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UNITED STATES DISTRICT COURT
SOUTHERN DISTRICT OF FLORIDA
Case N o. (B-80612-Civ-M ARR A
. t .* f . ' !' . j û z.. ,...; t . .akz'.w,.- q-e
SECURITIES AND EXCHANGE COM M ISSION,
Plaintiff,
)
M ICHAEL LAUER,
Defendant.
DEFENDANT M ICHAEL LAUER'S REPLY TO SEC'S RESPONSE TO LAUER'S
M OTION FOR LEAVE TO SUPPLEM ENT M ICHAEL LAUER'S THIRD M OTION TO
VACATE THE JUDGM ENT AND/OR DISM ISS THE COM PLAINT
Defendant M ichael Lauer files this reply to the SEC'S response to Lauer's m otion to
supplement his third motion to vacate the final judgment and/or dismiss the SEC'S complaint.
The SEC has no basis for opposing the filing of Lauer's motion.
First, no authority requires Lauer to consult with the SEC on a dispositive motion, as is
evident from a reading of the local rule, which exempts both motions for summary judgment and
certain motions to dismiss. A supplement to a motion to dismiss is a motion to dismiss. Until
17E2764, moreover, everything the SEC did in this case, starting with DE207, demonstrates that
it agrees whh the only possible reading of the rules. Thus, when Lauer filed his motion to
dismiss or, in the altem ative, to move venue to a more convenient location, the SEC accepted
Lauer's reading of the local rule. The SEC made no objection based on failure to consult when
Lauer filed three motions to vacate the judgment and dismiss the complaint earlier this year. DE
2676, DE 2677, DE 2740. lt made no objection when Lauer filed a motion for recusal. DE
2745. Even more significantly, it made no objection when Lauer previously filed a motion to
1
Case 9:03-cv-80612-KAM Document 2774 Entered on FLSD Docket 12/17/2013 Page 1 of 25
supplement a motion to dismiss. DE 2717. The SEC'S newly formed position should be
rejected.
Second, there was no ûçtransparent attempt to evade page limitations imposed by Local
Rule 7.1.C.'' That is why out of an abundance of caution Lauer filed a motion for leave to
supplement his third motion to vacate and/or dismiss. The subjed third motion to vacate the
judgment and dismiss the complaint, DE 2740, is based on a redacted Request for Commission
Adion and was filed on October 28, 2013. Lauer did not acquire the unredaded Request for
Comm ission Action that is the basis for the supplem entary motion until November 14, 2013, DE
2740, p.1, weeks after he tsled his third motion. Lauer obviously had no advanee notice of when
or how his FOIA request would be deeided.Finally, Lauer could just as easily have filed a
fourth motion to vacate and/or dism iss. The SEC'S position is frivolous and dilatory.
l
Third, the SEC'S response on the merits is risible. After consistently and successfully
resisting all discovery and produdion of documents relating to the events surrotmding the
institution of this case - as has the Receiver both in this Court, DE 2699, and in the Eleventh
Circuit by his motion to intervene in SEC v. Lauer, No. 13-1 31 10, 1 1th Cir., filed August 9, 20l 3
- the SEC attacks as incomplete Lauer's reliance on a dispositive document he obtained from the
SEC itself through FOIA. Of course, the SEC does not produce or even describe the balance of
the documents that it says are required to understand the Request for Com m ission Action. That
would be too easy, except for the obvious fad that the document that Lauer duly acquired from
the SEC is dispositive and there is no suggestion on its face that it must be read and construed in
the light of other docum ents, assum ing such a suggestion might m atter. In the covering letter
' If Lauer had filed a fourth motion to vacate/dismiss, the one-page Request for Com mission
Action would have been the subject of three separate motions and possibly three appeals,obviously inefficient.
2
Case 9:03-cv-80612-KAM Document 2774 Entered on FLSD Docket 12/17/2013 Page 2 of 25
dated M arch 13, 2013, in the FOIA case, while releasing the redacted Request for Commission
Action, the SEC represented that it was producing çûthose records reflecting the çcollective vote
of the Commissioners' to authorize an investigation and civil adion.'' Exhibit 1. The SEC'S
current statem ent that the Request for Commission Action is irrelevant is nothing less than
2astonishing.
