Judge Denise Cote
The Securities and Exchange Commission alleged that Boock and four codefendants hijacked defunct or inactive firms, issued unregistered stock and sold securities contrary to securities laws. The court granted the SEC partial summary judgment against Wong, and denied him partial judgment. It denied reconsideration. The U.S. Supreme Court’s decision in Janus Capital Group Inc. v. First Derivative Traders—that an investment advisor and parent capital group could not be held liable for misstatements in prospectuses of the legally distinct fund they owned and administered because they did not “make” the statements at issue in the case—did not relieve Wong of liability. In rejecting his argument that the court’s finding that “the fact the SEC may not have shown that [he] made a material misrepresentation or a material omission [did] not raise a genuine issue of material fact” could not stand in the face of principles articulated in Janus Capital, the court observed that the summary judgment opinion found that Wong deliberately participated in a “device, scheme or artifice to defraud, or an act, practice, or course of business which operates or would operate as a fraud or deceit, unlawful under Rule 10b-5(a) and (c) and Section 17(a)(1) and (3).”
