SEC v. Gastauer

United States Court of Appeals For the First Circuit

No. 25-1194

SECURITIES AND EXCHANGE COMMISSION,

Plaintiff, Appellee,

v.

RAIMUND GASTAUER,

Relief Defendant, Appellant, ROGER KNOX; WINTERCAP S.A.; MICHAEL T. GASTAUER; WB21 US INC.; SILVERTON SA INC.; WB21 NA INC.; C CAPITAL CORP.; WINTERCAP SA INC.; B2 CAP INC.,

Defendants,

SIMONE GASTAUER FOEHR; B21 LTD.; SHAMAL INTERNATIONAL FZE; WB21

DMCC,

Relief Defendants.

APPEAL FROM THE UNITED STATES DISTRICT COURT

FOR THE DISTRICT OF MASSACHUSETTS

[Hon. Richard G. Stearns, U.S. District Judge] Before

Aframe, Lynch, and Kayatta,

Circuit Judges.

Johannah Cassel-Walker, with whom Jo-Ann Tamila Sagar, Dana A. Raphael, and Hogan Lovells US LLP were on brief, for appellant. Theodore Weiman, Senior Appellate Counsel, Securities and Exchange Commission, with whom Jeffrey B. Finnell, Acting General Counsel, Securities and Exchange Commission, Tracey A. Hardin,

1

Solicitor, Securities and Exchange Commission, and Daniel Staroselsky, Assistant General Counsel, Securities and Exchange Commission, were on brief, for appellee.

August 19, 2026

2

- 3 -

KAYATTA, Circuit Judge. The Securities and Exchange Commission (SEC) named appellant Raimund Gastauer, a German national, as a so-called "relief defendant" in an enforcement action against his son, Michael Gastauer, a United States resident.¹In an earlier appeal from a judgment in favor of the SEC, Gastauer contested the court's exercise of personal jurisdiction over him. We ruled in his favor, foreclosing the SEC from contending that personal jurisdiction had been established over Gastauer as a relief defendant by imputing to him the forum contacts of Michael as the defendant-in-interest. SEC v. Gastauer (Gastauer I), 93 F.4th 1 (1st Cir. 2024).

On remand, the SEC sought jurisdictional discovery concerning Gastauer's own contacts with the forum. In response, Gastauer went to ground, filing no opposition to the request and refusing to provide any discovery thereafter or otherwise participate in the post-remand litigation, even after the district court granted the SEC's jurisdictional-discovery request and warned of sanctions. That refusal to participate in the proceedings did lead to sanctions, eventually resulting in the reinstatement of summary judgment against Gastauer and a disgorgement award in the approximate amount of $3.3 million.

3

- 4 - Gastauer now resurfaces as appellant, challenging the new judgment against him on several grounds. As we will explain, he has waited too long to voice his objections to the district court's rulings and judgment.

I.

A.

In October 2018, the SEC initiated a civil securities-fraud action against Michael -- and many others -- alleging that he had participated in a scheme enabling corporate insiders to sell stock while evading statutory and regulatory registration and disclosure rules. The complaint identified Gastauer as a relief defendant pursuant to 15 U.S.C. § 78u(d)(5), which allows the SEC to seek, and a federal court to grant, "any equitable relief that may be appropriate or necessary for the benefit of investors."²In relevant part, the SEC alleged that Michael caused two of his United States-based companies to

"transfer approximately $3.3 million to . . . Raimund Gastauer, or accounts held for Raimund Gastauer's benefit." The complaint sought disgorgement of those funds.³

4

- 5 - On March 28, 2019, Gastauer filed a motion to dismiss for lack of personal jurisdiction pursuant to Federal Rule of Civil Procedure 12(b)(2). Gastauer averred that he is a resident and citizen of Germany, has never lived in the United States, and has visited the United States only about five times in his life, with the most recent visit occurring in January 2009. The SEC opposed Gastauer's motion, arguing that: (1) Gastauer had sufficient contacts with the forum -- i.e., the United States -- to establish the court's personal jurisdiction over him; and (2) even if Gastauer did not himself have such contacts, the court could impute the forum contacts of Michael and his companies to Gastauer as a relief defendant to establish personal jurisdiction. In the alternative, the SEC requested jurisdictional discovery. On April 26, 2019, the district court entered an electronic order denying Gastauer's motion to dismiss. The court did not explain its ruling or address the SEC's request for jurisdictional discovery.

