Zeek Ponzi pimp clawback motions to dismiss denied
In an effort to get out of paying back the millions they collectively stole from Zeek Rewards victims, the scheme’s top profiteers filed a series of motions to dismiss mid 2014.
They then attempted to use the filing of these motions to stop the Receivership performing discovery (such as learning where they’d stashed their winnings).
A decision on that motion has been forthcoming, however with a recent ruling made on the filed motions to dismiss – it would now seem redundant.
Named as having filed respective motions to dismiss in the order are Trudy Gilmond, Trudy Gilmond, LLC, Jerry Napier, Darren Miller, Durant Brockett, Rhonda Gates, Innovation Marketing LLC, Aaron Andrews, Shara Andrews, Global Internet Formula, Inc., T. Lemont Silver, and Karen Silver.
Summarized in the order is the gist of the net-winner’s reasons for filing their motions to dismiss:
Defendants argue that this case must be dismissed for lack of subject matter jurisdiction pursuant to Rule 12(b)(1).
The SEC Action, from which the Receiver derives his authority to file the instant lawsuit, is based upon violations by RVG of federal securities statutes.
The Defendants contend that there is no subject matter jurisdiction in this case because RVG was not involved in the sale or marketing of any “securities.”
Basically they argue Zeek didn’t offer securities, and as such the SEC action, by which the Receievership “derives his authority” from, is null and void.
As per the court order, here’s why that’s a load of horseshit:
Section 2(a)(1) of the Securities Act and Section 3(a)(10) of the Exchange Act define a “security” to include an “investment contract.”
The Supreme Court has defined an “investment contract” as: (1) the investment of money; (2) in a common enterprise; (3) with an expectation of profits to be derived solely from the efforts of the promoter or a third party.
In the case of Zeek Rewards (a common enterprise), affiliates invested funds into VIP bids on the expectation of a 90 day ROI, funded by newly invested affiliate funds.
Quite clearly the participation of Zeek’s top pimps fits the definition of an “investment contract” described above.
The order continues;
The Howey test is a “flexible” principle “capable of adaptation to meet the countless and variable schemes devised by those who seek the use of the money of others on the promise of profits.”
The Supreme Court has explained that Congress intended the application of the Securities Act and Exchange Act “to turn on the economic realities underlying a transaction, and not on the name appended thereto.”
Enter the Howey test, designed to cut through the semantic bullshit we often see accompanying Ponzi schemes, by way of a series of prongs.
Courts have applied the Howey test to define a wide range of Ponzi schemes, pyramid schemes, and multi-level marketing schemes― including internet-based
schemes― as securities.The same holds true even if not all aspects of a scheme constituted securities, and even where some aspects of a scheme may have been legitimate.
In Zeek Rewards you had retail bids, which were sold through Zeekler. Completely irrelevant and dwarfed by the Ponzi VIP bids being purchased, but made available to the general public nonetheless.
Not surprisingly, the offering of retail bids means dick if the opportunity is operating as a Ponzi scheme.
This argument usually manifests itself as “but we sell a product or service!” when Ponzi schemes and their investors are challenged on the relevancy of any such offerings.
In the case of Zeek Rewards, here are the arguments its top Ponzi pimps floated in their respective motions:
Defendants implicitly concede that the Retail Profit Pool and the Matrix meet the first two elements of the Howey test, requiring an investment of money in a common enterprise.
Defendants’ argument is that they did not expect profits based solely upon the efforts of others; rather, they worked hard for the money they received.
Defendants have filed affidavits stating they worked many hours to:
(1) drive new customers to the penny auction site,
(2) promote the penny auction by placing daily advertisements on the internet,
(3) network with other marketing professionals to gain greater exposure for Zeekler and ZeekRewards,
(4) set up personal websites in an effort to drive traffic to Zeekler and ZeekRewards,
(5) recruit customers to the penny auction and new members to ZeekRewards,
(6) participate in training programs and leadership calls; and
(7) participate in mandatory compliance programs sponsored by ZeekRewards.
Courts have flexibly applied Howey’s “solely through the efforts of others” formulation.
And here’s what happens when said arguments are presented in a court of law:
Courts have flexibly applied Howey’s “solely through the efforts of others” formulation.
To hold otherwise would make it too “easy to evade [the Howey test] by adding a requirement that the buyer contribute a modicum of effort.”
