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SEC v. Lemelson

CASE SUMMARY

NCLA asks the U.S. Court of Appeals for the First Circuit to reverse a lower court’s denial of costs and attorney’s fees that Rev. Fr. Emmanuel Lemelson incurred in successfully defending himself against outrageously excessive sanctions demands by the Securities and Exchange Commission. A Massachusetts federal jury in 2021 rejected nearly all of the SEC’s baseless charges against Fr. Lemelson, a Greek Orthodox Priest and activist investor, including its false and incendiary allegations that he engaged in a scheme to defraud the market and even his own fund investors.

Despite the jury’s rebuke, SEC demanded as sanctions a permanent, lifetime prior restraint on Fr. Lemelson and more than $2 million in surrendered profits, interest, and civil penalties. The U.S. District Court for the District of Massachusetts saw right through SEC’s overreach and granted only a small fraction of what SEC demanded.  Yet despite acknowledging the “large disparity” between SEC’s demands and the final judgment, the court nevertheless ruled that Fr. Lemelson was not entitled to recover any of his defense costs and fees under the Equal Access to Justice Act (EAJA).

The EAJA, a law originally passed in 1980 and amended in 1996—both times with overwhelming bipartisan support in both houses of Congress—was specifically designed to deter powerful government agencies like SEC from making excessive demands to intimidate the private citizens and small businesses they sue in court, forcing them either to capitulate to unfair settlements or to incur costs and legal fees to defend themselves. The First Circuit should correct the District Court’s error and rule that SEC’s demanded sanctions against Fr. Lemelson were “excessive” and “unreasonable” within the meaning of the EAJA.

OUR CLIENT

Rev. Father Emmanuel Lemelson, Petitioner in Lemelson, et al. v. SEC

OUR TEAM

Mark Chenoweth
President and Chief Legal Officer
John J. Vecchione
Senior Litigation Counsel
Russ Ryan
Senior Litigation Counsel
Kaitlyn Schiraldi
Staff Attorney

RELEVANT MATERIALS

NCLA FILINGS

Brief Amicus Curiae Southern Policy Law Institute Supporting Defendants-Appellants for Reversal

December 4, 2024 | Read More

Brief of Amici Curiae Advancing American Freedom, Inc.; American Encore; Americans for Limited Government; Catholics Count; Eagle Forum; Eagle Forum of Georgia; Family Institute of Connecticut Action; Charlie Gerow; International Conference of Evangelical Chaplain Endorsers, ect.

December 4, 2024 | Read More

Appellants' Opening Brief

November 27, 2024 | Read More

Petitioners’ Reply Brief in Support of Petition for a Writ of Certiorari

November 17, 2023 | Read More

Petition for a Writ of Certiorari

July 31, 2023 | Read More

PRESS RELEASES

NCLA Asks First Circuit to Overturn Decision Enabling Excessive SEC-Demanded Sanctions

November 27, 2024 | Read More

NCLA Asks Supreme Court to Hear Securities Law Appeal with Major First Amendment Implications

August 1, 2023 | Read More

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