1
`
`APPENDIX
`TABLE OF CONTENTS
`Appendix A Opinion in the United States Court of
`Appeals for the Second Circuit
`App. 1
`(June 28, 2023)
`Appendix B Ruling on Plaintiff s Motion for
`Remedies and Judgment in the United
`States District Court for the District of
`Connecticut
`(September 6, 2018)
`App. 53
`Appendix C Order Denying Shalini A. Ahmed’s
`Petition for Panel Rehearing, or, in the
`Alternative, for Rehearing En Banc, in
`the United States Court of Appeals for
`the Second Circuit
`(October 12, 2023)
`
`App. 94
`
`

`

`App. 1
`
`APPENDIX A
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`UNITED STATES COURT OF APPEALS
`FOR THE SECOND CIRCUIT
`Nos. 21-1686, 21-1712
`[Filed June 28, 2023]
`United States Securities and
`Exchange Commission,
`Plaintiff-Appellee,
`
`v.
`
`Iftikar A. Ahmed, Shalini Ahmed, I.1.1,
`a Minor Child, by and through his next
`friends Iftikar and Shalini Ahmed, his
`PARENTS, I.I. 2, A MINOR CHILD, BY AND THROUGH
`HIS NEXT FRIENDS IFTIKAR AND SHALINI AHMED,
`HIS PARENTS, I.I. 3, A MINOR CHILD, BY AND
`THROUGH HIS NEXT FRIENDS IFTIKAR AND SHALINI
`Ahmed, his parents, I-Cubed Domains, LLC,
`Shalini Ahmed 2014 Grantor Retained
`Annuity Trust, DIYA Holdings, LLC,
`DIYA Real Holdings, LLC,
`Defendants-Appellants,
`
`v.
`
`Jed Horwitt,
`
`

`

`App. 2
`
`Receiver-Appellee*
`
`)
`
`August Term 2022
`Argued: January 18, 2023
`Decided: June 28, 2023
`On Appeal from the United States District Court for
`the District of Connecticut
`Before: WALKER, RAGGI, and PARK, Circuit Judges.
`Defendant Iftikar Ahmed defrauded his former
`employer and its investors of some $65 million over the
`span of a decade. His scheme ended in 2015 when he
`was indicted on unrelated insider-trading charges and
`a subsequent internal investigation revealed the full
`breadth of his wrongdoing. The Securities and
`Exchange Commission (“SEC”) brought this civil
`enforcement action against Ahmed for various
`violations of the securities laws.
`To secure a potential disgorgement judgment, the
`SEC joined Ahmed’s family and related entities as
`Relief Defendants, and the district court (Arterton, J.)
`froze Ahmed’s and the Relief Defendants’ assets.
`Ahmed is currently a fugitive from justice, apparently
`residing in India, so the district court excluded him
`from discovery of the SEC’s investigative file. Due to a
`lack of excess frozen funds, the district court also
`denied Ahmed access to funds to hire counsel. The
`district court granted the SEC’s motion for summary
`
`The Clerk of Court is respectfully directed to amend the caption
`accordingly.
`
`

`

`App. 3
`
`judgment and awarded disgorgement, supplemental
`enrichment (including prejudgment interest and actual
`gains), and civil penalties against Ahmed. The district
`court also adopted the SEC’s theory that Ahmed is the
`equitable owner of assets held in the name of the Relief
`Defendants as “nominees.”
`On appeal, Ahmed and the Relief Defendants
`challenge the district court’s judgment and calculation
`of disgorgement. The Relief Defendants also move to
`stay the liquidation of frozen assets by the Receiver-
`Appellee pending resolution of these consolidated
`appeals. We affirm the district court’s (1) exclusion of
`Ahmed from discovery and denial of his access to frozen
`funds to hire counsel; (2) calculation of Ahmed’s
`disgorgement obligation; and (3) retroactive application
`of the 2021 amendments to the Securities Exchange
`Act of 1934 to Ahmed’s disgorgement obligation. We
`conclude, however, that the district court (4) failed to
`assess whether actual gains on the frozen assets were
`unduly remote from Ahmed’s fraud, and (5) should
`have applied an asset-by-asset approach to determine
`whether the Relief Defendants are in fact only nominal
`owners of their frozen assets.
`The district court’s order is AFFIRMED in part
`and VACATED AND REMANDED in part. In a
`separate order, we dismiss as moot Defendants’
`appeals from the district court’s liquidation orders. The
`Relief Defendants’ motion for a stay is DENIED as
`moot, and all stays are VACATED.
`VINCENT Levy (Gregory Dubinsky, Andrew
`C. Indorf, on the brief), Holwell Shuster &
`
`

