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UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF MINNESOTA
)
TREVOR COOK, )
)
Plaintiff, )
)
v. ) Civil No.: 0:09mc80 (MJD/JJK)
)
UNITED STATES SECURITIES AND ) Chief Judge Michael J. Davis
EXCHANGE COMMISSION, )
) Magistrate Judge Jeffrey J. Keyes
Defendant. )
)
MEMORANDUM IN OPPOSITION TO COOK’S
MOTION TO STAY INVESTIGATION
The Securities and Exchange Commission (“SEC” or “Commission”) files this
memorandum in opposition to Trevor Cook’s (“Cook” or “Plaintiff”) motion to stay a
Commission investigation. The Court should deny Cook’s motion to stay and dismiss this
matter because: (1) Cook has failed to comply with the Federal Rules of Civil Procedure
which require that original civil proceedings be commenced by a complaint; (2) Cook’s
claims are barred by the doctrine of sovereign immunity; and (3) even if sovereign
immunity did not bar Cook’s claims, Cook has not demonstrated any reason to stay the
investigation.
BACKGROUND
On May 27, 2009, the Commission issued an Order Directing Private Investigation
and Designating Officers to Take Testimony in a matter entitled In the Matter of
Universal Brokerage FX, Inc., File No. C-07471 (the “Formal Order”). The Formal
Case 0:09-mc-00080-MJD-JJK Document 13 Filed 10/14/09 Page 1 of 17
2
Order, a copy of which is attached hereto as Exhibit A, authorizes members of the
Commission staff to undertake a non-public investigation into whether Universal
Brokerage FX, Inc. (“UBFX”), Oxford Global Partners, LLC (“Oxford Global”), their
officers, directors, employees and other persons may have violated the federal securities
laws by fraudulently offering and selling unregistered investments in purported foreign
currency trading programs in violation of Sections 5(a), 5(c), and 17(a) of the Securities
Act of 1933 (the “Securities Act”), Section 10(b) of the Securities Exchange Act of 1934
(the “Exchange Act”) and Rule 10b-5 thereunder. Trevor Cook is a part owner of Oxford
Global. Cook’s Memorandum in Support of Motion to Stay (“Cook’s Memo.”), p. 1.
Cook believes that he is a subject of the Commission’s investigation, id., as well as the
focus of a federal criminal grand jury investigation, id., p. 3.
Cook states that as part of its investigation, the Commission issued a subpoena for
the sworn testimony of Cook and others. Cook’s Mem., p. 4. In response to that
subpoena, Cook now moves this Court to stay the Commission’s investigation until
resolution of any and all criminal investigations or proceedings involving Cook. Id., p. 1.
Cook has not been indicted, id. p. 8, and no civil action has been filed against him by the
Commission. Cook states that the criminal matter is presently before the grand jury and
based only on that fact says he expects any indictment will occur in the near future. Id., p.
15. Cook provides no evidence of when the United States Attorney’s Office expects an
indictment will occur.
Case 0:09-mc-00080-MJD-JJK Document 13 Filed 10/14/09 Page 2 of 17
Rule 81 of the Federal Rules of Civil Procedure recognizes a few1
exceptions to the single form of action, but none of those apply here.
3
Cook argues that this Court should stay the Commission’s investigation because
with both a civil and a criminal investigation ongoing he is faced with a dilemma as to
whether he should testify or rely on the Fifth Amendment right not to testify in the civil
investigation. Cook states generally that “[c]ontinuation of the SEC investigation in light
of the criminal investigation would violate [his] Fifth Amendment privilege and interfere
with the preparation of his criminal defense,” but he does not allege that the Commission
is taking any action to force him to waive his Fifth Amendment privilege. Id., p. 11.
ARGUMENT
I. THIS ACTION SHOULD BE DISMISSED BECAUSE COOK HAS NOT
FILED A COMPLAINT.
