25-35 (L)

25-35 (L)
SEC v. Rogas
1UNITED STATES COURT OF APPEALS
2FOR THE SECOND CIRCUIT
3- - - - - -
4August Term, 2025
5(Argued: November 19, 2025 Decided: August 6, 2026)
6Docket Nos. 25-35 (Lead), 25-36 (Con)
7_________________________________________________________
8UNITED STATES SECURITIES AND EXCHANGE COMMISSION,
9Plaintiff-Appellee,
10UNITED STATES OF AMERICA,
11Intervenor,
12- v. -
13ADAM P. ROGAS,
14Defendant-Appellant,
15PILLSBURY WINTHROP SHAW PITTMAN LLP,
16Appellant,
17

1PAUL G. KOROL,
2Defendant,
3NS8 FP, LLC, MVP 2020, LLC, ROGASSI ENTERPRISES, LLC,
4Relief-Defendants.
5_________________________________________________________
6Before: KEARSE, RAGGI, and LIVINGSTON, Circuit Judges.
7In these consolidated appeals, defendant Rogas in No. 25-36 appeals from
8a December 12, 2024 order of the United States District Court for the Southern District
9of New York, Richard M. Berman, Judge, granting the motion of plaintiff United States
10Securities and Exchange Commission in this civil action to bar Rogas, for life, from
11serving as an officer or director of any public company, following (a) the September
1218, 2024 entry of an interim consent judgment that, inter alia, held him liable for more
13than $17,500,000 in net profits he gained through his violations of § 17(a) of the
14Securities Act of 1933, § 10(b) of the Securities Exchange Act of 1934, and Rule 10b-5
15thereunder, and permanently enjoins him from directly or indirectly violating those
16provisions, and (b) his November 3, 2022 conviction of securities fraud in violation of
17the Exchange Act, Rule 10b-5, and 18 U.S.C. § 2, see United States v. Rogas, 20-CR-539
18(S.D.N.Y. Nov. 3, 2022). In No. 25-35, Rogas and his attorneys Pillsbury et al. appeal
19from the court's December 2, 2024 order requiring Pillsbury to turn over $3,612,601.76,
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1the remainder of a $4 million retainer from Rogas that was held by Pillsbury on
2September 18, 2020--the date it was notified of a temporary restraining order freezing
3Rogas's assets and funds held for his benefit, which became a September 24, 2020
4freeze order--along with any gains Pillsbury obtained from holding the frozen funds
5after the imposition of that freeze.
6On appeal in No. 25-36, Rogas contends that the district court abused its
7discretion in barring him for life, rather than for a shorter period, from serving as an
8officer or director of any publicly traded company. In No. 25-35, Rogas and Pillsbury
9contend that the district court erred in ruling that the $3,612,601.76 were covered by
10the freeze order, arguing principally that the $4 million sent by Rogas as an advance
11payment for legal services had become the property of Pillsbury, not Rogas, before the
12temporary restraining order was entered. Finding no error or abuse of discretion in
13either decision, we affirm in No. 25-36 the district court's order permanently barring
14Rogas from serving as an officer or director of a publicly traded company; we affirm
15in No. 25-35 the district court's order directing Pillsbury to deposit with the registry of
16the court $3,612,601.76, together with any gains Pillsbury obtained from holding those
17frozen funds after being notified of the freeze.
18No. 25-36, affirmed. No. 25-35, affirmed.
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1PAUL G. ALVAREZ, Senior Appellate Counsel,
2Washington, D.C. (Jeffrey B. Finnell, Acting General
3Counsel, Jeffrey A. Berger, Assistant General Counsel,
4Securities and Exchange Commission, Washington,
5D.C., on the brief), for Plaintiff-Appellee.
6ANNE M. VOIGTS, Pillsbury Winthrop Shaw
7Pittman, Palo Alto, California (David Oliwenstein,
8Pillsbury Winthrop Shaw Pittman, New York, New
9York, on the brief), for Defendant-Appellant and
10Appellant.
11KEARSE, Circuit Judge:
12In these consolidated appeals, defendant Adam P. Rogas in No. 25-36
13appeals from the December 12, 2024 order of the United States District Court for the
14Southern District of New York, Richard M. Berman, Judge, granting the motion, in this
15civil action, by plaintiff United States Securities and Exchange Commission ("SEC" or
16"Commission") to bar Rogas, for life, from serving as an officer or director of an issuer
17that has a class of securities registered pursuant to Section 12 of the Securities
18Exchange Act of 1934 ("Exchange Act"), 15 U.S.C. § 78a et seq., or that is required to file
19reports pursuant to Section 15(d) of the Exchange Act, see United States Securities and
20Exchange Commission v. Rogas, 20-CV-7628, 2024 WL 5088097, at *9 (S.D.N.Y. Dec. 12,
212024) ("SEC v. Rogas II"), following (a) the September 18, 2024 entry of an interim
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1consent judgment that, inter alia, held Rogas liable for more than $17,500,000 in net
2profits he gained through his violations of § 17(a) of the Securities Act of 1933
3("Securities Act"), 15 U.S.C. § 77a et seq., § 10(b) of the Exchange Act, 15 U.S.C. § 78b,
4and Rule 10b-5 thereunder, 17 C.F.R. § 240.10b-5, and permanently enjoins him from
5directly or indirectly violating those provisions, and (b) his November 3, 2022
6conviction of securities fraud in violation of 15 U.S.C. §§ 78j(b) and 78ff, 17 C.F.R.
7§ 240.10b-5, and 18 U.S.C. § 2, see United States v. Rogas, 20-CR-539 (S.D.N.Y. Nov. 3,
82022) ("U.S. v. Rogas"). In No. 25-35, Rogas and his attorneys Pillsbury Winthrop Shaw
9Pittman LLP ("Pillsbury" or "PWSP") appeal from the court's December 2, 2024 order
10requiring Pillsbury principally to turn over $3,612,601.76, the remainder of a $4 million
11retainer from Rogas that was held by Pillsbury on September 18, 2020--the date it was
12notified of a temporary restraining order freezing Rogas's assets and funds held for his
13benefit, which was succeeded by an Asset Freeze and Order Granting Other
14Emergency Relief, dated September 24, 2020 ("Freeze Order"), continuing the freeze for
15the duration of this action. See United States Securities and Exchange Commission v. Rogas,
1620-CV-7628, 2024 WL 4930362, at *8 (S.D.N.Y. Dec. 2, 2024) ("SEC v. Rogas I").
17On appeal in No. 25-36, Rogas contends that the district court abused its
18discretion in barring him for life, rather than for a shorter period, from serving as an
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1officer or director of any publicly traded company (the "Officer and Director Bar"). In
2No. 25-35, Rogas and Pillsbury contend that the district court erred in ruling that the
3$3,612,601.76 were covered by the Freeze Order, arguing principally that the $4 million
4sent by Rogas as an advance payment for legal services had become the property of
5Pillsbury, not Rogas, before the temporary restraining order was entered.
6For the reasons that follow, we find no error or abuse of discretion in
7either decision. We affirm in No. 25-36 the district court's order permanently barring
8Rogas from serving as an officer or director of a publicly traded company. In No.
925-35, we affirm the district court's order directing Pillsbury to deposit with the
10registry of the court $3,612,601.76, representing what remained of the $4 million from
11Rogas when Pillsbury was informed of the freeze on Rogas's assets and on funds to be
12used for his benefit, together with any gains Pillsbury obtained from holding the
13frozen funds after the imposition of the freeze.
14I. BACKGROUND
15This civil action has its origin in misdeeds by Rogas from January 2018
16through June 2020 in connection with three offerings of securities in NS8, Inc. ("NS8"
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1or the "Company"), a technology company co-founded by Rogas in 2016, which offered
2e-commerce merchants software to detect and prevent fraud. As summarized below,
3the SEC's Amended Complaint (see A.91-125)--the allegations of which are no longer
4disputed by Rogas in connection with the Officer and Director Bar--shows that every
5month for 2½ years, Rogas caused NS8's business and revenue to be grossly
6overstated, misrepresentations that were relayed by NS8 to current and potential
7investors. During that period, NS8 raised approximately $149 million through
8offerings of NS8 securities. From the $149 million thus raised, NS8 repurchased shares
9of its stock from, inter alia, Rogas, who thereby personally, and through an entity he
10owned, received a net profit of more than $17.5 million.
11A. Rogas's Misrepresentations as to NS8's Revenue Bank Account
12During the relevant period, Rogas served as NS8's President and Chief
13Executive Officer. (See Amended Complaint ¶ 12; Declaration of Adam P. Rogas dated
14Sept. 5, 2023 ("Rogas Decl."), ¶ 3.) Although NS8 had a finance department, only Rogas
15had access to the bank account in which NS8 collected revenue from its customers (the
16"Revenue Account"). (See Amended Complaint ¶¶ 27, 29.) Beginning no later than
17January 2018, and continuing through at least June 2020, Rogas falsified the bank
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1statements for NS8's Revenue Account by downloading electronic copies and altering
2their text (a) to change payers' names, which exaggerated the number of customers
3NS8 had, and/or (b) to change the amounts received and inflate the amount of revenue
4NS8 was receiving from its actual customers. (See id. ¶¶ 28, 31.)
5In each of the 30 months in that period, Rogas inflated the balances that
6had appeared in the genuine bank statements for NS8's Revenue Account. (See id.
7¶ 31.) In all but one of those months, the falsely inflated amount was higher than the
8falsely inflated amount for the prior month; and the falsifications became massive. (See
9id.) For example, in November 2018, Rogas doctored NS8's Revenue Account
10statement to show a balance of more than $5.1 million, when in fact its balance was less
11than $2,000. (See id.) Indeed, in none of those 30 months was NS8's actual balance in
12the Revenue Account ever as high as even $4.1 million, but Rogas's fraudulently
13inflated amounts rose steeply. (See id.) In September 2019, Rogas doctored NS8's
14Revenue Account statement to show a balance of more than $23.7 million, when in
15reality its balance was less than $6,000. (See id.) In June 2020, Rogas doctored NS8's
16Revenue Account statement to show a balance of $62,088,506.43. (See id.) That
17exceeded its actual balance--$28,051.47--by more than $62 million. (See id.)
18NS8's financial statements were prepared by the Company's finance
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1department personnel, who did not have access to its actual Revenue Account
2statements. (See id. ¶¶ 27, 29.) Rogas sent the doctored, revenue-inflated Revenue
3Account statements to the finance team, which incorporated them in financial
4representations made to current and prospective NS8 investors. (See id. ¶¶ 29, 30.)
5Rogas's misrepresentations were also used by the finance department in preparing the
6Company's financial statements, which were also provided to current and prospective
7investors. (See id.)
8As NS8's CEO, Rogas personally reviewed and distributed these
9misleading financial statements with knowledge that they were based on bank
10statements that he had falsified. (See id. ¶ 30.) Rogas also used falsified statements to
11deceive prospective investors while they were conducting "due diligence." (Id. ¶ 34.)
12For example, during NS8's Spring 2020 offering, Rogas provided investors and their
13agents with falsified Revenue Account statements that artificially inflated NS8's
14revenue by tens of millions of dollars, and in one instance, the due-diligence
15"consultant" for a group of investors "discovered that the line items in the August 2019
16Revenue Account statement did not add up to the total balance reflected on that
17statement." (Id. ¶¶ 34-38.) When Rogas was asked about the discrepancy, he
18"re-doctored the August 2019 Revenue Account bank statement to include an
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1additional false deposit of $1 million, causing the line items to add up to the false total
2balance." (Id. ¶ 39.) Investors in NS8 relied on Rogas's falsified documents to their
3detriment. (See id. ¶¶ 36, 42, 46.)
4Rogas's misrepresentations were highly profitable for him personally.
5With the money NS8 received from investors in its offerings, it conducted a tender
6offer to preexisting shareholders. Rogas tendered shares he owned, and he received
7more than $17.5 million directly and through an entity he wholly controlled. (See
8Rogas brief on appeal at 7; Amended Complaint ¶¶ 14, 112, 124.) Rogas later
9transferred approximately $10 million of these funds to an account associated with
10PhutureCorp Inc. ("PhutureCorp"), another entity he controlled.
11 Despite Rogas's exclusive access to the real Revenue Account statements,
12his fraud had not gone unnoticed by some NS8 employees. In 2018 and early 2019, an
13NS8 employee ("Employee") raised concerns internally that NS8's "customer data
14(including purported customer numbers and monthly revenue) used to formulate
15external communications--including to potential and existing investors--was false."
16(Amended Complaint ¶ 57.) In July 2019, "through [whistleblower] counsel, the
17Employee submitted an anonymous tip to the SEC explaining that NS8 and Rogas may
18have overstated its number of customers and its revenue, and that the incorrect
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1numbers may have been used in a securities offering." (Id. ¶ 58.)
2On August 9, 2019, after the Employee "reiterated"--to his supervisor and
3to NS8's Chief of Staff ("COS")--"his concerns that NS8 may have falsely inflated
4customer counts" (id. ¶¶ 59-60), Rogas was alerted by the COS and promptly took steps
5to remove the whistleblower's access to NS8's internal systems and to determine how
6much the Employee knew. (See id. ¶¶ 61-64.) That evening, the Employee's access to
7NS8's building was revoked. (See id. ¶ 65.) The next day, the COS gave Rogas the
8Employee's NS8-issued laptop and password, and Rogas searched the computer. (See
9id. ¶¶ 66-67.) He gained access to the Employee's saved personal passwords, and
10thereby to his Hotmail account, which contained his "correspondence with his
11whistleblower counsel who assisted his reporting to the SEC," and to his Dropbox
12account, which contained "the exhibits that the Employee's counsel submitted to the
13SEC." (Id. ¶ 67.) At the direction of Rogas, the Employee was fired on or about August
1415, 2019. (See id. ¶ 70.)
15The SEC, based on the tip it had received, began investigating NS8. In
16November 2019, it issued subpoenas to Rogas and NS8 "in connection with an
17investigation into potential fraudulent conduct in a prior NS8 securities offering"; it
18issued additional subpoenas to Rogas and NS8 in March 2020. (Id. ¶¶ 8, 72.) Rogas
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1continued through June 2020 to falsify NS8's Revenue Account statements and to
2distribute misleading financial statements in securities offerings, despite receiving
3these subpoenas. (See id. ¶¶ 8, 31, 73.)
4In late August 2020, another "employee[] in NS8's finance department
5discovered the true balance of funds in the Revenue Account and the falsified
6transactions were uncovered." (Id. ¶ 74.) Also in late August, Rogas contacted
7Pillsbury seeking personal representation in connection with any issues concerning his
8role as President and CEO of NS8. (See, e.g., Part III below.) Rogas resigned from NS8
9in a September 1, 2020 email. (See id. ¶ 75; Rogas Decl. ¶ 5.)
10B. The Fallout
111. Commencement of the Present Case and the Asset Freeze
