Meadows v. SEC ( 1997 )

REVISED, AUGUST 26, 1997
UNITED STATES COURT OF APPEALS
For the Fifth Circuit
No. 96-60328
JAY HOUSTON MEADOWS
Petitioner
VERSUS
SECURITIES AND EXCHANGE COMMISSION
Respondent
On Petition for Review of an Order of the
Securities and Exchange Commission
August 22, 1997
Before DUHÉ, BENAVIDES, and STEWART, Circuit Judges.
DUHÉ, Circuit Judge:
Petitioner Jay Houston Meadows seeks review of an order of the
Securities and Exchange Commission sustaining sanctions imposed on
him by an administrative law judge for violations of § 17(a) of the
Securities Act of 1933, 15 U.S.C. § 77q(a), § 10(b) of the
Securities Exchange Act of 1934, 15 U.S.C. § 78j(b), and Rule 10b-
5, 17 C.F.R. § 240.10b-5, promulgated thereunder. We affirm.
I
At all relevant times, Jay Houston Meadows was a registered
representative affiliated with Rauscher Pierce Refnes, Inc.
(“RPR”), a registered broker-dealer. In late 1990, Meadows, along
with Marc W. Gunderson and William Craig Harriger,1 formed Mundiger
International, Inc. (“Mundiger”) and Mira Golf International, Inc.
(“Mira Golf”) (collectively, the “Companies”) to engage in two
businesses: Mira Golf was to wholesale recycled golf balls, and
Mundiger was to use the sale proceeds of the recycled golf balls to
drill and operate gas wells.2
The three principals, along with Brian Catlin, shouldered the
management obligations for both Companies. Gunderson, the brains
behind the ventures, claimed to have much experience in both
businesses and thus assumed the daily operating responsibilities;
Harriger, an attorney, provided legal and administrative support;
Catlin served as the Companies’ CPA; and Meadows joined purportedly
to assist Gunderson with managerial duties, to provide labor at
Mira Golf, and to invest Mundiger’s excess cash flow. The Division
of Enforcement (“Division”)3 contends, however, that Gunderson and
Harriger recruited Meadows solely to raise capital, noting
1
In May 1994, Gunderson and Harriger, without admitting or
denying any of the allegations in the complaints against them,
consented to the entry of permanent injunctions enjoining them from
violating the antifraud provisions of the securities acts.
2
Initially, Mundiger was to perform both businesses. The
principals created Mira Golf only after Meadows’s RPR compliance
officer informed Meadows that he could not serve as an officer or
director in any venture that sought to raise capital through the
sale of gas well interests. RPR also prohibited Meadows from
soliciting interests in either venture and from owning more than
10% of Mundiger’s stock.
3
All references to the Division are to the Securities and
Exchange Commission’s Division of Enforcement, the Respondent in
this action.
2
Meadows’s lack of relevant business experience other than his
contacts to potential investors. Whether Meadows did in fact raise
capital forms the basis of this appeal.
Pursuant to RPR’s instructions, Meadows took no formal
position at Mundiger, and he confined his investment in Mundiger to
$10,000, for which he received 10% of its stock. Meadows also
invested $100 in Mira Golf, for which he received an 8½% interest,
and was appointed its secretary-treasurer and one of its directors.
Meadows and Harriger presented Mundiger to the “Masterminds,”
a small networking group established solely to discuss money-making
opportunities,4 and they arranged for Gunderson to speak at an
upcoming meeting. At this meeting, Gunderson enthusiastically
represented the Companies’ prospects, promising that investors
could expect high returns within months of their investment.
Gunderson explained he had retained a lease on valuable gas-
producing property in the Fort Worth Basin (“Property”), and that
Mundiger had a contract to supply gas to the Texas Utility and Fuel
Company (“TUFCO”), a local Texas utility, at a price above the
current market price. He indicated he sought investors to help
finance the drilling on the Property before the TUFCO contract
expired in two-and-one-half years. Gunderson represented there was
only a six-percent possibility--a figure he attributed largely to
human error--that a particular well would fail to produce. Meadows
challenged none of these assertions. Rather, he echoed Gunderson’s
enthusiasm, claiming Mundiger would hit gas wherever it drilled.
4
Meadows and Harriger were members of the Masterminds.
