Cemtrex Investors’ Wallets to Determine Award in SEC Fraud Suit

The SEC must show investors have suffered pecuniary loss to obtain a court remedy in which a fraud perpetrator disgorges ill-gotten gains, the Second Circuit ruled Tuesday, vacating an award against Cemtrex Inc.‘s founder.

The appellate panel vacated a lower court ruling that didn’t assess Cemtrex shareholders’ financial harm from Aron Govil’s alleged diversion of $7.3 million to himself. The Securities and Exchange Commission will have a chance to make that showing when the case returns to the lower court, Judge Steven J. Menashi said.

The US Court of Appeals for the Second Circuit noted its ruling reiterated a ...