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            In Conway v. Heyl (In re Heyl), 590 B.R. 898 (B.A.P. 8th. Cir. 2018), the BAP affirmed the bankruptcy court’s order finding that the complaint did not state a claim for which relief is available under § 523(a)(19). A creditor brought an adversary complaint based on an investment loss that he alleged was caused by the debtor’s false pretenses, false representations, and actual fraud.  The debtor prevailed and the creditor then brought a second adversary proceeding, seeking to except the debt from the debtor’s discharge under 11 U.S.C. § 523(a)(19) based on a consent order issued by a securities enforcement body of the state of Missouri. The debtor again prevailed and the creditor appealed to the BAP.

            The BAP characterized the creditor’s argument as asserting that the mere finding by a securities enforcement body of a securities law violation by the debtor automatically results in a debt owed to the creditor. The BAP rejected this argument as combining the two separate elements of a claim under § 523(a)(19)—a debt that is “for” a violation of securities law or fraud in connection with the sale of securities and a debt that “results from” a judgment, settlement or decree. The court reasoned that while the consent order may help the creditor satisfy the “for” element, the consent order simply did not “result” in a debt owed to the creditor.