12On September 17, 2020, the SEC commenced the present civil action
13against Rogas, alleging that he had intentionally provided prospective investors with
14falsified information as to NS8's customer base and Revenue Account balances (1) in
15the offer or sale of NS8 securities, in violation of § 17(a) of the Securities Act, and (2) in
16connection with the purchase or sale of NS8 securities, in violation of § 10(b) of the
17Exchange Act and Rule 10b-5 thereunder. As relief, the original complaint--like the
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1Amended Complaint, which in November 2022 superseded it--requested principally
2that Rogas be permanently enjoined from engaging in similar conduct in violation of
3those provisions, and that he be required "to disgorge ill-gotten gains received during
4the period of violative conduct and pay prejudgment interest on such ill-gotten gains."
5(A.51 (original complaint); A.124 (Amended Complaint).)
6Prior to filing the original complaint, the SEC had filed an ex parte
7emergency motion for a temporary restraining order ("TRO") to "'freez[e] assets'" of
8Rogas and the relief defendants "'in order to prevent further misappropriation of
9investor funds and provide a corpus for returning investor funds to investors.'"
10SEC v. Rogas I, 2024 WL 4930362, at *4 (quoting SEC Emergency Motion for TRO dated
11September 14, 2020, at 1). Judge Paul A. Crotty, to whom the case then was assigned,
12granted the TRO and scheduled a hearing as to why such a freeze should not extend
13until the resolution of the action. (See A.53, 61-62.) As discussed in Part III below,
14Pillsbury was given notice of the TRO on the morning of September 18, 2020. The
15Freeze Order was entered on September 24, ordering that Rogas's assets and property
16(and property of the relief defendants) "wherever located or by whomever held, and
17whether acquired before or after institution of this action, are frozen" "pending
18resolution of the merits of this matter through trial or otherwise." (A.66.)
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1On September 17, 2020, Rogas was arrested and charged by the United
2States Department of Justice ("DOJ"), on a sealed criminal complaint that was unsealed
3by the court on that date, in the United States District Court for the Southern District
4of New York. See U.S. v. Rogas, 20-CR-539. In February 2021, the DOJ was allowed to
5intervene in the SEC's present action, and the DOJ's motion to stay the present action
6(except for the SEC's issuing subpoenas to financial institutions) pending conclusion
7of the criminal case was granted on consent of the parties.
8In or about April 2021, Rogas violated the Freeze Order by transferring,
9without court permission, more than $1.6 million held on deposit for one of his
10companies covered by the freeze, to a newly opened account at another bank. Rogas
11used some $500,000 of these funds to purchase luxury goods, including a swimming
12pool, hockey tickets, and a garden fountain; and he converted more than $1.1 million
13into cryptocurrency. When this was discovered, Rogas conceded that the "funds spent
14or transferred . . . were clearly within the Court's asset freeze order," and he assured
15that "he w[ould] commit no further violations." (A.81.) He "agreed," with the
16permission of the court, "to transfer whatever remain[ed] of the more than" $1.6 million
17he had spent or transferred "into the registry of the Court." (Id.)
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12. Rogas's Criminal Case
2In the meantime, in U.S. v. Rogas, Rogas had been indicted on October 13,
32020, charged with two counts of securities fraud and one count of wire fraud for his
4fabrication and transmission of NS8's bank and financial statements in connection with
5NS8's 2019 and 2020 securities offerings. In March 2022, pursuant to a plea agreement,
6Rogas pleaded guilty to one count of securities fraud. He was ultimately sentenced
7principally to 60 months' imprisonment, to be followed by 3 years' supervised release,
8and was ordered to forfeit $17,542,459. U.S. v. Rogas, Judgment (S.D.N.Y. Nov. 9, 2022).
9The Judgment also ordered, inter alia, that as to the forfeited funds, after
10satisfaction of the mandatory $100 assessment, priority be given to claims of
11"restitution principal" followed by "restitution interest," ahead of other claimant
12categories. Id. at 7. In an order dated December 9, 2022, Rogas was ordered to make
13restitution to the victims of the offense to which he pleaded guilty, in the total amount
14of $112,276,409.50.
153. Resolution of the Merits of the Present Civil Proceeding
16The stay in the present action was partially lifted in November 2022 to
17permit the SEC to file the Amended Complaint, and in early 2023 was entirely lifted.
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1Following lengthy negotiations, on March 7, 2024, Rogas and the SEC entered into an
2agreement to settle the securities fraud claims against him. In that agreement, Rogas
3acknowledged that he had "pleaded guilty to criminal conduct relating to certain
4matters alleged in the Amended Complaint in this action" and had "admitted the facts
5set out in the transcript of his plea allocution." (Notarized Consent of Defendant Adam
6P. Rogas dated March 7, 2024 ("Rogas Consent"), ¶ 2.) Rogas also, inter alia, referring
7to himself as "Defendant,"
8agree[d] that the Court shall, pursuant to Section 21(d)(2) of the
9Exchange Act . . . and Section 20(e) of the Securities Act . . . , prohibit
10Defendant from acting as an officer or director of any issuer that has a
11class of securities registered pursuant to Section 12 of the Exchange
12Act . . . or that is required to file reports pursuant to Section 15(d)
13of the Exchange Act . . . . Defendant further agrees that the length of
14time of the Officer and Director Bar shall be determined by the Court,
15upon motion of the Commission. Defendant further agrees that, in
16connection with the Commission's motion for an Officer and Director Bar,
17and at any hearing held on such a motion: (a) Defendant will be
18precluded from arguing that he did not violate the federal securities laws
19as alleged in the Amended Complaint and as admitted in the plea
20transcript attached as Exhibit A; (b) Defendant may not challenge the
21validity of this Consent or the Judgment; [and] (c) solely for the
22purposes of such motion, the allegations of the Amended Complaint shall
23be accepted as and deemed true by the Court . . . .
24(Id. ¶ 4 (emphases added).)
25With respect to the Officer and Director Bar eventually to be ordered by
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1the court, however, Rogas reserved the right to appeal with respect to the Bar's
2duration. (See id. ¶ 6 ("For the sake of clarity, this Consent does not waive Defendant's
3right to appeal from any determination made by the Court as to the period of the
4Officer and Director bar pursuant to paragraph four, supra.").)
5A September 18, 2024 interim "Judgment as to Defendant Adam P. Rogas"
6(or "Interim Civil Judgment") was entered in accordance with the Rogas Consent by
7Judge Berman, to whom the case had been reassigned on March 15, 2024. The Interim
8Civil Judgment principally held Rogas liable for disgorgement of $17,542,459.00 and
9liable to the Commission for $89,150.20 in prejudgment interest thereon, and enjoined
10him from securities laws violations as indicated above. It also ordered that Rogas's
11disgorgement liability be deemed satisfied by the order of restitution entered in
12U.S. v. Rogas.
13The Interim Civil Judgment noted in connection with the Commission's
14motion for an Officer and Director Bar that "[n]either this Judgment, nor the Consent,
15incorporated herein, shall operate to waive Defendant's right to appeal from any
16determination made by the Court as to the period of the Officer and Director bar."
17Interim Civil Judgment at 4.
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14. The Imposition of a Lifetime Officer and Director Bar
2The SEC thereafter moved for the imposition of a permanent Officer and
3Director Bar, arguing that the nature and history of Rogas's fraudulent conduct made
4it likely that misconduct would recur--making him unfit to be entrusted with the
5position of officer or director of a publicly traded company--and that a bar of shorter
6duration would be insufficient to protect the public. (See SEC Opening Brief Seeking
7a Permanent Officer and Director Bar, Civ. Dkt. No. 218, at 8-15.) Rogas opposed a bar
8of such duration, arguing that his conduct was "entirely aberrational"; that he had
9never engaged in nor been accused of any criminal activity, let alone securities
10misconduct; and that the bar should be no longer than five years. (See Rogas Brief in
11Opposition to SEC Request for a Lifetime Director and Officer Bar ("Rogas Opposition
12to Lifetime Bar"), Civ. Dkt. No. 219, at 1, 13, 15.)
13In its Decision and Order dated December 12, 2024, the district court, after
14considering each side's arguments, granted the SEC's motion. See SEC v. Rogas II,
152024 WL 5088097 (or "Rogas II"), at *1, *8-*9. Having noted that Congress authorized
16officer and director bars in order "'to protect public investors from persons who have
17already demonstrated, by engaging in deliberate fraudulent conduct, that they should
18not be entrusted with power over investor funds,'" id. at *4 (quoting H.R. Rep.
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1No. 101-616, at 13 (1990)), the district court also noted that our Court had
2outlined six . . . factors as "useful in making the unfitness
3assessment," including: "(1) the egregiousness of the underlying
4securities law violation; (2) the defendant's repeat offender status;
5(3) the defendant's role or position when he engaged in the fraud;
6(4) the defendant's degree of scienter; (5) the defendant's economic
7stake in the violation; and (6) the likelihood that misconduct will
8recur,"
9Rogas II at *5 (quoting SEC v. Patel, 61 F.3d 137, 141 (2d Cir. 1995) ("Patel")). The district
10court proceeded to consider the so-called Patel factors.
11With regard to the first, third, fourth, and fifth factors, the court found that
12"[w]ithout doubt, Rogas' violations of the securities laws were egregious." Rogas II
13at *5. Instead of insisting, in his fiduciary position as NS8's CEO, on financial
14statements and representations that were true and accurate, Rogas himself engaged in
15flagrant, deliberate, and personally profitable securities fraud in 2018-2020 by altering
16the bank statements in NS8's Revenue Account, and by sending the falsified statements
17to its finance department. See id. at *2, *5. During that period, "Rogas 'defrauded NS8
18investors in various securities offerings by falsifying NS8's bank statements to give the
19appearance that NS8 was generating millions of dollars in customer revenue with tens
20of millions of dollars of assets on hand.'" Id. at *2 (quoting Amended Complaint ¶ 31).
21In his plea of guilty to securities fraud, "he admitted that he [had] acted knowingly,
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1willfully, and with an intent to defraud." Id. at *7; see also U.S. v. Rogas, Plea Hearing
2Transcript at 21-26 (S.D.N.Y. Mar. 16, 2022) ("Plea Hearing Tr.").
3The district court observed that Rogas had a large economic stake in the
4success of his frauds, and personally reaped more than $17.5 million from the
5$149 million that NS8 received in its three 2019-2020 offerings. See Rogas II at *5. And
6it found significant the fact that Rogas had assiduously pursued his fraudulent conduct
7in aid of receiving a large personal payout when he was already receiving a substantial
8salary of $268,000-$422,000. See id.
9The district court considered Rogas's contention that his fraudulent
10conduct was "'entirely aberrational.'" Id. at *1 (quoting Rogas Opposition to Lifetime
11Bar); see also U.S. v. Rogas, Rogas Sentencing Memorandum at 1, 8, 9 (S.D.N.Y. Oct. 7,
122022) (characterizing his fraudulent conduct as a "singular aberrant event" and a
13"moment" in which he made a "wrongful and uncharacteristic mistake in judgment").
14The court rejected that characterization. Reiterating its view that Rogas's conduct was
15"egregious," the court noted that Rogas had "intentionally altered NS8's bank
16statements"--with a "high degree of scienter," and "not by mistake or accident." Rogas II
17at *7 (internal quotation marks omitted). It found that "Rogas' violations were not an
18isolated incident"; that "his fraud over 30 months was recurrent and systematic in
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1nature"; that "Rogas altered NS8 bank statements every month"; and that he
2"repeatedly and intentionally provided falsified documents to investors in connection
3with raising nearly $150 million in three separate securities offerings." Id. (emphasis
4in original) (internal quotation marks omitted).
5As to the second Patel factor, the court noted the Commission's concession
6that "while Rogas' fraudulent conduct occurred repeatedly and over a period of more
7than two years, Rogas is not (technically) a 'repeat offender' as he has not previously
8been prosecuted for violating the securities laws." Id. at *6. The court found that "in
9this case, . . . the strength of the remaining Patel indicators support the conclusion that
10Rogas is permanently unfit to serve as an officer or director of any public company."
11Id. at *9 (internal quotation marks omitted) (emphasis ours).
12As to the sixth Patel factor--which is the overarching concern for whether
13there is a likelihood that misconduct will recur--the district court noted that Rogas had
14provided false information to be given to regulators and potential investors, "falsely
15inflating the company's reported revenue and assets by significant amounts months
16after months" for some "two and a half years," in connection with "at least three
17securities offerings that raised approximately $149 million from investors." Id. at *5-*6.
18The court further found it egregious that Rogas had "attempt[ed] to hide
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1his fraud proceeds" by, inter alia, "purchas[ing a] Dominican Residence" (as discussed
2in a Rogas text exchange with an associate), and that he "took other assets to the
3Dominican Republic in order to move them offshore." Id. at *6 (internal quotation
4marks omitted). And it noted that "even after his arrest," Rogas violated the Freeze
5Order by moving more than $1.6 million to a newly opened account at a different bank,
6in order to spend large sums of money on luxury items, including a swimming pool.
7See id. The court concluded that "Rogas' conduct demonstrates a prevailing inclination
8. . . to place his own self-interest ahead of the interests of his investors and the public."
9Id. at *8 (internal quotation marks omitted).
10 The district court observed that Rogas was not a "repeat offender" as that
11term was used in Patel to refer to one who had been prosecuted previously, id. at *6;
12but the court found it material that Rogas's past fraudulent conduct was continual.
13Further, the court noted that "'Rogas's brazen, deceptive conduct continued even after
14the SEC contacted NS8'"; after "[t]he SEC issued subpoenas to Rogas and to NS8 in
15connection with its investigation into fraud at NS8, . . . 'Rogas continued to alter bank
16statements.'" Id. at *3 (quoting Amended Complaint ¶¶ 8, 73).
17The district court rejected Rogas's contention that a lifetime bar is
18inappropriate when the defendant has had no prior convictions. The court recognized
-22-

