205 F.3d 408 (D.C. Cir. 2000)
Jacob Wonsover, Petitionerv.Securities and Exchange Commission, Respondent
No. 99-1167
United States Court of Appeals for the district of columbia circuit
Argued January 21, 2000Decided March 14, 2000

On Petition for Review of an Order of the Securities and Exchange Commission
Adam D. Cole argued the cause for the petitioner.  Martin  E. Karlinsky, James W. Perkins and Frank C. Razzano were  on brief for the petitioner.
Randall W. Quinn, Assistant General Counsel, Securities  and Exchange Commission, argued the cause for the respondent.  Jacob H. Stillman, Solicitor, David M. Becker, Deputy  General Counsel, and Nathan A. Forrester, Attorney, Securities and Exchange Commission, were on the brief for the respondent.  Rada L. Potts, Attorney, Securities and Exchange Commission, entered an appearance.
Before:  Sentelle, Henderson and Rogers, Circuit Judges.
Opinion for the court filed by Circuit Judge Henderson.
Karen LeCraft Henderson, Circuit Judge:


1
Jacob Wonsover petitions for review of the Security and  Exchange Commission's (Commission) Order Imposing Remedial Sanction and the accompanying Opinion of the Commission (collectively, Sanction Order) suspending him "from  association with any broker or dealer for a period of six  months" and ordering him to cease and desist from committing or causing violations of sections 5(a) and 5(c) of the  Securities Act of 1933, 15 U.S.C.      77e(a), 77e(c) (1933 Act).Joint Appendix (JA) 1, 2.  Wonsover sold shares of Gil-Med  Industries, Inc. (Gil-Med) which he knew were not registered  and whose sale therefore violated the 1933 Act absent an  exemption from its registration requirements.  Finding that  no exemption applied, the Commission determined that Wonsover violated sections 5(a) and 5(c).  The Commission also  determined that Wonsover's inquiry into the sources of the  shares was inadequate under the circumstances and that his  violations were therefore "willful" under section 15(b)(4) of  the Securities Exchange Act of 1934, 15 U.S.C.     78o(b)(4)  (Exchange Act), which authorized his suspension.


2
While he argues his sales of unregistered securities were  exempt from the 1933 Act's prohibition, Wonsover primarily  disputes the Commission's finding of willfulness, contending  his inquiry regarding the unregistered shares was adequate  to preclude such a finding.  Wonsover also argues that the  sanction is draconian and that the public interest would be  better served by reducing it to a censure.  He requests that  we vacate the Commission's Sanction Order or, in the alternative, reduce the sanction to censure.


3
Substantial evidence supports the Commission's conclusion  that Wonsover acted without adequate inquiry under the  circumstances, in violation of sections 5(a) and 5(c) of the 1933  Act, and we hold that the Commission did not err in determining that the violations were willful.  The sanction was not  the maximum the Commission could have imposed and we  defer to the Commission's discretionary determination.  Accordingly, we deny Wonsover's petition for review.

I.

4
Wonsover began his career in the securities industry in  1981.  Approximately five years later he met Shimon Gibori,  the founder and CEO of Gil-Med.  Gil-Med made an initial  public offering in early 1998, registering with the Commission  1,050,000 shares (of 4,605,686 outstanding) for sale to the  public.  This, the only stock Gil-Med registered, was traded  publicly on the NASDAQ System.  On the whole, the stock  did not have much activity;  its market was "thin."  JA 841,  1103-06.  Henry Vogel, a behavioral therapist and Gibori  associate who invested in and promoted Gil-Med, sold shares  to his friends, associates and patients during 1988 and 1989.Informed of the difficulty shareholders were having in selling  the stock, Gibori and Vogel directed them to certain brokerage firms for help.  The shareholders found less than complete success and Gibori ultimately referred them to Wonsover, who was working at Paine Webber, Inc.


5
Between August 1989 and October 1990 Wonsover opened  accounts for nineteen purported Gil-Med shareholders whose  names were supplied to him by Gibori.1  Some of the shareholders did not exist while others no longer owned the GilMed shares held (and later sold) in their names.2  Wonsover  sold a total of 924,000 shares of unregistered Gil-Med stock.In light of the applicable statute of limitations, the Commission focused on the sale of 665,000 shares for seven of the  nineteen shareholders because the sales occurred within five  years of the Commission's institution of proceedings against Wonsover.3  Sales from the seven shareholders' accounts  generated more than $300,000 in proceeds.