`

`App. 4
`
`Goldberg LLP, New York, NY, for Defendant-
`Appellant Iftikar A. Ahmed.
`Adam G. Unikowsky (Zachary C. Schauf, on
`the brief), Jenner & Block LLP, Washington,
`DC, for Defendants-Appellants Shalini
`Ahmed, 1.1. 1, a minor child, by and through
`his next friends Iftikar and Shalini Ahmed,
`his parents, I.I. 2, a minor child, by and
`through his next friends Iftikar and Shalini
`Ahmed, his parents, I.I. 3, a minor child, by
`and through his next friends Iftikar and
`Shalini Ahmed, his parents, I-Cubed
`Domains, LLC, Shalini Ahmed 2014 Grantor
`Retained Annuity Trust, DIYA Holdings,
`LLC, DIYA Real Holdings, LLC.
`Stephen G. Yoder, Senior Litigation
`Counsel, for Dan M. Berkovitz, General
`Counsel, and John W. Avery, Deputy
`Solicitor, Securities and Exchange
`Commission, Washington, DC, for Plaintiff-
`Appellee Securities and Exchange
`Commission.
`John L. Cesaroni, Christopher H. Blau,
`Stephen M. Kindseth, Zeisler & Zeisler, P.C.,
`Bridgeport, CT, for Receiver-Appellee Jed
`Horwitt.
`PARK, Circuit Judge:
`Defendant Iftikar Ahmed defrauded his former
`employer and its investors of some $65 million over the
`span of a decade. His scheme ended in 2015 when he
`was indicted on unrelated insider-trading charges and
`
`

`

`App. 5
`
`a subsequent internal investigation revealed the full
`breadth of his wrongdoing. The Securities and
`Exchange Commission (“SEC”) brought this civil
`enforcement action against Ahmed for various
`violations of the securities laws.
`To secure a potential disgorgement judgment, the
`SEC joined Ahmed’s family and related entities as
`Relief Defendants, and the district court (Arterton, J.)
`froze Ahmed’s and the Relief Defendants’ assets.
`Ahmed is currently a fugitive from justice, apparently
`residing in India, so the district court excluded him
`from discovery of the SEC’s investigative file. Due to a
`lack of excess frozen funds, the district court also
`denied Ahmed access to funds to hire counsel. The
`district court granted the SEC’s motion for summary
`judgment and awarded disgorgement, supplemental
`enrichment (including prejudgment interest and actual
`gains), and civil penalties against Ahmed. The district
`court also adopted the SEC’s theory that Ahmed is the
`equitable owner of assets held in the name of the Relief
`Defendants as “nominees.”
`On appeal, Ahmed and the Relief Defendants
`challenge the district court’s judgment and calculation
`of disgorgement. The Relief Defendants also move to
`stay the liquidation of frozen assets by the Receiver-
`Appellee pending resolution of these consolidated
`appeals. We affirm the district court’s (1) exclusion of
`Ahmed from discovery and denial of his access to frozen
`funds to hire counsel; (2) calculation of Ahmed’s
`disgorgement obligation; and (3) retroactive application
`of the 2021 amendments to the Securities Exchange
`Act of 1934 to Ahmed’s disgorgement obligation. We
`
`

`

`App. 6
`
`conclude, however, that the district court (4) failed to
`assess whether actual gains on the frozen assets were
`unduly remote from Ahmed’s fraud, and (5) should
`have applied an asset-by-asset approach to determine
`whether the Relief Defendants are in fact only nominal
`owners of their frozen assets.
`I. BACKGROUND
`A. Factual Background
`In 2004, Ahmed joined Oak Management
`Corporation (“Oak”), a venture-capital firm. Ahmed
`was responsible for identifying and recommending
`“portfolio companies” in which Oak might invest and
`negotiating the terms of those investments.
`Over the course of a decade, Ahmed stole over
`$65 million from Oak and ten portfolio companies,
`identified as Companies A to J in the pleadings, using
`the same basic scheme in each fraudulent transaction.
`First, Ahmed opened bank accounts that he personally
`controlled ostensibly in the name of Oak and its
`portfolio companies. Second, he used those accounts to
`divert monies intended for Oak funds and portfolio
`companies into bank accounts that he and his wife
`controlled. To cover his tracks, Ahmed submitted
`fraudulent invoices and contracts to Oak,
`misrepresenting things like the size of in vestments, the
`currency exchange rates applicable to transactions, and
`the need to make payments to tax authorities or to
`reimburse legal and other fees. As one example of
`Ahmed’s fraud, in 2013, he negotiated an Oak entity’s
`investment in Company C that was conditioned on
`Company C redeeming shares of an entity that,
`
`