The case proceeded on the merits, and, on February 22, 2022, the SEC moved for summary judgment. The district court granted the motion in part, holding Gastauer liable for disgorgement of $500,000 but finding a genuine dispute of fact whether held by the original wrongdoer or by one who has received the proceeds after the wrong." Sanchez-Diaz, 88 F.4th at 88 (alteration in original) (quoting SEC v. Colello, 139 F.3d 674, 676 (9th Cir. 1998)).

5

- 6 - precluding summary judgment regarding the remaining approximately $2.8 million the SEC had sought. SEC v. Knox (Knox I), No. CV 18-12058, 2022 WL 1912877, at *5-6 (D. Mass. June 3, 2022).⁴ However, the court also found that Gastauer had committed a discovery violation by failing to produce during discovery certain evidence upon which he later relied in opposing summary judgment. Id. at *6 n.3. As a result, the court ordered Gastauer to sit for a supplemental deposition and allowed the SEC to resubmit its motion for summary judgment as to the remaining $2.8 million it sought in disgorgement. Id.

The SEC subsequently noticed a video deposition of Gastauer pursuant to the Federal Rules of Civil Procedure. Gastauer refused to sit for the deposition. The SEC then moved for sanctions pursuant to Rule 37(d). Gastauer opposed, arguing again that the court lacked personal jurisdiction over him and asserting that the SEC should be required to follow the discovery protocols of the Hague Convention on the Taking of Evidence Abroad

6

- 7 - in Civil or Commercial Matters (the "Hague Convention"), rather than the Federal Rules of Civil Procedure.⁵

On October 7, 2022, the district court allowed the SEC's motion for sanctions. SEC v. Knox (Knox II), No. CV 18-12058, 2022 WL 6156565, at *1 (D. Mass. Oct. 7, 2022). The court first reiterated its finding that it had personal jurisdiction over Gastauer, explaining why for the first time: Because Gastauer was named only as a relief defendant, the court did not think that it needed to independently establish personal jurisdiction over him so long as it had personal jurisdiction over Michael as the real defendant-in-interest. Id. at *2. The court then rejected Gastauer's argument regarding the Hague Convention, ruling that the SEC properly noticed the deposition under the Federal Rules of Civil Procedure. Id. at *2-3. Finally, as a sanction for Gastauer's "severe and repetitive" discovery violations, the court entered full summary judgment against him on the merits.⁶Id. at *3. The court's final judgment held Gastauer liable for

7

- 8 - disgorgement of $3,315,305 (plus prejudgment interest of $604,839).

B.

Gastauer appealed the district court's decision to this court. In his opening brief on that first appeal, Gastauer argued both that the district court's imputed-contacts theory was incorrect and that the district court lacked grounds for personal jurisdiction based on his own contacts with the forum. Brief for Appellant at 18-19, Gastauer I, 93 F.4th 1 (No. 22-1865). In its response brief, the SEC did not respond to -- or even acknowledge -- Gastauer's argument that the district court lacked personal jurisdiction over him based on his own contacts with the United States. Rather, its briefing focused, first, on arguing that Gastauer had waived his objection to personal jurisdiction by litigating the case on the merits, and, second, on defending the district court's imputed-contacts theory. Brief of the Securities & Exchange Commission at 2-3, Gastauer I, 93 F.4th 1 (No. 22-1865). On February 9, 2024, we issued our decision in

Gastauer I. 93 F.4th 1. After rejecting the SEC's waiver argument, we turned to "the heart of Gastauer's argument on appeal:

that the district court erred in finding that it had personal jurisdiction over him merely because it had jurisdiction over the real defendants-in-interest from whom he had received the wrongfully obtained funds." Id. at 8. In doing so, we noted that,

8

- 9 -

"[o]n appeal, the SEC makes no claim that Gastauer has any actual contacts with the United States," but instead "urges us to 'impute' to Gastauer the contacts of his son." Id. at 9. In a footnote, we added:

While in the proceedings below the SEC argued

in the alternative that Gastauer did satisfy

the minimum contacts requirement -- by

engaging in financial transactions routed

through U.S.-based institutions -- the SEC has

limited its argument on appeal to the

imputation of jurisdictional contacts from the

defendant-in-interest. We therefore consider

only this latter argument in our analysis.

