Shell Company Fraudster Wins Bid to Undo $1.7 Million Penalty

A Santa Monica, Calif. man on Tuesday won reversal of a $1.7 million civil penalty imposed for violations of federal securities laws after an appeals court said there were unresolved factual disputes.

Granting summary judgment on the amount of a civil penalty when there are genuine questions about material factual issues is an abuse of discretion, the US Court of Appeals for the Ninth Circuit said.

After a summary judgment that Imran Husain had violated securities laws, the district court imposed equitable statutory remedies, including a second-tier civil penalty of $1,757,000 based on Husain’s gross pecuniary gain. But the amount ...