U.s. Securities & Exchange Commission v. Patrick S. Carter

NOT FOR PUBLICATION
UNITED STATES COURT OF APPEALS
FOR THE NINTH CIRCUIT
U.S. SECURITIES & EXCHANGE
COMMISSION,
Plaintiff-Appellee,
v.
PATRICK S. CARTER,
Defendant-Appellant.
No. 21-56170
D.C. No.
8:16-cv-02070-JVS-DFM
MEMORANDUM*
Appeal from the United States District Court
for the Central District of California
James V. Selna, District Judge, Presiding
Argued and Submitted November 17, 2022
San Jose, California
Before: SCHROEDER, GRABER, and FRIEDLAND, Circuit Judges.
Patrick Carter appeals the district court’s judgment ordering disgorgement of
$14,628,767.87 plus prejudgment interest of $1,317,461.04, resulting from the
SEC’s civil enforcement action. Carter entered into a Consent to Entry of
Judgment (“Consent”) and agreed to be permanently enjoined from violating
FILED
DEC 2 2022
MOLLY C. DWYER, CLERK
U.S. COURT OF APPEALS
* This disposition is not appropriate for publication and is not precedent
except as provided by Ninth Circuit Rule 36-3.

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Sections 10(b) and 15(a) of the Exchange Act, Exchange Act Rule 10b-5, and
Sections 5 and 17(a) of the Securities Act of 1933. The Consent provided the
following paragraph in connection with how the Commission’s motion for
disgorgement should be determined:
[T]he allegations of the Complaint shall be accepted as and deemed true by
the Court; and . . . the Court may determine the issues raised in the motion
on the basis of affidavits, declarations, excerpts of sworn deposition or
investigative testimony, and documentary evidence, without regard to the
standards for summary judgment contained in Rule 56(c) of the Federal
Rules of Civil Procedure.
Carter argues on appeal that the district court abused its discretion in
ordering Carter to disgorge profits calculated using $13,440,690.65 as the amount
of proceeds Carter obtained from the sale of his Founder Shares. He argues that
the Commission failed to provide admissible evidence showing that he received
$13,440,690.65 from the sale of his Founder Shares. Carter consented to the truth
of the allegations of the complaint, however, and the complaint alleged that he had
received “approximately $14 million” from the sale of Founder Shares to investors.
In light of the terms of the Consent and the documentation provided, the
Commission was not also required to supply evidence that the amount Carter
received was between $13 and $14 million.
AFFIRMED.
2

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