3
Meadows, however, never seriously investigated the validity of
such claims. He testified he relied largely on both Harriger’s
opinion of Gunderson and Gunderson himself. The only independent
inquiry Meadows made was in late 1990 when he visited the
Companies’ offices after regular business hours--and in the absence
of Gunderson and Harriger--to verify Mira Golf’s golf ball
inventory. When Harriger learned of the unannounced visit, he
changed the locks and temporarily refused to give Meadows a key.
Meadows, who was one of Mira Golf’s officers and directors, was
somehow untroubled by Harriger’s action, testifying he knew he
still had authority to inspect the books during business hours.
Meadows, however, never chose at any time to examine any of the
books because he “trusted that it was being taken care of.”
Following the initial Masterminds meeting, Meadows, either
alone or with Gunderson and/or Harriger, met in the RPR offices and
elsewhere with Masterminds members and other potential investors to
encourage their investment in the Companies. Between late 1990 and
early 1991, Mundiger raised approximately $800,000 from over twenty
investors through the sale of participation interests in several
separate drilling programs. Mira Golf raised $78,000 from nine
investors. Of the twenty or so investors in these Companies, ten
were Meadows’s RPR clients.5
Mundiger drilled its first two gas wells in early 1991.
Output was far short of that represented by the principals; in
5
The Division does not suggest that any of the investments
passed through RPR or that Meadows received any commission from RPR
for the investments made.
4
fact, production costs far exceeded revenues, a pattern that
continued for six of the ten wells Mundiger drilled. Gunderson,
however, falsely represented otherwise, claiming these wells were
profitable. In a February 1991 memo to Meadows and Catlin,
Gunderson and Harriger wrote that “we have grossly underestimated
our wells[’] production[,]” and urged Meadows and Catlin to solicit
more investors for future programs. Without verifying Gunderson’s
claims of above-expectation well production, Meadows repeated them
to potential investors. Investors testified that Meadows’s
positive characterizations of the wells’ successes influenced their
investment decisions.
In April 1991, Mundiger began paying investors their purported
pro rata shares of revenues earned from gas production and sales to
TUFCO. These distributions, however, were in excess of investors’
actual shares but still significantly less than what Gunderson,
Harriger, and Meadows had represented. Mundiger apparently
obtained the funds for these overpayments from investor funds
furnished for subsequent well programs.
In May 1991, Meadows resigned his positions at Mira Golf
following various salary disputes with Gunderson and Harriger.
Thereafter, he sold back some of his ownership interests in the
Companies for an initial payment of $10,000 and additional monthly
payments of $1,000 for one year. The monthly payments were
conditioned, however, upon Meadows’s silence as to the Companies’
financial situation. Under this agreement, Meadows received
$13,000 in total, approximately $3,000 more than his aggregate
5
investment just over seven months earlier.
In August 1991, Harriger told Catlin he suspected Gunderson of
misappropriating Mundiger funds. In September 1991, Catlin assumed
managerial responsibilities for Mundiger and discovered that in
fact both Gunderson and Harriger had been misappropriating
corporate funds for their personal uses. Catlin also learned that
Gunderson had grossly misrepresented the Property’s productive
capacity; most of the wells had gone dry. Catlin further
ascertained that the Companies had never been profitable; in fact,
he determined that Mundiger was insolvent. Contrary to the
promises of Gunderson, Harriger, and Meadows, none of the
investors, except Meadows, recouped his or her initial investment.
In January 1994, the Securities and Exchange Commission
(“Commission”) instituted administrative proceedings against
Meadows. It alleged that Meadows, in connection with the offer and
sale of the Companies’ securities, willfully violated § 17(a) of
the Securities Act of 1933, § 10(b) of the Securities and Exchange
Act of 1934, and Rule 10b-5 promulgated thereunder. The ALJ
agreed, finding Meadows had misrepresented to investors the risks
of investing in the Companies, the likelihood the ventures would be
profitable, and the speed with which investors would recoup their
investments. The ALJ then barred Meadows from association with any
broker-dealer with a right to reapply in two years; ordered Meadows
to permanently cease and desist from committing or causing any
violation of the antifraud provisions; and fined Meadows $100,000.
On appeal, the Commission affirmed. Meadows appeals.
6
II
We uphold an agency’s decision unless it is “arbitrary,
capricious, an abuse of discretion, or otherwise not in accordance
with law.” 5 U.S.C. § 706(2)(A); accord Hawkins v. Agricultural
Marketing Serv., 10 F.3d 1125, 1128 (5th Cir. 1993). We uphold the
Commission’s factual findings if supported by substantial evidence.
