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Do It For The Caselaw
Do It For The Caselaw

Federal appellate decisions, explained in plain English for working lawyers and legal operators.

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Case Explained: Nos. 24-1770,24-1771,24-1772,24-1773,24-1774 SECURITIES AND EXCHANGE COMMISSION v. ZHIYING YVONNE GASARCH; MIKE K. VELDHUIS; PAUL SEXTON; COURTNEY KELLN; JACKSON T. FRIESEN FREDERICK L. SHARP; WILLIAM T. KAITZ; AVTAR S. DHILLON; GRAHAM R. TAYLOR APPEALS FROM THE UNITED STATES DISTRICT COURT FOR THE DISTRICT OF MASSACHUSETTS [Hon. William G. Young, U.S. District Judge] Before Gelpí, Thompson, and Montecalvo Circuit Judges Karen A. Pickett, with whom Pickett Law Offices, P.C. was on brief, for appellant Zhiying Yvonne Gasarch Katie Renzler, with whom Michael Tremonte and Sher Tremonte LLP were on brief, for appellant Mike K. Veldhuis Robert S. Silverblatt, with whom Stephen G. Topetzes, Neil T Smith, and K&L Gates LLP were on brief, for appellant Paul Sexton Case: 24-1772 Document: 00118406314 Page: 1 Date Filed: 02/19/2026 Entry ID: 6787272 Frank Scaduto, with whom Kevin B. Muhlendorf and Wiley Rein LLP were on brief, for appellant Courtney Kelln Maranda Fritz, with whom Timothy J. Fazio and MG+M The Law Firm were on brief, for appellant Jackson T. Friesen Kerry J. Dingle, Senior Appellate Counsel, with whom Jeffrey B. Finnell, Acting General Counsel, Tracey A. Hardin, Solicitor and Daniel Staroselsky, Assistant General Counsel, were on brief for appellee February 19, 2026 Case: 24-1772 Document: 00118406314 Page: 2 Date Filed: 02/19/2026 Entry ID: 6787272 – 3 – THOMPSON, Circuit Judge. The prospect of buying low on a stock just before it shoots the moon has enamored investors for centuries. But, as commonsense suggests and history has proven not every start-up becomes a blue chip and not every investment reaps retirement-worthy profits. So, rather than taking a risk in search of the next big bonanza, some underhanded financiers elect to rig the system in their favor and, to the unfortunate detriment of unsuspecting investors, profit off pure speculation that they deceitfully conjure up Appellants Zhiying Yvonne Gasarch, Jackson Friesen, Mike Veldhuis, Paul Sexton, and Courtney Kelln participated in a scheme to do just that before they ran headfirst into federal securities laws. For nearly a decade, appellants — led by a character named Frederick (“Fred”) Sharp — bought up cheap stocks in bulk, paid promoters to drum up misleading hype for their stocks, and then sold off their shares at artificially inflated prices. All the while, appellants went to great lengths to hide their ownership of these stocks and their involvement in this nefarious scheme When the music stopped and the lights came on, all five appellants found themselves subject to an SEC civil enforcement action and liable to pay back millions in ill-gotten gains Appellants Gasarch and Friesen now appeal the results of their respective jury trials, and the remaining appellants appeal the remedies imposed by the district court after they waived their Case: 24-1772 Document: 00118406314 Page: 3 Date Filed: 02/19/2026 Entry ID: 6787272 – 4 – trial rights and conceded liability. For myriad reasons, each appellant claims error occurred below and that the district court abused its discretion in ordering the remedies it deemed fitting of the offenses. It will take us a minute to explain all of this so hunker down and read on to learn why we mostly agree and affirm across the board, but for one remedy pertaining to appellant Sexton I. SCENE-SETTING A. Statutory Background Before explaining the sophisticated scheme devised by appellants, we lay some foundation on the federal securities laws and regulations at issue in this appeal. While we will attempt to do as much table setting as we can here, we will be supplementing our legal discussion throughout the course of this multi-faceted