But since the SEC insists that other documents are relevant, Lauer will discuss the only
other document that the SEC produced to date. In the initial FOIA proceeding, after Lauer was
required to file a civil action in the United States District Court for the District of Columbia,
along with the redacted Request for Commission Action, the SEC produced its Order Directing
Private Investigation and Designating Officeis to Take Testimony,'' dated July 7, 2003, the snme
date as the Request for Commission Action. Exhibit 2. That Order stated the Commission's
position that the M iami staff was not prepared to file an action against Lauer. Thus, page 1 of
Exhibit 2 says that identified individuals and entities Qkmay have, directly or indirectly, employed
devices, schemes or artifices to defraud; . . . .'' Page 2 of Exhibit 2 ordered çlthat a private
investigation be made to determine whether the aforesaid persons, entities, or others have
engaged or are about to engage in any of the reported acts, or practices or in any acts or practices
of similar purport or object'' (emphasis added). Lauer does not see how that additional document
advances the SEC'S position on this issue. For obvious reasons the SEC concealed this
document from Judge Zloch and this Court and resisted all discovery.
Since the attomey-client privilege is a nonconstitutional privilege, the Court should draw
adverse inferences from the SEC'S and Receiver's passionate refusal to produce anything
2 The SEC'S argum ent is hard to follow. It states in footnote 3 that it w ill address the m erits
of Lauer's motion later, yet proceeds to argue the merits in the body of its opposition. To
avoid any suggestion that Lauer is pennitting the SEC'S argument to go unanswered, he
includes a brief refutation of the SEC'S argument in this reply
Case 9:03-cv-80612-KAM Document 2774 Entered on FLSD Docket 12/17/2013 Page 3 of 25
relating to what they did shortly before and shortly after the filing of the complaint and the
appointment of Receiver Steinberg. M oreover, by representing that the withheld documents are
helpful to the SEC'S position, the SEC has once against waived any privilege that it may have
had not to produce additional SEC documents that bear on the subject matter of the Request for
Commission Action. One cannot simultaneously rely on the privilege as both a shield and a
sword. Lauer specifcally renews his request for discovery based on the recent actions of the
SEC and Commission, which include The Receiver's statement in this Court that he and the SEC
were engaged in ajoint operation along with the SEC'S failure to contradict that position. Lauer
discusses this aspect of the waiver in his third motion to vacate the judgment and dismiss the
complaint.
In the Court of Appeals, the Receiver filed a motion to intervene in order to argue his
position that communications between the SEC and him were protected by the joint-entemrise or
common-interest exception to waiver of the attorney-client privilege. Exhibit 3 (Certiticate of
Interested Persons and Corporate Disclosure Statement deleted). The SEC did not respond.
Later, Lauer filed a motion to strike or deny that motion. Both the SEC and Receiver opposed
the motion. Signitk antly, the SEC agreed with the Receiver's position on waiver of the
attorney-client privilege. The SEC opposition is attached hereto as Exhibit 4 (Certificate of
lnterested Persons and Comorate Disclosure Statement deleted). The Court granted the
Receiver's motion to intervene and denied Lauer's motion to strike or deny.
The SEC has taken the position in DE 2764 that the Request for Commission Action was
only 1ta sm all portion of the docum ents between the Comm ission's staff and the Com missioners''
and that Sçltlhe Commission's staff brought this case as the Commissions intended . . . .'l'he last-
cited argument was designed to convince the Court that there are additional records that have not
4
Case 9:03-cv-80612-KAM Document 2774 Entered on FLSD Docket 12/17/2013 Page 4 of 25
been produced that support the staff's position that it was following Com mission directions. The
Court granted the Receiver's motion to intervene. That constitutes a waiver of the attorney-
client privilege. As noted, it constitutes a prohibited effort to use the privilege as a sword and a
shield.
It is clear that the SEC Commissioners did not authorize the unconstitutional actions that
the M iami SEC decided to take against Lauer, Lancer M anagement Group and Lancer
M anagem ent Group II, and the Lancer-m anaged hedge funds. In particular, the Commission did
not authorize the SEC to engage in the flagrantly unlawful and unconstitutional action of shutting
down the innocent hedge funds on the basis of an expatp order. The SEC resorts with
inapplicable authority that uses language that speaks of the Slconsequence for noncompliance
with statutory timingprovisions,'' United States v. James Daniel Good Real Property, 510 U.S.