`

`App. 7
`
`unbeknownst to Oak, was owned by Ahmed. Ahmed
`pocketed more than $8 million from this particular
`scheme.1
`In April 2015, Ahmed was arrested on criminal
`charges in an insider-trading case. See United States v.
`Kanodia, No. 15-cr-10131 (D. Mass. Apr. 21, 2015),
`ECF 19.2 Following his arrest, Oak conducted an
`
`1 This transaction is described more fully in Section II.B.3.a, infra.
`
`2 Ahmed has been involved in at least four other cases relating to
`his conduct at Oak. First, Ahmed and a codefendant were indicted
`for the aforementioned insider trading, which remains pending
`against Ahmed given his fugitive status. See United States v.
`Kanodia, No. 15-cr-10131 (D. Mass.). The First Circuit affirmed
`the conviction of Ahmed’s codefendant, see United States v.
`Kanodia, 943 F.3d 499 (1st Cir. 2019), as well as the district court’s
`order of a default judgment of forfeiture on Ahmed’s appearance
`bond, see United States v. Ahmed, Nos. 21-1193,21-1194, 2022 WL
`18717740, at *1 (1st Cir. Nov. 1, 2022). Second, the SEC and
`Ahmed settled a civil enforcement action based on the same
`insider-trading conduct in 2019, and the district court entered a
`corresponding consent judgment. See Final J. as to Def. Iftikar
`Ahmed & Relief Def. Rakitfi Holdings, LLC, SEC v. Kanodia, No.
`15-cv-13042 (D. Mass. July 8, 2019), ECF 198. Third, Ahmed was
`indicted in a separate fraud and criminal money-laundering
`prosecution, which remains pending. See Indictment, United States
`v. Ahmed, No. 16-cr-10154 (D. Mass. June 1, 2016), ECF 34.
`Fourth, Oak’s former client NMR E-Tailing LLC sued Oak and
`Ahmed. See Decision After Trial on Damages at 3, NMR E-Tailing
`LLC v. Oaklnv. Partners, No. 656450/2017 (N.Y. Sup. Ct. June 21,
`2021), ECF 406. Oak and NMR settled, but Ahmed proceeded to
`trial on damages (with liability established by default) pro se and
`as a fugitive, resulting in a judgment against him for $7.5 million
`in compensatory damages, $500,000 in punitive damages, and
`prejudgment interest. See id. at 1-3,11. On appeal, the trial court’s
`judgment was affirmed. See Decision and Order, NMR E-Tailing
`
`

`

`App. 8
`
`internal investigation, which revealed that Ahmed had
`misappropriated approximately $67 million between
`2005 and 2015. Oak terminated Ahmed for cause and
`denied Ahmed “carried interest”
`ffectively a bonus
`tied to Oak’s performance—based on a provision of its
`General Partnership Agreement.
`B. Procedural Background
`1. Preliminary Injunction
`On May 6, 2015, the SEC filed a civil complaint
`against Ahmed, alleging violations of the Securities
`Exchange Act of 1934, the Securities Act of 1933, and
`the Investment Advisers Act of 1940. The SEC also
`named the Relief Defendants3 as the recipients of ill-
`gotten gains and joint owners of accounts receiving
`such gains. To secure a potential judgment, the district
`court granted a temporary restraining order, freezing
`$55 million in assets. After the SEC moved for a
`preliminary injunction to continue the TRO, Ahmed
`fled the United States and remains a fugitive.
`After a two-day hearing, the district court granted
`a preliminary injunction, freezing approximately
`$65 million for disgorgement, $9.3 million for potential
`
`LLC v. Oak Inv. Partners, No. 2021-1883 (N.Y. App. Div. 1st Dep’t
`May 25, 2023), ECF 53.
`
`3 The Relief Defendants are Shalini Ahmed (Ahmed’s wife),
`Ahmed’s three minor sons, and several companies held in the
`Ahmeds’ names or for their benefit: Iftikar Ali Ahmed Sole
`Proprietorship; I-Cuhed Domains, LLC; Shalini Ahmed 2014
`Grantor Retained Annuity Trust; DIYA Holdings, LLC; and DIYA
`Real Holdings, LLC.
`
`