6
Wonsover understood that the clients held "restricted" GilMed stock.4  The sale of restricted stock generally is forbidden by 15 U.S.C.     77e.  Wonsover, however, asserts that the  sales were covered by the exemption found in section 4(4) of  the 1933 Act, 15 U.S.C.     77d(4),5 or at least that he reasonably believed they were covered by the exemption.6  He  directed all potentialsales of Gil-Med shares through Paine  Webber's Restricted Stock Department (RSD) for clearance  and contends that this, along with some less substantial  efforts, constituted adequate inquiry into the restricted nature of the stock.  The referral to the RSD notwithstanding,  Wonsover did not show during the administrative proceedings  that he had acquired adequate background information on the  Gil-Med stock.  Specifically, he could not produce investment  executive worksheets for any of the nineteen account-holders. The worksheets, which he and other Paine Webber brokers  ordinarily complete when requesting clearance from the RSD,  reflect how and when the shareholders acquired the shares at  issue.  Nevertheless, he claims the RSD contacted Gil-Med's  transfer agent, its lawyers and its auditors and ultimately  approved every sale of Gil-Med stock.  Wonsover also cites  written confirmation he received from Gil-Med's transfer  agent and attorneys that the sales were legitimate.  He  claims to have been duped by Vogel pretending to be one of  the listed, fictitious customers (Haim Cheap).  In fact, Wonsover relies on how elaborate and effective Gibori and Vogel's  ruse was7 in arguing that his actions were not willful violations of the 1933 Act.


7
Early in the administrative proceedings Wonsover freely  admitted (but would later recant) that he made no inquiry  into how or when the Gil-Med shareholders acquired their  stock.  See, e.g., JA 836, 846-48.  Instead, he passed the duty  of inquiry to Paine Webber's RSD and lawyers.  See JA 836.The Commission demonstrates that several "red flags" should  have alerted Wonsover to the fact that Gibori in fact controlled the unregistered shares Wonsover was selling and,  therefore, no exemption was available.8  Those red flags  include Gibori's exercise of an unusual amount of control over  the nineteen accounts.  He delivered account documentation,  picked up proceeds checks and held trading authorization for  at least two accounts.  Some purported shareholders resided  overseas.  Fourteen of the nineteen listed Gil-Med headquarters as their official address and many listed Gil-Med's  telephone number too.  Despite the foreign mailing addresses  of three account holders, Wonsover heeded Gibori's instructions and directed their checks to Gil-Med and their correspondence to Gil-Med to Gibori's attention.  Similarly, many  of the accounts contained suspicious information.  Some account forms represented U.S. citizenship while corresponding  W-8 forms certified foreign citizenship.  Several had identical  personal addresses in Tel Aviv and identical bank references.Some of the stock certificates forged by Gibori and Vogel,  which the Commission believes were amateurishly forged,  listed only a surname that, in one instance, was misspelled.


8
In addition to their relation to Gibori, the shareholders also  had an affiliation with Gil-Med.  Some used Gil-Med headquarters as their personal mailing address and some even  identified their occupation as sales representatives for GilMed.  Another red flag was that the nineteen shareholders,  collectively, sought to sell a substantial block of Gil-Med  (924,000 shares, nearly equaling the entire public float of  1,050,000), a stock Wonsover knew was not widely traded.The Commission also notes that the S-18 registration statement of the 1998 offering reflected no ownership by any of  the nineteen shareholders and thus directly contradicted  Wonsover's stated belief that those shareholders acquired  their shares in 1986 or 1987 in private placements.  See JA  1179-80.  The last red flag the Commission identifies was the  difficulty in clearing the sales with the Gil-Med transfer  agent and the RSD, a difficulty Wonsover was aware of and  which he had not encountered in gaining approval for sale of  properly exempt, restricted stock in the past.  In response to  the RSD's hesitation, he made repeated telephone calls to  push for its approval, including falsely claiming the shareholders were poor and needed the money immediately.  See JA  982.


9
In a detailed opinion, the Commission affirmed the administrative law judge's (ALJ) conclusion that Wonsover violated sections 5(a) and 5(c) of the 1933 Act, 15 U.S.C.     77e,9 and  that the violations were willful under section 15(b)(4) of the  Exchange Act, 15 U.S.C.     78o(b)(4),10 which grants the Commission authority to suspend brokers for willful violations of  the 1933 Act.  The Commission suspended Wonsover "from  association with any broker or dealer for a period of six  months" and, pursuant to 15 U.S.C.     77h-1, ordered him to  cease and desist from committing or causing violations of  sections 5(a) and 5(c) of the 1933 Act.  See JA 1, 2.