See 15 U.S.C. § 78y(a)(4); Whiteside & Co. v. SEC, 883 F.2d 7, 9
(5th Cir. 1989). “Substantial evidence is such relevant evidence
as a reasonable mind might accept to support a conclusion. It is
more than a mere scintilla and less than a preponderance.” Ripley
v. Chater, 67 F.3d 552, 555 (5th Cir. 1995) (footnotes omitted).
It is not the function of an appellate court to reweigh the
evidence or to substitute its judgment for that of the Commission.
See id.
By contrast, legal conclusions are “for the courts to resolve,
although even in considering such issues the courts are to give
some deference to the [agency’s] informed judgment.’” Faour v.
United States Dept. of Agriculture, 985 F.2d 217, 219 (5th Cir.
1993) (quoting Federal Trade Comm’n v. Indiana Fed’n of Dentists,
476 U.S. 447, 454 (1986)).
II
Section 17(a) of the Securities Act of 1933 states in
pertinent part:
It shall be unlawful for any person in the offer or
sale of any securities . . ., directly or
indirectly--
(1) to employ any device, scheme, or artifice
to defraud, or
7
(2) to obtain money or property by means of
any untrue statement of a material fact or
any omission to state a material fact
necessary in order to make the statements
made . . . not misleading, or
(3) to engage in any transaction, practice, or
course of business which operates or would
operate as a fraud or deceit upon the
purchaser.
15 U.S.C. § 77q(a). Meadows insists we cannot hold him culpable
under this section.6 We disagree.
A
Meadows reasons that § 17(a) culpability attaches only to
“offerors” or “sellers” of securities, and he maintains he acted as
neither in the offer and sale of the Companies’ securities. The
Division disputes Meadows’s interpretation of § 17(a), arguing that
§ 17(a) encompasses more than just “offerors” or “sellers” because
it applies to “any person in the offer or sale of any security”
(emphasis added).7 We need not resolve this interpretive issue.8
6
Meadows insists the Division conceded he did not act as a
“seller” under § 17(a) when it informed the ALJ that it is not
“alleging that Mr. Meadows quote unquote sold the securities.”
Meadows’s allegation blatantly ignores the context in which this
statement was made. In response to the ALJ’s confusion as to
exactly what charges Meadows faced and exactly in what capacity
Meadows was charged, the Division explained, “We are not alleging
§ 5 [i.e., 15 U.S.C. § 78e, which prohibits any broker or dealer
from selling unregistered securities]. We are not alleging,
although . . . it’s implicit in much of the testimony . . . that
Mr. Meadows quote unquote sold the securities. We are alleging
nothing more than § 10(b) and § 17 may require . . . .”
7
The Division does not specify, however, the class of
defendants it believes is contemplated by § 17(a).
8
Our research has uncovered no case squarely resolving this
question. We recognize the Supreme Court has stated that the
language of § 17(a) “does not require that the fraud occur in any
particular phase of the selling transaction,” United States v.
8
Even if we assume, without deciding, that § 17(a) applies only to
offerors or seller, Meadows’s argument still fails because
substantial evidence demonstrates Meadows was, in fact, a “seller.”
A “seller” is one who (1) “engages in solicitation,” Pinter
v. Dahl, 486 U.S. 622, 643 (1988), and (2) is “motivated at least
in part by a desire to serve his own financial interests or those
of the securities owner.” Pinter, 486 U.S. at 647.9 Meadows fits
squarely within this definition.
1
In the investment context, one who solicits attempts to
produce the sale by urging or persuading another to act. See id.
at 646. Persuasion can take many forms. Here, Meadows, who
testified he considers himself a terrific salesman, admitted he
could initiate a sale simply by informing a customer that he liked
a certain investment or had invested in a particular venture.
Substantial evidence shows Meadows exploited these sales tactics to
raise capital for Mundiger and Mira Golf. By characterizing the
Companies as opportunities too good to pass up, Meadows solicited
many investors to furnish capital for worthless projects.
Naftalin, 441 U.S. 768, 773 (1979), and that “[t]he statutory terms
[offer and sale] . . . are expansive enough to encompass the entire
selling process, including the seller/agent transaction.” Id.
Naftalin, however, dealt with the single issue whether a seller
could be held liable under § 17(a)(1) for fraudulent conduct
directed against his broker.