Instead, courts have focused on whether promoters’ efforts are “undeniably significant” or “essential managerial efforts”driving the enterprise’s success or failure.
Before we continue, observe that none of the seven points raised above had anything to do with the daily ROI Zeek Rewards paid out. The sole requirement needed for Zeek to continue operating was an influx of newly invested affiliate funds.
The Court finds that the Defendants predominantly relied on the managerial “efforts of others” ―namely Burks and Rex Venture― to generate profits. Burks and Rex Venture contributed “significant” and “essential managerial efforts” to the enterprise.
They created, updated, and operated the websites, handled all payments, managed the bank accounts and payment service providers, managed affiliate and customer accounts, managed all affiliate and customer services, oversaw and disbursed all bids, operated the auctions, created all advertisements, sponsored recruiting videos and calls, and decided the daily payout percentages for the Retail Profit Pool.
It’s a bit long-winded, but the order is clarifying that the so-called effort Zeek’s top pimps claim they exerted, was ultimately irrelevant. They relied on Zeek Rewards (Rex Venture Group) to continue to receive new investment to pay them with.
Investors, on the other hand, could participate in the Retail Profit Pool and the Matrix with minimal effort.
For example, participating in the Retail Profit Pool required:
(i) purchasing a monthly subscription;
(ii) purchasing and giving away VIP Bids or selling Retail Bids;
(iii) placing one free online advertisement daily; and
(iv) enrolling penny auction customers, all of which could be accomplished via automated programs developed by Burks and Rex.
The ZeekRewards website boasted that copying and pasting free ads created by Defendants should take no more than five minutes per day.
Placing more than one ad per day, or working to create improved ads, had no impact on the daily award percentage earned by a qualified affiliate.
Similarly, participating in the Matrix required:
(i) purchasing a monthly subscription; and
(ii) recruiting at least two investors to enroll in the monthly subscription plan, after which that investor was eligible to receive commissions on every additional
paid subscriber within his or her “downline.”This minimal effort does not change the fact that investors relied primarily on the efforts of Burks and Rex for the profits they sought to share.
Indeed, courts have held that the “efforts of others” element of Howey is met where, as here, investors accrue profits primarily by recruiting new members.
Defendants’ emphasis upon the long hours they worked to recruit other others is misplaced. Without the essential managerial efforts of Burks and RVG, no profits would have been generated at all.
For the reasons stated above, Judge Mullen dismissed the net-winner’s claims that the Receivership had no authority in the matter (subject matter jurisdiction).
Basically Zeek was a Ponzi scheme that was involved in offering unregistered securities – and publishing ads (which was largely automated in any case) for said Ponzi scheme does not constitute significant effort towards the ROIs received.
Indeed the only thing that mattered when it came to the ROI was RVG’s shuffling of new affiliate funds to pay off existing investors (identified above as RVG’s “managerial efforts”).
Next up, the claim that the Receiver failed to “state a claim upon which relief can be granted”.
Here the court, despite the net-winner’s claims that no claims were stated, outlines the Receivership’s claims for relief:
In his First Claim for Relief, the Receiver seeks recovery of funds paid out to the Net Winners, alleging that these funds are the result of fraudulent transfers that are avoidable by the Receiver and recoverable from the Defendants.
Defendants argue that this claim must be dismissed because neither the Receiver nor RVG (in whose shoes he stands) is a “creditor” as defined in the North Carolina Uniform Fraudulent Transfer Act (“NCUFTA”) and therefore he has no standing to pursue fraudulent transfer claims.
Defendants’ argument is without merit. The NCUFTA defines “creditor” as a person who has a claim.
Basically the net-winners tried to argue RVG and the Receivership was not a creditor under North Carolina law.
Judge Mullen however found that North Carolina law ‘defines “creditor” as a person who has a claim’.
Quite clearly the Receivership has a claim here, and so the net-winner’s argument is baloney.
Specifically as to why it’s baloney,
it is well-settled that a Receiver has standing to assert claims for fraudulent transfer under the UFTA because the Receivership entity was harmed by the diversion of those assets. See Scholes v. Lehmann, 56 F.3d 750 (7th Cir. 1995).
In Scholes, the defendants, who included a net winner in a Ponzi scheme, argued that the receiver’s fraudulent transfer claims belonged to the creditors rather than the receiver.