II.

10
We review the Commission's findings of fact for substantial  evidence.  See Steadman v. SEC, 450 U.S. 91, 97 n.12 (1981)  ("Commission findings of fact are conclusive for a reviewing  court 'if supported by substantial evidence.' ") (quoting 15  U.S.C.      78y, 80a-42, and 80b-13);  15 U.S.C.     77i ("The  finding of the Commission as to the facts, if supported by  evidence, shall be conclusive.");  see also Steadman, 450 U.S.  at 96 (securities laws provide scope of judicial review of  Commission disciplinary proceedings).  As for the Commission's conclusions of law, we apply the standards set forth in  the Administrative Procedure Act (APA) and "will set aside  [its] legal conclusions only if 'arbitrary, capricious, an abuse  of discretion, or otherwise not in accordance with law,' 5  U.S.C.     706(2)(A)." Proffitt v. FDIC, 200 F.3d 855, 860  (D.C. Cir. 2000).  Our review of the Commission's  sanction is limited both by the APA and Supreme Court  precedent.  See Norinsberg Corp. v. Department of Agric., 47  F.3d 1224, 1227 (D.C. Cir.), cert. denied, 516 U.S. 974 (1995).The APA limits our inquiry to whether the Commission's  sanction was "arbitrary, capricious, an abuse of discretion, or  otherwise not in accordance with law," 5 U.S.C.     706(2)(A);see Norinsberg Corp., 47 F.3d at 1227-28, and the Supreme  Wonsover contends that the Commission applied the incorrect standard in determining willfulness and, in any event, his  conduct was not willful under either standard.11  He focuses  on the ALJ's articulation of the willfulness standard:  "It is  well-settled that a finding of willfulness under [section  15(b)(4) of] the Exchange Act does not require an intent to  violate, but merely an intent to do the act which constitutes  the violation."  JA 85.  In his opening brief, Wonsover argued that the government must prove he acted with knowledge that his conduct was unlawful, see Brief of Petitioner at  21, but he subsequently changed the standard to reckless  disregard.  See Reply Brief at 3-9.  While the Commission  did not endorse the ALJ's standard, it expressly affirmed his  decision under either formulation of willfulness, to wit:  intentional commission of the act constituting the violation or  knowledge of (or reckless disregard of) the fact that his  conduct violated the law.  See JA 17-21.


11
Wonsover argues that to find willfulness where the actor  had no knowledge that his conduct was unlawful would extinguish the higher degree of culpability the willfulness requirement establishes in what Wonsover calls a two-tiered system  of broker liability exposing only willful violators to the more  severe sanctions of censure and suspension.  In other words,  he claims the Commission applied a standard rendering the  Congress' use of "willfully" meaningless instead of a standard  requiring proof of the actor's knowledge that his conduct  violated the law or, at a minimum, that he acted in reckless  disregard of the law.  Most of the cases Wonsover relies on,  however, apply to statutory schemes different from the 1933  Act and the Exchange Act, see Brief of Petitioner at 21-22  (citing, for example, Bryan v. United States, 524 U.S. 184  (1998) (statute prohibiting unlicensed dealing in firearms);Ratzlaf v. United States, 510 U.S. 135 (1994) (antistructuring  laws for domestic banks);  TransWorld Airlines, Inc. v. Thurston, 469 U.S. 111, 129 (1984) (ADEA)), and several involve  criminal prosecutions, see id. (citing, for example, Cheek v.  United States, 498 U.S. 192, 201 (1991) (income tax evasion)).See generally United States v. O'Hagan, 139 F.3d 641, 647  (8th Cir. 1998) (distinguishing Ratzlaf and Cheek from securities cases).  Wonsover does cite a Supreme Court opinion, as  well as the Eighth Circuit's opinion on remand, interpreting  section 10(b) of the Exchange Act.  See, e.g., Brief of Petitioner at 22-23 (citing United States v. O'Hagan, 521 U.S. 642  (1997), on remand 139 F.3d 641 (8th Cir. 1998)).  The Supreme Court rejected by implication Wonsover's assertion  that one must know of the relevant legal requirement for his  act to willfully violate that requirement.  See O'Hagan, 521  U.S. at 665-66 (discussing "two sturdy safeguards Congress  has provided regarding scienter" first, that "Government  must prove that a person 'willfully' violated the provision" and  second (and independently), that "defendant may not be  imprisoned for violating Rule 10b-5 if he proves that he had  no knowledge of the rule") (emphasis added).  On remand the  Eighth Circuit followed suit:  "Courts that have interpreted 'willfully' in     32 [of the Exchange Act] have reached the  same conclusion that we reach in this case:  'willfully' simply  requires the intentional doing of the wrongful acts--no knowledge of the rule or regulation is required."  See O'Hagan, 139  F.3d at 647.


