Securities and Exchange Commission v. Skelley

Background

A July 8, 2019 default judgment had been entered against Defendant William C. Skelley. The Securities and Exchange Commission’s request for disgorgement, prejudgment interest, and a civil penalty was then referred to Magistrate Judge Debra Freeman for a post-default judgment hearing and recommendation.

Judge Freeman issued a Report and Recommendation on February 25, 2021. She recommended awarding the SEC $1,073,746.65 in disgorgement of Skelley’s ill-gotten gains; $184,655.27 in prejudgment interest for the period from December 31, 2013, through May 31, 2019, plus additional interest calculated on the combined amount of $1,258,401.92 for the period from June 1, 2019, through the date judgment was entered; and $1,073,746.65 in third-tier civil penalties. The Report was emailed to Skelley on February 26, 2021, and no timely objections were filed.

Court’s Review

When no timely objection is made to a magistrate judge’s report and recommendation, the district court reviews the record for clear error before accepting it. Judge Lorna G. Schofield found no clear error in the recommendations concerning disgorgement, prejudgment interest, or civil penalties.

Disposition

The court adopted the Report and awarded the SEC:

- $1,073,746.65 in disgorgement; - $184,655.27 in prejudgment interest covering December 31, 2013, through May 31, 2019; - $103,363.71 in additional prejudgment interest covering June 1, 2019, through the date of entry of judgment; and - $1,073,746.65 in third-tier civil penalties.

The order required Skelley to pay these amounts within fourteen days after entry of the order. The SEC could seek civil contempt or use other legally authorized collection procedures after that fourteen-day period. Skelley also had to pay post-judgment interest on delinquent amounts under 28 U.S.C. § 1961. The Clerk of Court was directed to enter judgment and close the case.