Id. at 9 n.4. In the end, we rejected the district court's imputed-contacts theory, ruling that "due process prohibits the imputation of contacts to a relief defendant like Gastauer, whose only involvement in the case is his receipt of a unilateral transfer of money from a third party." Id. at 12. We therefore

"reversed" "[t]he district court's exercise of personal jurisdiction" over Gastauer and "remanded to the district court for further proceedings consistent with this opinion." Id. at 13 (emphases omitted).

C.

On remand, the district court promptly ordered supplemental briefing on "whether Gastauer had sufficient minimum contacts with the forum for the court to exercise personal jurisdiction over him." To that end, the SEC filed a memorandum asserting that Gastauer was subject to the district court's

9

- 10 - personal jurisdiction based on his own forum contacts and, in the alternative, requesting jurisdictional discovery. To support its argument that Gastauer's known conduct was sufficient to establish personal jurisdiction over him, the SEC argued that Gastauer had facilitated two sets of wire transfers he received from U.S.-based companies owned and controlled by Michael: (1) a $500,000 transfer made in December 2017 -- labeled "loan agreement 12/17" -- from WB21 US Inc. to Gastauer's personal bank account; and (2) a pair of transfers made in February 2018 totaling over $2.8 million, from C Capital Corp. to a law firm's client account in London, which was then used to purchase a condominium in the name of an entity allegedly controlled by Gastauer.

Gastauer filed no response to either the district court's order or the SEC's memorandum. Instead, roughly two weeks after the SEC's filing, counsel for Gastauer emailed the SEC stating that Gastauer did not plan to file any response and that Gastauer had asked counsel to withdraw from the case. In response to the SEC's expressed concern that Gastauer would stonewall further proceedings, Gastauer's now-former counsel relayed to the SEC a message from Gastauer directing the SEC to contact his German attorneys going forward.⁷

10

- 11 - In an electronic order dated May 16, 2024, the district court found that "[o]n the current record, the connection between the wires and Gastauer's in-forum conduct falls short of supporting the SEC's claim of personal jurisdiction over Gastauer." However, the district court also found that the SEC had made out "a colorable case for jurisdiction" and "identifie[d] factual disputes that may show exercising jurisdiction over Gastauer is proper." Accordingly, the district court allowed "jurisdictional discovery on the issue of Gastauer's involvement in financial transactions in the United States involving Michael Gastauer, WB21 US Inc., and C Capital Corp." The district court further ruled that, in conducting such discovery, the SEC could rely on the Federal Rules of Civil Procedure rather than the Hague Convention. Finally, the district court warned that "Rule 37 sanctions for failing to cooperate are applicable, up to and including establishing as admitted jurisdictional facts."

The SEC subsequently served on Gastauer five document requests, five interrogatories, and a notice of deposition. In response, Gastauer's German counsel sent a letter to the SEC -- but not the court -- stating that Gastauer would only participate in discovery served pursuant to the Hague Convention. Although German counsel asked the SEC to make its letter "available" to the district court -- and the SEC did so -- Gastauer filed no objection with the court directly. On July 15, in light of Gastauer's

11

- 12 - noncompliance with the district court's jurisdictional-discovery order, the SEC filed a motion to compel or, in the alternative, for sanctions. Again, Gastauer filed no response. When the district court subsequently held a hearing on the SEC's motion, neither Gastauer nor any counsel representing him appeared. On August 6, 2024, the district court, pursuant to Rule 37(b), allowed the SEC's motion for sanctions "by establishing as admitted facts that would support the exercise of personal jurisdiction over [Gastauer]."

