In this case the Securities and Exchange Commission filed a civil action to permanently enjoin certain corporations and individuals from distributing unregistered securities and engaging in fraudulent manipulative practices in connection with the sale of securities.
Prior to the judgment below, nine of the defendants had agreed to permanent injunctions and the SEC had dismissed five defendants without prejudice to refiling. Of the original 28 defendants in this case, only the following actively contested at trial the issuance of an injunction: J. Quincy Adams, Audy Byram, Waggoner Carr, James Farha, David Hoover, John Osorio, Phillip Proctor, Tom Max Thomas, and South Atlantic Company [SAC].
Only four of the defendants, Waggoner Carr, David Hoover, John Osorio and South Atlantic Corporation, have appealed the judgment of the district court.
In an opinion
Each of the appellants allege that the facts are insufficient to justify his inclusion in the group covered by the injunction. An exhaustive study of the record of this case shows ample evidence to establish that each appellant was sufficiently connected with this complex affair to support the findings of involvement in past, present or imminent future violations so as to justify an injunction against manipulations in futuro.
The judgment is affirmed.
COLEMAN, Circuit Judge (concurring in part and dissenting in part):
With no difficulty at all I can, and do, concur in the opinion of this Court affirming the judgment below as to David Hoover, John Osorio, and South Atlantic Corporation.
As to the remaining appellant, Waggoner Carr, I have serious doubt.
As the opinion points out, this was indeed a "complex affair". The trial record consumed 2,533 pages. Since I am in agreement as to all appellants except one, I restrict my discussion to the findings of the District Court applicable to Mr. Carr. These findings are reported, 334 F.Supp. 452-453:
L. Waggoner Carr
As to whether these findings justified an injunction against Carr, his counsel cogently urges:
Carr's pledge of unregistered stock was not a violation of the Securities Act, that the Commission failed its burden of proving that Carr aided and abetted the unlawful pledge of stock as collateral, that there is no evidence that Carr aided and abetted a scheme to manipulate and defraud, and that there was no evidence that Carr used the mails or an instrumentality of commerce.
Upon consideration of the record as a whole, and particularly the specific findings as to this appellant, I would reverse and remand with directions that as to him the injunction be dissolved.