ROGERS, Circuit Judge:
This case is before the court on a petition to review the opinion and order of the Securities and Exchange Commission permanently denying Steven Altman, an attorney admitted to practice in New York State, the privilege of appearing or practicing before the Commission, pursuant to Rule 102(e)(1)(ii) of the Commission's Rules of Practice, and Section 4C of the Securities Exchange Act of 1934 ("the Act"). The Commission found that Altman, in appearing before it, violated three Disciplinary Rules of the New York Bar Association Lawyer's Code of Professional Responsibility, and that the violations were "egregious, recurrent, and reflected a high degree of scienter." Steven Altman, Esq., Exchange Act Release No. 63306, 2010 SEC LEXIS 3762, at *70 (Nov. 10, 2010). Altman also petitions for review of the Commission's denial of his motion for reconsideration and a stay. Steven Altman, Esq., Exchange Act Release No. 63665, 2011 SEC LEXIS 30 (Jan. 6, 2011).
Altman, now proceeding pro se, contends that the procedure employed by the Commission was unconstitutional, because (1) the Commission lacked authority to sanction him under Rule 102(e)(1)(ii) and Section 4C of the Act based on its determination of violations of the New York Bar disciplinary rules; (2) the Commission failed to provide notice that it could proceed against him in the absence of prior action by New York State and of the standard of conduct that could be found to violate Rule 102(e)(1)(ii) and Section 4C; and (3) the Commission's findings are not supported by substantial evidence. He
Altman is a general commercial litigator who has rarely practiced before the Commission. In this instance, he represented a client who had been subpoenaed by the Division of Enforcement in a proceeding against a company. Altman's client had previously been employed by another company but occasionally performed secretarial tasks for the company under investigation. At the time of the subpoena, the client (through Altman) was involved in negotiations with the client's prior employer about a severance package. The Division learned the client could testify that a key defense of the company being investigated was false. After the Division contacted Altman to request an interview with his client, Altman engaged in a series of telephone conversations with the company's attorney, Irving Einhorn, who, unbeknownst to Altman, tape recorded five of the six conversations. The transcripts show that Altman encouraged Einhorn to convince the company to facilitate the payment of a severance package to Altman's client and to remove the client's name as a co-signer of two car leases held by the company's CEO. Among the various exchanges, in the final taped conversation of February 10, 2004, Einhorn asked Altman: "What is the bottom line? What is it going to take? What kind of package is this? . . . What is the package that [the client] wants to, you know, not cooperate or whatever?" Altman responded: "Get [the client] off those leases and, you know, a year's salary. . . ." Einhorn then asked: "What will we get if they do that, [the client] won't cooperate or [the client] won't remember?" Altman responded: "Uh, probably both." SEC Off. of Gen. Counsel Ex. 18 at 1660.
On January 30, 2008, the Commission instituted proceedings against Altman for "engag[ing] in unethical or improper professional conduct" in violation of Rule 102(e)(1)(ii) and Section 4C of the Act. An administrative law judge found, after an evidentiary hearing at which Altman was represented by counsel, that Altman had violated three of the New York Bar disciplinary rules,
Altman's challenge to the Commission's authority to sanction him based on violations of the New York Bar disciplinary
15 U.S.C. § 78d-3(a)(2). By its plain terms Section 4C authorizes the Commission to deny the privilege of appearance upon finding improper professional conduct. Because it does not unambiguously define "unethical or improper professional conduct," the question is whether the Commission's interpretation of the statute to allow it to apply State Bar disciplinary rules to define the proscribed conduct is permissible. See Chevron U.S.A. Inc. v. Natural Res. Def. Council, Inc., 467 U.S. 837, 843, 104 S.Ct. 2778, 81 L.Ed.2d 694 (1984). "In reviewing an agency's interpretation of its authority under a statute it administers, the court will uphold that interpretation so long as it is a reasonable interpretation of the statute." Financial Planning Ass'n v. SEC, 482 F.3d 481, 487 (D.C.Cir.2007) (citing Village of Bergen v. FERC, 33 F.3d 1385, 1389 (D.C.Cir.1994)).
Rule 102(e)(1)(ii) of the Commission's Rules of Practice was codified as Section 4C of the Act as part of the Sarbanes-Oxley Act of 2002, Pub.L. 107-204, 116 Stat. 745 (2002) (codified as 15 U.S.C. § 78d-3(a)(2)). Prior to its codification the Commission stated that it "perceives no unfairness whatsoever in holding those professionals who practice before [the Commission] to generally recognized norms of professional conduct . . . whether or not such norms had previously been explicitly adopted or endorsed by the Commission. To do so upsets no justifiable expectations, since the professional is already subject to those norms." Carter and Johnson, 47 S.E.C. 471, 508 & n. 65 (Feb. 28, 1981) (referencing the American Bar Association ("ABA") Code of Professional Responsibility Disciplinary Rules). The text of Section 4C is virtually identical to Rule 102(e)(1)(ii).
Contrary to Altman's position, the Commission did not lack authority to act because of previous pronouncements that it would generally not do so without prior judicial or administrative findings of misconduct. Altman points to the Commission's statements of its general policy.
