SEC Denies Sandeep Aggarwal's Motion to Vacate Bar

UNITED STATES OF AMERICA before the SECURITIES AND EXCHANGE COMMISSION SECURITIES EXCHANGE ACT OF 1934 Release No. 104987 / March 13, 2026 INVESTMENT ADVISERS ACT OF 1940 Release No. 6952 / March 13, 2026 Admin. Proc. File No. 3-15672 In the Matter of SANDEEP AGGARWAL ORDER DENYING MOTION TO VACATE OR MODIFY BARS In 2013, a federal district court enjoined Sandeep Aggarwal from violating antifraud provisions of the federal securities laws based on his tipping non-public information to investors while working as a research analyst at a registered broker-dealer and registered investment adviser. Also in 2013, Aggarwal was convicted of one count of securities fraud and one count of conspiracy to commit securities fraud based on the same conduct. In 2014, the Securities and Exchange Commission accepted Aggarwal’s offer of settlement of a proposed administrative disciplinary proceeding based on the district court’s injunction and the criminal conviction. Based on that offer, the Commission issued an order instituting proceedings, making findings, and imposing sanctions (the “Settled Order”). In particular, as relevant here, the Settled Order barred Aggarwal from association with any broker, dealer, or investment adviser, and barred him from participating in an offering of penny stock (the “Associational and Penny Stock Bars”). SEC v. Lee, No. 13-CV-5185 (S.D.N.Y. Dec. 6, 2013), Dkt. No. 20 (enjoining Aggarwal, by consent, from future violations of Exchange Act Section 10(b) and Rule 10b-5 thereunder). United States v. Aggarwal, No. 13-CR-884 (S.D.N.Y. Dec. 3, 2013), Dkt. No. 18 (order accepting guilty plea allocution before a U.S. magistrate judge). Sandeep Aggarwal, Exchange Act Release No. 71260, 2014 WL 68368, at *1 (Jan. 8, 2014), vacated in part, Exchange Act Release No. 93684, 2021 WL 5632486 (Nov. 30, 2021) (vacating collateral bars). Aggarwal, 2014 WL 68368, at *2 (imposing industry and penny stock bars). The Settled Order also imposed collateral bars on Aggarwal, but the Commission previously granted his request to vacate those collateral bars. Aggarwal, 2021 WL 5632486, at *1.

Aggarwal now moves to vacate the Associational and Penny Stock Bars or, in the alternative, requests that the broker-dealer and penny stock bars be temporarily suspended. The Division of Enforcement opposes his motion. The Commission and courts have long emphasized the “strong interest” in the finality of settlements. A movant such as Aggarwal must therefore show compelling circumstances to justify vacating or modifying a settled order. Aggarwal has not made the necessary showing. I. Aggarwal pleaded guilty, was civilly enjoined, and consented to the Associational and Penny Stock Bars, but the district court later granted federal prosecutors’ request for leave to dismiss the criminal proceeding via a nolle prosequi. In July 2013, the U.S. Attorney’s Office for the Southern District of New York charged Aggarwal with conspiracy to commit securities fraud and conspiracy to commit wire fraud, and the Commission filed a complaint charging Aggarwal with violating Section 10(b) of the Securities Exchange Act and Rule 10b-5 thereunder. Both actions were based on Aggarwal’s tipping of non-public information in an insider trading scheme. A few months later, Aggarwal pleaded guilty in the criminal proceedings and consented to a partial judgment against him in the Commission’s action. In his plea allocution, Aggarwal admitted that he tipped non-public information to several investors “to improve [his] standing as an analyst and to help generate revenue for [his] firm,” and he admitted that he “knew what [he] was doing was wrong.” In his settlement of the Commission’s civil injunctive action, Aggarwal agreed to being enjoined from future violations of Section 10(b) and Rule 10b-5, but the court left open the imposition of disgorgement and civil penalties for a later date. At the same time, Aggarwal also submitted his offer of settlement in this proceeding, agreeing to the Commission’s imposing the Associational and Penny Stock Bars. The Commission accepted that offer by instituting this proceeding and imposing sanctions under Section 15(b) of the Securities Exchange Act of 1934 and Section 203(f) of the Investment Advisers Act of 1940. Those provisions authorize the Commission to impose sanctions on a person who, as relevant here, has been either (i) convicted within the last ten years of certain crimes or (ii) enjoined from certain actions, conduct, or E.g., Richard D. Feldmann, Exchange Act Release No. 77803, 2016 WL 2643450, at *2 (May 10, 2016) (quoting Michael H. Johnson, Exchange Act Release No. 75894, 2015 WL 5305993, at *4 (Sept. 10, 2015)); see also Cummings v. Greater Cleveland Reg’l Transit Auth., 865 F.3d 844, 846 (6th Cir. 2017) (“There is a deeply embedded judicial and legislative policy in favor of keeping final judgments final. That is especially true for settlement agreements.” (internal citations omitted)). Certain Off-Channel Commc’ns Settled Orders, Exchange Act Release No. 102860, 2025 WL 1101495, at *1 (Apr. 14, 2025); see also Guy S. Amico, Exchange Act Release No. 100453, 2024 WL 3291362, at *1 (July 2, 2024) (applying the “compelling circumstances” standard when denying motion to vacate a supervisory bar). 15 U.S.C. § 78o(b)(6); 15 U.S.C. § 80b-3(f).