1that there is no such condition in the statutory authorization for Officer and Director
2Bars, see Rogas II at *5 (citing 15 U.S.C. § 78u(d)(2)); that according to Patel itself, "it is
3not essential for a lifetime ban that there be past violations," 61 F.3d at 142; and that
4courts have previously "had 'no trouble concluding' that [a] defendant was
5'permanently unfit' to serve as an officer or director, even though 'the criminal
6conviction . . . that form[ed] the basis of [the defendant's] civil liability [was] his first
7conviction,'" Rogas II at *9 (quoting SEC v. Gupta, No. 11-CV-7566, 2013 WL 3784138,
8at *4 (S.D.N.Y. July 17, 2013)).
9Finding that the circumstances in the present case, including Rogas's
10apparent disdain for federal investigations into securities fraud and his "prevailing
11inclination . . . to place his own self-interest ahead of the interests of his investors and
12the public," persuaded it that Rogas was likely to engage in misconduct in the future
13if he again became an officer or director of a publicly traded company, the court
14order[ed] and direct[ed] that, effective immediately, Adam P.
15Rogas is permanently barred from serving as an officer or director
16of any issuer that has a class of securities registered pursuant to
17Section 12 of the Exchange Act [15 U.S.C. § 78l] or that is required
18to file reports pursuant to Section 15(d) of the Exchange Act [15
19U.S.C. § 78o(d)] because a permanent [] bar is both necessary and
20in the public interest.
21Rogas II at *8-*9 (internal quotation marks omitted).
-23-

