SEC vs. unregistered penny stocks

BOSTON — The First Circuit upheld a Massachusetts federal court’s decision to rule against a man for failing to register penny stock sales, but vacates the court’s injunction against future penny stock trades because it did not properly articulate its rationale. The court was right to enter a disgorgement order even if it did not contain an offset for capital gains taxes, but was wrong in holding that it couldn’t impose a civil penalty in the absence of a jury trial.