SEC opposes Sloan’s $30,800 carve-out request
The SEC has filed an opposition to Faith Sloan’s request for $30,800.
In their April 4th filing, the SEC claim
Sloan filed a virtually identical motion on June 10, 2014.
The Court denied that motion on June 25, 2014. The Court should deny Sloan’s recycled motion as well.
The motion in question saw Sloan request $15,800 because she was ‘unable to pay for her food, her rent and her normal living expenses and will not be able to retain her attorney‘.
The motion was denied on the basis that the court had ordered ‘no “carve outs” (of money) would be issued to defendants who did not comply with orders to declare their assets to the SEC‘.
That was just shy of two years ago and despite Sloan since “considering” declaring her assets, nothing much has changed.
The SEC allege that as of April 4th, Sloan has
- refused to identify her assets, as required by Paragraph VI of the Preliminary Injunction and
- repeatedly violated the asset freeze in Paragraph III of the Preliminary Injunction and
The Court has repeatedly made clear that there will be no carve-outs from the asset freeze for defendants who fail to identify their assets.
As a result, Sloan’s refusal to identify her assets is reason enough to deny her motion to release funds.
Regarding the funds in question, Sloan claimed the SEC had failed “offered no evidence that the assets that the Court has frozen are in any way “tainted”.
To which the SEC have replied they are ‘not required to trace the frozen assets back to any specific fraudulent acts.‘
That is not the law.
The purpose of an asset freeze to ensure that a defendant does not dissipate funds during the pendency of the case, thus preserving those funds for distribution to defrauded investors upon entry of a final judgment.
As suspected, the burden of proof that the funds requested are not tainted falls on Sloan. Tainted or otherwise, in her filing Sloan offered up no explanation as to the source of the $30,800.
Another point of contention was Sloan’s citation of Luis v. U.S. and the sixth amendment. As noted by Don@ASDUpdates, the sixth amendment only applies to criminal proceedings. Sloan’s citation of Luis v. U.S. relies on the sixth amendment.
Luis involved a criminal prosecution for fraud related to health care.
Luis has no bearing on this case, for the obvious reason that the Sixth Amendment right to counsel does not apply in civil cases.
Sloan’s motion is before the court, with a decision expected either later this week or next.
Footnote: Our thanks to Don@ASDUpdates for providing a copy of the SEC’s April 4th “Opposition To Defendant Sloan’s Motion To Release Funds”.