1C. Rogas's Representation by Pillsbury
2In the meantime, on September 9, 2020, after Rogas hired Pillsbury to
3represent him in connection with any issues concerning his role as President and CEO
4of NS8, Rogas had his PhutureCorp entity wire Pillsbury $4 million. On September 18,
52020, Pillsbury was notified of the TRO freezing Rogas's assets. Based on information
6provided by Rogas and Pillsbury, the district court found that, for Pillsbury's legal
7services rendered through that date, the $4 million had been reduced to $3,612,601.76.
8As discussed in Part III below, the district court in SEC v. Rogas I in 2024
9granted a motion by the SEC to require Pillsbury to turn that amount over to the
10government, on the ground that the $3,612,601.76 was an asset of Rogas that was
11frozen by the TRO and the Freeze Order, and thus could not be used to pay for
12Pillsbury's legal services to Rogas thereafter. Rogas and Pillsbury, in No. 25-35,
13challenge that decision, arguing that the $4 million sent to Pillsbury by Rogas's entity
14PhutureCorp on September 9 was not covered by the TRO and Freeze Order, on the
15theory that, upon its September 9 receipt by Pillsbury, the $4 million was the property
16of Pillsbury, not Rogas.
17
-24-

1II. THE CHALLENGE TO THE DURATION OF THE OFFICER AND DIRECTOR
2BAR
3On appeal from SEC v. Rogas II, Rogas contends that the district court
4abused its discretion by imposing a lifetime Officer and Director Bar, rather than a bar
5of shorter duration, arguing that the court improperly considered him to be a repeat
6offender, thereby "infect[ing] its analysis of the Patel factors"; that it misevaluated the
7likelihood of his recidivism by ignoring his acceptance of responsibility; and that it
8imposed the lifetime bar for the improper purpose of punishing him. (See Rogas's brief
9on appeal at 26-34, 34-37, 39-41.)
10We review the imposition of injunctive relief and civil penalties for abuse
11of discretion, see, e.g., SEC v. Pentagon Capital Management PLC, 725 F.3d 279, 287 (2d
12Cir. 2013); SEC v. Bankosky, 716 F.3d 45, 47 (2d Cir. 2013) ("Bankosky"); and "the burden
13of showing that the court abused [its] discretion . . . necessarily is a heavy one,"
14SEC v. Manor Nursing Centers, Inc., 458 F.2d 1082, 1100 (2d Cir. 1972), abrogated on other
15grounds by Liu v. SEC, 591 U.S. 71 (2020). "Under this standard, we will reverse only
16if we have a definite and firm conviction that the court below committed a clear error
17of judgment in the conclusion that it reached upon a weighing of the relevant factors."
-25-

1Bankosky, 716 F.3d at 47 (internal quotation marks omitted).
2Rogas has not met this standard. The statutory provision for an Officer
3and Director Bar gives courts ample discretion; the Patel factors are neither mandatory
4nor exclusive; the district court gave appropriate consideration to the Patel factors, did
5not consider Rogas as a "repeat offender" as that term was used in Patel, and gave
6adequate explanations for its assessment that Rogas was likely to recidivate if he were
7again to be an officer or director of a publicly traded company; and the record amply
8supports the court's conclusions.
9The SEC commenced this action in September 2020 pursuant to § 21 of the
10Exchange Act, 15 U.S.C. § 78u, which provides, inter alia, that when it appears to the
11Commission that a person is engaged in, or is about to engage in, acts or practices
12constituting a violation of the Exchange Act or a Rule promulgated thereunder, the
13Commission may bring an action in an appropriate federal court to enjoin such acts or
14practices. See 15 U.S.C. § 78u(d)(1). Rogas thereafter, in the criminal action, pleaded
15guilty to violating § 10(b) of the Exchange Act and Rule 10b-5 thereunder, 15 U.S.C.
16§ 78j(b) and 17 C.F.R. §240.10b-5. (See, e.g., Rogas Consent ¶ 2.) In an action brought
17under § 78u(d)(1),
18the court may prohibit, conditionally or unconditionally, and
-26-

1permanently or for such period of time as it shall determine, any person
2who violated section 78j(b) of [Title 15] or the rules or regulations
3thereunder from acting as an officer or director of any issuer that
4has a class of securities registered pursuant to section 78l of [Title
515] or that is required to file reports pursuant to section 78o(d) of
6[Title 15] if the person's conduct demonstrates unfitness to serve as an
7officer or director of any such issuer.
815 U.S.C. § 78u(d)(2) (emphases added).
9In 1995 when Patel was decided, § 78u(d)(2) "provide[d for] a bar on
10service as an officer or director . . . based on substantial unfitness," Patel, 61 F.3d at 142
11(emphasis added). In Bankosky, we noted that "[i]n 2002, Congress replaced 'substantial
12unfitness' with simply 'unfitness,'" 716 F.3d at 48 (citing Sarbanes-Oxley Act of 2002,
13§ 305(a), Pub. L. No. 107-204, 116 Stat. 745, 778-79 (2002) (amending 15 U.S.C.
14§ 78u(d)(2))); and we stated that
15the legislative history demonstrates that Congress's intent was to
16lower the threshold of misconduct for which courts may impose
17director and officer bans. See S.Rep. No. 107-205, at 27 (2002),
18available at 2002 WL 1443523 (explaining that standard was changed
19to "unfitness" because "'substantial unfitness' standard . . . [was]
20inordinately high, causing courts to refrain from imposing bars
21even in cases of egregious misconduct") . . . .
22Bankosky, 716 F.3d at 48. We noted that the
23lowering [of] the threshold of misconduct required to impose the
24officer and director bar[] did not undermine the usefulness of the
25Patel factors, which indicate where evidence of unfitness might be
-27-