`

`App. 9
`
`prejudgment interest, and $44 million for potential civil
`penalties ($118.3 million in total). We affirmed the
`order. See SEC v. I-Cubed Domains, LLC, 664 F. App’x
`53, 55-56 (2d Cir. 2016). The district court later denied
`Ahmed’s request for $6 million from frozen funds to
`hire counsel. In addition, during discovery, Ahmed
`requested access to confidential information in the
`SEC’s possession, but the district court denied his
`request, citing the fugitive-disentitlement doctrine.
`2. Summary Judgment
`Although Ahmed’s fugitive status has remained
`unchanged, the legal landscape has not. Before
`proceeding to summary judgment, the district court
`held the case pending the Supreme Court’s decision in
`Kokesh v. SEC, 137 S. Ct. 1635 (2017). Kokesh held
`that “[djisgorgement in the securities-enforcement
`context is a ‘penalty’ within the meaning of [28 U.S.C.]
`§ 2462, and so disgorgement actions must be
`commenced within five years of the date the claim
`accrues.” Id. at 1639. Kokesh did not address, however,
`“whether courts possess authority to order
`disgorgement in SEC enforcement proceedings.” Id. at
`1642 n.3. After the decision, the parties proceeded to
`summary judgment, and Ahmed moved once more to
`modify the asset freeze. The district court bifurcated
`the case into liability and remedy stages, and applying
`Kokesh’s five-year bar, modified the asset freeze to
`freeze assets up to $89 million.
`At the liability stage, the district court entered
`summary judgment for the SEC. At the remedies stage,
`the district court awarded a permanent injunction,
`$41,920,639 in disgorgement, $21 million in civil
`
`

`

`App. 10
`
`penalties, $1,520,953 in prejudgment interest for the
`period before the asset freeze at the IRS underpayment
`rate, and “actual returns on the frozen assets” during
`the pendency of the asset freeze. Special App’x at SPA-
`98 to -109. The district court rejected Ahmed’s
`argument that Kokesh barred disgorgement, and it
`denied an offset for the “carried interest” that Ahmed
`forfeited to Oak upon his termination for “Disabling
`Conduct” within the meaning of his contract with Oak.
`The district court also adopted the “nominee” theory
`as to the assets held in the name of the Relief
`Defendants. Applying a six-factor test, the district
`court concluded that these frozen assets were equitably
`owned by Ahmed and that the Relief Defendants had
`failed to refute the SEC’s supporting evidence.
`Although the district court permitted liquidation of
`frozen assets to proceed under the supervision of
`Receiver-Appellee Jed Horwitt (the “Receiver”), it
`stayed distribution pending appeal. In a ruling issued
`in conjunction with an amended final judgment, the
`district court clarified that the judgment did “not
`extinguish the SEC’s remaining alternative theory of
`liability against the Relief Defendants” under SEC v.
`Cavanagh (Cavanagh I), 155 F.3d 129 (2d Cir. 1998).
`Special App’x at SPA-162.
`3. Initial Appeal
`After Ahmed filed a notice of appeal, we held the
`case in abeyance pending the Supreme Court’s decision
`in Liu v. SEC, 140 S. Ct. 1936 (2020).4 Although the
`
`Ahmed also moved for the release of funds to pay for counsel. A
`motions panel of this Court construed Ahmed’s motion as seeking
`
`

