On February 17th, the Ninth Circuit dismissed a petition challenging the SEC's affirmance of a NASD disciplinary proceeding. The Ninth Circuit concluded that the SEC applied the correct scienter requirement when it concluded that petitioners' conduct violated Rule 10b-5. The SEC considered all of the evidence bearing on petitioners' actual state of mind, including their extreme departure from ordinary standards of care. The SEC properly considered the objective unreasonableness of petitioners' actions as some evidence supporting the inference that they acted with scienter, but did not treat it as dispositive. The Commission recognized that scienter turns on an actor's actual state of mind at the time of the relevant conduct and determined that petitioners knew they had no direct knowledge of the truth or falsity of their statements. The Court further concluded that substantial evidence supported the SEC's finding of recklessness. Petitioners made representations without conducting any meaningful independent investigation to confirm the truth of their representations. Gebhart v. SEC.