1found in a defendant's misconduct. Whatever the contours of the
2new standard, "unfitness" is clearly a lower hurdle than "substantial
3unfitness." See S.Rep. No. 107-205, at 27 (2002). It necessarily
4follows that a person who is "substantially unfit" under the Patel
5analysis is also "unfit" under the revised statute. Thus, the Patel
6factors are just as relevant to determining "unfitness" as they were
7to determining "substantial unfitness."
8Id.
9Rogas, relying on the inclusion of whether the defendant was a repeat
10offender among the factors that Patel listed as usually worthy of consideration, argues
11that, as a first offender, he could not properly be subjected to a lifetime Officer and
12Director Bar. He notes relentlessly that he had not been convicted of a securities
13violation previously (see, e.g., Rogas brief on appeal at 1, 7, 20, 26-27, 37); and he
14apparently believes that, in the court's assessment of whether the defendant is likely
15to engage in misconduct, no factor other than a prior conviction is material (see, e.g.,
16id. at 26 ("a single, extended course of conduct does not make a defendant a 'repeat
17offender'"); id. ("the duration and seriousness of his violation" did not make him "a
18repeat offender"); id. at 28 ("Rogas' efforts to avoid detection" did not "justify treating
19him as a repeat offender"); id. at 28 n.10 ("Rogas' violation of the asset freeze while the
20SEC Matter was stayed also has no bearing on whether he is a repeat offender")).
21But Patel did not purport to announce a checklist of factors that must be
-28-

1present or absent. We said
2[t]hese factors are useful in making the unfitness assessment,
3although we do not mean to say that they are the only factors that
4may be taken into account or even that it is necessary to apply all these
5factors in every case. A district court should be afforded substantial
6discretion in deciding whether to impose a bar to employment in
7a public company.
8Patel, 61 F.3d at 141 (emphasis added). And indeed, as pertinent to the present case
9and to Rogas's heavy reliance on the fact that he had not been prosecuted for criminal
10acts in the past, we noted in Patel that so long as the "district court articulate[s] the
11factual basis for a finding of the likelihood of recurrence" of misconduct, "it is not
12essential for a lifetime ban that there be past violations," id. at 142 (emphasis added).
13Rogas asserts that the lifetime bar was "[o]verkill," and argues that "the
14simple fact that a defendant used his position as an officer and director to engage in
15misconduct . . . in no way justif[ies] the prediction that future misconduct will occur."
16(Rogas brief on appeal at 37-38, 35 (internal quotation marks omitted).) But the "simple
17fact" label ignores much of what the district court considered--which even Rogas
18acknowledges included "the egregiousness of Mr. Rogas' conduct, his level of scienter,
19and the length of time over which he carried out his scheme" (id. at 35). And it ignores
20aspects of the court's analysis of the record in addition to Rogas's "high degree of
-29-

1scienter" and his steadfast persistence for 30 months of falsifications. Rogas II at *7
2(internal quotation marks omitted).
3The district court recognized the magnitude of Rogas's fraudulent
4conduct, which "falsif[ied] NS8's bank statements to give the appearance that NS8 was
5generating millions of dollars in customer revenue with tens of millions of dollars of
6assets on hand." Id. at *2 (quoting Amended Complaint ¶ 31).
7The court also noted that when Rogas learned that an employee had
8discovered his fraudulent inflations and had informed the SEC, he had the employee
9fired. See Rogas II at *3. This not only violated § 21F(h) of the Exchange Act, 15 U.S.C.
10§ 78u-6(h), the whistleblower-protection provision; it deprived the Company of a
11careful, competent, and responsible employee, in the interest of perpetuating Rogas's
12fraudulent conduct. And indeed, despite knowing that the SEC had been alerted,
13Rogas continued his monthly fraudulent inflation of NS8's Revenue Account balances.
14In addition, the district court noted that even after the SEC served Rogas
15with subpoenas investigating suspected fraud in a prior NS8 offering of securities,
16Rogas continued to inflate NS8's revenue numbers. See Rogas II at *3. Rogas's
17fraudulent numbers were used in connection with "at least three" "separate securities
18offerings." Id. at *5, *7 (emphasis in original) (internal quotation marks omitted). And
-30-

1having "altered bank statements to show millions of dollars of fictional customer
2revenue and assets," Rogas "directly benefited when NS8 conducted a tender offer
3with" money NS8 raised from "new investors," and bought his shares for more than
4$17.5 million. Id. at *2 (internal quotation marks omitted).
5The record detailed the millions of dollars by which Rogas fraudulently
6inflated the NS8 Revenue Account balances. The Amended Complaint--whose
7allegations, as noted above, are not disputed--charted month-by-month from January
82018 through June 2020 the exact amounts by which Rogas inflated the balances in
9NS8's Revenue Account, revealing the magnitude of the frauds. As shown in the
10Amended Complaint ¶ 31, from the outset the falsely inflated amount was never less
11than $1 million; and it quickly rose, because Rogas did not simply inflate that balance
12each month--in all but one of those months, he also increased the amount by which the
13balance was inflated. For example, in the first three months, January, February, and
14March of 2018, the falsely inflated amounts were, respectively, less than $1.1 million,
15more than $1.1 million, and more than $1.3 million. By the last three months of 2018,
16the falsely inflated amounts were, sequentially, more than $4.3 million, more than
17$5.1 million, and more than $6 million.
18Moreover, after becoming aware that his fraud had been discovered and
-31-

1was being investigated, Rogas's increases of the falsely inflated balances became
2steeper. For August 2019--the month in which Rogas learned that NS8's whistle-
3blowing Employee had informed the SEC of the fraud and had sent documents to the
4SEC--Rogas's falsely inflated amount was more than $17.9 million. Unfazed by the
5Employee's tip to the SEC, Rogas increased the falsely inflated amount for
6September 2019 to more than $23.7 million. (See Amended Complaint ¶ 31.)
7Rogas was similarly undaunted by actual federal investigation. SEC
8served Rogas with its fraud-investigating subpoenas in November 2019 and
9March 2020. (See id. ¶¶ 8, 72.) In 2019, Rogas increased the falsely inflated amount for
10November to more than $29.1 million, and for December to more than $34.4 million.
11(See id. ¶ 31.) In 2020, Rogas increased the falsely inflated amount for March to more
12than $46.8 million, for April to more than $51.5 million, for May to more than
13$56.1 million, and for June to more than $62 million. (See id.)
14In actuality, from January 2018 through June 2020, there were only six
15months in which the true balance in NS8's Revenue Account was more than $1 million;
16and in no month was its actual balance as high as $4.1 million. But prospective
17investors in 2019 and 2020 were led to believe, from Rogas's doctored Revenue
18Account statements, that NS8 had many millions of dollars in revenue, with a
-32-

1compounded growth rate of nearly 450 percent per year between January 2018 and
2December 2019. In 2019 and 2020, NS8's three securities offerings raised a total of
3$149 million from investors who relied on numbers inflated by Rogas; and NS8 used
4nearly 12 percent of the total--i.e., $17,542,459--to repurchase Company shares from
5Rogas. (See id. ¶ 2; A.226.)
6The district court remarked on Rogas's apparent avarice. Although as
7CEO and President of his relatively young and struggling company "Rogas received
8a significant salary of between $268,000 to $422,000 from 2018 to 2020, he nevertheless
9sought and obtained $17.5 million of fraud proceeds, i.e., in addition to his substantial
10compensation." Rogas II at *5. The $17.5 million was more than 41-to-65 times Rogas's
11"substantial" salary. Id. We also note that even at the lower end of the pay range
12identified by the court, Rogas's salary for at least 20 of the 30 months was more than
13twice as high as the actual balance in NS8's Revenue Account--and in many months his
14salary was more than 10 times as high as NS8's Revenue Account balance.
15(See Amended Complaint ¶ 31.)
16We are also unpersuaded by Rogas's argument that the permanent
17injunction was inappropriate on the ground that the district court failed to give his
18"complete and unconditional acceptance of responsibility any weight when assessing
-33-

1whether he was likely to commit further violations of the securities laws." (Rogas brief
2on appeal at 1; see also id. at 10 ("unconditional acceptance"); id. at 20 ("unequivocal
3acceptance"); id. at 34 ("sincere[] and unqualified acceptance").) As evidence of his
4complete, unequivocal, sincere recognition of the wrongfulness of his conduct, he
5cites--as he did in the district court (see Rogas Opposition to Lifetime Bar at 3)--the
6written submissions he gave the court in his criminal case and the statement he made
7at his plea hearing. Rogas states that in his plea allocution, he
8affirmed his unconditional acceptance of responsibility for his
9actions and promised to provide meaningful restitution:
10I accept full responsibility for these actions, and I am
11committed to doing everything in my power for as long as it
12takes to provide restitution to those whom my actions have
13harmed, to live a responsible and productive life, and to
14continue as a committed husband to my wife Beth and father
15to my two young daughters . . . .
16(Rogas brief on appeal at 10 (quoting Plea Hearing Tr. 22).) Rogas argues that while
17the district court recognized that a defendant's recognition of the wrongfulness of his
18conduct can be probative as to the likelihood of future recurrence, it "ignored" that
19principle. (Rogas brief on appeal at 35.)
20We doubt that the district court ignored the principle or Rogas's
21submissions. Rather, we infer that the court paid close attention to Rogas's
-34-