practices. The Commission based the Settled Order on both provisions, because Aggarwal was then subject to both a civil injunction and a criminal conviction. After issuance of the Settled Order, but before sentencing in the criminal case, the U.S. Court of Appeals for the Second Circuit issued an opinion in United States v. Newman, clarifying the “personal benefit” element of insider trading law. More than four years later, Aggarwal consented to a final judgment in the Commission’s civil injunctive proceeding, continuing the same injunctive relief the court had ordered in 2013 and imposing an approximately $32,000 civil penalty (which, as noted above, the court had left open at the time of Aggarwal’s initial settlement in 2013). A few days later, the district court granted leave for prosecutors to dismiss the criminal proceeding against Aggarwal via a nolle prosequi. Prosecutors cited three reasons why further prosecution of Aggarwal “would not be in the interests of justice”: (1) the Second Circuit’s issuance of Newman; (2) the passage of time and resulting difficulties in securing evidence since Aggarwal’s underlying misconduct; and (3) the civil judgment and bars still in place. Aggarwal moves to vacate the Associational and Penny Stock Bars or, in the alternative, requests that the broker-dealer and penny stock bars be temporarily suspended. He contends that the dismissal of the criminal proceeding by the nolle prosequi constitutes changed factual circumstances that, along with what he argues are the bars’ undue hardship and unintended consequences, amount to the type of compelling circumstances that warrant modifying or vacating the Settled Order’s bars against him. We disagree. II. Because Aggarwal is still civilly enjoined, the dismissal of the parallel criminal proceeding against him is not a compelling circumstance that justifies vacating the Associational and Penny Stock Bars. Because of the nolle prosequi, one of the statutory bases for instituting this proceeding no longer exists. But the injunction remains. And as courts have explained, the “existence of [a civil] injunction provides a ground for [a] bar adequate in itself and independent from the criminal conviction.” Indeed, Aggarwal does not dispute that the Settled Order remains valid after the nolle prosequi. 15 U.S.C. § 78o(b)(6)(A)(ii), (b)(4)(B)(iii), (b)(4)(C); 15 U.S.C. § 80b-3(e)(2), (3), (4), (5). 773 F.3d 438 (2d Cir. 2014), abrogated in part by Salman v. United States, 580 U.S. 39, 50 (2016). Aggarwal, No. 13-CR-884 (S.D.N.Y. Feb. 14, 2020), Dkt. No. 74 (requesting and receiving leave to file the nolle prosequi, which would “dispose of” Aggarwal’s criminal proceeding); see also Fed. R. Crim. P. 48(a) (providing that “[t]he government may, with leave of court, dismiss an indictment, information, or complaint”). Aggarwal, No. 13-CR-884 (S.D.N.Y. Feb. 14, 2020), Dkt. No. 74 (nolle prosequi). Elliot v. SEC, 36 F.3d 86, 87 (11th Cir. 1994) (per curiam); cf. Salim B. Lewis, Exchange Act Release No. 51817, 2005 WL 1384087, at *2 & n.11 (June 10, 2005) (finding that the