43, 63-64 (1993) (emphasis added), or compliance with 11al'l internal agency deadline,'t Barnhart
v. Peabody Coal Co., 537 U.S. 149, 157-50 (2003) (emphasis added). The SEC engages in no
more than wishful thinking.Lauer is talking about agency authority' He is not talking about
timing deadlines! To equate fundamental rights protected by the Constitution and by statute with
minor timing requirements flagrantly distorts the obligation of administrative agencies and their
obligation to adhere to the law.
The SEC states at DE 2765, page 3: C;A statutory provision stating that the Govenlment
shall do something, without more, does not create ajurisdictional limit precluding action.'' Why
does the SEC think Congress required the Commission to approve filing a complaint against a
citizen, with all the horrible ensuing consequences, rather than let an inexperience local staff file
one willy nilly? Such a fundamental violation of the Constitution and laws on the part of the
United States govelmment has consequences. See, e.g., United States v. Giordano, 416 U.S. 505
Case 9:03-cv-80612-KAM Document 2774 Entered on FLSD Docket 12/17/2013 Page 5 of 25
(1974) (reversing convictions for government's failure to follow specific requirements of wiretap
statute); Stern v. Marshall, 131 S.Ct. 2594, 2605 (201 1) (Roberts, C.J.) Cçç-fhe structural
principles secured by the separation of powers protect the individual . . . ,''' quoting Bond v.
United States, 131 S.Ct. 2355, 2365 (201 1)); Bivens v. Six Unknown Agents ofthe Federal
Bureau ofNarcotics, 403 U.S. 388 (1971) (individual can bring suit against government agents
f iolating the Fourth Amendment); Burke v. Smith 252 F.3d 1260 1263 1265-66 (1 1th CirOr V , , , .
2001) (setting aside as void an earlier judgment because the district court failed to conduct a
fairness hearing on the settlem ent of a minor's claim , holding that the hearing requirement was
binding); Carter v. Fenner, 136 F.3d 1000 (5th Cir. 1998) (affirming district court's decision
declaring a consent judgment void when the child's representative failed to secure court approval
before the settlement, which the court held was essential to protect the interests of minors).
Fundnmental protections protect individuals.
W HEREFORE, the Court must accept Lauer's supplement to his third motion to vacate
the judgment and dismiss the complaint.
Res ectfully subm it'te ,
David M . DorsenSuite 500
2900 K Street, N.W .
W ashington, DC 20007
Telephone: 202 204-3706
E-Mail: Dorsen3s@aol.comAttorney for M ichael Lauer
Dated: December 13, 2013
6
Case 9:03-cv-80612-KAM Document 2774 Entered on FLSD Docket 12/17/2013 Page 6 of 25
E X H IB IT 1
7
Case 9:03-cv-80612-KAM Document 2774 Entered on FLSD Docket 12/17/2013 Page 7 of 25
# +.# %s> tl;ï u 1*
.%uk o. - p o
+ n *wC
OFFICE OF THEGENEM L COIJMSEL
U N ITED STATES
SECURIMIES AND EXGHANGE COMMISSIONW ASHINGTON, D.C. 20549
Stop 9612 March 13, 2013
David M . Dorsen
2900 K Sleeta N.W ., Suite 500
W ashington, D.C. 20007
Re: Appeal, Freedom of lafonnation Act (F0IA) Requeqt No. 2012-10548
Dear Mr. borsen:
of Inform aion Act appeal of thedecision of the FolN privacy Act Oo cer
, Securities and Excbnnge Commissiow to withbolddocllments submitted by Commission staffto the Commissioners related to a civil
complaintagainst M ichael Lauer ms well as records reflecting mly vote to authotize an investi
gation andfiling of the civil comple t against M r. Lauer. On Novem ber 5, 2012, the FOIA Offker asserted
Exemption 5, 5 U.S.C. 552(19(5), to withhold responsive records. In your November 13 appeal,as further clarified on November 16, you limited the scope of the request to solely those records
reflecting the llcollective vote of the Commissioners'' to authorize an hwestigation and civil
action. As nalw wed on appeal, your request excludes any commlmicaéons 9om Commissionattomeys and slnffto the Commission. 1 have reviewed your appeal and have determined t
oexercise my discretion and to relemse the seriatim vote authorizing the ftling of a civil a
céon anda copy of tile Formal Order of hwestigation
, both of which are enclosed. This discretionaryrelemse should not be interpreted as a waiver of any applicable exemption should you mak
e arequest for similar information in the future.