1protestations of acceptance of responsibility and found that they did not dispel the
2indications that his misconduct would likely recur, given that Rogas's oral statements
3at his plea hearing provided more cause for concern than for comfort.
4The plea-hearing statement on which Rogas relies appears in the following
5context.
6THE COURT: So Mr. Rogas, . . . tell me in your own words
7what you did to make you believe you're guilty of the charge in
8Count One of the indictment.
9THE DEFENDANT: . . . .
10In my position as president and CEO, I made a series of poor
11judgments and decisions that led to me making material
12misrepresentations to potential and actual investors in NS8
13inaccurately reflecting the company's revenue. These
14misrepresentations were made in connection with rounds of
15fundraising the company conducted through the sale of securities
16in the fall of 2019 and the spring of 2020.
17This is not who I am, and I have never before violated the
18law like this. My actions were not for personal financial gain or
19profit. My misplaced intent was to afford the company, my colleagues
20and team members--which I truly believed in--the time needed to generate
21enough revenue to sustain, grow, and support the hundreds of jobs that
22we had created.
23I had no doubt that given this time, NS8 would be very successful
24and innovative, and that it would both produce the promised returns and
25benefits for its investors and employees and continue to provide
26significant cybersecurity value and protection to its customers.
-35-

1Upon my resignation, I attempted, through counsel, to
2contact the company management to offer assistance, the return of
3money and stock, in an effort to keep the company viable and
4protect the shareholder value and protect the hundreds of jobs that
5we had created.
6That being said, I fully understand what I did was wrong. I
7understand that what I did broke the laws of the United States, and
8it sickens me that the actions that I alone took in an effort to protect
9ended up harming so many people.
10I accept full responsibility for these actions, and I am
11committed to doing everything in my power for as long as it takes
12to provide restitution to those whom my actions have harmed, to
13live a responsible and productive life, and to continue as a
14committed husband to my wife Beth and father to my two young
15daughters . . . .
16Thank you, your Honor.
17(Plea Hearing Tr. 20-22 (emphases added).)
18Rogas's statement was followed by illuminating questions from the court,
19suggestions by the Assistant United States Attorney ("AUSA") for further clarification,
20and a proposed "clarif[ication]" by Rogas's attorney.
21THE COURT: . . . [W]hen you made those material
22misrepresentations, did you know those representations to be false?
23THE DEFENDANT: I did.
24THE COURT: And did you make those misrepresentations with
25the intent to defraud potential investors?
-36-

1THE DEFENDANT: I certainly wasn't thinking of it that way,
2but I guess it did, your Honor.
3THE COURT: So that was a yes?
4THE DEFENDANT: Yes.
5(Id. at 22-23 (emphases added).)
6After the AUSA asked the court to clarify that Rogas admitted "knowing
7[his misrepresentations] were misleading and wrong and that investors were relying
8on those statements when they invested money with NS8" (id. at 25), the court tried
9again, and defense counsel William M. Sullivan, Jr., volunteered to interpret:
10THE COURT: . . . . When you made material
11misrepresentations to investors, first of all, did you know what you
12were doing was wrong and illegal?
13THE DEFENDANT: I knew -- yes.
14THE COURT: Yes, you did know.
15THE DEFENDANT: I did know.
16. . . .
17THE COURT: And you knew it was illegal to make
18misrepresentations to investors.
19THE DEFENDANT: Yes.
20MR. SULLIVAN: Your Honor, if I might clarify, I think Mr.
-37-

1Rogas is trying to say that at the time he made the misrepresentations, the
2specific intent was not to defraud the investors at that time, even
3though he knew that he was making material misrepresentations, that
4the information he was claiming was false, but he believed the
5company would ultimately survive, but that's not enough to allow him
6to articulate a defense, just so we're clear. He knew what he was
7saying was wrong, but he also believed at the end of the day that the
8investors would recoup their money, and more. That's not enough to
9overcome the responsibility that he has for this offense, but just for
10purposes of clarity, we're just trying to give some context to the
11defendant's state of mind.
12(Id. at 25-26 (emphases added).)
13This record plainly does not support Rogas's claim that the district court
14erred in not taking into account his purported acceptance of responsibility. While
15Sullivan's "clarif[ication]" did tend to clarify that Rogas "knew that he was making
16material misrepresentations," the qualification that his "specific intent was not to
17defraud the investors at that time" plainly did not show unconditional acceptance of
18responsibility. (Id. at 26 (emphasis added).)
19Further, the Sullivan interpretation emphasized Rogas's own statement
20that his goal was merely to assist his relatively new company to survive long enough
21to prosper, and that Rogas "believed the company would ultimately survive," that he "knew
22what he was saying was wrong, but he also believed at the end of the day that the investors
23would recoup their money, and more." (Id. at 26 (emphases added).) But "[j]ustice is not
-38-

1served by inflicting injustice. The ends do not justify the means. There is no 'Robin
2Hood' defense to illegal and wrongful conduct." Chevron Corp. v. Donziger, 833 F.3d 74,
385 (2d Cir. 2016) (other internal quotation marks and emphases omitted); see, e.g.,
4United States v. Connelly, 156 F.3d 978, 982-83 (9th Cir. 1998) (upholding denial of
5sentencing credit for a defendant convicted of fraud whose statements "at sentencing
6[were] sufficiently inconsistent with acceptance of responsibility" in light of his "'Robin
7Hood story' regarding the motive behind his frauds").
8Nor did Rogas's characterizations, in his own words, of his actions and his
9impetus for those actions suggest that he would be unlikely to engage in similar end-
10justifies-the-means conduct if he were in a position to do so in the future. He said that
11"poor judgments and decisions . . . led" him to "mak[e] material misrepresentations to
12potential and actual investors" (Plea Hearing Tr. 21 (emphasis added))--as if the real
13misdeeds were those vague and unexplained "judgments and decisions" rather than
14his specific misfeasance in changing the electronic versions of the numbers in NS8's
15Revenue Account statements to inflate the balances shown, and causing his doctored
16versions to be distributed to potential investors. And he minimized the magnitude and
17effect of his doctoring the bank statements by indicating that, in his view,
18the altering of stated bank balances from, for example, $2,000 to $5 million
-39-

1(see Amended Complaint ¶ 31 (November 2018)), and changing $28,000 to $62 million
2(see id. (June 2020)) were merely "inaccurate[] reflect[ions]" of the actual balances.
3We find no error in the district court's declining to credit Rogas's
4contention that his haec verba professions of acceptance of responsibility should have
5persuaded the court that he was not likely to engage in misconduct if he were to be an
6officer or director of a public company in the future. Nor do we see any merit in
7Rogas's contention that the district court imposed the permanent Officer and Director
8Bar in order to punish him.
9We conclude that the district court properly considered the actual
10characteristics and nature of Rogas's fraudulent conduct and weighed the relevant
11factors in assessing the likelihood that Rogas would engage in misconduct if he were
12again to be an officer or director of a publicly traded company. They included:
13# the persistence of Rogas's decision to falsify NS8's financial
14condition every month for two and a half years;
15# his decision to inflate the statement of its revenue every month,
16and nearly always by an amount greater than the inflated amount for the
17prior month;
18# his articulated view that overstating NS8's Revenue Account
19balance by many millions of dollars--as much as $62 million--when most
20of the actual balances are well below $100,000 is merely an "inaccurate[]
21reflect[ion]" of the balance;
-40-

1# his attempt to preserve continuation of his fraudulent practice by
2firing a valuable Company employee;
3# his seeking and obtaining, in addition to his substantial salary,
4$17.5 million of the funds raised from investors who relied on the
5fraudulent revenue statements;
6# his attempts to protect his fraud proceeds from repatriation by
7taking assets "offshore";
8# his withdrawal--in violation of the Freeze Order that was
9intended to preserve funds for return to defrauded investors--of more
10than $1.6 million, which he proceeded to spend on luxuries or convert to
11cryptocurrency; and
12# his apparent utter disdain for federal fraud regulation and
13investigations as, after he received SEC fraud-investigative subpoenas, he
14not only did not end his fraudulent conduct, he sharply increased the
15magnitude of his fraudulent numbers.
16The district court's conclusion that Rogas evinced a "prevailing inclination
17. . . to place his own self-interest ahead of the interests of his investors and the public"
18and revealed a likelihood that he would engage in misconduct in the future if he again
19became an officer or director of a publicly traded company, Rogas II at *8-*9 (internal
20quotation marks omitted), is well supported by this record. Given those conclusions
21and Rogas's belief, which he appears still to hold, that the end justifies the means, we
22see no error, much less a clear error, in the district court's judgment that the public
23would be best served by imposing on Rogas the lifetime Officer and Director Bar.
-41-

