The CFTC has been denied summary judgment against Alan Friedland (right).

The Compcoin fraud case continues towards trial, now scheduled for January 31st, 2022.

The CFTC moved for summary judgment against Friedland back in July.

In their filing, the CFTC argued there was “no genuine issue of these material facts” in the case.

In a fourteen page order addressing the seven counts of fraud brought against Friedman, the court disagreed.

Counts 1 and 4 pertain to fraud. The court found the CFTC’s submitted evidence hadn’t definitively proved Friedland acted with scienter.

That is to say Friedland acted to intentionally “defraud, manipulate or deceive” Compcoin victims.

Counts 2 and 5 pertain to “fraud by a CTA” (Commodity Trading Advisor).

The court found that CompCoin itself was indisputable not a CTA.

The CFTC has also not directed this Court to any authority for the proposition that Friedland can be held liable for statements made on behalf of a non-CTA simply because he is an associated person or principal of a different CTA.

Moreover, the CFTC has failed to sufficiently establish any other legal basis to impute Compcoin LLC’s statements to Fintech or Friedland.

Counts 3 and 7 pertain to aiding and abetting.

The allegations raised by the CFTC in these counts relied on arguments already rejected in previous counts.

the CFTC has not established that a violation occurred, and therefore, it has also failed to establish that it is entitled to summary judgment with respect to its claims for aiding and abetting.

Count 6 pertains to “failure to include a proper disclaimer”.

The court found that the subject matter in question was CompCoin’s website.

There is no evidence in the record that either the Compcoin LLC white paper or the historical rates of return for ART were included on Fintech’s website or otherwise made by Friedland in his role as a principal of Fintech.

Such to the extent the CFTC might pursue count 6 claims against CompCoin, the court was “far from clear” on whether the relevant Code of Federal Regulation section would apply.

It is not clear that the regulation applies to the actions of Compcoin LLC, and the CFTC has failed to state any legal basis for so applying it.

A reminder that this ruling means the CFTC couldn’t clear the bar for summary judgment. These issues will still be presented and argued at trial.

The order denying the CFTC summary judgment was made on December 14th. The trial scheduling order was made on the same day.

An appeal filed by Friedland on December 13th might delay proceedings.

Friedland’s appeal pertains to a June 30th filing, wherein Friedland sought permission to file amended answers and defenses to the CFTC’s complaint.

The Court denied the Motion to Amend because Defendants failed to demonstrate good cause for their delay, and they did not cite specific facts establishing when they became aware of the basis for the proposed amendments or their diligence in seeking leave to amend.

Friedland filed for reconsideration, which was denied on December 13th.

That was followed up by a notice of appeal, filed later the same day.

Friedland has previously sought to push the January trial back 90 days,

so that sufficient time may be afforded for preparation, adjustments may be made based on outstanding motions, and to ensure the efficient adjudication of this matter is executed in a timely manner.

That motion, filed on December 6th, was denied on December 14th.

Pending trial and the resolution of Friedland’s appeal, the other point of note is a settlement conference scheduling order.

The order was made on December 15th, directing the parties to attend a to be scheduled settlement conference.

 

Update 25th December 2021 – The settlement conference has been scheduled for January 10th, 2022.

 

Update 6th February 2022 – No settlement was reached and Alan Friedland’s appeal was denied on February 1st.

The Jury Trial kicked off on January 31st. Day four of the trial was held on Thursday February 3rd.

On day four of his trial, Friedland settled with the CFTC.