Rules 2, 3, 8 and 10 of the Federal Rules of Civil Procedure restrict original civil
proceedings in a district court to a single form of action, commenced by a complaint
naming the parties, stating the basis for the court’s jurisdiction and demanding specified
relief against someone. Cook’s motion to stay the Commission’s investigation is1
deficient in most of these respects. The motion does not purport to be a complaint, and it
states no basis for this Court’s jurisdiction and asks for no judgment against anyone. The
motion merely asks that the Court stay the Commission’s investigation. Rather, Cook has
instituted a summary proceeding for which the rules make no provision. In Application
of Howard to Quash Summons, 325 F.2d 917 (3 Cir. 1963), the Third Circuit remandedrd
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4
and instructed the district court to dismiss Howard’s application to quash a subpoena
from the IRS for failure to comply with the applicable rules of civil procedure, as the
application named no defendant, stated no basis of jurisdiction and only asked for a
hearing and that the court quash the summons.
The court in Howard noted that “there are a few special situations in which federal
practice permits summary procedure either for the adjudication of a matter ancillary to a
pending judicial proceeding or for the determination of some dispute concerning property
already within the court’s custody or control.” Id. at 919 (citing Hale v. Henkel, 201 U.S.
43 (1906)); see also SEC v. Ross, 504 F.3d 1130, 1146-47 (9 Cir. 2007) (equitableth
powers of receiver appointed by SEC in connection with civil enforcement action did not
permit receiver to use summary proceedings to seek disgorgement of commissions where
proceeds not located in the district and no independent basis for personal jurisdiction).
Cook’s motion to stay the Commission’s investigation is not ancillary to any pending
judicial action and concerns no property under the control of the district court. Rather,
the motion to stay is an original action that fails to comply with the Federal Rules of Civil
Procedure and consequently must be denied and the matter dismissed.
II. THE DOCTRINE OF SOVEREIGN IMMUNITY BARS THIS ACTION.
The United States, “as sovereign, is immune from suit save as it consents to be
sued.” United States v. Sherwood, 312 U.S. 584, 586 (1941). Thus, consent to suit is a
prerequisite to subject matter jurisdiction over a claim against the United States, its
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5
agencies and officials. See FDIC v. Meyer, 510 U.S. 471, 475 (1994). Sovereign
immunity extends to the Commission. SEC v. Independence Drilling Corp., 595 F.2d
1006, 1008 (5 Cir. 1979); Holmes v. Eddy, 341 F.2d 477, 480 (4 Cir. 1965); In re SECth th
ex rel. Glotzer, 374 F.3d 184, 192 (2d Cir. 2004).
To overcome this immunity, any waiver must be “unequivocally expressed in
statutory text * * * and will not be implied”; it “will be strictly construed, in terms of its
scope, in favor of the sovereign.” Lane v. Pena, 518 U.S. 187, 192 (1996). Cook carries
the burden of identifying such an express statutory waiver. See Makarova v. United
States, 201 F.3d 110, 113 (2d Cir. 2000); Paradyne v. U.S. Dep’t of Justice, 647 F. Supp.
1228, 1231 (D.D.C. 1986). Cook fails to meet this burden, as he references no statutory
waivers of sovereign immunity and does not even mention what he believes to be the
basis for the Court’s jurisdiction.
The Administrative Procedure Act (“APA”), 5 U.S.C. 701 et seq., is generally the
waiver of sovereign immunity that persons seeking non-monetary relief against the
government would rely on, but it does not allow this action. Although the APA allows
some claims against the federal government, the APA does not permit judicial review of
an agency’s action that is specifically committed to its discretion by law. 5 U.S.C.
701(a)(2); Dew v. United States, 192 F.3d 366, 371 (2d Cir. 1999), cert. denied, 529 U.S.
1053 (2000) (the APA does not waive sovereign immunity “where a matter is statutorily
committed to agency discretion”). Also, the APA’s waiver of sovereign immunity does
Case 0:09-mc-00080-MJD-JJK Document 13 Filed 10/14/09 Page 5 of 17
15 U.S.C. 78u(a)(1) states in pertinent part:2
The Commission may, in its discretion, make such investigations as it
deems necessary to determine whether any person has violated, is violating,
or is about to violate any provision of this title, the rules or regulations
thereunder * * *.
15 U.S.C. 78u(b) states in pertinent part:
For the purpose of any such investigation * * * any member of the
Commission or any officer designated by it is empowered to administer
oaths and affirmations, subpoena witnesses, compel their attendance, take
evidence, and require the production of any books, papers, correspondence,
memoranda, or other records which the Commission deems relevant or
material to the inquiry. * * *
6
not “affect[] other limitations on judicial review.” 5 U.S.C. 702.