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May 31, 2026

Case Explained: Nos. 24-1770,24-1771,24-1772,24-1773,24-1774 SECURITIES AND EXCHANGE COMMISSION v. ZHIYING YVONNE GASARCH; MIKE K. VELDHUIS; PAUL SEXTON; COURTNEY KELLN; JACKSON T. FRIESEN FREDERICK L. SHARP; WILLIAM T. KAITZ; AVTAR S. DHILLON; GRAHAM R. TAYLOR APPEALS FROM THE UNITED STATES DISTRICT COURT FOR THE DISTRICT OF MASSACHUSETTS [Hon. William G. Young, U.S. District Judge] Before Gelpí, Thompson, and Montecalvo Circuit Judges Karen A. Pickett, with whom Pickett Law Offices, P.C. was on brief, for appellant Zhiying Yvonne Gasarch Katie Renzler, with whom Michael Tremonte and Sher Tremonte LLP were on brief, for appellant Mike K. Veldhuis Robert S. Silverblatt, with whom Stephen G. Topetzes, Neil T Smith, and K&L Gates LLP were on brief, for appellant Paul Sexton Case: 24-1773 Document: 00118406314 Page: 1 Date Filed: 02/19/2026 Entry ID: 6787272 Frank Scaduto, with whom Kevin B. Muhlendorf and Wiley Rein LLP were on brief, for appellant Courtney Kelln Maranda Fritz, with whom Timothy J. Fazio and MG+M The Law Firm were on brief, for appellant Jackson T. Friesen Kerry J. Dingle, Senior Appellate Counsel, with whom Jeffrey B. Finnell, Acting General Counsel, Tracey A. Hardin, Solicitor and Daniel Staroselsky, Assistant General Counsel, were on brief for appellee February 19, 2026 Case: 24-1773 Document: 00118406314 Page: 2 Date Filed: 02/19/2026 Entry ID: 6787272 – 3 – THOMPSON, Circuit Judge. The prospect of buying low on a stock just before it shoots the moon has enamored investors for centuries. But, as commonsense suggests and history has proven not every start-up becomes a blue chip and not every investment reaps retirement-worthy profits. So, rather than taking a risk in search of the next big bonanza, some underhanded financiers elect to rig the system in their favor and, to the unfortunate detriment of unsuspecting investors, profit off pure speculation that they deceitfully conjure up Appellants Zhiying Yvonne Gasarch, Jackson Friesen, Mike Veldhuis, Paul Sexton, and Courtney Kelln participated in a scheme to do just that before they ran headfirst into federal securities laws. For nearly a decade, appellants — led by a character named Frederick (“Fred”) Sharp — bought up cheap stocks in bulk, paid promoters to drum up misleading hype for their stocks, and then sold off their shares at artificially inflated prices. All the while, appellants went to great lengths to hide their ownership of these stocks and their involvement in this nefarious scheme When the music stopped and the lights came on, all five appellants found themselves subject to an SEC civil enforcement action and liable to pay back millions in ill-gotten gains Appellants Gasarch and Friesen now appeal the results of their respective jury trials, and the remaining appellants appeal the remedies imposed by the district court after they waived their Case: 24-1773 Document: 00118406314 Page: 3 Date Filed: 02/19/2026 Entry ID: 6787272 – 4 – trial rights and conceded liability. For myriad reasons, each appellant claims error occurred below and that the district court abused its discretion in ordering the remedies it deemed fitting of the offenses. It will take us a minute to explain all of this so hunker down and read on to learn why we mostly agree and affirm across the board, but for one remedy pertaining to appellant Sexton I. SCENE-SETTING A. Statutory Background Before explaining the sophisticated scheme devised by appellants, we lay some foundation on the federal securities laws and regulations at issue in this appeal. While we will attempt to do as much table setting as we can here, we will be supplementing our legal discussion throughout the course of this multi-faceted