'
Imnresponding to your November 13, 2012, Freedom
For the Commission
by delegated authority,
Richard M . Humes
Associate General Cotmsel
Enclosure
Case 9:03-cv-80612-KAM Document 2774 Entered on FLSD Docket 12/17/2013 Page 8 of 25
E X H IB IT 2
8
Case 9:03-cv-80612-KAM Document 2774 Entered on FLSD Docket 12/17/2013 Page 9 of 25
qYFtJSLICU S ATES OF AMERICAbefore theS
ECURI'I'IES AND EW HANGE COMY SSION
July 7, 2803
. '*
1In the M atter of :
. '
LANCER oe sHoltEyo c. ORDYRDIRECTINGPRIVA.
Im sn cAn ox wxsm 02939 DXSTGNATW G om cEas
: m ya m m osy. .
'
. i .
I
n e staFhai reported information to the Comndssion tbat tends to showthat:
'
A. Three hedge fmtds started in 1994, 1995 and 1999
, timt are notre/stered with the Commissiow - - Lancer Parters LP, Lancer UFshöre, hc.; andThe Omnl'Fu< Ltd. (collmévely referred to
as the RLDCC F=ds'l - - oseredinvestzpts to the public, in the form of limited parte
rKhib, intœests or shares, tke. ' .œ ' ..X .proceeds of which were te d b#Qw T Jmcer Fund
s to'pdmnrily invœt in small an'dmid-cap companies. At ieirpeak the Ixqncœ Funds rep
ortedlymanaged over $1.2billioa
B. At all relevut times, Michael Lauer Cuuer''). through hismanagvment companies
, Lmwer Management Group LLC and Lancer ManagementGroup 11 LLC (W-qncer Me geme
nf 3. operated the Ixncer Flmdq and SeI'VH asits invese ent msnlger. Iiuer is the.fotmder
, sole m anagçr and prindpal owner ofLancer M anagement.
C-. While engaged in theDmhase and sale of securï es
,
in the form Oj'%SYY' Od in Connection * t11 tlleP. jtea parusvsup jmom s orshares
, Iwauer and yomcer Managenput and ceua oj.tjja proxt auoor youwom cezsa direcjors
, employees, agrnts, aëljatqs and ozerpersoss or eatz
es mayhave, directly or indirectly, employed deuces
, schemas or arc ces to dew udi .obe ed money or property by meam
s oji or ole- se may have made untruestatemena of matedal facu or omitted jo
sute material j'acts necessaryu ortw t;make the statements made iu jjgu oj'gp cjxumsta
nces uutsr wuu tjsy wyx>.y,
made. not misleading; or engaged fn acts traasacuons pmctices
, or courso oçbusiness wliich would and did operate as a fraud or deceit upon purcha
ers antjothers concenzingy among otà. thups, maipujauve trading practues
, se yajua ogthe Lancer Funds poztfolios, the manner of theïr opemgons
, specu c pousuoholdinps, and management's backpotmd
.
offer and
Case 9:03-cv-80612-KAM Document 2774 Entered on FLSD Docket 12/17/2013 Page 10 of 25
le%t 2000 to July 2003, Iaauery TmncerM anagement
y andother persbns or entities associ
ated w1t11 them, in çonnection w1t11 them or tkeirbusiness as an invesc ent add
ser, may have, directly or indirectly. employeddevices. sohemes or artifces to d
egaud any client or prosnv fve olienji or engagedin tonsacuons
, praçûces or couoes of btlsiness which have operatH or wouldopemte R a âaud or d
eceit upon any client or prospecuve clienty concenu'ng,among pther tbings
y me pulative tading practices, the value of àè lzmcer Flmdsortfolios, the mlmner of their op
erations, specifio poztfoliû holdiugs. and
P
manag= ent's backpound-
From atD.