`

`App. 11
`
`Exchange Act did not explicitly authorize a
`“disgorgement” remedy, Liu held that disgorgement is
`a form of “equitable relief’ authorized under 15 U.S.C.
`§ 78u(d)(5)—answering the question left open by
`Kokesh. Liu, 140 S. Ct. at 1940.
`Shortly after Liu, Congress enacted the William M.
`(Mac) Thornberry National Defense Authorization Act
`for Fiscal Year 2021 (“NDAA”), Pub. L. No. 116-283,
`§ 6501(a)-(b), 134 Stat. 3388, 4625-26 (codified at 15
`U.S.C. § 78u(d)(3), (7)-(8)). The NDAA amended the
`Exchange Act in three ways relevant here. First, the
`NDAA explicitly authorized the SEC to pursue
`disgorgement in civil actions. See NDAA § 6501(a), 134
`Stat. at 4625-26 (codified at 15 U.S.C. § 78u(d)(7)).
`Second, the NDAA extended the statute of limitations
`for “a claim for disgorgement” to “not later than 10
`years after the latest date of the violation” for conduct
`under certain securities laws. Id. at 4626 (codified at 15
`U.S.C. § 78u(d)(8)). Finally, the NDAA provided that its
`amendments “shall apply with respect to any action or
`proceeding that is pending on, or commenced on or
`after, the date of enactment of this Act.” Id.
`The SEC moved to remand for recalculation of
`Ahmed’s disgorgement obligation under the NDAA.
`Ahmed opposed, arguing that (1) this Court lacked
`jurisdiction to remand because the SEC failed to cross­
`appeal; (2) application of the NDAA would reopen a
`final judgment; (3) the NDAA lacks a clear retroactivity
`
`mandamus relief directing the district court to rule on a similar
`motion then before it and denied Ahmed’s motion as moot after the
`district court denied the motion.
`
`

`

`App. 12
`
`command, and retroactive application would violate the
`Ex Post Facto Clause; and (4) the NDAA does not apply
`to disgorgement under 15 U.S.C. § 78u(d)(5). A motions
`panel granted the SEC’s motion and remanded “for a
`determination of Appellant’s disgorgement obligation
`consistent with § 6501 of the [NDAA], and, if
`appropriate, entry of an amended judgment.” SEC u.
`Ahmed, Nos. 18-2903,18-2932,19-102,19-103,19-355,
`19-2974,19-3375,19-3610,19-3721,2021WL1171712,
`at *1 (2d Cir. Mar. 11, 2021).
`4. Remand and Liquidation
`On remand, the district court found that the
`NDAA’s ten-year statute of limitations applied and
`increased the disgorgement amount from $41,920,639
`to $64,171,646.14, with $9,755,798.34 in prejudgment
`interest. The district court also rejected the same
`arguments Ahmed raised before the motions panel.
`Ahmed and the Relief Defendants appealed again,
`giving rise to this action.
`The district court also approved the Receiver’s
`proposed liquidation plan, which was divided into two
`phases (“First Liquidation Order”). Phase 1 would
`liquidate non-unique assets, and phase 2 would
`liquidate unique assets as needed to satisfy the
`judgment. The district court denied the Relief
`Defendants’ motion for a stay pending appeal.
`Defendants then appealed the First Liquidation Order,
`which this Court held in abeyance pending resolution
`of the merits of this appeal.
`Phase 1 ended with $118 million in the receivership
`estate, which was insufficient to secure the total
`
`

`

`App. 13
`
`judgment, then estimated to be in excess of
`$125 million. The district court approved most of the
`Receiver’s phase 2 plan and rejected the Relief
`Defendants’ motion to stay liquidation of the unique
`assets pending appeal (“Second Liquidation Order”).
`Defendants appealed the Second Liquidation Order,
`with the Relief Defendants moving to stay liquidation
`of the unique assets. This Court held the appeals of the
`Second Liquidation Order in abeyance pending our
`decision in these appeals from the redetermined
`amended final judgment. While the Relief Defendants’
`stay motion was pending, the Receiver indicated that
`he would begin phase 2 by liquidating a MetLife life-
`insurance policy on December 28, 2022, and listing the
`Ahmeds’ two Park Avenue apartments for sale on
`May 8, 2023. We granted temporary administrative
`stays pending our decision on the Relief Defendants’
`motion for a stay of liquidation.
`II. DISCUSSION
`Ahmed first argues that summary judgment was
`improper because he was excluded from discovery and
`denied access to funds to hire counsel. Ahmed also
`argues that the district court miscalculated
`disgorgement by incorrectly approximating net profits
`and erroneously applying the NDAA. The Relief
`Defendants raise two additional arguments: first, the
`district court improperly calculated prejudgment
`interest and actual gains, and second, it misapplied the
`“nominee” doctrine. Although we are not persuaded by
`Ahmed’s arguments, we find merit in some of the Relief
`Defendants’ arguments.
`
`