9
Although Pinter involved § 12 of the 1933 Act, it interpreted
language identical to that found in § 17(a), viz., the terms
“offer” and “sale.” The ALJ’s decision to apply the Pinter
definitions to the instant case was therefore proper and is not
questioned by the parties.
9
In particular, the record demonstrates Meadows recommended the
Companies to investors;10 claimed that Mundiger would hit gas
wherever it drilled; avowed that an investment in Mundiger was a
“sweetheart” or “slam dunk” deal; estimated that Mira Golf’s
potential profit on each recycled golf ball was between $.19 and
$.50; assured that an investment in Mira Golf was “pretty safe”;
maintained that investors could expect payback within six-months;
conveyed that the first two wells “came in real well” but that the
latest well package was “the most sure thing” and a “huge plum”;
asserted that investments in Mundiger and Mira Golf would help
realize the investor’s investment goals; advised investors on means
by which they could procure funds to invest in the Companies;
remarked that demand to participate in the well programs was
greater than the supply of participation interests; commented that
all his RPR clients invested in the Companies; and disclosed that
he had done the same.11
Notably, the record also reveals that others perceived Meadows
as a fundraiser. Investors testified they considered Meadows the
10
Four investors testified that Meadows recommended investments
in one or both of the Companies; three of the four were Meadows’s
RPR clients. At least two investors testified they would not have
become involved with the Companies absent Meadows’s recommendation.
11
Meadows points to four witnesses who testified that he did
not solicit their investment. Nonetheless, two of these investors
later testified they relied on Meadows’s investment suggestions;
one later testified he wouldn’t have gotten involved had Meadows
not recommended the investment; and another testified he tendered
payment to Meadows. In any event, that some witnesses did not
testify against Meadows does not refute others’ statements that
Meadows had solicited them.
10
“salesperson” of the Companies’ three principals.12 Gunderson and
Harriger viewed Meadows similarly. When Mundiger was short on
capital, they wrote to Meadows and Catlin asking them to “contact
[their] investors” and to “get [their] feelers out now.” Meadows
himself understood his role to be that of a salesman. After
another client made the decision to invest, Meadows declared, “Boy,
I wish all my sales were that easy.” The evidence establishes,
therefore, that Meadows engaged in the solicitation of
investments.13
2
Liability will extend to Meadows, however, only if substantial
evidence shows that his solicitations were motivated by personal
financial gain. See Pinter, 486 U.S. at 647. “Congress did not
intend to impose [liability] on a person who urges the purchase but
whose motivation is solely to benefit the buyer.” Id. Meadows
claims his motivations were pure, arguing that the evidence shows
only that he was motivated by a gratuitous desire to share an
attractive investment opportunity with his fellow country club
members and others. In support, he notes he received neither a
salary from the Companies nor a commission from RPR. These facts,
12
The testimony shows that Meadows used his RPR offices to
solicit or to participate in the solicitation of investors; that he
personally picked up an investment check at an investor’s home; and
that he accepted investment checks from investors at his RPR
offices. Such utilization of his RPR offices lends further support
to investors’ perceptions of Meadows as a salesman.
13
We emphasize that we considered the totality of the
circumstances in finding that Meadows solicited investors. No
particular factor played a determinative role in our decision.
11
however, are not dispositive. Where a defendant “anticipat[es] a
share of the profits,” the Supreme Court has held that he has
solicited for personal financial benefit. See id. at 654
(alteration in original). Meadows was a shareholder of both
Mundiger and Mira Golf and thereby stood to benefit personally from
the additional investments he solicited.14 We conclude, therefore,
that substantial evidence supports the Commission’s finding that
Meadows acted as a seller under § 17(a).
B
Meadows also complains he cannot be held culpable under §
17(a) insofar as substantial evidence fails to show he acted with
scienter.15 Liability under § 17(a)(1) attaches only upon a showing
of severe recklessness. See Securities and Exchange Comm’n v.
Southwest Coal and Energy Comm’n, 624 F.2d 1312, 1320-21 & n.17
(5th Cir. 1980). Severe recklessness is:
limited to those highly unreasonable omissions or
misrepresentations that involve not merely simple or
even inexcusable negligence, but an extreme
departure from the standards of ordinary care, and
that present a danger of misleading buyers or
sellers which is either known to the defendant or is
so obvious that the defendant must have been aware
of it.