On October 24, 2024, the SEC renewed its motion for summary judgment. The district court, via electronic order, reminded Gastauer that he had until November 14, 2024, to oppose the SEC's summary-judgment motion. The SEC emailed that order to Gastauer's German counsel, who told the SEC -- but, again, not the district court -- that Gastauer would not be accepting any "[c]ourt documents . . . other than [those] received from Germany's central authority under the Hague Convention on Service."

On January 29, 2025, the district court allowed the SEC's motion, reinstated its prior entry of summary judgment, and held Gastauer liable for disgorgement of the entire $3,315,305 plus $1,347,326 in prejudgment interest. SEC v. Knox (Knox III), No. CV 18-12058, 2025 WL 330557, at *2-3 (D. Mass. Jan. 29, 2025). This timely appeal followed.

12

- 13 -

II.

Gastauer makes three arguments challenging the district court's jurisdictional-discovery order on appeal, but, as we will discuss, he made none of those arguments to the district court on remand. Accordingly, under our circuit's somewhat inconsistent precedent, those arguments are either forfeited and thus subject to plain-error review, see, e.g., Nat'l Fed'n of the Blind v. The Container Store, Inc., 904 F.3d 70, 86 (1st Cir. 2018),⁸or waived and therefore not subject to appellate review at all except as a

"matter of discretion" under "the most extraordinary circumstances," Nat'l Ass'n of Soc. Workers v. Harwood, 69 F.3d 622, 627 (1st Cir. 1995) (citation omitted); accord Dahua Tech. USA, Inc. v. Zhang, 138 F.4th 1, 10 (1st Cir. 2025). Gastauer, for his part, argues that we should, as a matter of discretion, consider the merits of any arguments he failed to raise below, though he does not label such arguments as "waived" or cite any standard to guide that discretion. For simplicity, we will use

13

- 14 - the label "forfeited," though we need not determine the particular governing standard because Gastauer has failed to convince us -- indeed has largely failed to argue -- that we should forgive his silence below under any standard. We take each argument in turn.

A.

First, Gastauer contends that the district court erred in ordering jurisdictional discovery because the mandate of Gastauer I required the district court to dismiss him from the case. This argument invokes the mandate rule, which "prevents relitigation in the trial court of matters that were explicitly or implicitly decided by an earlier appellate decision in the same case." United States v. Moran, 393 F.3d 1, 7 (1st Cir. 2004). Gastauer's failure to raise this mandate-rule theory below dooms his argument on appeal. At no point on remand did Gastauer, his U.S. counsel (before withdrawal), or his German counsel (even in communications with the SEC) suggest that our ruling in Gastauer I required his dismissal from the case. A clearer example of forfeiture by silence would be difficult to find. See Tho Dinh Tran v. Alphonse Hotel Corp., 281 F.3d 23, 32-33 (2d Cir. 2002) (finding forfeiture of mandate-rule argument where argument "was never presented to the district court before, during, or after the bench trial"), overruled on other grounds by Slayton v. Am. Express Co., 460 F.3d 215 (2d Cir. 2006).

14

- 15 - Gastauer counters that the SEC itself first waived any argument that it could establish personal jurisdiction over him on remand by limiting its briefing in Gastauer I to the imputed-contacts theory. But Gastauer's waiver argument is itself forfeited because, like his mandate-rule argument, he failed to raise it on remand. See United States v. Scott, 705 F.3d 410, 415 (9th Cir. 2012) ("A party who fails to assert a waiver argument forfeits -- and therefore implicitly waives -- that argument.").⁹ In sum, Gastauer's complete abandonment of the post-remand case renders his mandate-rule argument forfeited at the very least. Gastauer has not shown reason for us to ignore that forfeiture and reach the merits of his argument, either. To start, Gastauer makes no claim that he can satisfy plain-error review, asserting only that the plain-error standard does not apply in civil cases.¹⁰He has thereby "definitively waive[d]" plain-error

15

- 16 - review. United States v. Benjamin-Hernandez, 49 F.4th 580, 584-85 (1st Cir. 2022).

