the Whisper Newsletter, Terry would turn around and sell his personal holdings of that particular stock within a few days. Since the price of a featured stock often increased soon after Whisper Newsletter's aggressive promotion to subscribers, Terry made substantial profits from his sales. This pattern of selling in contravention of the Whisper, recommendations was repeated over a two year period for all stocks Terry received as compensation for promotion of these stocks.
B. J.S. Holdings.
J.S. Holdings is a holding company, owned by Jeffrey Szur, which in turn owns J.S. Securities. J.S. Holdings received a wire transfer in the amount of $ 255,000 from Defendant Huttoe on August 21, 1996. Plaintiff claims that this amount represents proceeds of the sale of unregistered SOE stock from a nominee account in the name of National Trading Services, Inc. ("NTSI"), a Florida Corporation controlled by Huttoe.
II. STANDARD OF REVIEW
A party against whom a claim . . . is asserted . . . may, at any time, move with or without supporting affidavits [*12] for a summary judgment in the party's favor as to all or any part thereof. . . . The judgment sought shall be rendered forthwith if the pleadings, depositions, answers to interrogatories, and admissions on file, together with the affidavits, if any, show that there is no genuine issue as to any material fact and that the moving party is entitled to judgment as a matter of law.
Fed. R. Civ. P. 56(b)-(c). The party seeking summary judgment bears the initial burden of demonstrating an absence of a genuine issue of material fact. Celotex Corp. v. Catrett, 477 U.S. 317, 322, 91 L. Ed. 2d 265, 106 S. Ct. 2548 (1986). In determining whether the movant has met this burden, a court must consider all factual inferences in the light most favorable to the non-moving party. McKinney v. Dole, 246 U.S. App. D.C. 376, 765 F.2d 1129, 1135 (D.C. Cir. 1985). Once the moving party makes its initial showing, however, the nonmoving party must demonstrate "specific facts showing that there is a genuine issue for trial." Celotex, 477 U.S. at 324; McKinney, 765 F.2d at 1135. Moreover, "in determining a motion for summary judgment, [*13] the court may assume that facts identified by the moving party in its statement of material facts are admitted, unless such a fact is controverted in the statement of genuine issues filed in opposition to the motion." Local Rule 108(h).
III. CLAIMS AGAINST SHANNON TERRY & DUNBAR HOLDINGS
The SEC alleges that Terry violated SA § 17(a), SEA <span class="term" id="TMB" onmouseover="parent.pNav.tOn(this)" onclick="paren |
