On September 10th, the Ninth Circuit addressed transfer agent liability under Section 5 of the Securities Act. The SEC alleged that defendants improperly sold unregistered securities and the district court agreed, entering summary judgment in the SEC's favor. The Ninth Circuit, however, partially reversed holding that there were genuine issues of fact regarding whether the transfer agent and its owner were necessary participants and substantial factors in the distribution of the unregistered stock sufficient to impose liability under Section 5 of the Securities Act. SEC v. CMKM Diamonds, Inc.