Securities and Exchange Commission v. Huber

Dist. Ct. did not err in using “rising tide” method to distribute remaining portion of recovered assets from Ponzi scheme, even though rising tide method treats investors’ withdrawals from Ponzi scheme while it was still in operation as partial compensation for their losses. While net loss method would have given all investors equal percentage of losses based on net investments with Ponzi scheme, Dist. Ct. had discretion to use rising tide method to prefer investors who never withdrew money from Ponzi scheme since investors who withdrew some of their investments tended to be better off financially when Ponzi scheme collapsed, and since record showed that only 18% of investors would receive nothing under rising tide method.