A September 13th scheduling order has set an SEC v. OnPassive trial date for April 6th, 2026.

Note this is not a typo, the trial is scheduled eighteen months out from September, 2024.

The court’s scheduling order follows OnPassive owner Ashraf Mufareh’s motion to dismiss the case being denied on August 27th.

Following the dismissal, Mufareh and his wife filed their answer to the SEC’s August 2023 filed complaint.

The SEC alleges Mufareh and his wife defrauded consumers out of $108 million. Mufareh and his wife deny all of the SEC’s claims.

Mufareh and the SEC had been in settlement discussions while a decision on Mufareh’s motion to dismiss was pending.

An update on proceedings is provided in a September 11th joint filing requesting an discovery deadline extension;

The Parties have also met and conferred to resolve discovery disputes on several occasions. Despite these efforts, the Parties agree that an extension of the deadlines is necessary to complete fact and expert discovery in this case.

Part of the reason discovery is complex is due to the SEC wanting to depose OnPassive employees in India.

On October 10, 2023, the Parties jointly submitted a Uniform Case Management Report in which they noted that depositions may be taken in India, which may require requests for the Court to issue Letters Rogatory to the Indian Central Authority.

The Parties stated that ONPASSIVE would take all necessary steps to obviate the need for Letters Rogatory including by making employees available for depositions to the extent possible.

The Parties agree that an extension of the deadlines is necessary to complete fact and expert discovery in this case.

This is so largely because of the issues previewed in the Uniform Case Management Report, namely that due to the fact that certain witnesses and evidence are located in India the Parties require additional time to complete discovery.

Who exactly the SEC will depose remains a point of conflict.

The Parties have not yet reached agreement about the potential depositions of up to 14 foreign-located witnesses (many former employees of ONPASSIVE affiliate entities), many of which will require the issuance of Letters of Request to India and could take several months for India to process.

Mufareh has also, to date, been unable to provide the SEC with additional requested discovery.

Significant document discovery is also still pending including, among other things, critical software code in the possession of the Defendants which is located overseas.

This core evidence is necessary before the Parties can take certain depositions and disclose expert reports.

I’m trying not to read too much between the lines but these deposition discovery issues follow OnPassive employees in India striking back in June.

At the time, OnPassive’s Indian employees claim they hadn’t been paid for six months. Whether this is still the case remains unclear.

Either way, I’m sure there’s more than a few OnPassive employees who’ll be eager to speak to the SEC.

And finally on a potentially related note, OnPassive’s website has now been down for over 24 hours. OnPassive’s website is believed to have been hosted and operated from within India.

Whether OnPassive’s website going down is related to employee issues in India, and/or the SEC’s pending depositions of said employees, is unclear.

To the best of my knowledge Ash Mufareh hasn’t publicly addressed OnPassive’s website going down.

OnPassive’s Twitter account stopped posting on June 23rd. The last video upload to OnPassive’s YouTube channel was on May 30th.

 

Update 4th October 2024 – OnPassive’s website is back online.