E. While eqgaged in the activities set fo% above
, lxuer and lmncerManagemmt and certm'n of their present anior former off
cers, dtr' ectpaaemployees, agmts
, xY liltes and oler persons or enéties, directly or indirectly
,m àde use of the mails
, and the means and iustmments of transportadon andcommtmicaupn in intemtxt
t com m erce. and of tâe means and insfnxmentalities ofinterstate commerce
, or the facility of a nafonal gecurities exchange
.
n e Commissiona having considered the staff
s report and deeming suchactq atd pracéces, iftrue, to be a possible violation of Secdon 17(a) of tâeSeouddes Act of 1933 Cs
eçuriies Acf')a Sedion 101) of the Senlm'ties Excbxnglu k aAct of 1934 ( Exchsnge Aof 3 and R e 10b
-5 promulgated ierelm er and' SecGons 2û6(1) and (2) of the lnvese ent Advisers A
ct of 1940 CWdvisers Act''),
snds it neçessary and appropriate and hereby:
ORDERS, pursxlnnt to the provisions of Secuon 20(a) of the SezmritiesAct
, Sώon 21(a) of the Exchnnge Act and Secion 209(a) of tke Advisea Act
,tbst q privat: investiation be made to detctmine whether the aforesaid persons
,entites, or others.éave engage or are about to
engage irl any of the ro orted acts,or pcactices or in any acts orpracuces
of similar pumort or object and
ORDERED, purjuant to the provisions of Sœio
n l9(c)of the SecM ties Act Section' 21*) of the Exchaage Act and
.sece n 209*) of theAdvisers Act that for the purposes of such investigaéon David Nelson
, Glenn S.Gordpn, Jolm C..Mattimore, Nicholms A
. M oùaco, Eiic R. Busto, Robbie L. M ayer.Terence M . Tennant
, Fem ando Torres, Trisha D. Sindler
, Teresa J. Verges, KenyA Zinn Robert K
. Levensow Alise Johnsow Chris M ne'n Jon Jordm and each
of
*' 7
Fiem, are hereby desir atéd oo cers of Ge Commission and empo
wered tosdminister oaths and nm rmations, subpoena wiGessœ
, compel tlzéir attenda èe,take evibence, require the production of
anybooks, pajers, correspondence,
ITIS R RTHER
2
Case 9:03-cv-80612-KAM Document 2774 Entered on FLSD Docket 12/17/2013 Page 11 of 25
memöranday con% cts, agreemerlts, or other records de.emed rdevaat or material to
dto perfoe a11 other dutiœ in conne où tterewitll as pre-= 'bed bythe inquhy >j 'aW.
By tlle Com mission.
3011a* G. KAtZ
SCCOW
e' . .
i. . UW + .J
By: Jill M. Petersös.-
tant Secretar-/.Assis
Case 9:03-cv-80612-KAM Document 2774 Entered on FLSD Docket 12/17/2013 Page 12 of 25
E X H IB IT 3
9
Case 9:03-cv-80612-KAM Document 2774 Entered on FLSD Docket 12/17/2013 Page 13 of 25
Case: 13-13110 Date Fîled: 08/09/2013 Page: 1 Of 51
IN TlW
UM TED STATES COURT OF APPEALS
FOR Tlv ELEVEN TH CIRCUIT
Case No. 13-13110-EE
SECURITIES M D EXCHAN GE COM M ISSION
PlaintiffAppellee,
SHCH AEL LAUER,
Defendant/Appellant.
Receiver's M otion for Leave to Intervene in M ichael Lauer's Appeal
of District Court's Omnibus Order Denying M otion for an Order
Allowing the Parties to Take Discovery Relating Solely to
D efendant's M otion to Vacate the Judgment
Juan C. EnjamioHunton & W illinm s LLP
1 1 1 1 Brickell Avenue
Suite 2500
M iami, FL 33131
(305) 810-2500
Counsel for M arty Steinberg, Receiver
C-1 of 44
Case 9:03-cv-80612-KAM Document 2774 Entered on FLSD Docket 12/17/2013 Page 14 of 25
Case: 13-13110 Date Filed: 08/09/2013 Page: 46 of 51
M otion
M arty Steinberg, Esq., as the court-appointed receiver of various
Receivership Entities, and a party with an interest in the outcom e of this appeal,
pursuant to Fed. R. App. P. 15, hereby files this motion for leave to intervene in
M ichael Lauer's appeal of the District Court's Omnibus Order Denying M otion for
an Order Allowing the Parties to Take Discovery Relating Solely to Defendant's
M otion to Vacate the Judgment.
