Action against Defendant, outside counsel to a medical device company, for allegedly engaging in a series of frauds designed to inflate the company’s stock price for his benefit.  The SEC alleges that Defendant falsified purchase orders with fictitious companies in order to increase sale numbers in SEC filings and press releases.  The Ninth Circuit affirmed the district court’s grant of summary judgment in favor of the SEC, finding that Defendant’s conviction in a parallel criminal case conclusively established all of the facts the SEC was required to prove with respect to its securities fraud claims. The Ninth Circuit found the conviction to be preclusive because: (1) both cases involved the same alleged scheme; (2) both claims involved application of the same law; and (3) pretrial preparation and discovery in the criminal proceeding could reasonably be expected to have covered the same issues that would arise in the SEC’s case.

Ninth Circuit Opinion