SEC Must Bolster Arguments for ‘Adviser’ Liability in Fraud Case

Judgment against a man the SEC accused of investment fraud will partially stand, but the agency must return to district court to argue whether a law governing “investment advisers” applies, the Second Circuit ruled Tuesday.

The Securities and Exchange Commission can’t rely on its own interpretation of the term “investment adviser,” the US Court of Appeals for the Second Circuit said in an unsigned, unpublished opinion. The appeals court affirmed Evarist Amah’s liability, his disgorgement of $10,000, and two out of three $223,229 civil penalties under the Securities Act and the Securities Exchange Act.

But the three-judge panel vacated the ...