follows:
ln support of this M otion, the Receiver states as
Introduction
0n July 8, 2003, the United States Securities and Exchange Comm ission
Other Relief against Michael(the GtSEC') tiled a Complaint for Injunctive and
Lauer (:&Lauer'') and various Lauer-controlled entities
before the United States District Court for the Districtof Florida (the içDistrict
(the (CSEC Complaint'')
Court''), initiating Case No. 03-80612-CIV-M ARRA/HOPIUNS (the
GGlteceivership Case''). On July 10, 2003, the District Court entered an Order
Appointing Receiver, which nm ong other things appointed M arty Steinberg, Esq.
as Receiver of a number of Receivership Entities. Since his appointm ent, the
Receiver has worked to m arshal assets for the benefit of investors and creditors of
the Receivership Entities, which were form erly controlled by Lauer. Hunton &
W illiams LLP (1çH&W '') hms represented the Receiver since his appointment.
1
Case 9:03-cv-80612-KAM Document 2774 Entered on FLSD Docket 12/17/2013 Page 15 of 25
Case: 13-13110 Date Filed: 08/09/2013 Page: 47 of 51
On September 24, 2008, the District Court entered its Order and Opinion on
M otion for Sum mary Judgment,wherein the Distrid Court entered summ ary
judgment in favor of the SEC and against Lauer (DE 2133). On September 22,
2009, the District Court entered a Final Judgment Granting Permanent Injunction
and Other Relief Against Lauer (DE 2321, the çiludgmenf'). After Lauer appealed
the Judgm ent, it was afûrm ed by the Eleventh Circuit, and the Supreme Court of
the United States denied certiorari.
On February 20, 2013, Lauer filed in the District Court a M otion to Vacate
the Judgment and Dismiss the Complaint (DE 2676, the ttMotion to Vacate''). On
this sam e date, Lauer Sled in the D istrict Court a M otion for an Order Allow ing
Him to Take D iscovery Related Solely to the M otion
téMotion for Discovery'').In the Motion for Discovery, Lauer stated that he was
to Vacate (DE 2679, the
seeking discovery of num erous docum ents, including, but not lim ited to the
following'.
1) dçdocuments relating to or consisting of instructions andcomm unications between the SEC and Hunton & W illiam s and its
partners between June 1, 2003, and Septem ber 30, 2003, relating to
maintaining or not m aintaining the status quo at Lancer and theLancer hedge funds or m aking changes w ith respect to the operation
of Lancer and the Lancer hedge fundslil'' and
2) tldocuments reiecting or relating to actions taken by theReceiver with respect to Lancer M anagem ent and the Lancer hedge
funds between July 8 and July 25, 2003, including the sale of any
assets, the term ination of any leases, the term ination of any contractsto supply services or otherwise, the termination of any employees
, and
Case 9:03-cv-80612-KAM Document 2774 Entered on FLSD Docket 12/17/2013 Page 16 of 25
Case: 13-13110 Date Filed: 08/09/2013 Page: 48 Of 51
the removal of any equipm ent or documents from the offices of
Lancer M anagem ent.''
Because the M otion for Discovery sought discovery that im properly delved
into the Receiver's litigation case strategy or the Receiver's adm inistration of the
Receivership Entities, and documents that are subject to attorney-client or work-
product protections, on M arch 21, 2013, the Receiver objected to the Motion for
Discovery (DE 2699). On June
Order (DE 2724, the çEomnibus Order'') denying the Motion for Discovery. This
13, 2013, the District Court entered its Om nibus
appeal of the Om nibus Order followed.l A s explained herein, the Receiver has a
direct interest in Lauer's appeal of the Om nibus Order. Because Lauer did not list
the Receiver as a party to his appeal of the Omnibus Order, however, the Receiver
seeks leave to intervene in this appeal.
R eceiver's Interest
As stated herein, the Receiver has a direct interest in Lauer's appeal of the
Omnibus Order with respect to Lauer's attempts to obtain information or
docum ents protected by the attorney-client and/or work-product privileges of the
Receiver. Thus, to the extent leave is required, the Receiver should be perm itted to
intervene in this appeal.
1 h Omnibus Order also denied various other m otions by Lauer which are alsoT e
subject to the appeal. The Receiver does not, however, seek to intervene other thanto address the discovery issues.
