Securities & Exchange Commission v. Risman
Docket: No. 00-6244
Court: Court of Appeals for the Second Circuit; March 22, 2001; Federal Appellate Court
Alan Benlolo appeals a default judgment against him for violating antifraud provisions of the Securities Act and the Exchange Act, which resulted in an injunction against future securities law violations and a joint and several liability for disgorgement totaling $670,365, including prejudgment interest. Benlolo had previously pled guilty to conspiracy charges related to securities and precious metals fraud, receiving an 18-month prison sentence, three years of supervised release, and a $400,000 restitution order. He was deported to Canada in 1999. On appeal, Benlolo argues that his deportation hindered his ability to defend himself in the lawsuit and that the disgorgement order overlaps with his restitution obligation. The court upheld the default judgment, noting that Benlolo could have defended through an attorney or by mail, and found his default willful. Additionally, the court rejected the claim of double recovery, stating that the SEC must ensure that victims do not receive duplicative compensation from both disgorgement and restitution. If any disgorgement funds remain after full restitution, they must be returned to Benlolo. The District Court's judgment is affirmed.