Joshua David Nicholas has settled with the civil EmpiresX class-action.

Nicholas’ settlement follows “money of arms-length mediation” between the parties.

As per a proposed settlement filed by the EmpiresX class-action Plaintiffs;

On July 28, 2022, Defendant Nicholas contacted Plaintiffs’ Counsel and expressed a desire to begin settlement negotiations, that he wished to cooperate with Plaintiffs’ Counsel.

Over the past several weeks, Plaintiffs’ Counsel has worked to negotiate this Settlement with Defendant Nicholas so that they could secure the greatest chance of recovery for Plaintiffs and the Class from the Nonsettling Defendants.

It is clear from Defendant Nicholas’ proffer that he does not have significant funds or assets from which to repay victims of the Empires-X Ponzi scheme.

Moreover, Defendant Nicholas’ plea agreement with the DOJ already provides for required restitutionary payments.

In that sense, Nicholas’ class-action settlement is more about what he knows than financial recovery.

What Defendant Nicholas does have, however, is detailed information regarding the inner workings of the Empires-X Ponzi scheme and information that is reasonably likely to lead to additional evidence in order to hold Nonsettling Defendants and other third parties responsible for the Empires-X Ponzi scheme, as well as assets located within the United States.

If Nicholas’ class-action settlement is approved, he’s agreed to cooperate with the Plaintiff Class – with the aim of working towards recovery from defendants Emerson Pires and Flavio Goncalves.

Nicholas’ proposed settlement was filed on August 29th. The court granted preliminary approval on August 30th.

A hearing on final approval is scheduled for October 27th.

It is unusual to have active related DOJ, SEC, CFTC and non-regulatory proceedings taking place in parallel.

I’m expecting the DOJ, SEC and/or CFTC will eventually step in to stay the civil class-action. The Receiver appointed in the EmpiresX class-action has confirmed they’re in contact with the SEC and CFTC.

The regulators have acknowledged the case but are still working out how to approach the Receivership’s appointment.

One interesting tidbit from Nicholas’ class-action settlement is confirmation he intends to plead guilty.

Class-action Plaintiffs claim, when Nicholas reached out to them regarding potential settlement, that he

was in the process of negotiating a plea agreement in response to a federal indictment the U.S. Department of Justice brought against him in connection with Empires-X.

I confirmed this against the DOJ’s EmpiresX case docket, wherein on August 29th Nicholas’ criminal case was referred to a Magistrate Judge for a Change of Plea Hearing.

At time of publication Nicholas’ Change of Plea Hearing hasn’t been scheduled. I’ll continue to monitor the dockets updates.

 

Update 9th September 2022 – Joshua Nicholas has pled guilty to one count of conspiracy to commit securities fraud.