12
Willfulness is usually understood to be contextual.  See  Ratzlaf, 510 U.S. at 141 ("Willful ...  is a word of many  meanings, and its construction [is] often ...  influenced by  its context.") (internal quotation marks omitted) (quoting  Spies v. United States, 317 U.S. 492, 497 (1943)).  In the  context of the provision at issue here, we have rejected the  knowledge and the reckless disregard standards and defined  willfulness thus:


13
It is only in very few criminal cases that "willful" means done with a bad purpose.  Generally, it means no morethan that the person charged with the duty knows what he is doing.  It does not mean that, in addition, he mustsuppose that he is breaking the law.


14
Hughes v. SEC, 174 F.2d 969, 977 (D.C. Cir. 1949) (internal  quotation marks omitted).  In Gear hart & Otis, Inc. v. SEC,  348 F.2d 798 (D.C. Cir. 1965), we rejected the argument "that  specific intent to violate the law is an essential element of the  willfulness required to violate Section 15(b)" and noted that  the argument "ha[d] been rejected by this court, by the  Second Circuit, and by the Commission."  348 F.2d at 802-03.We further stated that "[i]t has been uniformly held that  'willfully' in this context means intentionally committing the  act which constitutes the violation" and rejected the contention that "the actor [must] also be aware that he is violating  one of the Rules or Acts."  Id. at 803.


15
In his reply brief and at oral argument, Wonsover seized on  our discussion of "willful misconduct" and "reckless disregard" in Saba v. Compagnie Nationale Air France, 78 F.3d  664 (D.C. Cir. 1996), a decision interpreting the Warsaw  Convention.  Wonsover contends that Saba, which discussed  cases involving securities laws, demands application of a  subjective recklessness standard, a standard more demanding  than ordinary reckless disregard.  In Saba we acknowledged the two recklessness standards we have applied and distinguished the more demanding subjective standard from the  one more akin to gross negligence:  "One meaning of recklessness, then, is simply a linear extension of gross negligence, a  palpable failure to meet the appropriate standard of care[,  and the] second, as we have recognized in other contexts, is a  legitimate substitution for intent to do the proscribed act  because, if shown, it is a proxy for that forbidden intent."  78  F.3d at 668 (citation omitted).  One of the "other contexts"  the Saba court cited was the review of securities law violations.  Describing that standard, the court said that either  the defendant must have known the risk of violation his action  presented or his action posed a risk "so obvious [he] must  have been aware of it."  Id. at 668-69 (quoting SEC v.  Steadman, 967 F.2d 636, 641 (D.C. Cir. 1992) (reversing  SEC's determination that appellants violated section 17(a)(1)  of 1933 Act, section 10(b) and Rule 10b-5 under Exchange  Act and section 206(1) of Investment Advisers Act)).  In  other words, "if it can be shown that a defendant gazed upon  a specific and obvious danger, a court can infer that the  defendant was cognitively aware of the danger and therefore  had the requisite subjective intent."  Id. at 669.


16
Here, the Commission based its determination of willfulness on Wonsover's failure to conduct sufficient inquiry into  the sources of the unregistered Gil-Med shares in the circumstances before him.  The Commission's regulations permit a  broker's transaction if the broker "[a]fter reasonable inquiry  is not aware of circumstances indicating that the person for  whose account the securities are sold is an underwriter with  respect to the securities or that the transaction is a part of a  distribution of securities of the issuer."  17 C.F.R.     230.144.An oft-quoted paragraph of a Commission release clarifies  when a broker's inquiry can be considered reasonable:


17
The amount of inquiry called for necessarily varies with the circumstances of particular cases.  A dealer who is offered a modest amount of a widely traded security by a responsible customer, whose lack of relationship to the issuer is well known to him, may ordinarily proceed with considerable confidence.  On the other hand, when a dealer is offered a substantial block of a little-known security, either by persons who appear reluctant to dis-close exactly where the securities came from, or where the surrounding circumstances raise a question as to whether or not the ostensible sellers may be merely intermediaries for controlling persons or statutory underwriters, then searching inquiry is called for.