Any reliance by Cook on the APA would fail to establish subject matter
jurisdiction over his motion to stay the Commission’s investigation. The Second Circuit
dealt with the question of whether Congress the APA’s waiver of sovereign immunity
permits a suit seeking equitable relief for alleged wrongdoing in a Commission
investigation. Sprecher v. Graber, 716 F.2d 968 (2d Cir. 1983). Concluding it has not,
the court relied on two points.
First, the initiation of an investigation and decision to issue a subpoena have each
been committed to the Commission’s discretion by Congress and are not judicially
reviewable under the APA. Id. at 974 (citing 15 U.S.C. 78u(a) and (b)). The Eighth2
Circuit has also found that an agency’s “investigation itself, like the final decision
whether or not to take enforcement action, is within the ‘enforcement arena’ and
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7
therefore, committed to agency discretion” and therefore, immune from judicial review.
Greer v. Chao, 492 F.3d 962, 965 (8 Cir. 2007) (quoting Giacobbi v. Biermann, 780 F.th
Supp. 33, 37 (D.D.C. 1992)); see also Ngure v. Ashcroft, 367 F.3d 975, 982 (8 Cir.th
2004) (citing Lincoln v. Vigil, 508 U.S. 182, 190 (1993)) (“in certain instances, agency
action is deemed committed to agency discretion by law, and thus unreviewable by the
courts.”).
Second, a subpoena enforcement action “is the exclusive method by which the
validity of SEC investigations and subpoenas may be tested in the federal courts. * * *
We hold, therefore, that [equitable actions challenging Commission investigations] are
barred by the doctrine of sovereign immunity.” Sprecher v. Graber, 716 F.2d at 975
(emphasis added); see also SEC v. Arthur Young & Co., 584 F.2d 1018, 1028 (D.C. Cir.
1978) (any abuse of subpoena power by SEC is to be addressed through court oversight of
subpoena enforcement actions brought by the SEC). Because a Commission subpoena
seeking testimony and the production of documents is not self-executing, the Commission
has no power to impose sanctions for noncompliance. The Commission can enforce a
subpoena only by filing an action in federal court, and subpoenaed persons are subject to
penalties only if they refuse to obey a court order enforcing the subpoena. 15 U.S.C.
77v(b), 78u(c); SEC v. Jerry T. O’Brien, Inc., 467 U.S. 735, 741 (1984). Numerous
courts have recognized that a subpoena enforcement proceeding is an adequate remedy at
law for persons who believe a subpoena has been issued for any improper reason. See,
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8
e.g., Reisman v. Caplin, 375 U.S. 440, 446-47 (1964); Lopes v. RTC, 155 F.R.D. 14, 16
(D.R.I. 1994).
The Second Circuit later re-affirmed Sprecher v. Graber, stating that “[a] district
court has no jurisdiction to award non-monetary relief against an agency on a claim that it
is conducting an improper investigation where another statue provides an exclusive
avenue of redress, or where the action complained of is committed to agency discretion. *
* * The exclusive method for testing the validity of the SEC’s investigatory motives or
methods is a contested subpoena enforcement proceeding * * * .” Sprecher v. Von Stein,
772 F.2d 16, 18 (2d Cir. 1985) (emphasis added); see also SEC v. Finazzo, 2009 WL
3228566, at *2 (2d Cir. Oct. 8, 2009) (“We have concluded that ‘SEC investigations are
authorized “in its discretion” by 15 U.S.C. § 78u(a),’ * * * and that ‘[t]he exclusive
method for testing the validity of the SEC’s investigatory motives or methods is a
contested subpoena enforcement proceeding under 15 U.S.C. § 78u(c) * * *’” (citations
omitted)).
Thus, Cook has no basis for contending that the APA waives sovereign immunity
to challenge the initiation or conduct of Commission investigations, as Cook is attempting
to do here with his motion to stay the Commission’s investigation. Because Cook has not
asserted any jurisdictional basis for the requisite waiver of sovereign immunity, the
motion for stay of the Commission’s investigation must be denied and the matter
dismissed.
