Securities & Exchange Commission v. Cross Financial Svc.

MEMORANDUM **

Victor Sherman appeals a district court order requiring him to disgorge a $150,000 retainer fee that he received to represent Michael J. Colello in a criminal case related to the SEC civil action against Colello. We have jurisdiction pursuant to 28 U.S.C. § 1291 . We review the disgorgement order for an abuse of discretion, SEC v. Colello, 139 F.3d 674 , 675 (9th Cir.1998), and affirm.

Sherman also argues that the district court violated due process right by considering prior evidence against Colello and drawing an adverse inference against Colello from Colello’s continued assertion of his Fifth Amendment privilege. However, Sherman waived these arguments by not challenging the use of the prior evidence or adverse inference in the district court. See Keenan v. Allan, 91 F.3d 1275 , 1278 n. 4 (9th Cir.1996). Assuming, arguendo, that Sherman did not waive these challenges, his arguments fail because the district court only drew the adverse inference against Colello, not Sherman; the inference was that Colello, not Sherman, violated the freeze order.

Sherman argues that the district court abused its discretion by finding that the retainer came from investor funds…