Lawyer Can’t Beat Back SEC’s ‘Sell Shares, Get Paid’ Case

By Jennifer Bennett

An attorney failed in his bid to shut down SEC allegations he wrote misleading opinion letters after a federal judge declined to dismiss the case against him.

Norman T. Reynolds, a Houston-based securities attorney, faces Securities and Exchange Commission allegations he wrote misleading opinion letters for Mustafa David Sayid’s shell companies, allowing Sayid to freely trade otherwise restricted shares. Sayid, an attorney in New York, also faces SEC allegations.

U.S. District Court for the Southern District of New York Judge John F. Keenan Jan. 10 denied Reynolds’ motion to dismiss. Reynolds said he shouldn’t be liable for the false statements in the letters in part because he made it clear he was relying on what Sayid told him. Keenan disagreed, holding Reynolds can’t escape liability by claiming he based his opinion solely on Sayid’s statements where he failed to investigate what Sayid told him and ignored contradictory evidence.

Reynolds initially hesitated but issued the letters sometime after Sayid sent him an email saying, “Sell the shares, get paid,” according to the SEC’s April 2017 complaint.

Reynolds’ firm website lists Rule 144 opinion letters as one of his areas of expertise. The SEC’s Rule 144 involves the selling of restricted and control stocks.

Reynolds’ attorneys didn’t immediately respond to a request for comment.

The case is SEC v. Sayid, 2018 BL 9039, S.D.N.Y., No. 17 Civ. 2630 (JFK), 1/10/18.

To contact the reporter on this story: Jennifer Bennett in Washington at

To contact the editor responsible for this story: Seth Stern at