Case 0:09-mc-00080-MJD-JJK Document 13 Filed 10/14/09 Page 8 of 17
Instead of pointing to relevant case law, Cook starts his argument by3
quoting a test that is inapplicable and that he cannot meet. See Cook’s Mem., p. 6
(quoting Koester v. American Republic Investments, Inc., 11 F.3d 818, 823 (8 Cir.th
1993)). Cook does not – and cannot – meet that test because it requires consideration of
whether “two proceedings are so interrelated that he cannot protect himself at the civil
trial by selectively invoking his Fifth Amendment privilege” or whether “two trials will
so overlap that effective defense of both is impossible.” Koester, 11 F.3d at 823. When
investigations to determine the existence or scope of any wrongdoing are at issue, it is not
possible to determine the scope of any interrelatedness or overlap in future proceedings.
9
III. EVEN IF SOVEREIGN IMMUNITY DID NOT BAR COOK’S CLAIMS,
THE MOTION SHOULD BE DENIED, AS COOK HAS NOT MET THE
STANDARD FOR A STAY.
Even if the doctrine of sovereign immunity did not bar Cook’s claims, the motion
should be denied, as Cook has not met the standard necessary for a stay. Indeed, Cook
has not cited a single case in which a court stayed an investigation, as opposed to a civil
proceeding in federal court, and Cook does not present a single argument that would
justify that extraordinary relief. Cook makes no showing that having parallel civil and3
criminal investigations into allegations of serious wrongdoing is “unfair” or that any
action by the Commission would violate his Fifth Amendment privilege. Also, Cook
completely ignores the serious prejudice to persons who may have been harmed by
Cook’s possible illegal conduct if the Commission is not allowed to continue with its
investigation.
A. Simultaneous Pursuit of the Criminal and Commission Investigations
Is Fair and Proper.
Cook’s arguments that simultaneous civil and criminal investigations are unfair is
Case 0:09-mc-00080-MJD-JJK Document 13 Filed 10/14/09 Page 9 of 17
10
completely unfounded. It is well-established that the federal government may pursue
simultaneously parallel civil and criminal proceedings that arise from the same facts. As
the Supreme Court stated in U.S. v. Kordel, 397 U.S. 1, 11 (1970), “it would stultify
enforcement of federal law to require a government agency * * * invariably to choose
either to forgo recommendation of a criminal prosecution once it seeks civil relief, or to
defer civil proceedings pending the ultimate outcome of a criminal trial.” See also SEC
v. First Financial Group of Texas, 659 F.2d 660, 666 (5 Cir. 1981) (“There is no generalth
federal constitutional, statutory or common law rule barring the simultaneous prosecution
of separate civil and criminal actions by different federal agencies against the same
defendant involving the same transactions.”).
Cook attempts to overcome this basic proposition by raising two inconsistent and
largely irrelevant arguments: (1) stays are not necessarily improper before an indictment
is issued; and (2) criminal discovery is limited once a criminal case is brought. First, the
fact that in some situations courts have issued a stay before an indictment is issued does
not make that appropriate here. Cook does not and cannot dispute that “[p]re-indictment
requests for a stay of civil proceedings are generally denied.” Fidelity National Title Ins.
Co. of New York v. National Title Resources Corp., 980 F.Supp. 1022, 1025 (D. Minn.
1997) (quoting U.S. v. Private Sanitation Industry Ass’n, 811 F. Supp. 802, 805
(E.D.N.Y. 1992)); see also SEC v. Dresser Industries, Inc., 628 F.2d 1368, 1376 (D.C.
Cir. 1980) (the case for staying civil proceedings is “a far weaker one” when “[n]o
Case 0:09-mc-00080-MJD-JJK Document 13 Filed 10/14/09 Page 10 of 17
11
indictment has been returned”); Trustees of Plumbers & Pipefitters National Pension
Fund v. Transworld Mechanical, Inc., 886 F. Supp. 1134, 1139 (S.D.N.Y. 1995) (“stays
will generally not be granted before an indictment is issued”). Cook makes no attempt to
even explain why this case is analogous to any of the ones he cites, and it is not analogous
because all of those cases involved situations where a civil case had already been brought.
Moreover, in those cases it was the government that requested the stay in order to protect
grand jury proceedings or because there were two cases being pursued by the government
and the public interest in a prompt investigation was not implicated.
