U.S. SECURITIES EXCH. COMM. v. U.S. WIND FARMING

MILTON SHADUR, Senior District Judge

Following the most recent status hearing in this action to discuss further proceedings as to defendant Raymond McNamee ("McNamee") pursuant to the remand from our Court of Appeals, this Court has been concerned as to the possibility of misinterpretation of the views that it expressed briefly and orally during that hearing. One of the things then mentioned by this Court in that respect related to the possibility of imposing a type of sanction against McNamee by reason of his violation of the early-entered preliminary injunction order that would have to take the form of a proceeding for criminal contempt.

This Court's expression during the status hearing of some disinclination to take that course should be understood as dependent on the outcome of the further proceedings involving other relief, such as the restitution remedy referred to by the Court of Appeals in its opinion. If for example any financial obligation imposed on McNamee in connection with such other relief were to appear inadequate to deal with what our Court of Appeals held to be his scofflaw actions in clear violation of the injunction in this case, whether such inadequacy stems from difficulties of proof or any other source, this Court would regard it as entirely proper to consider pursuing the criminal contempt route. According to the Court of Appeals' opinion, McNamee's conduct plainly violated the terms of the injunction, and if such a conclusion were validated in criminal contempt proceedings in a manner that allows of no legitimate excuse (such as justifiable reliance on the opinion of counsel), an appropriate financial sanction would appear to be called for because of McNamee's flouting of the court's authority.