See Broad v. Rockwell Int’l Corp., 642 F.2d 929, 961 (5th Cir.
14
Though Meadows did not invest directly in any of Mundiger’s
well programs, Mundiger itself held a 22½ % to 63% working interest
in each drilling program.
15
Meadows was charged with violating all three subsections of
§ 17(a). Scienter is not an element of a § 17(a)(2) or § 17(a)(3)
cause of action, however. See Aaron v. Securities & Exchange
Comm’n, 446 U.S. 680, 697 (1980). Under these subsections,
culpability is established merely by a showing of negligence. See
id.
12
1981) (en banc); Southwest Coal, 624 F.2d at 1321 n.17. Although
Meadows insists the record does not show that he knew or should
have known his conduct presented a danger of misleading others, the
substantial weight of the evidence demonstrates otherwise.
Meadows solicited investors with materially false and
misleading claims that Mundiger and Mira Golf were low-risk
investments that were virtually certain to yield a high return.16
Moreover, Meadows failed to disclose many material facts, including
that: he, an officer and director of Mira Golf, had been
temporarily denied after-hours access to the Companies’ books; he
had never conducted a background investigation into Gunderson, any
of Gunderson’s assertions, or the Companies’ purported successes
and that therefore, he had no basis for recommending the
investments; he was aware Gunderson recently had been accused of
misappropriation; he was aware Gunderson, while unemployed, was
known as a big spender; he was aware Gunderson had a reputation for
being able to “sell ice to an Eskimo”; he was aware Gunderson and
Harriger refused to follow Catlin’s recommendation that they
maintain separate bank accounts for each of Mundiger’s drilling
programs; he discovered the funds for each drilling project were
commingled; and he had been forced out of the Companies by
Gunderson and Harriger, who also paid him to be silent about the
Companies’ financial situation.
In light of his knowledge of these disturbing facts, to say
16
See supra Part II.A.1.
13
that Meadows, a securities professional,17 knew or should have known
that his recitations of Gunderson’s consistently optimistic claims
of the Companies’ successes presented a danger of misleading buyers
is an understatement.18 We conclude, therefore, that substantial
evidence supports the Commission’s determinations.
III
The Commission also found that Meadows willfully violated §
10(b) of the Securities Exchange Act of 1934, 15 U.S.C. § 78j(b),
and Rule 10b-5, 17 C.F.R. § 240.10b-5, promulgated thereunder.
Meadows disputes only whether substantial evidence supports the
Commission’s finding that he acted with scienter. As with § 17(a),
liability under § 10(b) and Rule 10b-5 attaches upon a showing of
severe recklessness. See Broad, 642 F.2d at 961-62. As discussed
above, we have concluded that Meadows acted with the requisite
scienter. We thus affirm the Commission’s findings.
17
Meadows attacks certain language in the Commission’s opinion
as erroneously imposing upon him those due diligence obligations
pertinent only to a securities professional acting in that
capacity. Because the Division does not allege Meadows acted as a
registered representative with respect to the sale of interests in
the Companies, Meadows argues we must reverse.
At one point in its opinion, the Commission referred to a
stockbroker’s obligation to investigate any highly optimistic
claims he or she makes. This reference notwithstanding, we
conclude the Commission’s finding of scienter turned on its
determination that Meadows, whether acting as a registered
representative or otherwise, exhibited conduct that represents an
extreme departure from the standards of ordinary care. Meadows
made material misrepresentations and omitted material facts when he
had strong reasons to do otherwise, and his actions or lack thereof
presented a clear danger of misleading buyers. We therefore find
Meadows’s argument without merit.
18
The Commission rejected Meadows’s explanations for his
conduct. Substantial evidence supports this decision.
14
IV
Meadows next alleges the ALJ denied him a fair hearing.
A
Meadows claims first that the ALJ failed to give any reasons
both for his decision to reject testimony indicating Meadows did
not solicit investors and for his conclusion that Harriger, a less-
than-trustworthy individual, was a credible witness for the
Division. We are bound by an ALJ’s credibility determinations.
See Helena Laboratories Corp. v. NLRB, 557 F.2d 1183, 1187 (5th
Cir. 1977). “If, however, the credibility choice is based on an
inadequate reason, or no reason at all, we are not compelled to
respect it, and shall not do so.” NLRB v. Moore Business Forms,
Inc., 574 F.2d 835, 843 (5th Cir. 1978).
