SEC Argues for Ability to Obtain Penalty Beyond Defendant’s Gain

The SEC and a shell company creator squared off in the Ninth Circuit over questions about courts’ authority to fine securities law violators an amount beyond what they gained individually from their illegal scheme.

Last year, the Securities and Exchange Commission obtained a district court ruling imposing a $1.75 million penalty on Imran Husain, who allegedly ran an illegal scheme to create shell companies and sell for a profit after public offerings.

Husain, who was one of two people implicated in the scheme, said in his appeal that it is the highest penalty of its kind imposed on a person ...