1III. THE ROGAS/PILLSBURY CHALLENGES TO THE TURN-OVER ORDER
2In No. 25-35, Rogas and Pillsbury challenge the decision of the district
3court in SEC v. Rogas I, 2024 WL 4930362 (or "Rogas I"), requiring Pillsbury to turn over
4to the government $3,162,601.76, representing the remainder of Rogas's $4 million
5retainer that Pillsbury held on September 18, 2020, when it was informed of the TRO
6freezing Rogas's assets. The SEC sought such an order in a motion filed in May 2024
7("Turn-Over Motion"); Rogas opposed, filing a cross-motion seeking a declaration that
8the Freeze Order did not apply to the $4 million retainer (see Rogas Cross-Motion
9Opposing Turn-Over Motion, Civ. Dkt. No. 191 ("Rogas/Pillsbury Opposition")). The
10district court, after receiving briefing and written submissions from the parties,
11including a May 27, 2024 letter from the DOJ addressed to both sides ("DOJ Letter")
12and submitted by the SEC, heard oral argument on July 10, 2024.
13The record on these motions, with respect to the nature of the retainer, the
14respective contentions of Pillsbury and the SEC, and the communications among
15Pillsbury, the SEC, and the DOJ during Rogas's criminal prosecution, is described by
16the district court in Rogas I, familiarity with which is assumed, and is briefly
17summarized here.
-42-