`

`App. 14
`
`A. Summary-Judgment Challenges
`Ahmed challenges the district court’s summary-
`judgment order, arguing that the district court erred by
`limiting his access to discovery and by denying his
`request to unfreeze assets to hire counsel. Neither
`argument is persuasive.
`1. Discovery Limitations
`The district court did not abuse its discretion by
`denying Ahmed extraterritorial access to confidential
`records in the SEC’s possession. Drawing on the
`fugitive-disentitlement doctrine, the district court
`reasoned that Ahmed had “removed himself from the
`jurisdiction of the [district court],” so the district court
`had “no ability to enforce” an “appropriate protective
`order limiting his use of the documents produced.”
`Endorsement Order Denying Def.’s Mot. for Full Access
`to the SEC’s Investigative File at 3, SEC v. Ahmed,
`No. 15-cv-675 (D. Conn. Aug. 22, 2016), ECF 286. The
`district court thus denied Ahmed access to SEC
`discovery materials. Ahmed argues that this denied
`him “any practical means of defending himself’ in
`violation of “the adversarial process set forth in the
`Federal Rules of [Civil] Procedure” and the Due Process
`Clause. Appellant’s Br. at 53, 60-61. We disagree.
`Federal Rule of Civil Procedure 26(c)(1) permits a
`district court to “issue an order to protect a party or
`person from annoyance, embarrassment, oppression, or
`undue burden or expense.” See Degen v. United States,
`517 U.S. 820,826 (1996) (explaining that district courts
`have broad authority “to manage discovery in a civil
`suit, including the power to enter protective orders
`
`

`

`App. 15
`
`limiting discovery as the interests of justice require”);
`accord Empire Blue Cross & Blue Shield v. Finkelstein,
`111 F.3d 278, 281 (2d Cir. 1997). We review discovery
`orders for abuse of discretion. See Lederman v. N. Y. C.
`Dep’t of Parks & Recreation, 731 F.3d 199, 202 (2d Cir.
`2013); United States v. Technodyne LLC, 753 F.3d 368,
`378 (2d Cir. 2014).
`The district court’s discovery restrictions here were
`a reasonable exercise of its broad power to enforce
`protective orders. “Courts invested with the judicial
`power of the United States have certain inherent
`authority to protect their proceedings and judgments in
`the course of discharging their traditional
`responsibilities.” Degen, 517 U.S. at 823. A district
`court retains “authority to manage discovery,”
`including “limit[ing] discovery in the interests of
`justice.” Finkelstein, 111 F.3d at 281; see also Degen,
`517 U.S. at 827 (“A federal court has at its disposal an
`array of means to enforce its orders.”). The discovery
`material at issue was subject to a protective order
`under Rule 26 based on the confidential and sensitive
`nature of the documents, and the district court
`determined that the court could not enforce such an
`order because Ahmed had removed himself from the
`court’s jurisdiction. The district court’s limitation of
`Ahmed’s extraterritorial access to the protected
`materials thus constituted a reasonable exercise of the
`court’s “inherent authority to protect” its own discovery
`orders to limit Ahmed’s access to civil discovery in light
`of his status as a fugitive. Degen, 517 U.S. at 823.
`Ahmed’s proposed alternatives, like monetary
`sanctions, would not ensure the adequate protection of
`confidential information in this case.
`
`