In evaluating Aggarwal’s request, the Federal Rules of Civil Procedure are instructive, even though they do not govern our administrative proceedings. Indeed, the Commission regularly looks to the Federal Rules to resolve questions not directly addressed by our Rules of Practice. As the Supreme Court has explained, a party seeking to modify a settled order under Federal Rule of Civil Procedure 60(b)(5) on the ground that the order is “no longer equitable” must establish “that a significant change in circumstances warrants revision of the decree.” Modifications may be appropriate, for example, where new factual conditions make compliance “substantially more onerous”; a consent decree becomes “unworkable because of unforeseen obstacles”; enforcement without modification would be detrimental to the public interest; or there is a significant change in law. Applying this analysis in evaluating a defendant’s request to modify a settled order, for example, the Second Circuit rejected a defendant’s argument that the defendant’s previous consent to an injunction against future violations of the antifraud provisions of the federal securities laws was “no longer equitable” because his guilty plea in a parallel criminal proceeding had been vacated. The court there noted that, while the parallel criminal proceeding may have influenced the defendant’s strategy in the civil proceeding, the two proceedings were “entirely separate” and the defendant had entered into his consent judgment in his civil proceeding to secure the benefits thereof, including finality. Therefore, the court held that the vacatur of the defendant’s criminal conviction did not present “exceptional circumstances” warranting the vacatur of the civil consent judgment as well. pardoning of respondent’s criminal conviction did not invalidate the Commission’s settled bar order that was also based, independently, on a civil injunction, where settled order did not specifically indicate that the Commission would have reached a different result without the conviction). See, e.g., Gregory T. Bolan Jr., Exchange Act Release No. 85971, 2019 WL 2324336, at *3 n.22 (May 30, 2019) (referencing Federal Rule of Civil Procedure 60(b) and federal cases in denying a motion to vacate a settlement); Feldmann, 2016 WL 2643450, at *3 n.24 (same regarding a motion to modify a settlement); Robert M. Ryerson, Exchange Act Release No. 57839, 2008 WL 2117161, at *5 & n.18 (May 20, 2008) (“Under certain circumstances, the Federal Rules of Civil Procedure provide helpful guidance, such as when issues are not directly addressed by our Rules of Practice.”). Rufo v. Inmates of Suffolk Cnty. Jail, 502 U.S. 367, 383 (1992) (quoting Fed. R. Civ. P. 60(b)(5) and explaining that a party is not entitled to modification of a final judgment merely “when it is no longer convenient to live with the terms of a consent decree”). The Supreme Court gave the example of modification furthering the public interest where it was necessary to avoid pretrial release of violent felons. Id. at 384–85. Id. at 383–92 (noting that a “clarification in the law” does not “automatically” warrant modifying a consent decree because that “would undermine the finality of such agreements and could serve as a disincentive to negotiation of settlements”). SEC v. Conradt, 696 F. App’x 46, 47 (2d Cir. 2017). Id.

Similarly here, Aggarwal agreed to the Settled Order voluntarily, with the advice and assistance of counsel. Aggarwal thus entered into the Settled Order “with his eyes wide open” about the fact that the Settled Order was authorized based on both his injunctions and his then-criminal conviction. And while the subsequent removal of his criminal conviction might have made a strategic difference to the parties had they known that would happen when they agreed to settle the Commission’s administrative proceeding, the Second Circuit rejected such possible strategic regrets as a basis for vacating a settlement. Indeed, Aggarwal “took his chances” by agreeing to the Settled Order and “cannot be heard to cry foul, and accordingly must live with his choice.” Regardless, because the nolle prosequi itself specifically cited the bars’ continued existence as a reason prosecutors sought dismissal, any inquiry into whether Aggarwal would have still agreed to those bars had the criminal proceeding been dismissed beforehand is circular. Although prosecutors cited “legal developments subsequent to Aggarwal’s guilty plea” as a basis for the nolle prosequi, we do not find the Second Circuit’s Newman decision to be a compelling circumstance either. The Supreme Court has explained that a “clarification in the law” does not “automatically” warrant modifying a consent decree because that “would undermine the finality of such agreements and could serve as a disincentive to negotiation of settlements.” And here, Aggarwal does not claim that Newman invalidates the Settled Order. Indeed, Aggarwal notably consented to continuation of the civil injunction that underlies the Settled Order well after the Second Circuit issued Newman. III. Aggarwal has not identified verifiable, unanticipated consequences that justify vacating the Associational and Penny Stock Bars. Nor do we agree with Aggarwal that the bars should be vacated because they have had unforeseen negative consequences. Aggarwal notes that he is now the Chief Executive Officer Cf. Ballard ex rel. Ballard v. Phila. Sch. Dist., 273 F. App’x 184, 188 (3d Cir. 2008) (noting that representation by counsel during settlement negotiations is a factor that weighs against that party’s later request to vacate a settlement agreement). United States v. Bank of New York, 14 F.3d 756, 759-60 (2d Cir. 2014) (denying defendant’s request to set aside consent decree in civil forfeiture action where defendant had been granted relief from related criminal conviction). See supra notes 17–18 and accompanying text. Bank of New York, 14 F.3d at 759-60; cf. SEC v. Mango Labs, LLC, No. 1:24-cv-07334, 2026 WL 161024, at *3, 6 (S.D.N.Y. Jan. 21, 2026) (Opinion and Order) (denying request under Rule 60(b) for relief from previous settled Final Judgment in light of “alleged change in the SEC’s enforcement approach” because the defendant cannot “unwind [the] finality” of its settlement “based on buyer’s remorse”). Rufo, 502 U.S. at 383–92. Lee, No. 13-CV-5185 (S.D.N.Y. Feb. 13, 2020), Dkt. No. 89 (consent of Aggarwal to reentry of civil injunction and imposition of civil penalty); Aggarwal, No. 13-CR-884 (S.D.N.Y. Feb. 14, 2020), Dkt. No. 74 (nolle prosequi dismissing Aggarwal’s criminal proceeding).