Instead, Gastauer points to United States v.

Cheveres-Morales for the proposition that we may "raise an abridgement of the mandate rule sua sponte." 83 F.4th 34, 40 (1st Cir. 2023). He does not, however, explain why this is a case where we should do so. In Cheveres-Morales, we took up a mandate-rule issue notwithstanding its waiver after a defendant, on remand from a first appeal in which the government conceded sentencing error, had been resentenced to a higher term of imprisonment based on similar erroneous grounds. Id. at 38-40. In doing so, we noted that "the equities strongly preponderate[d] in favor of review,"

citing our specific "institutional interest in protecting the integrity of our mandate," as well as our more general interest in

"avoiding a miscarriage of justice" in light of Cheveres-Morales's reasonable expectation that he would receive a reduced, rather than enhanced, sentence on remand. Id. at 42. In contrast, here, our institutional interest is not the same because -- though we need not definitively rule on the merits -- we have serious doubts that the district court did violate the mandate rule. Gastauer I neither instructed the district court to dismiss for lack of personal jurisdiction, nor said anything to foreclose jurisdictional discovery. Similarly, the risk of a miscarriage of justice is lessened here where Gastauer's own actions -- namely,

16

- 17 - his withdrawal from the proceedings -- led to the district court's exercise of jurisdiction. All in all, this is simply not a case in which the equities weigh in favor of reaching Gastauer's forfeited mandate-rule argument.

B.

In the alternative, Gastauer argues the district court erred in ordering jurisdictional discovery on the record before it. To warrant jurisdictional discovery, a party must show only

"a colorable claim of jurisdiction," i.e., "a non-frivolous dispute about facts that may yield a sufficient predicate for in personam jurisdiction." Motus, LLC v. CarData Consultants, Inc.,

23 F.4th 115, 128 (1st Cir. 2022) (first misquoting United States

v. Swiss Am. Bank, Ltd., 274 F.3d 610, 625-26 (1st Cir. 2001)). Gastauer insists that the SEC failed to meet this threshold, so the district court's order authorizing jurisdictional discovery was error.

Again, the problem for Gastauer is that he did not object to jurisdictional discovery on remand from Gastauer I. In Gastauer's view, he preserved this issue for appeal because he raised the defense of personal jurisdiction from the very start of the case and has reiterated that defense throughout -- at least when he has chosen to communicate with the courts. However, an objection to personal jurisdiction is not the same as an objection to jurisdictional discovery, given the lower threshold for the

17

- 18 - latter. See In re Auto. Refinishing Paint Antitrust Litig., 358 F.3d 288, 291-92, 292 n.3 (3d Cir. 2004) (explaining appellants objected to personal jurisdiction but not court's finding that jurisdictional discovery standard was met). Simply put, Gastauer did not have the option of both contesting personal jurisdiction and blocking reasonable jurisdictional discovery. See, e.g., Ins. Corp. of Ir. v. Compagnie des Bauxites de Guinee, 456 U.S. 694,

706, 709 (1982).

While Gastauer tries to frame this as an appeal not from a jurisdictional-discovery order but from the district court's failure to dismiss him for lack of personal jurisdiction, that is simply not the case. Gastauer never renewed his motion to dismiss on remand or even argued to the district court that his original motion to dismiss also applied to the remand proceedings, and the district court therefore never ruled on any such motion post remand. Rather, the district court sanctioned Gastauer by deeming admitted facts sufficient to establish personal jurisdiction -- a sanction Rule 37 expressly permits. See Fed. R. Civ. P. 37(b)(2)(A)(i); Ins. Corp. of Ir., 456 U.S. at 704-06.¹¹

18

- 19 - Finally, German counsel's communications with the SEC did not preserve Gastauer's objection to jurisdictional discovery, either. Those communications never stated that Gastauer opposed jurisdictional discovery generally, only that he opposed it if not undertaken pursuant to the Hague Convention. Besides, while the SEC later brought these communications to the district court's attention, Gastauer needed to present his argument to the district court directly to preserve the issue for appeal. See United States

v. Slade, 980 F.2d 27, 30 (1st Cir. 1992) ("It is a bedrock rule that when a party has not presented an argument to the district court, [that party] may not unveil it in the court of appeals."

