United States Court of Appeals for the Fifth Circuit United States Court of Appeals Fifth Circuit

____________ FILED March 20, 2024 No. 22-10235 Lyle W. Cayce ____________ Clerk Ralph S. Janvey, in his Capacity as Court-Appointed Receiver for The Stanford International Bank Limited, et al.,

Plaintiff—Appellee,

versus GMAG, L.L.C.; Magness Securities, L.L.C.; Gary D. Magness; Mango Five Family Incorporated, in its Capacity as Trustee for The Gary D. Magness Irrevocable Trust,

Defendants—Appellants,

consolidated with _____________

No. 22-10429 _____________ Securities and Exchange Commission, et al.,

Plaintiffs,

versus GMAG, L.L.C.; Gary D. Magness Irrevocable Trust; Gary D. Magness; Magness Securities, L.L.C.,

Defendants—Appellants, Case: 22-10235 Document: 123-1 Page: 2 Date Filed: 03/20/2024

versus Ralph S. Janvey,

Appellee. ______________________________

Appeals from the United States District Court for the Northern District of Texas USDC Nos. 3:15-CV-401, 3:09-CV-298 ______________________________

ON PETITION FOR REHEARING EN BANC Before Stewart, Dennis, and Southwick, Circuit Judges. Leslie H. Southwick, Circuit Judge: No judge in regular active service requested the court be polled on re- hearing en banc; therefore, the petition for rehearing en banc is DENIED. Treating the petition for rehearing en banc as a petition for panel rehearing, the petition is GRANTED. We withdraw our opinion, Janvey v. GMAG, L.L.C., 69 F.4th 259 (5th Cir. 2023), and substitute the following. In 2009, Stanford International Bank (“SIB”) was exposed as a Ponzi scheme and placed into receivership. The Receiver sought to recover estate assets from various parties including Gary Magness and some of his affiliates. The district court refused to consider a setoff that would have reduced the Receiver’s judgment against Magness, concluding among other reasons that a setoff would be inequitable. We AFFIRM. FACTUAL AND PROCEDURAL BACKGROUND In 2009, the Securities and Exchange Commission (“SEC”) exposed the fraudulent operations of SIB. Janvey v. GMAG, L.L.C., 977 F.3d 422, 425 (5th Cir. 2020). For nearly two decades, SIB had issued fraudulent certificates of deposit (“CDs”) that paid above-market interest rates. Id.

2 Case: 22-10235 Document: 123-1 Page: 3 Date Filed: 03/20/2024

No. 22-10235 c/w No. 22-10429 The payments were derived from new investors’ funds. Id. The scheme ultimately left thousands of investors with $7 billion in losses. Id. This court has frequently considered appeals from the receivership.1 We summarize the facts relevant to this appeal. Defendants-Appellants are Gary Magness; GMAG, L.L.C.; and several other Magness entities (collectively, “Magness”). Between December 2004 and October 2006, Magness purchased $79 million in SIB- issued CDs. Id. After reports that the SEC was investigating SIB, Magness sought to redeem his