Neither, as Altman contends, does the Commission's exercise of authority absent prior disciplinary proceedings against him by New York State implicate separation of powers or federalism concerns. The sanction imposed on Altman is limited to appearances before the Commission and has no effect either on his ability to practice law in New York State and to appear before any court, or on New York State's authority to discipline him. Cf. United States v. Cutler, 58 F.3d 825, 838 (2d Cir. 1995). And Altman's contentions that the Commission could have taken a more limited approach under Rule 180 of its Rules of Practice, that New York State follows a different, and likely more comprehensive, disciplinary process, and that the U.S. Patent and Trademark Office has a more robust disciplinary process are not relevant to the question whether the Commission acted within its authority in sanctioning him.
Altman's contention that he lacked sufficient notice of either the possibility of Commission administrative proceedings absent prior disciplinary action by New York State or of the standards of conduct subject to discipline under Rule 102(e)(1)(ii) and Section 4C of the Act also fails. The court will uphold the Commission's legal conclusions unless they are "arbitrary, capricious, an abuse of discretion, or otherwise not in accordance with law." 5 U.S.C. § 706(2)(A); Graham v. SEC, 222 F.3d 994, 999-1000 (D.C.Cir. 2000); Wonsover v. SEC, 205 F.3d 408, 412 (D.C.Cir.2000).
In Marrie v. SEC, 374 F.3d 1196, 1205 (D.C.Cir.2004), this court stated, in a case involving the discipline of an accountant pursuant to Rule 102(e)(1), that "[i]t cannot be gainsaid that the Commission could reasonably conclude that any licensed accountant is on notice of professional standards generally and of what constitutes
Implementation of Standards of Professional Conduct for Attorneys, supra note 3, 67 Fed.Reg. at 71,671 n. 13.
Altman was on notice of his duty to comply with the New York Bar disciplinary rules, and when appearing before the Commission, he could be held to that duty. Cf. In re Snyder, 472 U.S. at 645 & n. 6, 105 S.Ct. 2874. He cannot seriously suggest that he lacked notice that conduct in the nature of a fraud on Commission proceedings falls within the purview of Rule 102(e), the purpose of which is to "protect the integrity of the Commission's own processes. . . ." Marrie, 374 F.3d at 1200.
Likewise, Altman's contention that he lacked notice of the standard of conduct proscribed by Rule 102(e)(1)(ii) and Section 4C of the Act is unpersuasive. Although the court has sustained challenges to the Commission's imposition of Rule 102(e)(1) sanctions based on inadequate notice of the applicable standard, see Marrie, 374 F.3d 1196; Checkosky v. SEC, 139 F.3d 221 (D.C.Cir.1998); Checkosky v. SEC, 23 F.3d 452 (D.C.Cir.1994), those cases, on which Altman relies, concerned the failure to provide standards or notice as to the possibility that negligent or reckless conduct could fall within Rule 102(e)'s ambit. See Marrie, 374 F.3d at 1202. The Commission found Altman had engaged in "egregious" intentional improper professional conduct, Altman, 2010 SEC LEXIS, at *70, specifically that he was seeking a severance package for his client in exchange for untruthful testimony in Commission proceedings or evasion of its process by his client.
The Commission's factual determinations are conclusive "if they are supported by substantial evidence" in the record.
Finally, Altman contends the sanction was excessive in view of his otherwise unblemished disciplinary record, mitigating personal factors, and his subsequent significant community service. Again he has presented his arguments only in his reply brief and forfeited them. See Rollins, 937 F.2d at 652 n. 2. In any event, the court will not "disturb the Commission's choice of sanction unless it is either unwarranted in law or without justification in fact." Horning, 570 F.3d at 343 (internal quotation marks, ellipsis, and citation omitted); see WHX Corp. v. SEC, 362 F.3d 854, 859 (D.C.Cir.2004).
The Commission's factual findings are supported by substantial evidence in the record and its choice of sanction was statutorily authorized under Section 4C of the Act. The Commission applied the public interest standards set forth in Steadman v. SEC, 603 F.2d 1126, 1140 (5th Cir.1979), see Kornman v. SEC, 592 F.3d 173, 187-88 (D.C.Cir.2010), and it was unpersuaded that circumstances in mitigation identified by Altman in his Reply Brief warranted a lesser sanction. To the extent Altman would reprise arguments in mitigation that he presented to the Commission, he has not provided grounds for the court to conclude the Commission abused its discretion. See Wonsover, 205 F.3d at 413 (quoting Svalberg v. SEC, 876 F.2d 181, 185 (D.C.Cir.1989)); see also Kornman, 592 F.3d at 187-88. To the extent he raises new arguments, it is unclear how his subsequent community service demonstrates an abuse of discretion by the Commission, much less how claimed reputational damage would be undone by a lesser sanction given the nature of the improper professional conduct found by the Commission.
Accordingly, the petition for review is denied.
Compare 17 C.F.R. § 201.102(e)(1), with 15 U.S.C. § 78d-3(a)(2).