I’m not 100% on the specifics but there’s been a procedural change regarding Mining Capital Coin’s preliminary injunction.

Back on May 10th the case docket reflected a preliminary injunction hearing was schedule for May 19th.

Instead, a “report and recommendation” (R&R) was filed by a Magistrate Judge on May 18th.

The good news is the filing recommends a preliminary injunction be granted.

As per the R&R;

The SEC has demonstrated a proper showing for a preliminary injunction against all Defendants.

As such, the undersigned respectfully RECOMMENDS that the Motion’s request for a preliminary injunction be GRANTED.

We’ve previously covered the SEC’s case for a preliminary injunction.

In his defense against the motion, defendant Luiz Carlos Capuci (right) argued

  1. despite running away to Brazil mid-investigation, that the SEC was required to secure service of process over him (with respect to the requested preliminary injunction); and
  2. the SEC lacked jurisdiction because “the securities scheme described in the Complaint centered on foreign investors and involved, at most, an incidental number of United States investors”.

The Magistrate Judge rejected both defenses.

Co-defendant Emerson Sousa Pires (right), has not made any filings in the SEC’s case.

When the SEC reached out to the attorney that represented Pires during their investigation, they were advised he no was no longer representing him.

Pires also fled to Brazil mid SEC investigation. Reading between the lines it appears Pires, who hold Brazilian citizenship, believes he’s out of reach in Brazil.

And he very well may be. Brazil does not extradite its citizens.

Certainly, Capuci and Pires fleeing to Brazil factored into the Magistrate’s decision.

Defendants evidently recognize the wrongful nature of their conduct and at least one Defendant, Capuci, allegedly liquidated a number of assets and left the United States for Brazil after the SEC issued subpoenas in its investigation.

The Court also notes that both Capuci and Pires were subpoenaed during the SEC’s investigation of this case and both asserted their Fifth Amendment privilege.

Moreover, according to the SEC, both Capuci and Pires are believed to be presently in Brazil.

The Court therefore finds that a preliminary injunction is necessary to prevent Defendants from engaging in future violations of the securities laws due to the apparent lack of remorse shown by Defendants and the ease with which they may revive a similar scheme via the internet.

Looking forward, any objections to the R&R filings are to be made by June 1st. After which, it is expected a preliminary injunction will be granted against Mining Capital Coin, Capuci and Pires.

 

Update 2nd June 2022 – Capuci’s attorneys filed an objection to the R&R filings on June 1st. The court has extended the TRO in place till June 13th.

I’m not 100% on whether the SEC’s replies to the objections raised by Capuci, or whether the court just factors them in at the yet to be scheduled preliminary injunction hearing.

I’ll check back for a docket update early next week.