`

`App. 16
`
`We affirm the discovery limitations as a reasonable
`means of enforcing a protective order, so we do not
`decide whether the fugitive-disentitlement doctrine
`might apply in this case consistent with due process.5
`See Wells Fargo Advisors, LLC v. Sappington, 884 F.3d
`392, 396 n.2 (2d Cir. 2018) (“We are free to affirm on
`any ground that finds support in the record, even if it
`was not the ground upon which the trial court relied.”
`(cleaned up)).
`2. Denial of Funds to Hire Counsel
`The district court did not abuse its discretion by
`declining to unfreeze assets for Ahmed to hire counsel.
`Ahmed argues that the district court “over-froze [his]
`liquid assets, and thus improperly deprived him of the
`ability to use his money to hire counsel.” Appellant’s
`Br. at 61. For the reasons stated infra, the district
`
`5 Under the fugitive-disentitlement doctrine, “a person who is a
`fugitive from justice may not use the resources of the civil legal
`system while disregarding its lawful orders in a related criminal
`action.” United States v. Eng, 951 F.2d 461, 464 (2d Cir. 1991),
`abrogated on other grounds by Degen, 517 U.S. 820. A blunt
`instrument, the fugitive-disentitlement doctrine “forbid[s] all
`participation by the absent claimant.” Degen, 517 U.S. at 826
`(emphasis added). Although we do not decide whether the doctrine
`apphes here, we note that the purposes underlying it are served by
`the district court’s order. Disentitlement is rooted in a court’s
`ability to enforce a “judgment on review,” “discourage [] the felony
`of escape,” “encourageQ voluntary surrenders,” and “promote [] the
`efficient, dignified operation of the courts.” Id. at 824 (cleaned up).
`Ahmed faces several criminal charges, see supra note 2, and
`granting him full access to discovery could further discourage his
`voluntary return to the United States and grant him an unfair
`advantage in those proceedings to the extent they are based on the
`same or related underlying conduct.
`
`

`

`App. 17
`
`court properly calculated disgorgement, so it did not
`abuse its discretion by concluding that there were no
`frozen funds available for Ahmed to hire counsel.6 It is
`well-settled that a defendant has no right to use
`tainted assets for his legal defense. See Caplin &
`Drysdale, Chartered v. United States, 491 U.S. 617,626
`(1989) (“A defendant has no Sixth Amendment right to
`spend another person’s money for services rendered by
`an attorney.”). Moreover, Ahmed has no constitutional
`right to counsel in this civil enforcement action. See
`United States v. Coven, 662 F.2d 162, 176 (2d Cir.
`1981). In any event, the Relief Defendants have hired
`able counsel who have also represented Ahmed’s
`interests throughout these proceedings.
`B. Disgorgement
`The district court did not abuse its discretion in
`calculating disgorgement. First, the district court
`accurately estimated net profits and reasonably
`declined to offset Ahmed’s forfeited “carried interest.”
`Second, the district court properly gave retroactive
`effect to the NDAA.
`
`6 Our decision to vacate and remand the district court’s award of
`“actual gains” has no bearing on the denial of Ahmed’s motion to
`unfreeze funds for two reasons. First, the “actual gains” calculation
`is part of the post-judgment liquidation process, whereas Ahmed’s
`motion to unfreeze funds relates to the scope of the prehminary
`injunction. Second, “actual gains” are calculated based on the
`growth of disgorged assets regardless of the size of the judgment.
`So “actual gains” and disgorgement are independent for present
`purposes.
`
`

`

`App. 18
`
`1. Legal Standard
`The Exchange Act, as amended, states that “[i]n any
`action or proceeding brought by the Commission under
`any provision of the securities laws, the Commission
`may seek, and any Federal court may order,
`disgorgement.” 15 U.S.C. § 78u(d)(7). “Disgorgement
`serves to remedy securities law violations by depriving
`violators of the fruits of their illegal conduct.” SEC v.
`Contorinis, 743 F.3d 296, 301 (2d Cir. 2014). We review
`disgorgement orders for abuse of discretion. SEC v.
`Warde, 151 F.3d 42, 49 (2d Cir. 1998). “We review de
`novo questions of a statute’s interpretation and
`constitutionality.” United States v. alKassar, 660 F.3d
`108, 129 (2d Cir. 2011).
`2. Equitable Disgorgement After the NDAA
`As a preliminary matter, the parties assume, and
`we agree, that Liu s equitable limitations on
`disgorgement survive the NDAA. In Liu, the Supreme
`Court held that although the Exchange Act did not (at
`the time) explicitly authorize “disgorgement,”
`“equitable relief’ under § 78u(d)(5) includes
`disgorgement. 140 S. Ct. at 1940. The Court thus held
`that any disgorgement award must be consistent with
`traditional principles of equity. See id. at 1947. Shortly
`after Liu, Congress enacted the NDAA, which
`specifically added “disgorgement” as a remedy under
`§ 78u(d)(7) while leaving untouched “equitable relief’
`available via § 78u(d)(5). We read “disgorgement” in
`
`

