112 F. 3d 516 - Gibbons v. Securities and Exchange Commission

MEMORANDUM**

Brian L. Gibbons petitions pro se for review of an order of the Securities and Exchange Commission (SEC) affirming the National Association of Securities Dealers' (NASD) imposition of sanctions against Gibbons for violating Article III, § 1 of the NASD Rules of Fair Practice1 by providing misleading statements in response to a NASD inquiry. We have jurisdiction pursuant to 15 U.S.C. § 78y(a)(1), and we deny the petition.

The SEC's factual findings are conclusive if supported by substantial evidence. See 15 U.S.C. § 78(a)(4). If the evidence is susceptible to more than one rational interpretation, this court must uphold the SEC's findings. See Eichler v. SEC, 757 F.2d 1066, 1069 (9th Cir.1985).

Here, substantial evidence supports the Commission's order. The NASD sent Gibbons a letter asking Gibbons to disclose the amount of compensation that he received from transactions in Busline Media securities. Gibbons responded to this letter by stating that "there was no financial gain to me from Busline Media or Franklin-Lord." During the course of its investigation, the NASD learned that Gibbons had received commissions from the Busline Media transactions. Gibbons later admitted that he had received $30,000 in commissions from purchases of Busline securities.

Gibbons admits receiving compensation from the Busline Media transactions. Gibbons argues, however, that his conduct should be excused because: (1) he offered to disclose the misstatement before the NASD discovered it; (2) he was threatened by his former employer; and (3) he relied on the advice of his counsel. The SEC considered these claims, but found that they did not excuse Gibbon's false statements. Because the record demonstrates, and Gibbons admits, that he made false statements in response to the an NASD inquiry, we conclude that substantial evidence supports the SEC's order. See id. at 1069.

In addition, Gibbons's contention that the sanction imposed is excessive lacks merit. "The SEC has broad power to determine appropriate sanctions and we will reverse only for an abuse of discretion." See Sorrell v. SEC, 679 F.2d 1323, 1327 (9th Cir.1982). The Commission found that providing false information to the NASD was a serious violation that would hinder the NASD's ability to carry out its regulatory responsibility. Accordingly, the Commission did not abuse its discretion by upholding the NASD's imposition of sanctions. See id.