of Droom, a large, India-based e-commerce company he founded. Although Aggarwal acknowledges that the bars imposed in the Settled Order “in no way prohibit [him] from serving as the CEO of Droom,” he claims they have unexpectedly hindered the company’s ability to raise money, as “investors have shown a reluctance to invest in the company expressly due to questions about the bars.” But such difficulties in establishing or maintaining relationships with investors are a foreseeable consequence of agreeing to a bar order. Aggarwal similarly contends that the regulators in India, where Droom hopes to have its IPO, have expressed concerns about the Settled Order and its impacts. Again, however, financial and reputational damage of the kind Aggarwal raises are natural and foreseeable consequences of the Settled Order. It is also unclear how vacating the Associational and Penny Stock Bars would alleviate these alleged consequences. Aggarwal offers as evidence three Droom executives’ statements that the Settled Order has caused regulators and third parties to have concerns about Droom’s planned IPO, as well as a letter from the Indian stock exchange asking Droom to list the injunction, Settled Order, and dismissed criminal charges against Aggarwal as the first rather than seventh risk factor in Droom’s IPO application. This evidence does not establish that the Associational and Penny Stock Bars in particular—as opposed to the underlying findings of misconduct in the injunction—have caused Aggarwal’s claimed consequences. And Aggarwal’s own Droom employees state that they are uncertain whether the stock exchange will ultimately even disapprove the IPO. Thus, this is not the type of verifiable, unanticipated consequence that might warrant modifying his Settled Order. IV. Aggarwal has identified no other compelling circumstance that justifies vacating the Associational and Penny Stock Bars. Finally, Aggarwal generally cites in support of his motion a multifactor test that the Commission has sometimes considered in determining whether to vacate a bar order. But the See, e.g., Amico, 2024 WL 3291362, at *4 (denying motion to vacate supervisory bars and concluding that the fact that the bars purportedly hindered clearing and settlement relationships and negatively affected the generation of new business are natural and foreseeable consequences of the bars); Stephen S. Wien, Exchange Act Release No. 49000, 2003 WL 23094748, at *5 (Dec. 29, 2003) (concluding that hindering dealings with prospective business associates is not an unanticipated consequence of a bar). See, e.g., Fred Liebau, Jr., Exchange Act Release No. 92353, 2021 WL 2863016, at *2 (July 8, 2021) (harm to one’s professional reputation and record is a natural and foreseeable consequence of a bar); Gregory Osborn, Exchange Act Release No. 10641, 2019 WL 2324337, at *4 (May 31, 2019) (finding that respondent’s claim of a loss of a job opportunity and of suffering financial and reputational damage were “natural and foreseeable consequences” of bar order). See Amico, 2024 WL 3291362, at *2 (noting that, in considering whether to vacate a bar, the Commission considers whether the bar has had “verifiable, unanticipated consequences”). See id.