Second, the cases Cook cites regarding stays after an indictment is issued are
similarly irrelevant because an indictment has not been issued against Cook. Issues about
the limitations on criminal discovery are hardly relevant when criminal authorities can
still use a grand jury to seek any information that is potentially relevant. See U.S. v. Sells
Engineering, Inc., 463 U.S. 418, 423 (1983). In any event, the cases addressing a concern
about civil authorities sharing information with criminal authorities find that parallel
proceedings are improper only if the sole purpose of the civil proceeding is to obtain
evidence for the criminal proceeding. See, e.g., Kordel, 397 U.S. at 11; First Financial
Group, 659 F.2d at 666. In general, “Congress has expressly authorized the SEC to share
information with the Department of Justice to facilitate the investigation and prosecution
of crimes.” United States v. Stringer, 535 F.3d 929, 939 (9 Cir. 2008) (citing 15 U.S.C.th
77t(b), 78u(d)); see also United States v. Edwards, 526 F.3d 747, 759 (11 Cir. 2008)th
Case 0:09-mc-00080-MJD-JJK Document 13 Filed 10/14/09 Page 11 of 17
12
(recognizing SEC can share evidence of misconduct with Department of Justice); Dresser,
628 F.2d at 1385 (rejecting limit on SEC’s ability to provide information to the Justice
Department and noting that the securities laws expressly authorize the SEC to provide
information to Justice). Cook does not contend that the Commission has shared any
information other than as authorized by statute.
B. Cook Has No Basis for Contending that the Commission’s Investigation
Could Violate His Fifth Amendment Privilege Against Self-
Incrimination.
Cook asserts that a Commission investigation would violate his Fifth Amendment
privilege against self-incrimination, but his argument shows not that there would be a
violation but that Cook does not like the potential consequences of relying on the Fifth
Amendment. It is well-established that forcing an individual to risk non-criminal
disadvantage by remaining silent for fear of self-incrimination in a parallel criminal
proceeding is not an unconstitutional infringement. Baxter v. Palmigiano, 425 U.S. 308,
317-18 (1976). The discomfort of a defendant’s position in having to choose between
testifying in a civil deposition or asserting his fifth amendment privilege against self-
incrimination does not rise to the level of a deprivation of due process: “Others have
faced comparable circumstances; the choice may be unpleasant, but it is not illegal and
must be faced.” SEC v. Musella,1983 WL 1297, at *2 (S.D.N.Y. 1983); see also United
States v. District Council of New York City, 782 F. Supp. 920, 925 (S.D.N.Y. 1992)
(denying stay where defendants faced choice of testifying or asserting the Fifth
Case 0:09-mc-00080-MJD-JJK Document 13 Filed 10/14/09 Page 12 of 17
13
Amendment privilege; “The fact that defendants face a potentially unpleasant choice is no
reason to stay discovery.”); Arden Way Associates v. Boesky, 660 F. Supp. 1494, 1498
(S.D.N.Y. 1987) (defendant in civil case argued answering complaint could incriminate
him; court denied motion for stay finding defendant could assert Fifth Amendment
privilege in answer and such an answer would not impose risk of losing case); Gellis v.
Casey, 338 F. Supp. 651, 653 (S.D.N.Y. 1972) (“Any witness in a civil or criminal trial
who is himself under investigation or indictment is confronted with the dilemma of
choosing to testify or to invoke his privilege against self-incrimination. Nevertheless, he
must make the choice despite any extra-legal problems and pressures that might follow.”).
In any event, Cook’s claim that the investigation will force him to choose between
waiving his right not to testify under the Fifth Amendment or asserting the privilege and
risking an adverse inference is inaccurate. Cook cannot show that asserting his Fifth
Amendment rights in investigative testimony will lead to an adverse inference. He cites
no authority in which a final adjudication against a defendant was based on the assertion
of Fifth Amendment rights during an investigation. If investigative testimony were to
provide a basis for an adverse inference, it would be in cases where a defendant continued
to rely on Fifth Amendment rights after the Commission brought an enforcement action,
which has not yet happened here. In fact, assertion of Fifth Amendment rights during a
Commission investigation does not bar later substantive testimony in a deposition or at
trial. See, e.g., Harris v. Chicago, 266 F.3d 750, 753-54 (7 Cir. 2001).th
Case 0:09-mc-00080-MJD-JJK Document 13 Filed 10/14/09 Page 13 of 17
In deciding whether to issue a stay, a court may consider the following five4
factors, where relevant: (1) the interest of the plaintiff in proceeding expeditiously with
this litigation or any particular aspect of it, and the potential prejudice to plaintiff of a
delay; (2) the burden which any particular aspect of the proceedings may impose on
defendant; (3) the convenience of the court in the management of its cases, and the
efficient use of judicial resources; (4) the interests of persons not parties to the civil
litigation; and (5) the interest of the public in the pending civil and criminal litigation.
