Texas Real Estate Developer Wins Bid to Undo Broad Receivership

A Texas-based real estate developer accused of securities violations won an appeal challenging the appointment of a receiver over all entities under his direct or indirect control, after the Fifth Circuit said the court applied the wrong legal standard.

The trial court applied SEC v. First Financial Group of Texas, when it should have applied Netsphere, Inc. v. Baron, the court said.

In First Financial, the SEC had already obtained a preliminary injunction preventing the defendants from, among other things, disposing of assets and records of the company, and the receivership was “proper as an adjunct” to ...