`

`App. 19
`
`§ 78u(d)(7) to refer to equitable disgorgement as
`recognized in Liu.1
`First, § 78u(d)(7) authorizes “disgorgement,” which
`we have long understood to refer to “the chancellor’s
`discretion to prevent unjust enrichment” at equity.
`SEC v. Commonwealth Chem. Sec., Inc., 574 F.2d 90,
`95 (2d Cir. 1978); see 15 U.S.C. § 78u(d)(3)(A)(ii)
`(explaining that the SEC may seek and courts have
`jurisdiction to “require disgorgement... of any unjust
`enrichment by the person who received such unjust
`enrichment” as a result of violating the Exchange Act).
`This terminology is “consistent with a remedy rooted in
`equity, given that ‘unjust enrichment’ is another term
`of art—the basis for all restitution, which is often
`equitable.” Hallam, 42 F.4th at 340. Indeed, as the
`Supreme Court has observed, ‘“statutory reference[s]’
`to a remedy grounded in equity ‘must, absent other
`indication, be deemed to contain the limitations upon
`its availability that equity typically imposes.’” Liu, 140
`S. Ct. at 1947 (alteration in original) (quoting Great-W.
`Life & Annuity Ins. Co. v. Knudson, 534 U.S. 204, 211
`n.l (2002)); see also Astoria Fed. Sau. & Loan Ass’n v.
`Solimino, 501 U.S. 104, 108 (1991) (“Congress is
`understood to legislate against a background of
`common-law adjudicatory principles.”). The NDAA’s
`text evinces no intent to contradict Liu or to strip
`
`7 The Fifth Circuit recently held that § 78u(d)(7) “authorize [s] legal
`‘disgorgement’ apart from the equitable ‘disgorgement’ permitted
`by Liu” and questioned “whether equitable disgorgement . . .
`survived the 2021 Exchange Act amendments.” SEC v. Hallam, 42
`F.4th 316, 341, 343 (5th Cir. 2022). We dechne to follow the Fifth
`Circuit’s approach.
`
`

`

`App. 20
`
`disgorgement of “limit[s] established by longstanding
`principles of equity” in favor of an unbounded “legal”
`form of disgorgement. Liu, 140 S. Ct. at 1947. We thus
`apply “the strong presumption that repeals by
`implication are disfavored and that Congress will
`specifically address preexisting law when it wishes to
`suspend its normal operations in a later statute.” SEC
`v. Alpine Sec. Corp., 982 F.3d 68, 78 (2d Cir. 2020)
`(brackets omitted) (quoting Epic Sys. Corp. v. Lewis,
`138 S. Ct. 1612, 1624 (2018)).
`Second, reading “disgorgement” under § 78u(d)(7) as
`equitable disgorgement is consistent with the statutory
`history. Before the NDAA, “Congress did not define
`what falls under the umbrella of ‘equitable relief,’” so
`“courts . . . had to consider which remedies the SEC
`may impose as part of its § 78u(d)(5) powers.” Liu, 140
`S. Ct. at 1940. This created some uncertainty about
`whether, for example, the Exchange Act authorized
`disgorgement and the applicable statute of limitations.
`See, e.g., Kokesh, 581 U.S. at 461-62 & n.3. The NDAA
`then clarified some aspects of this uncertainty. The
`express addition of “disgorgement” as a remedy
`specified under § 78u(d)(7) is thus best read, not as
`superfluity, but as a “belt and suspenders” clarification
`that equitable disgorgement is available under the
`Exchange Act. Moreover, the authorization of a ten-
`year statute of limitations under § 78u(d)(8)(A)(ii) is
`best understood as expressly overruling Kokesh’s five-
`year statute of limitations as to certain securities
`violations. So we conclude that disgorgement under
`§ 78u(d)(7) must comport with traditional equitable
`limitations as recognized in Liu.
`
`

`

`App. 21
`
`3. Disgorgement Calculation
`The district court properly calculated Ahmed’s
`disgorgement obligation. Ahmed argues that the
`district court (1) miscalculated “net profits” from two
`fraudulent transactions involving Company C (“Cl”
`and “C2”) and (2) failed to account for the “carried
`interest” forfeited to Oak upon his termination for
`“Disabling Conduct.” He further argues that any
`reduction in the district court’s disgorgement award
`should also reduce the district court’s civil penalty. We
`conclude that both arguments are meritless, so we
`decline to disturb the district court’s rulings as to
`either disgorgement or civil penalties.
`a. Net Profits Calculation
`The district court did not abuse its discretion in its
`calculation of net profits. Disgorgement must “not
`exceed a wr