18
Distribution by Broker-Dealers of Unregistered Securities,  Securities Act Rel. No. 33-4445 (Feb. 2, 1962).  The circumstances facing Wonsover did not involve a modest offer, a  widely traded security or a customer with no relationship to  the issuer.  Rather, the Gil-Med shareholders whose names  Gibori gave Wonsover offered him a substantial block of a  little-known and thinly traded security under circumstances  raising questions not only as to whether the ostensible sellers  may have been intermediaries for controlling persons or  statutory underwriters but also whether they even existed. Clearly, a "searching inquiry" was called for.


19
Wonsover failed to investigate the Gil-Med accounts despite Gibori's unusual degree of control over the accounts,  many of the shareholders' apparent affiliation with Gil-Med,  the sheer amount of shares involved for a thinly traded stock  (nearly equaling the public float), the inconsistent account  documentation and his difficulty in securing RSD clearance. We conclude that substantial evidence supports the Commission's finding that Wonsover's inquiry was not reasonable  under the circumstances and that the Commission did not err  in determining that his resulting violations were willful under  our traditional formulation of willfulness for the purpose of  section 15(b) or even under the subjective recklessness standard Wonsover presses.12  Precedent will not suffer Wonsover's argument that he justifiably relied on the clearance of  sales by the RSD, the transfer agent and counsel.  See, e.g.,  O'Leary v. SEC, 424 F.2d 908, 912 (D.C. Cir. 1970) (reliance  on advice of counsel potentially mitigating but not exculpatory);  Sorrell v. SEC, 679 F.2d 1323, 1327 (D.C. Cir. 1982)  (broker's reliance on counsel's advice did not excuse his own  lack of investigation);  Stead v. SEC, 444 F.2d 713, 716 (10th  Cir. 1971) ("The act of ...  calling the transfer agent is  obviously not a sufficient inquiry.");  A.G. Becker Paribas  Inc., 48 S.E.C. 118, 121 (1985) ("If a broker relies on others to  make the inquiry called for in any particular circumstances, it  does so at its peril.").  As Paine Webber's Rule 144 Manual  cautioned, "[a]n investment executive ...  has the primary  responsibility to prevent illegal sales of restricted or control  stock."  Brief of Commission at 18.


20
Wonsover's argument that the sanction should be reduced  also fails.  The statute authorizing the Commission to suspend Wonsover limits when and how the sanction can be  imposed.  The Commission must "find[], on the record after  notice and opportunity for hearing, that such ...  suspension  ...  is in the public interest."  15 U.S.C.     78o(b)(4).  The  Commission complied with the statute's directives and expressly considered, among other aggravating and mitigating  factors, "the effect of Wonsover's misconduct on both the  securities industry as a profession and on the investing  public."  JA 24-25.  The sanction fell within the spectrum of  the Commission's statutory authority, see 15 U.S.C.      78o(b)(4);      77h-1, and choosing a point on that spectrum  is a determination left to the Commission.  See O'Leary, 424  F.2d at 912 ("[A]s to petitioners' protest that they 'were first  offenders,' acting in accord with advice of counsel, and causing no injury to the investing public, we concur with Chief  Judge Lumbard's statement in Tager v. SEC, 344 F.2d 5, 8  (2d Cir. 1965):  'While these factors might have warranted a  lighter sanction, they did not require one.' ").


21
For the foregoing reasons, we conclude that substantial  evidence supports the Commission's determination that  Wonsover failed to conduct reasonable inquiry into the  sources of the unregistered shares he sold and that his  inadequate inquiry in the face of several "red flags" justified


22
a finding of willfulness.  In addition, we find no abuse of  discretion in the Commission's chosen sanction.  Accordingly,  Wonsover's petition for review is


23
Denied.



Notes:


1
 Counsel for petitioner conceded at oral argument that Wonsover  had personally met none of the shareholders, with the possible  exception of Vogel.


