Fitting Unfit To The Facts[T]he court may prohibit, conditionally or unconditionally, and permanently or for such period of time as it shall determine, any person who violated section [10(b)] of this title or the rules or regulations thereunder from acting as an officer or director of any issuer that has a class of securities registered pursuant to section  of this title or that is required to file reports pursuant to section [15(d)] of this title if the person's conduct demonstrates unfitness to serve as an officer or director of any such issuer.
In permanently enjoining Patel from serving as an officer or director of any public company at the behest of the SEC, the district court necessarily determined that Patel was substantially unfit to hold such positions. The court identified six factors that it considered in resolving the issue of substantial unfitness: "(1) the 'egregiousness' of the underlying securities law violation; (2) the defendant's 'repeat offender' status; (3) the defendant's 'role' or position when he engaged in the fraud; (4) the defendant's degree of scienter; (5) the defendant's economic stake in the violation; and (6) the likelihood that misconduct will recur." These factors were suggested in a law review article by Jayne W. Barnard entitled When is a Corporate Executive "Substantially Unfit to Serve"?, 70 N.C.L.Rev. 1489, 1492-93 (1992). . .SIDE BAR: After the 1995 2nd Circuit Opinion in Patel, Congress amended Section 21(d)(2) in 2002 by replacing "substantial unfitness" with a lower standard of simply "unfitness." See Sarbanes-Oxley Act of 2002 § 305(a), Pub. L. No. 107-204, 116 Stat. 745, 778-79 (2002) (amending 15 U.S.C. § 78u(d)(2))
[A]part from the district court's findings, we are also troubled by the fact that Bankosky was buying call options in shares of Millennium Pharmaceuticals, Inc., a company that his employer was in negotiations to acquire. The call option purchases could have increased trading demand for the target company's shares and share price, making the acquisition bid more costly or even pricing a deal beyond reach. This conduct betrays an impulse to place self-interest ahead of his employer's and its shareholders' interests and further demonstrates unfitness to serve as a corporate fiduciary. Cf. McCrae Assoc., LLC v. Universal Capital Mgmt., Inc., 746 F. Supp. 2d 389, 400 (D. Conn. 2010) ("The duty of loyalty mandates that the best interest of the corporation and its shareholders takes precedence over any interest possessed by a director, officer or controlling shareholder and not shared by the stockholders generally.") (quotation and alteration omitted). In light of the circumstances presented, the district court reasonably determined that a ten-year ban was warranted. Hence, it did not abuse its discretion.