factors that Aggarwal asks us to consider, even taken together, do not justify modifying or vacating the Associational and Penny Stock Bars. Aggarwal attempts to minimize his misconduct, for example, by asserting that he personally “did not trade on” the stock about which he tipped others and claims that he did not “receive any financial benefit in connection with the alleged conduct.” We decline to vacate the Associational and Penny Stock Bars based on this argument, which Aggarwal could have raised before agreeing to the Settled Order. We also note that the amended complaint in the civil proceeding, which Aggarwal cannot now dispute, stated that Aggarwal committed his violations “with the expectation of receiving a benefit.” Aggarwal also argues that he complied with the Settled Order since entering into it and that he has otherwise had a long and successful career in the securities industry—with the events underlying the Settled Order the sole blot on his disciplinary record. But Aggarwal’s prior industry history was known at the time of the Settled Order, and notwithstanding his eleven years of alleged post-settlement compliance, we “expect financial industry professionals to comply with our orders.” And eleven years of alleged post-settlement compliance is not the type of compelling circumstance that warrants our vacating or modifying the Settled Order. Finally, Aggarwal argues that the Commission should not have imposed the Penny Stock Bar, which he characterizes as an “impermissible collateral bar.” That argument amounts to See id. (denying motion to vacate supervisory bars after weighing the relevant factors). See Calhoun Asset Mgmt., LLC, Exchange Act Release No. 99322, 2024 WL 147796, at *3 (Jan. 11, 2024) (refusing to vacate settlement based on argument that no customers were harmed because “we have consistently rejected such collateral attacks on the merits as a basis for undoing the terms of a settlement”). See Siris v. SEC, 773 F.3d 89, 96 (D.C. Cir. 2014) (holding that “[t]he Commission was entitled to rely on the allegations of the complaint in deciding whether or not imposition of a lifetime bar on Siris was in the public interest” where defendant had agreed not to contest the complaint in a Commission disciplinary proceeding); Lee, No. 13-CV-5185 (S.D.N.Y. Feb. 13, 2020), Dkt. No. 89 (Aggarwal’s consent to final judgment containing a civil penalty and a reimposed injunction, executed contemporaneously with dismissal of criminal proceeding) (reflecting Aggarwal’s agreement not to contest the facts alleged in the amended complaint in a Commission disciplinary proceeding). See Lee, No. 13-CV-5185, Amended Complaint, at ¶ 33 (S.D.N.Y. July 30, 2013), Dkt. No. 5. Advance Practice Advisors, LLC, Advisers Act Release No. 6889, 2025 WL 1735741, at *3 & n.17 (June 23, 2025) (quoting Brett Thomas Graham, Exchange Act Release No. 84106, 2018 WL 4348490, at *4, *10 (Sept. 12, 2018) (denying request to modify settled order), petition denied, 794 F. App’x 81 (2d Cir. 2019)). See John Gardner Black, Exchange Act Release No. 70318, 2013 WL 4737370, at *5–6 (Sept. 4, 2013) (denying petition to vacate associational bar and concluding that the passage of 15 years since the imposition of a bar does not weigh in favor of vacating the bar).

relitigating the merits of whether the Settled Order could include a Penny Stock Bar, however, and therefore is not a basis for vacating the Penny Stock Bar. V. We deny Aggarwal’s alternative request to temporarily suspend the Associational and Penny Stock Bars. As an alternative to vacating the Associational and Penny Stock Bars, Aggarwal requests that we temporarily suspend some of the bars so that he can establish a track record of compliance. The Settled Order specifies, however, that Aggarwal can apply for consent to associate notwithstanding the bars. He has not attempted to do so. Instead, he states that he “does not intend to associate with any of the barred classes or entities.” By his own acknowledgment, therefore, Aggarwal could not establish any track record of compliance as an associated person of a broker-dealer or investment adviser, even if we suspended the Associational Bars. With respect to the Penny Stock Bar, Aggarwal requests that, “because it is in the realm of theoretical (if unlikely) possibility that, in the future, [Droom’s] stock could fall into the SEC’s definition of a ‘penny stock,’ . . . the Commission should grant incremental relief to Aggarwal by suspending the penny stock bar and/or permitting Aggarwal to promote or participate in the offering of penny stock for a finite period of time so that he can continue in his role as CEO of Droom and build a track record of successful compliant conduct.” We do not find this theoretical possibility that Aggarwal might participate in a future offering of penny stock in the U.S. markets to be a compelling reason to modify the Penny Stock Bar to which he previously agreed in the Settled Order. To the extent Aggarwal wishes to pursue incremental relief as to the Penny Stock Bar, notwithstanding the continuation of the Associational Bars, he may file an application for consent to participate in offerings of penny stock. * * * For the above reasons, we find that Aggarwal has not demonstrated compelling circumstances that justify vacating or modifying the Associational and Penny Stock Bars to which he agreed. See Calhoun Asset Mgmt., 2024 WL 147796, at *3 (observing that the Commission has “consistently rejected . . . collateral attacks on the merits as a basis for undoing the terms of a settlement”). See, e.g., Liebau, 2021 WL 2863016, at *2 (“Generally, we first grant consent to associate before granting a petition to vacate.”); Graham, 2018 WL 4348490, at *5 (same). See Applications for Reentry, https://www.sec.gov/enforcement-litigation/applications- reentry (Apr. 21, 2025) (explaining application process).

Accordingly, IT IS ORDERED that the motion of Sandeep Aggarwal to vacate or modify the remaining associational and penny stock bars imposed by the Commission’s January 8, 2014, order is DENIED. By the Commission. Vanessa A. Countryman Secretary