Fidelity National Title Ins., 980 F. Supp. at 1024; Keating v. Office of Thrift Supervision,
45 F.3d 322, 324-25 (9 Cir. 1995), cert. denied, 516 U.S. 827 (1995); Arden Way, 660 F.th
Supp. at 1497.
See also Dresser, 628 F.2d at 1377 (“Effective enforcement of the securities5
laws requires that the SEC and Justice be able to investigate possible violations
simultaneously. * * * If the SEC suspects that a company has violated the securities laws,
it must be able to respond quickly: it must be able to obtain relevant information
concerning the alleged violation and to seek prompt judicial redress if necessary.”); SEC
v. Grossman, 1987 WL 9192, at *2 (S.D.N.Y. 1987) (SEC injunctive relief “implicates
14
C. A Stay Is Contrary to the Interests of the Commission, the Public, and
Defrauded Investors.
Not only has Cook failed to show any type of unfairness that could possibly justify
a stay, he has also failed to show that a stay of the Commission’s investigation could ever
serve the public interest. In fact, there would be a significant negative impact if a stay
were imposed.4
A stay of the Commission’s investigation would frustrate the public interest in
prompt and effective enforcement of the federal securities laws. In the context of SEC
enforcement actions, courts have recognized that “[p]rotection of the efficient operations
of the securities markets and the financial holdings of investors” are important public
interests that cannot await the outcome of a criminal investigation. First Financial Group,
Inc., 659 F.2d at 667. When the Commission sues to enforce the securities laws, it5
Case 0:09-mc-00080-MJD-JJK Document 13 Filed 10/14/09 Page 14 of 17
the public interest in the integrity of the stock market”); Arden Way, 660 F. Supp. at 500
(“the public interest in the integrity of securities markets militates in favor of the efficient
and expeditious prosecution of these civil litigations”).
15
vindicates public rights and furthers the public interest. SEC v. Rind, 991 F.2d at 1492.
As stated in Dresser, “The SEC cannot always wait for Justice to complete the criminal
proceedings if it is to obtain the necessary prompt civil remedy; neither can Justice always
await the conclusion of the civil proceeding without endangering its criminal case.” 628
F.2d at 1377. Delays harm the Commission’s and the public’s interest in prompt
enforcement actions because of the possibility that “[w]itnesses will become unavailable,
memories of conversations and dates will fade, documents will become lost or destroyed
and trails will grow cold.” Id. In addition, if the investigation is delayed, assets that
could be used to make defrauded investors whole could be dissipated before the
Commission has a chance to identify and freeze them, as it is given the power to do under
Section 21C(c)(1) of the Exchange Act. 15 U.S.C. 78u-3(c)(1).
All of these considerations are relevant here. If the stay of proceedings sought by
Cook were to be granted, the Commission’s investigation would sit idle for an indefinite
period of time, while the parties wait to see if an indictment is ever brought, and then wait
further while any criminal prosecution runs its course. All the while, the public interest in
vigorous enforcement of the securities laws would be frustrated.
Cook’s efforts to minimize the harm caused by a stay ignore the many reasons for
proceeding promptly. Cook has not provided any assurances that all the proceeds of the
Case 0:09-mc-00080-MJD-JJK Document 13 Filed 10/14/09 Page 15 of 17
alleged fraud are protected or that all of the evidence the Commission may need will be
available in the future. Cook’s unsupported statements he is no longer operating his
allegedly fraudulent business and that $1 million is frozen along with an unspecified
amount of money in Switzerland do virtually nothing to provide comfort to potentially
defrauded investors, who may have lost far more than $1 million. See Cook’s Mem., p.
