Robin Bruce McNabb v. Securities and Exchange Commission

*1129 OPINION

This case involves two issues arising out of a disciplinary proceeding brought by the National Association of Securities Dealers, Inc. (the “NASD”) against appellant, Robin Bruce McNabb. First, McNabb appeals the Securities and Exchange Commission’s (the “Commission”) final order, issued October 4, 2000, which found that certain promissory notes were securities under section 3(a)(10) of the Securities and Exchange Act of 1934 (the “1934 Act”). See 15 U.S.C. § 78c(a)(10) (1994). Second, McNabb appeals the Commission’s decision to sustain the sanctions imposed upon him by the NASD: a censure, a lifetime bar from association with any NASD member firm, and a fine of $50,000. We affirm.

I

From February 1990 until December 7, 1995, McNabb was employed by American Investors Company (“AIC”), a broker-dealer firm and member of the NASD. During this time, McNabb managed the AIC Office of Supervisory Jurisdiction in San Jose, California. He operated the office as an independent contractor under the name RKM Financial Group (“RKM”). At the time of his employ, McNabb also held a real estate broker’s license and provided tax and accounting services to his clients.

Between…

Opinion by Judge MAGILL; Dissent by Judge FISHER. ‘

Dissenting:

I respectfully dissent from the decision insofar as it affirms the NASD’s lifetime bar of McNabb from association with any NASD member firm. According to the “General Principles Applicable to All Sanction Determinations,” “[t]he concept of progressive discipline applies to NASD disciplinary proceedings.” Yet a lifetime bar is the most serious punishment available, to be imposed upon a repeat offender or one whose misconduct is particularly egregious. There was no evidence that McNabb had a history of misconduct, and *1134 his misconduct in this case was not so egregious as to warrant departure from the progressive scheme. Further, it is not clear that his misconduct caused any tangible harm- — his customers’ affidavits establish that he is repaying their money and they bear him no ill will. Under these circumstances, although I certainly do not condone McNabb’s conduct, I cannot agree that the abuse of discretion standard requires us to affirm such a severe penalty.

298 F.3d 1126 Robin Bruce McNABB, Petitioner, v. SECURITIES AND EXCHANGE COMMISSION, Respondent. No. 00-71528. United States Court of Appeals, Ninth Circuit. Argued and Submitted February 15, 2002. Filed August 12, 2002. COPYRIGHT MATERIAL OMITTED Thomas B. Kidwell, San Jose, CA, for the petitioner. Nathan A. Forrester, Senior Counsel, and Randall W. Quinn, Assistant General Counsel, Securities and Exchange Commission, Washington, DC, for the respondent. Petition to Review a Decision of the Securities and Exchange Commission. Before: REINHARDT, MAGILL, * and FISHER, Circuit Judges. OPINION MAGILL, Circuit Judge. 1 This case involves two issues arising out of a disciplinary proceeding brought by the National Association of Securities Dealers, Inc. (the "NASD") against appellant, Robin Bruce McNabb. First, McNabb appeals the Securities and Exchange Commission's (the "Commission") final order, issued October 4, 2000, which found that certain promissory notes were securities under section 3(a)(10) of the Securities and Exchange Act of 1934 (the "1934 Act"). See 15 U.S.C. § 78c(a)(10) (1994). Second, McNabb appeals the Commission's decision to sustain the sanctions imposed upon…