2
Case 9:03-cv-80612-KAM Document 2774 Entered on FLSD Docket 12/17/2013 Page 17 of 25
Case: 13-13110 Date Filed: 08/09/2013 Page: 49 of 51
Arguraent
A. This Court Should Perm it the Receiver to lntervene.
Federal Rule of Civil Procedure 24(a)(2) provides that a court Edmust permit''
intervention by anyone who Gçclaim s an interest relating to the property or
transaction that is the subject of the action, and is so situated that disposing of the
action may as a practical m atter impair or im pede the m ovant's ability to proted its
interest, unless existing parties adequately represent that interest.'' Rule
24(b)(1)(B) allows intervention by anyone who has a claim or defense that shares
with the main action a comm on question of law or fact.
Under the facts of this case, the Receiver should be perm itted to intervene in
this appeal of the Omnibus Order in order to protect the Receiver's attorney-client
and work-product privileges. As discussed above, Lauer seeks discovery that is
directly designed to invade those privileges and improperly inquire into the
Receiver's administration of the Receivership Entities. As such, the Receiver has
an interest in the appeal and w ould be negatively impacted by any order from this
Court perm itting Lauer to obtain any privileged docum ents or information.
Accordingly, the Receiver should be permitted to intervene in this appeal.
By not listing the Receiver as a party to the appeal, Lauer is attem pting to
forestall any opposition or comm ent by the Receiver to Lauer's underlying
discovery requests which are nmong the issues addressed in the appeal. Lauer
Case 9:03-cv-80612-KAM Document 2774 Entered on FLSD Docket 12/17/2013 Page 18 of 25
Case: 13-13110 Date Filed: 08/09/2013 Page: 50 Of 51
should not be perm itted to do this. The Receiver's rights and interests will
potentially be affected by this Court's consideration of the appeal and the Receiver
is entitled to be heard on these issues. Accordingly, the Court should allow the
Receiver to intervene.
W H EREFORE, the Receiver respectfully requests that, to the extent leave
is required, this Court grantthis motion to intervene, and grant such other and
further relief as is just and proper.
th d f August, 2013.Dated this 9 ay o
Respectfully submitted,
Hunton & W illiams LLP
s/luan C. Eniamio -
Juan C. EnjamioFlorida Bar No. 571910
1 1 1 1 Brickell Avenue, Suite 2500M iami, Florida 33131
Te1: (305) 810-2500Fax: (305) 810-2460jenjamio@hunton.com
Counsel for M arty Steinberg, Receiver
Case 9:03-cv-80612-KAM Document 2774 Entered on FLSD Docket 12/17/2013 Page 19 of 25
E X H IB IT 4
10
Case 9:03-cv-80612-KAM Document 2774 Entered on FLSD Docket 12/17/2013 Page 20 of 25
Case: 13-13110 Date Fi+d: 0W27/2013 Page: 1 of 10
IN TH EUNITED STATES CO URT O F APPEALS
FOR THE ELPVENTH CIRCUIT
Case N o. 13-131 IO-EE
SECURITES AND EXCHA NGE COM M ISSION
Plaintiff/Appellee,
M ICHA EL LAUER,
Defendant/Appellant,
and
LANCER M ANAGEW NT GROUP II, LLC, et al.,
Defendants.
Securities and Exchange Com m ission's
O pposition to M otion to Strike
Case 9:03-cv-80612-KAM Document 2774 Entered on FLSD Docket 12/17/2013 Page 21 of 25
Case: 13-13110 Date Filed: 09/27/2013 Page: 7 of 10
OPPOSITION
Plaintiff-Appellee Securities and Exchange Comm ission opposes Defendant-
Appellant M ichael Lauer's Emergency M otion to Strike or Deny Receiver's
M otion to Intervene.
On February 20, 2013, as part of his effort to overturn the district court
judgment, Lauer asked the district court for leave both to depose the Receiver and
to request docum ents from the Receiver. DE2679 at 1, 2-3.The Receiver opposed
Lauer's discovery m otion because he failed to show any entitlem ent to additional
discovery and because the documents he sought were shielded by various
privileges. 17E2699 at 4-7. The district coul't denied Lauer's motion in an
Omnibus Order, DE2724 at 5-6, and Lauer appealed that order. DE2727.
