SEC v. Eric I. Tsao

Filing

UNPUBLISHED PER CURIAM OPINION filed. Originating case number: 8:03-cv-01596-RWT Copies to all parties and the district court/agency. [999987494].. [16-1515]

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UNPUBLISHED
UNITED STATES COURT OF APPEALS
FOR THE FOURTH CIRCUIT

No. 16-1515

SECURITIES AND EXCHANGE COMMISSION,
Plaintiff - Appellee,
and
UNITED STATES OF AMERICA,
Intervenor/Plaintiff,
v.
ERIC I. TSAO,
Defendant - Appellant.

Appeal from the United States District Court for the District of
Maryland, at Greenbelt. Roger W. Titus, Senior District Judge.
(8:03-cv-01596-RWT)

Submitted:

November 7, 2016

Decided:

December 15, 2016

Before SHEDD, AGEE, and KEENAN, Circuit Judges.

Affirmed by unpublished per curiam opinion.

Stephen J. Crimmins, Brian M. Walsh, MURPHY & MCGONIGLE, P.C.,
Washington, D.C., for Appellant. Jeff Rosenblum, Deputy General
Counsel, Richard M. Humes, Associate General Counsel, Timothy N.
McGarey, Special Trial Counsel, U.S. SECURITIES & EXCHANGE
COMMISSION, Washington, D.C., for Appellee.

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Unpublished opinions are not binding precedent in this circuit.

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PER CURIAM:
In 2004, Eric I. Tsao entered into a consent decree with
the Securities and Exchange Commission (SEC).

Tsao appeals the

district court’s order denying his motion to reopen the case and
modify

the

portion

of

the

consent

decree

barring

him

from

serving as an officer or director of a public company (“O/D
bar”).

Finding no error, we affirm.

We review the denial of a Rule 60(b) motion for abuse of
discretion.

Aikens v. Ingram, 652 F.3d 496, 501 (4th Cir. 2011)

(en banc).

“Under Rule 60(b)(5), a court may relieve a party

from an order if it is no longer equitable that the judgment
should have prospective application.”

Thompson v. U.S. Dep’t of

Hous. & Urban Dev., 404 F.3d 821, 826 (4th Cir. 2005) (internal
quotation marks omitted).

Rule 60(b)(5) encompasses a district

court’s inherent authority to modify a consent decree. *

Id.

To support a motion to modify a consent decree, the moving
party
change

“bears
in

the

burden

circumstances

of

establishing

warrants

that

revision

of

a

significant

the

decree.”

Thompson, 404 F.3d at 827 (quoting Rufo v. Inmates of Suffolk

*

Because a district court may modify a consent decree under
Rule 60(b)(5), Tsao’s contention that the decree may also be
modified under Rule 60(b)(6) fails — Rule 60(b)(6) “may be
invoked in only extraordinary circumstances when the reason for
relief from judgment does not fall within the list of enumerated
reasons given in Rule 60(b)(1)-(5).” Aikens, 652 F.3d at 500.

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Cty. Jail, 502 U.S. 367, 383 (1992)).

“A significant change

either in factual conditions or in law can support a requested
modification.”

Id. (internal quotation marks omitted).

A significant change in the factual conditions can
support a modification if the changed conditions make
compliance with the decree substantially more onerous,
if the decree proves to be unworkable because of
unforeseen obstacles, or if enforcement of the decree
without the modification would be detrimental to the
public interest.
Ordinarily, however, modification
should not be granted where a party relies upon events
that actually were anticipated at the time it entered
into a decree.
Id. (citations and internal quotation marks omitted).
We

conclude

discretion
district

in

court

that

the

declining

district

to

considered

modify
the

consider any erroneous facts.
court’s

description

of

court
the

relevant

did

not

consent

abuse

decree.

factors

and

did

its
The
not

While we agree with the district

Tsao’s

postconviction

conduct

as

laudable, Tsao has been able to achieve great success in his
profession despite the O/D bar.

Tsao’s current employer was

aware of the O/D bar when it hired him, and thus any difficulty
it faces in becoming a public company with him as an officer was
foreseeable.

Moreover,

Tsao

demonstrates

no

more

than

speculation that his employer’s interests would be harmed in the
future.

And while Tsao’s work in public health does benefit the

public interest, this fact fails to overcome the public interest
in the finality of judgments.

To the extent that Tsao argues

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the

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SEC

has

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not

sought

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lifetime

O/D

bars

in

other

insider

trading cases, we note that the cited cases are distinguishable,
and that the SEC has sought such sanctions in appropriate cases.
See, e.g., Sec. & Exch. Comm’n v. Resnick, 604 F. Supp. 2d 773,
783 (D. Md. 2009); see also Rufo, 502 U.S. at 389 (noting that
not every “clarification in the law automatically opens the door
for

relitigation

of

the

merits

of

every

affected

consent

decree”).
Accordingly,
dispense

with

contentions

are

we

oral

affirm

the

argument

adequately

district

because

presented

in

court’s

the
the

facts

order.

We

and

legal

materials

before

this court and argument would not aid the decisional process.

AFFIRMED

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