Both the SEC’s and CFTC’s civil cases against EmpiresX and its owners have been administratively stayed.

In separate orders filed on September 19th and 28th, Judge Altonaga stayed the cases pending service on defendants Emerson Pires and Flavio Goncalves.

Pires and Goncalves ran EmpiresX. Both defendants, who have also been criminally charged, fled to Brazil upon learning they were under investigation.

As a result the SEC and CFTC have initiated international service on the Defendants through the Hague Convention.

While that will get the job done, the immediate issue is it’s a time consuming process.

Acknowledging that service via Hague Convention can take “six to eight months, or more”, the court has ordered both cases stayed to “ensure the orderly progress of the case(s)”.

The CFTC has been directed to file Status Reports detailing service progress every 60 days, beginning October 7th. The SEC has been directed to do the same beginning October 28th.

The case shall be restored to the active docket after all Defendants are served upon Court order following motion of a party.

After all Defendants have been served, Defendants shall submit a single combined response or separate answers within the time allowed for the last-served Defendant to respond.

Co-defendants Empires Consulting Corp and Joshua Nicholas have already been served.

I’ll continue to monitor both the SEC’s and CFTC’s case dockets for updates on a monthly basis.


Update 27th February 2023 – As per a February 7th filed Status Report from the CFTC;

On December 26, 2022, the Brazilian Central Authority notified the CFTC that it had been unable to effect service on Emerson Pires at the address provided.

To date, the CFTC has not received any communication from the Central Authority regarding the status of service on Flavio Goncalves

The CFTC anticipates that, after the Brazilian Central Authority advises it regarding service on Flavio Goncalves, the CFTC will seek authority from the Court to serve Pires and Goncalves by publication and other means pursuant to Federal Rule of Civil Procedure

That Pires and Goncalves are likely evading service in Brazil doesn’t come as a surprise. The pair are wanted fugitives after all.

I suspect the BCA will inform the CFTC of failed service attempts on Goncalves by mid year, after which the CFTC will proceed to service via publication.

There have been no updates on the SEC case docket.


Update 26th March 2023 – The SEC has signalled it intends to file a motion for alternative service against Pires and Goncalves

This is from a February 27th Status Report (evidentially filed shortly after I made the update above):

The SEC recently received indication that the Brazilian authorities’ efforts to serve Pires and Goncalves have been unsuccessful.

Should the SEC confirm that service will  not likely be effectuated via the Hague Convention, the SEC anticipates filing a
motion for alternative service.

There’s also an update on Joshua Nicholas;

The SEC and Nicholas have been engaged in efforts to resolve this litigation. To that end, Nicholas has submitted a settlement proposal that is contingent on the anticipated restitution order in the criminal action.

After restitution has been imposed, the SEC Commissioners will consider his settlement proposal.

Nicholas was ordered to pay $3.3 million in restitution earlier this month.

I believe it generally takes four to six weeks for the SEC Commissions to consider a settlement proposal. Prior to that though we sometimes get a proposed settlement filing.

Either way I’d expect news of Nicholas’ settlement with the SEC by the end of April, possibly mid-May at the latest.


Update 30th March 2023 – Brazilian authorities have confirmed they were unable to effect service on Goncalves.

The SEC has been granted permission to serve Pires and Goncalves via email.