Rnr Enterprises, Inc. v. Securities And Exchange Commission

122 F.3d 93 (2nd Cir. 1997)

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Nature of the Case

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Facts

Wells and D challenged the enforceability of an administrative subpoena served on him and the company he controls pursuant to a Formal Order of the SEC that opened an investigation into a particular industry but did not name either defendant. The Formal Order identified in the subpoena was issued by the SEC in July 1994. The order stated that there had been possible violations of federal securities laws in connection with the offering and sale of securities in 'ventures that acquire licenses for, or develop or operate transmission facilities of, or otherwise concern, Specialized Mobile Radio . . . and similar telecommunications technologies that are subject to licensing by the United States Federal Communications Commission.' It stated that from 1988 to the present, certain persons had offered such 'Telecommunications Technology Securities' without filing the requisite registration statements with the SEC; obtained money or property by means of untrue statements or misleading omissions of material fact, made in connection with the offer, purchase or sale of such securities; or effected transactions in such securities without first registering as brokers or dealers. The order directed that 'a private investigation be conducted to determine whether any persons have engaged, are engaged, or are about to engage, in any of the [alleged] acts, practices, or courses of business, or in any acts, practices, or courses of business of similar purport or object,' and it authorized two designated SEC officers to (among other things) 'subpoena witnesses and compel their attendance' for the purposes of the investigation. P recited the determination by Commission staff 'that Ds might have information relevant to the Investigation.' Ds contend that the subpoenas issued violated their due process rights and the Administrative Procedure Act. D refused to appear. P filed an action to enforce the subpoena. The district court granted enforcement. Ds appealed. Ten days before oral argument P filed a 'Suggestion of Mootness,' arguing that the appeal should be dismissed for lack of jurisdiction because Wells had already appeared before P staff and invoked his Fifth Amendment privilege against self-incrimination.