Securities & Exchange Commission v. J.T. Wallenbrock & Associates

MEMORANDUM

James H. Donell, the receiver in this SEC civil enforcement action, appeals the district court’s denial of receivership fees for the period of January 1, 2010 to May 31, 2012 and fees for terminating the receivership. The SEC, which stipulated to the fees below, supports the receiver’s position that the requested fees were reasonable. We agree and reverse.

In a securities fraud action, the district court may establish a receivership to prevent the defendants from further dissipating the investors’ assets. SEC v. Wencke, 783 F.2d 829 , 837 n. 9 (9th Cir.1986). The court supervises the receiver, who is entitled to reasonable fees and expenses, subject to the court’s approval. See SEC v. Hardy, 803 F.2d 1034 , 1037 (9th Cir.1986).

The district court abused its discretion in denying fees for the period of January 1, 2010 to May 31, 2012. The receiver attached hundreds of pages of billing statements to establish that the fees were reasonable. The district judge, noting that “[t]he stipulation did not provide for explanation of the fees,” appears to have overlooked these attachments. Moreover, the receiver’s efforts in this period plainly benefitted investors. He obtained…