1A. News on $4 Million: Who Knew What, From Where, When, and Why
2As adverted to in Part I.C. above, in late August 2020, after an additional
3NS8 employee had discovered Rogas's fraud, Rogas contacted Pillsbury partner
4Sullivan, and engaged the services of Pillsbury in connection with any issues
5concerning his positions at NS8. The record contains an engagement letter which bears
6the date August 31, 2020, but which Rogas signed on September 1 and delivered to
7Pillsbury on September 2 (hereinafter referred to as the "September 2, 2020 engagement
8letter" or the "September 2 Letter"). (See, e.g., Rogas Decl. ¶¶ 3-5.) In that letter, it was
9agreed that Rogas would remit a $15,000 retainer to Pillsbury and would continually
10replenish that amount as needed to have Pillsbury's "work on his behalf" continue.
11(Declaration of William M. Sullivan, Jr., dated May 17, 2024 ("Sullivan Decl."), ¶ 5;
12see also September 2 Letter Addendum (A.200); Rogas Decl. ¶ 5).)
13"Several days later," Rogas spoke with Sullivan and two other Pillsbury
14attorneys in a "multi-hour call" in which Rogas "provided a comprehensive recitation
15of [his] time with NS8 and actions [he] had taken in [his] capacity as President and
16CEO." (Rogas Decl. ¶ 6.) Thereafter, Sullivan advised that Rogas would face multiple
17investigations and lawsuits that would be lengthy and costly. (See id. ¶¶ 7-8; Sullivan
18Decl. ¶ 7.) According to Rogas, on the basis of all of those conversations,
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1on September 9, 2020, [he] made the independent and voluntary
2decision to initiate two separate wire transfers to Pillsbury totaling
3$4,000,000, an amount well in excess of the small initial retainer
4required by the engagement letter.
5(Rogas Decl. ¶ 9.) Sullivan similarly stated:
6Therefore, on September 9, 2020, Mr. Rogas sent Pillsbury two wire
7transfers totaling $4 million (the "Retainer") from a Silicon Valley
8Bank account associated with PhutureCorp, an entity affiliated with
9Mr. Rogas. As Mr. Rogas's declaration . . . independently and
10expressly confirms, the Retainer was to secure Pillsbury's
11representation and pay in advance for the legal services Mr. Rogas
12expected Pillsbury would provide to him.
13(Sullivan Decl. ¶ 8.)
14There is in the record no engagement letter reflecting Rogas's
15September 9, 2020 payment of $4 million. While there was a letter dated September
1614, 2020, modifying the September 2 Letter (in a respect not relevant here), the
17September 14 letter made no mention of Rogas's sending Pillsbury $4 million on
18September 9. Indeed, the addendum to the September 14 letter outlining financial
19aspects of "the legal services to be rendered for this representation" repeated the details
20of the September 2 Letter--i.e., that Pillsbury was requesting a $15,000 retainer, and
21replenishments in the amount of $15,000. (See A.208.)
22Pillsbury did not inform the SEC that it had received a $4 million retainer
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1from Rogas. Pillsbury maintained that it considered the TRO and the ensuing Freeze
2Order to be inapplicable to Rogas's $4 million retainer--which it had received prior to
3the issuance of the TRO--because it had been wired from PhutureCorp, a Rogas entity
4that was not named in the SEC complaint as a "relief defendant." (See Sullivan
5Decl. ¶¶ 8-12.)
6The DOJ Letter stated that, in a series of phone calls in or about November
72020, the DOJ had informed Pillsbury, inter alia, that the $4 million retainer Rogas gave
8to Pillsbury had been fraud proceeds, and that those funds thus should not be used to
9pay Rogas's legal expenses. (See A.273.) It stated that the DOJ had asked Pillsbury to
10"segregate those crime proceed funds, and not spend down those funds to pay for
11attorney's fees," and that Pillsbury, although not conceding the accuracy of DOJ's
12information, "agreed not to further dissipate" the remaining amount of the $4 million
13retainer, which was "approximately $3.7 million." (Id.)
14However, by February 2024, the DOJ understood that $2 million of the
15retainer funds had been billed by Pillsbury. At the July 10, 2024 hearing on these
16motions, in response to an inquiry by the court as to the status of the funds, Sullivan
17stated that Pillsbury had "been billing against the 4 million," and that "at this point, it's
18exhausted." (A.316.)
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1The SEC maintained that it had known nothing of Rogas's sending
2Pillsbury the $4 million retainer until September 2022, nearly two years after the asset
3freeze was imposed. The SEC stated that it became aware that Rogas had sent
4Pillsbury such a sum only because of the contents of a Pillsbury response to a 2022 SEC
5request for financial information from Rogas. That response, an untitled accounting
6document, was attached to the SEC's Turn-Over Motion, and showed that Rogas had
7an "Asset[]" of "$3,612,601.76" at "Pillsbury (Escrow)." (A.220; see also id. at 217
8("Unencumbered Assets," "Other Assets," "$3,612,601.76").)
9B. The Terms of the Freeze Order
10The Freeze Order, the terms of which were identical to those in the TRO,
11provided in relevant part as follows:
12A. $35,084,900 of assets, funds, or other property of
13Defendant Adam Rogas and Relief Defendants NS8 FP, LLC, MVP
142020, LLC, and Rogassi Enterprises, LLC, wherever located or by
15whomever held, and whether acquired before or after institution of
16this action, are frozen;
17B. Defendant, Relief Defendants, and their officers, directors,
18successor corporations, subsidiaries, affiliates, trustees, family
19members, agents, servants, employees, attorneys-in-fact, and those
20persons in active concert or participation with them who receive
21actual notice of this order . . . shall hold and retain within their
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1control, and otherwise prevent any disposition, transfer, pledge,
2encumbrance, assignment, dissipation, concealment, or other
3disposal whatsoever of any of their funds or other assets or things
4of value presently held by them, under their control or over which
5they exercise actual or apparent investment or other authority, in
6whatever form such assets may presently exist and wherever
7located, up to []$35,084,900; and
8C. Any bank, financial or brokerage institution or other person
9or entity holding any funds, securities or other assets in the name of,
10for the benefit of, or under the control of Defendant Adam Rogas . . .
11shall hold and retain within their control and prohibit the
12withdrawal, removal, transfer or other disposal of any such funds
13or other assets.
14Freeze Order Parts I.A.-I.C (emphases added). It also provided that "any party or
15non-party may seek [relief] from th[e Freeze Order] upon a proper showing."
16Id. Part I.D.
17C. The Parties' Contentions as to the Nature of Rogas's Retainer
18In opposition to the SEC's Turn-Over Motion and in support of its own
19motion, Pillsbury argued principally that Rogas's $4 million retainer payment
20constituted an advance payment retainer under New York State law, that such
21retainers immediately become the property of the attorney upon receipt, and that, thus,
22the Freeze Order did not apply to it. (See Rogas/Pillsbury Opposition at 7-15.)
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1According to Pillsbury, after Rogas's comprehensive description of the actions he had
2taken in running NS8,
3[i]t was immediately apparent that Mr. Rogas would likely be
4facing criminal, SEC and civil investigations and litigation and that
5any legal defense representation would be lengthy and expensive.
68. Therefore, on September 9, 2020, Mr. Rogas sent Pillsbury
7two wire transfers totaling $4 million (the "Retainer") from a Silicon
8Valley Bank account associated with PhutureCorp, an entity
9affiliated with Mr. Rogas. As Mr. Rogas's declaration (attached
10hereto as Exhibit A) independently and expressly confirms, the
11Retainer was to secure Pillsbury's representation and pay in advance for
12the legal services Mr. Rogas expected Pillsbury would provide to him.
139. Consistent with Pillsbury's understanding that the
14Retainer was an advance payment retainer for legal services
15expected to be provided, Mr. Rogas sent the Retainer directly to
16Pillsbury's operating account.
1710. Once the Retainer was deposited into Pillsbury's
18operating account, the funds remained there; the Retainer was
19never transferred into a trust or escrow account, and the funds were
20never treated by Pillsbury as property owned by Mr. Rogas, under his
21control, or for his benefit.
22(Sullivan Decl. ¶¶ 7-10 (emphases added).)
23Rogas's declaration also took the position that he had divested himself of
24ownership of the $4 million--at least temporarily:
2510. I executed these wire transfers to provide Mr. Sullivan
26and Pillsbury with advance payment to secure legal representation
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1and pay for all necessary and sufficient services to be provided, and
2to ensure that there would always be sufficient retainer funds for
3Mr. Sullivan and Pillsbury to work against, in representing me . . . .
4When I transferred these amounts to Pillsbury, consistent with what I
5understand to be New York law, I lost my ownership interest in those
6funds; and, that was my intention in order to secure necessary and
7sufficient legal representation.
811. I understood that Mr. Sullivan would work against the
9funds transferred to represent me and provide necessary and
10sufficient legal services for a period that I understood was expected
11to proceed for several years and very likely include multiple
12lawsuits. I further understood that Mr. Sullivan would treat the
13funds as advanced payment for legal representation to be billed at the
14hourly rate structure identified in the engagement letter. I
15communicated this understanding to Mr. Sullivan subsequent to
16my wiring the funds.
17. . . .
1813. . . . . I understood that I still had the right to . . . terminate
19the representation at any time if I so choose, and to the return of any
20remainder of the retainer fund paid to Pillsbury at the conclusion of
21services.
22(Rogas Decl. ¶¶ 10-11, 13 (emphases added).)
23The SEC, which had not learned of Rogas's $4 million payment to
24Pillsbury before September 2022, disputed Pillsbury's "advance payment"
25characterization of the $4 million. The SEC argued that it was instead a "security
26retainer," in which, under New York State law, the attorney holds the money solely in
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1order to guarantee the client's ability to pay for the services the client expects the
2lawyer to provide. (A.186.) The SEC argued that the $15,000 retainer Pillsbury and
3Rogas agreed to in their September 2, 2020 engagement letter was plainly a security
4retainer; it required an initial payment and periodic replenishments when the balance,
5because of services rendered, fell below the agreed level; and nothing in the record
6showed that the $4 million retainer was any different. A security retainer is the
7property of the client, not the attorney. See, e.g., Entegra Power Group LLC v. Dewey &
8Leboeuf LLP, 493 B.R. 421, 428-29 (Bankr. S.D.N.Y. 2013).
9The SEC also argued that regardless of the type of retainer, which could
10affect ownership, the Freeze Order forbade any persons or entities from withdrawing,
11removing, transferring or otherwise disposing of any funds or assets they held "for the
12benefit of . . . Rogas," Freeze Order Part I.C. It argued that Pillsbury had held--and
13improperly had disposed of--the $4 million for the benefit of Rogas.
14D. The District Court's Decision
15The district court in Rogas I agreed with the SEC's view that the $4 million
16retainer was a security retainer that did not belong to Pillsbury:
17The Court finds that Rogas did, in fact, retain an interest in that
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1portion of the retainer that was not yet earned. See Committee on
2Professional Ethics, Ethics Opinion 816, New York State Bar
3Association, ¶ 8 (Oct. 26, 2007); see also Gala Enters., Inc. v. Hewlett
4Packard Co., 970 F. Supp. 212, 219 (S.D.N.Y. 1997). "The mere fact
5that the client advances money through retainer payment does not
6entitle the attorney to claim 'ownership' of the funds at the moment
7of receipt. It is in effect money of the client to be held in
8constructive trust with the attorney being entitled to payment as he
9performs work. If the attorney does not perform the work he must
10return the money." In re Level 8 Apparel LLC, [No. 16-13164, 2023
11WL 2940489,] at *20 [(Bankr. S.D.N.Y. Apr. 13, 2023)].
12Rogas I at *6 n.9.
13Further, the district court ruled that "[e]ven if Rogas' funds were an
14advance payment retainer, $3.6 million was subject to the TRO and the Freeze Order,"
15because "the unearned portion of the funds were [sic] . . . held by Pillsbury in the name
16of, for the benefit of, or under the control of Rogas and frozen by the [] Freeze Order."
17Id. (emphasis added) (internal quotation marks omitted). The court noted that
18PhutureCorp, from whose account Rogas had the $4 million wired to Pillsbury, had
19received $10 million of the $17.5 million that Rogas received as a result of his
20fraudulent conduct. See id. at *4 n.7. The court pointed out that
21"[i]t is well-settled that a defendant has no right to use
22tainted assets for his legal defense." SEC v. Ahmed, 72 F.4th 379, 395
23(2d Cir. 2023). A defendant has no "right to spend another person's
24money for services rendered by an attorney, even if those funds are
25the only way that the defendant will be able to retain the attorney
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1of his choice." Caplin & Drysdale v. United States, 491 U.S. 617, 626,
2109 S.Ct. 2646, 105 L.Ed.2d 528 (1989).
3Rogas I at *5.
4We see no error in the district court's application of this principle to the
5facts in this case, either on the basis that the $4 million Rogas sent to Pillsbury was not
6an advance payment retainer and was in fact a security retainer, or on the basis that
7that money was intended to be used for the benefit of Rogas, defending him against
8the criminal, civil regulatory, or private civil litigation that he and Pillsbury
9anticipated. As to the nature of the retainer, the record contains no contemporaneous
10record to support the Rogas/Pillsbury characterization of it as an advance payment
11retainer. And while Sullivan stated in his affidavit that "the funds were never treated
12by Pillsbury as property owned by Mr. Rogas, under his control, or for his benefit,"
13(Sullivan Decl. ¶ 10 (emphases added)), the manner in which Pillsbury "treated" the
14funds would not be dispositive. And in any event, that statement is belied by
15Sullivan's other statements--and similar statements by Rogas--that the money was to
16be used for Pillsbury's representation of Rogas in the expected prosecution, SEC
17litigation, and other civil lawsuits.
18Further, there is documentary evidence from Pillsbury as to the status,
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1treatment, and ownership of the "$3,612,601.76" remainder of the $4 million that Rogas
2sent to Pillsbury. In September 2022, Sullivan responded to an SEC request for an
3accounting of Rogas's income and assets by sending the SEC an accounting document--
4"Exhibit A"--that "contain[ed] all of the financial information provided" in U.S. v. Rogas
5to the "Probation Department in connection with Mr. Rogas' sentencing." (Letter from
6Sullivan to Nicholas P. Heinke, SEC Senior Trial Counsel, dated September 14, 2022
7("Sullivan Letter"), at 1.) Among "Unencumbered Assets," the document listed Rogas's
8"Other Assets" as "$3,612,601.76." (Sullivan Letter, Exhibit A at 3.) In the section
9identifying "Other Assets," it listed "$3,612,601.76," describing that sum as a "Deposit
10At PWSP LLP" and as an "Asset Located" at "Pillsbury (Escrow)." (Id., Exhibit A at 6.)
11Thus, although Sullivan asserted that "the Retainer was never transferred
12into a[n] . . . escrow account" (Sullivan Decl. ¶ 10), the Rogas asset information that
13Pillsbury submitted on his behalf--both to the Probation Department in his criminal
14case and to the SEC in the present case--showed that nearly two years after the asset
15freeze, Rogas had an "Unencumbered Asset" of "$3,612,601.76," which "Pillsbury" held
16in "Escrow."
17The record also clearly supports the district court's ruling that, regardless
18of how the ownership of the $4 million retainer was characterized, Rogas and Pillsbury
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1intended that those funds were to be used for Rogas's benefit. Although Sullivan
2stated that Rogas's $4 million was "never . . . for his benefit" (Sullivan Decl. ¶ 10
3(emphasis added)), he also said that the "$4 million" that "on September 9, 2020,
4Mr. Rogas sent Pillsbury" was "to secure Pillsbury's representation and pay in advance
5for the legal services Mr. Rogas expected Pillsbury would provide to him" (id. ¶ 8 (emphases
6added)). And Rogas similarly characterized the purpose of his $4 million as "retention
7of . . . Sullivan [and] Pillsbury . . . to represent me in this lawsuit, as well as in the [DOJ's]
8criminal prosecution, . . . and in related third-party civil litigation," and said his
9"advanced payment of funds" was "for services to be provided in the course of that
10representation." (Rogas Decl. ¶ 2 (emphases added); see also id. ¶ 10 (the "retainer funds"
11were "for Mr. Sullivan and Pillsbury to work against, in representing me" (emphasis
12added)); id. ¶ 13 ("I understood that I still had the right to . . . terminate the
13representation at any time if I so choose, and to the return of any remainder of the retainer
14funds paid to Pillsbury at the conclusion of services." (emphasis added)).)
15We see no error in the district court's ruling that the $4 million Rogas sent
16to Pillsbury--from an account into which he had deposited $10 million he received as
17part of his profits from the 30 months of fraudulent inflation of NS8's revenues--was
18covered by the Freeze Order, and that Pillsbury violated that order by using profits
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1Rogas received from his fraud to defend him in the government's actions against him
2for that fraud.
3CONCLUSION
4We have considered all of the arguments by Rogas and Pillsbury on these
5appeals and have found them to be without merit. The orders of the district court are
6affirmed.
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