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Tripodi v. Welch, 810 F.3d 761 (10th Cir. Jan. 13, 2016)

Jan 13, 2016

The Tenth Circuit affirmed the district court’s finding that a default judgment against the plaintiff was not dischargeable in bankruptcy because it fell within 11 U.S.C. § 523(a)(19), which renders debts nondischargeable when they arise in connection with a violation of state or federal securities law. In doing so, the Court rejected the plaintiff’s argument that it should extend the principle that default judgments generally are not given preclusive effect in bankruptcy to Section 523(a)(19). That section “sought to close [t]his loophole in the law’ and ‘hold accountable those who violate securities laws after a government unit or private suit results in a judgment or settlement against the wrongdoer.’”