In the Courts

On Dec. 4, 2015, the U.S. Court of Appeals for the Ninth Circuit rendered its decision in United States v. Lloyd, 2015 WL 7873401, a case involving the sale of unregistered securities. The five defendants worked for telemarketing “boiler rooms” (outbound call centers) in California and Florida and were responsible for soliciting investments to finance production and distribution of films. Approximately 650 individuals invested a total of over $23 million after the defendants promised high returns with little to no risk, and many of these individuals lost their entire investment.

The indictments against the individuals ' all of whom were connected to two movie production companies ' charged conspiracy, wire fraud, mail fraud and securities fraud, spanning a period from 2001 to 2009. The two managers for the California and Florida offices (Lloyd and Keskemety) pleaded guilty and appealed their sentences. One telemarketer (Greenhouse) convicted after a trial appealed his sentence, and two additional telemarketers (Nelson and Baker), convicted at the same joint trial as Greenhouse, appealed their convictions and sentences. The Ninth Circuit affirmed Lloyd's sentence, vacated Keskemety's sentence and remanded for resentencing, reversed Nelson's conviction, affirmed Baker's conviction, and affirmed Greenhouse's sentence. The court noted that “[t]he number of defendants, the lengthy period involved, and the type of conduct made this a difficult case for any trial court to resolve. The record shows that the district judge competently and fairly resolved many of the innumerable issues that arose in trial and at sentencing. The points on which we disagree with the district judge raise issues that are both complex and close.”