(emphasis added)).¹²

Having made no timely complaint to the district court, Gastauer forfeited his objection to the merits of the court's contacts with the United States, and the court took such contacts as established. See Ins. Corp. of Ir., 456 U.S. at 709 ("The sanction took as established the facts -- contacts with [the forum] -- that [the plaintiff] was seeking to establish through discovery. That a particular legal consequence -- personal jurisdiction of the court over the defendants -- follows from this, does not in any way affect the appropriateness of the sanction.").

19

- 20 - jurisdictional-discovery order. Further, Gastauer makes no argument that his belated objection either satisfies the plain-error standard or else presents the extraordinary circumstances necessary for us to exercise our discretion to forgive his forfeiture. Accordingly, he is not entitled to any further review of this forfeited objection.

C.

Lastly, Gastauer asserts that, even if jurisdictional discovery was proper, the district court erred by allowing such discovery to proceed under the Federal Rules of Civil Procedure, rather than the Hague Convention.

Gastauer did raise a Hague Convention argument to the district court prior to our decision in Gastauer I, but that did not preserve the issue now before us. Gastauer's prior Hague Convention argument came in response to merits discovery. In contrast, the discovery requested after Gastauer I concerned only Gastauer's jurisdictional contacts with the United States. See In re Auto. Refinishing, 358 F.3d at 303 (contrasting "'merits' discovery, which [one] can expect to be more comprehensive or burdensome" with "more limited and less intrusive jurisdictional discovery"). The only Hague Convention-based objection Gastauer made to jurisdictional discovery came in his German counsel's communications with the SEC, but again, Gastauer's objections -- expressed only to the SEC -- were not preserved

20

- 21 - simply because opposing counsel had the courtesy to pass them on to the district court. Gastauer needed to present his Hague Convention-based objection to jurisdictional discovery directly to the district court to preserve the issue for appeal. See, e.g., Dynamic Image Techs., Inc. v. United States, 221 F.3d 34, 38 (1st Cir. 2000) (holding that plaintiffs "raise[d] [a discovery argument] too late" where they failed to oppose government's discovery motion or develop their argument before the district court). To rule otherwise would open the door to disputes regarding what exactly each party has or has not filed with the court.

Even if we were to construe Gastauer's prior Hague Convention-based objection to merits discovery as initially preserving his present objection to jurisdictional discovery -- which we do not -- that objection was forfeited (or even waived) by Gastauer's subsequent actions. The district court rejected Gastauer's Hague Convention argument in the order that directly preceded Gastauer I. Knox II, 2022 WL 6156565, at *3. The issue was therefore ripe for review in Gastauer I, yet Gastauer never pressed the issue in that appeal. The district court's decision on the Hague Convention then arguably became the law of the case for future, similar discovery attempts, likely foreclosing further review. See United States v. Wallace, 573 F.3d 82, 90 (1st Cir. 2009) ("When [appellant] failed to challenge

21

- 22 - the obstruction of justice enhancement the first time around [on appeal], it became the law of the case."); Unión Internacional UAW, Loc. 2415 v. Bacardí Corp., 8 F.4th 44, 53 (1st Cir. 2021) ("[A] legal decision made at one stage of a civil or criminal case, unchallenged in a subsequent appeal despite the existence of ample opportunity to do so, becomes the law of the case for future stages of the same litigation." (quoting United States v. Bell, 988 F.2d 247, 250 (1st Cir. 1993))).

Gastauer thus failed to preserve his Hague

Convention-based objection for this appeal. And, once more, he develops no independent argument whatsoever that this objection either satisfies plain-error review or implicates the extraordinary circumstances necessary for us to reach the merits. We need go no further.

III.

Finding no reason to allow Gastauer to take his leave of the district court proceedings and then raise on appeal objections to those proceedings that he could have made below, we affirm the district court's judgment.

22