On August 9, 2013, the Receiver filed a motion to intervene in this appeal.
He sought to intervene primarily to defend the district court's Omnibus Order
' f discovery from the Receiver.l Thus, to theinsofar as it denied Lauer s request or
extent that Lauer appeals the district court's denial of his request for additional
1 Although Lauer appealed the Om nibus Order denying his request for discovery,
his opening brief, filed August 8, 2013, did not include a section that plainly
argued the district court's denial of discovery was error. lnstead, discovery is
mentioned only in passing in the context of other argum ents. Lauer Br. 37, 58-59.
Thus, Lauer abandoned any argum ents that the district court's denial of discovery
was error. United States v. Jernigan, 341 F.3d 1273, 1283 n.8 (1 1th Cir. 2003).N otwithstanding Lauer's abandonment, the Commission brietly addressed Lauer's
passing m entions of discovery. Comm ission Br. 49. The Receiver's intervention
motion establishes grounds for him to participate in the appeal and to separately
address the discovery issue, if he so chooses.
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Case: 13-13110 Date Filed: 09/27/2013 Page: 8 of 10
discovery, the Receiver has identiGed a direct intexest in this appeal, and the
Com mission therefore does not oppose allowing the Receiver to intervene.
Lauer's m otion is not a m odel of clarity. Its caption bills it as a m otion to
strike or deny the Receiver's intervention motion, but Lauer specifically requests
that, assuming this Court grants the Receiver's m otion before the October 7 due
date for his reply to the Comm ission's bridf, çtthe due date on his reply brief be
October 7, 20 13, or seven days after the Receiver tsles his brief, whichever is
later.'' Lauer assures the Court that if it does not act on the Receiver's intervention
motion, he will file his reply brief on or before October 7. Thus, Lauer asks for an
extension of tim e, contingent on the possible grant of the Receiver's m otion before
October 7. Although the Com mission believes that request is prem ature, it
nonetheless does not object to the contingent extension of time requested by Lauer.
To the extent that Lauer's m otion asks the court to deny the Receiver's
m otion, it is untimely. The proper means for Lauer to oppose the Receiver's
intervention motion was to file a response on or before August 19. See Fed. R.
App. P. 27(a)(3)(A).Instead, Lauer waited until September 24 to file an
SsEm ergency M otion''z asking to the Court to deny the Receiver's intervention. He
did not, however, ask for leave to file his opposition out of time or offer any
2 L 's motion also fails to comply with 1 1th Cir. R. 27-1(b)(1) because it doesauer
not explain why his motion w ill be moot if not acted on within seven calendar days
and fails to include the specific discussion required by 1 1th Cir. R. 27-1(b)(2).
2
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Caseê 13-13110 Date Filed: 09/27/2013 Page: 9 of 10
explanation for his failure to file a timely opposition.Thus, Lauer's motion to
deny the Receiver's motion should be denied as untimely.
Finally, Lauer states no b% is for striking the Receiver's motion. His
confusion about whether to ççreserve wèrds'' to answer the Receiver's arguments in
his reply brief provides no basis to strike. Fed. R. Civ. P.12(9 (pleadings may be
stricken because of çtredundant, immaterial, impertinent, or scandalous matterlsq'').
For the foregoing reasons, the Commission does not oppose the Receiver's
intervention m otion, and that the Court should deny Lauer's motion to strike.
Respectfully Subm itted,
/s/ Beniamin VetterBENJAM IN VETTER
Ofsce of the General Counsel
Securities and Exchange Comm ission
100 F Street NE
W ashington, DC 20549
vetterb@sec.aov(202) 551-7945
Case 9:03-cv-80612-KAM Document 2774 Entered on FLSD Docket 12/17/2013 Page 24 of 25
CERTIFICATE OF SERVICE
1 HEREBY CERTIFY that on this 13th day of Decem ber, 2013, a true and correct
copy of the foregoing has been sent by first-class mail to:
Christopher M artin, Esq.
Securities & Exchange Comm ission
80l Brickell Avenue
Suite 1800
M iam i, FL 33131
r d
David Bane, Esq.
Hunton & W illiam s
1 1 1 1 Brickell Avenue
Suite 2500
M inm i, FL 33131
David M . DorsenAttorney for M ichael Lauer
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