2
 Gibori and Vogel had earlier bought shares back from certain  investors who had experienced difficulty selling them.


3
 In this opinion we refer to facts surrounding the sales of GilMed shares without distinguishing the seven shareholders from the  remaining twelve.  The information available to Wonsover regarding sales and accounts for the twelve Gil-Med shareholders whose  accounts are not included among the seven accounts at issue is  relevant to his culpability for activity involving the seven Gil-Med  accounts the Commission reviewed inasmuch as they shed light  either on Wonsover's knowledge of and investigation into the background of the unregistered shares or on his sale of the shares  without knowing of their background or adequately investigating it.


4
 "[R]estricted" stock is defined as "[s]ecurities acquired directly  or indirectly from the issuer, or from an affiliate of the issuer, in a  transaction or chain of transactions not involving any public offering."  17 C.F.R.     230.144(a)(3)(i).


5
 This section exempts "brokers' transactions executed upon customers' orders on any exchange or in the over-the-counter market  but not the solicitation of such orders."  15 U.S.C.     77d(4).  The  exempted "brokers' transactions" are further defined in the Commission's regulations and the portion Wonsover relies on covers  "transactions by a broker in which such broker ...  [a]fter reasonable inquiry is not aware of circumstances indicating that the  person for whose account the securities are sold is an underwriter  with respect to the securities or that the transaction is a part of a  distribution of securities of the issuer."  17 C.F.R.     230.144(g)(3).


6
 Wonsover no longer argues that the transactions were covered  under various other exemptions, as he did before the Commission,  see JA 10-17.


7
 A separate civil action left Gibori permanently enjoined from  serving as an officer or director of a public company.  Vogel  resolved the Commission's charges through settlement.  See JA 5  n.7.


8
 The Commission concluded that Gibori, as the founder and CEO  of Gil-Med who controlled the Gil-Med accounts, was in effect an  underwriter, making the exemption inapplicable.  See supra note 5.


9
     77e. Prohibitions relating to interstate commerce and the  mails
(a) Sale or delivery after sale of unregistered securities
[Section 5(a)] Unless a registration statement is in effect as to a security, it shall be unlawful for any person, directly or indirectly--
(1) to make use of any means or instruments of transportation or communication in interstate commerce or of the mails to sell such security through the use or medium of any prospectus or otherwise;  or
(2) to carry or cause to be carried through the mails or in interstate commerce, by any means or instruments of transportation, any such security for the purpose of sale or for delivery after sale.. . .
(b) Necessity of filing registration statement
[Section 5(c)] It shall be unlawful for any person, directly or indirectly, to make use of any means or instruments of transportation or communication in interstate commerce or of the mails to offer to sell or offer to buy through the use or medium of any prospectus or otherwise any security, unless a registration statement has been filed as to such security, or while the registration statement is the subject of a refusal order or stop order or (prior to the effective date of the registration statement) any public proceeding or examination under section 77hof this title.
15 U.S.C.     77e.


10
 Section 78o, entitled "Registration and regulation of brokers  and dealers," reads in pertinent part as follows:
(c) Manner of registration of brokers and dealers
. . .
(3) The Commission, by order, shall censure, place limitations on the activities, functions, or operations of, suspend for a period not exceeding twelve months, or revoke the registration of any broker or dealer if it finds, on the record after notice and opportunity for hearing, that such censure, placing of limitations, suspension, or revocation is in the public interest and that such broker or dealer, whether prior or subsequent to becoming such, or any person associated with such broker or dealer, whether prior or subsequent to becoming so associated--
. . .
(D) has willfully violated any provision of the Securities Act of 1933....


11
 Although also arguing that the transactions were exempt under  section 4(4) of the 1933 Act, 15 U.S.C.     77d(4), Wonsover does not  dispute that the accounts and sales involved a statutory underwriter, a factor which ordinarily forecloses the exemption.  See 17  C.F.R.     230.144(g).  Rather, he claims he was ignorant of that fact  at the time of the transactions despite what he contends was  reasonable inquiry.  If his contention were to hold, the exemption  might be available to him.  See id.     230.144(g)(3).  Our resolution  of this issue, therefore, turns on whether Wonsover's inquiry was  reasonable under the circumstances.


12
 Our decision upholding the Commission's finding of willfulness  leaves Wonsover no room to argue that he conducted a reasonable  inquiry (or was unaware of circumstances foreclosing the exemption) and that the sales were thus exempt under section 4(4) of the  1933 Act.