15. Similarly, his vague expectation that criminal authorities will proceed quickly
provides no meaningful assurances. See id.
Cook also continues to ignore the difference between an investigation and a
proceeding in court to adjudicate rights, and much of what he says is irrelevant to the
investigative stage. The fact that a criminal case may resolve many issues raised in a civil
case is almost entirely irrelevant because until the Commission completes its
investigation, it will not know the scope of its case. It also cannot know whether the
criminal case will overlap with its case until the indictment is issued. Similarly, issues of
judicial economy are not relevant at this stage because nothing other than this motion for
a stay is before the Court. Courts rarely play a role in investigations. Indeed, the
Commission must be free to conduct its investigation without undue interference or delay.
SEC v. Brigadoon Scotch Distributing Co., 480 F.2d 1047, 1053 (2d. Cir. 1973).
* * *
Case 0:09-mc-00080-MJD-JJK Document 13 Filed 10/14/09 Page 16 of 17
17
CONCLUSION
For the foregoing reasons, Cook’s motion to stay the Commission’s investigation
should be denied.
Respectfully submitted,
/s/ John E. Birkenheier
MELINDA HARDY
Assistant General Counsel
KRISTIN S. MACKERT
Special Trial Counsel
LAURA E. WALKER
Senior Counsel
100 F Street, N.E.
Washington, D.C. 20549-9612
202-551-5149 (Hardy)
JOHN E. BIRKENHEIER
Regional Trial Counsel
175 W. Jackson Blvd.
Suite 900
Chicago, IL 60604
312-886-3947
Counsel for the Securities and Exchange
Commission
Local Counsel:
Robyn A. Millenacker, AUSA
District of Minnesota
300 South Fourth Street
Minneapolis, MN
612-664-5600
612-664-5788
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UNITED STATES DISTRICT COURTFOR THE DISTRICT OF MINNESOTA
__________________________________________)
TREVOR COOK, ))
Plaintiff, ))
v. ) Civil No.: 0:09mc80 (MJD/JJK))
UNITED STATES SECURITIES AND ) Chief Judge Michael J. DavisEXCHANGE COMMISSION, )
) Magistrate Judge Jeffrey J. KeyesDefendant. )
__________________________________________)
LR 7.1(c) CERTIFICATE TO DEFENDANT’SMEMORANDUM IN OPPOSITION TO
COOK’S MOTION TO STAY INVESTIGATION
I, John E. Birkenheier, certify that Defendant’s Memorandum in Opposition to Cook’s Motion toStay Investigation complies with Local Rule 7.1(c).
I further certify that Word Perfect 11 was used to prepare this memorandum, and that this wordprocessing program has been applied specifically to include all text, including headings,footnotes, quotation in the following word count.
I further certify that the above referenced memorandum contains 4387 words.
Respectfully submitted,
/s/ John E. Birkenheier John E. BirkenheierOne of the Attorneys for DefendantU.S. Securities and Exchange Commission175 W. Jackson Boulevard, Suite 900Chicago, IL 60604
Date: October 14, 2009 (312) 353-7390
Case 0:09-mc-00080-MJD-JJK Document 13-2 Filed 10/14/09 Page 1 of 1
UNITED STATES DISTRICT COURTFOR THE DISTRICT OF MINNESOTA
__________________________________________)
TREVOR COOK, ))
Plaintiff, ))
v. ) Civil No.: 0:09mc80 (MJD/JJK))
UNITED STATES SECURITIES AND ) Chief Judge Michael J. DavisEXCHANGE COMMISSION, )
) Magistrate Judge Jeffrey J. KeyesDefendant. )
__________________________________________)
CERTIFICATE OF SERVICE
I, John E. Birkenheier, hereby certify that on October 14, 2009, I caused the following documentto be filed electronically with the Clerk of the Court through ECF, and as well as electronicallyupon counsel as follows:
Respectfully submitted,
/s/ John E. Birkenheier John E. BirkenheierOne of the Attorneys for DefendantU.S. Securities and Exchange Commission175 W. Jackson Boulevard, Suite 900Chicago, IL 60604
Dated: October 14, 2009 (312) 353-7390
Case 0:09-mc-00080-MJD-JJK Document 13-3 Filed 10/14/09 Page 1 of 1