We disagree with Meadows’s contention that the ALJ failed to
give any reasons for his decision. The ALJ stated he reviewed the
testimony and found it does not support Meadows’s claim of an
unfair hearing. Our review of the record satisfies us that the
ALJ’s reason is adequate. As to Harriger’s credibility, we point
out that the Commission noted its findings of Meadows’s culpability
do not rest on Harriger’s testimony. On appellate review, our job
is not to reweigh the evidence. Our job is to review the record to
determine if substantial evidence supports the judge’s finding. It
does.19
B
19
We note that Meadows has failed to point to anything in the
record suggesting the ALJ’s credibility assessments should not be
upheld.
15
Meadows next argues that the ALJ evidenced a pattern of bias
or prejudice against him. He claims the ALJ aggressively supported
the Division’s case by vigorously cross-examining Meadows’s
witnesses, by restricting the evidence exculpating Meadows of
fraudulent conduct, and by targeting Meadows and his counsel with
sarcastic comments.
In Liteky v. United States, 114 S. Ct. 1147 (1994), the
Supreme Court set forth the standard for establishing bias. The
Court said, “[J]udicial remarks during the course of a trial that
are critical or disapproving of, or even hostile to, counsel, the
parties, or their cases, ordinarily do not support a bias or
partiality challenge” unless “they reveal such a high degree of
favoritism or antagonism as to make fair judgment impossible.” Id.
at 1157. The Commission considered Meadows’s allegation of
procedural impropriety and concluded the ALJ treated both sides
equally. Substantial evidence supports this finding: the ALJ
cross-examined witnesses on both sides, limited the number of
witnesses each party could call, finding the testimony repetitive,
and plied both parties with sarcasm.
V
Meadows next argues that the sanctions imposed on him by the
Commission--a bar from association with any broker or dealer with
the right to reapply in two years, a cease and desist order, and a
$100,000 fine--are unwarranted. We will affirm the Commission’s
imposition of sanctions absent arbitrariness or an abuse of
discretion. See Whiteside, 883 F.2d at 10. Moreover, “[i]t would
16
be a gross abuse of discretion to bar an investment advisor from
the industry on the basis of isolated negligent violations.”
Steadman v. Securities & Exchange Comm’n, 603 F.2d 1126, 1141 (5th
Cir. 1979), aff’d on other grounds, 450 U.S. 91 (1981).
Meadows gives us no reason to disturb the Commission’s choice
of sanctions. The temporary bar from association is neither
arbitrary nor an abuse of discretion. The record demonstrates
Meadows engaged in a continual pattern of culpable behavior with
severe recklessness and with almost no thought to those he would
harm.20 The temporary bar from association is thus an appropriate
remedy designed to protect the public from future misconduct.21
Moreover, the $100,000 fine is justified. Section 21B(b) of
the Exchange Act, 15 U.S.C. § 78u-2(b), grants the Commission
authority to assess penalties of $100,000 for each fraudulent act
or omission if it resulted in substantial losses. Every investor,
except Meadows, suffered losses. By the close of 1993, Mundiger
investors had received a return of $167,445 on aggregate
20
Meadows relies on Johnson v. SEC, 87 F.3d 484 (D.C. Cir.
1996), for the proposition that a temporary bar from the securities
industry is a punitive rather than remedial sanction. Meadows’s
reliance on Johnson is misplaced, however. Johnson emphasized that
the imposition of a six-month suspension is less penal in nature
where the reason for the sanction is the degree of risk petitioner
poses to the public and is based upon findings demonstrating
petitioner’s unfitness to serve the investing public. See id. at
489. In the instant action, the ALJ made such findings.
21
Meadows argues the temporary bar from the brokerage industry
sounds the death knell for his career as a stockbroker. We note,
however, that re-entry following a temporary bar is neither
illusory nor unwelcome. See In re Arthur H. Ross, Exchange Act
Release No. 34-30956, 1992 WL 188932, at *2-3 (SEC July 27, 1992);
In re Paul Edward Van Dusen, Exchange Act Release No. 34-18284,
1981 WL 27886, at *3 (SEC Nov. 24, 1981).
17
investments of $783,126; Mira Golf investors lost more than 90% of
their investment. The imposed sanctions are thus not
disproportionate to Meadows’s conduct.
VI
For the foregoing reasons, we
AFFIRM.
18