The Seventh Circuit rejected this argument and found that because the corporate entities were harmed when assets were diverted through the fraudulent transfer, the receiver, as holder of claims belonging to the corporations, had standing to assert those claims.
This Court has also adopted the reasoning of the Scholes court. (various cases cited)
In those cases, the court-appointed receiver brought a suit to recover funds fraudulently transferred to the defendants in connection with a Ponzi scheme.
This Court explicitly relied on the Scholes decision in finding that the receiver had standing to bring the fraudulent transfer claims against the defendants based on the loss of funds that caused harm to the receivership entity.
Defendants’ position is contrary to the weight of authority and the Court finds that the Receiver does have standing to assert a claim under the NCUFTA.
Then we have the assertion from the net-winners that the Receivership
has failed to plead the NCUFTA claim with the specificity required by Rule 9(b).
Specifically, Defendants contend that the Complaint:
(1) fails to make a single factual allegation against any of the named Defendants (other than alleging their places of residence and that they were Net Winner Affiliates);
(2) constitutes a bare recital of the statutory elements of fraudulent transfer; and
(3) fails to identify the dates or amounts of any fraudulent transfers allegedly made by any of the named Defendants.
Right. The Receivership “failed to make a single factual allegation against any of the named Defendants”, y’know… other than naming them as net winners in a $850 million Ponzi scheme.
*cue twilight zone music*
In support of their argument, Defendants cite two unpublished cases, one from the Eastern District of North Carolina, and one from the Bankruptcy Court for the Middle District of North Carolina.
Neither case contains an articulation of the court’s reasoning for applying Rule 9(b) to a NCUFTA claim.
Courts that have closely analyzed the issue have found that fraudulent transfer claims pursuant to the UFTA are subject to Rule 8’s pleading standard.
As these courts explain, a claim for fraudulent transfer involves no allegations of fraud on the part of the defendant transferee, but only by the non-party
transferor (the Insiders here).Consequently, where a complaint does not allege that the defendants themselves committed fraudulent acts, Rule 8 applies.
Based upon the persuasive reasoning of these courts, the Court finds that Rule 8 governs the fraudulent transfer claim.
And the whole “waah the Receivership didn’t explicitly detail each and every ROI transaction from Zeek!” argument is then also tossed out the window:
Defendants contend that even if the Court applies the pleading requirements of Rule 8, the Complaint nevertheless fails because the Receiver makes only threadbare recitals of the elements of a NCUFTA claim supported by mere conclusory statements.
The Court has reviewed the Complaint, which sets forth in great detail the existence of the RVG Ponzi scheme, the manner in which it operated, the amount of funds transferred to the named Defendants, and the general timeframe of the transfers.
Defendants would have the Receiver allege the specific dates and amounts of each of the 690+ transfers from RVG during the life of ZeekRewards.
The Court finds such specificity to be unnecessary and unwarranted.
You received Ponzi ROIs from a Ponzi scheme and that’s enough to warrant a claim against you. Obvious would appear to be obvious… well, except to Zeek Rewards’ net-winners.
Taking all the Complaint’s allegations as true and drawing all reasonable inferences in Plaintiff’s favor, the Court finds that the Complaint states a plausible claim for relief for violation of the NCUFTA.
Accordingly, Defendants’ Motion to Dismiss this claim is denied.
The Receivership also made the claim against the net-winners under “common law fraudulent transfer”.
Defendants assert that this claim must be dismissed because the claim does not exist in North Carolina.
The Receiver contends that his common law fraudulent transfer claim is asserted in the alternative.
To the extent that the Receiver cannot assert claims under the NCUFTA, he argues that he is entitled under common law to recover the fraudulent transfers made by RVG to the Defendants.
The Court agrees. Defendants’ Motion to Dismiss this claim is likewise denied.
The last claim made by the Receiver was that under “constructive trust”.
A constructive trust is not an actual trust by the traditional definition. It is a legal fiction that is used as a remedy for unjust enrichment.
Hence, there is no trustee, but the constructive trust orders the person who would otherwise be unjustly enriched to transfer the property to the intended party.
Unjust enrichment in this case of course being the transfer of newly invested affiliate funds to Zeek’s top investors.
The Defendants move to dismiss the Receiver’s claim for constructive trust, arguing that “constructive trust” is an equitable remedy, not a cause of action.
Moreover, Defendants argue that North Carolina case law is clear that a constructive trust is an equitable remedy that is only available if there is no adequate legal remedy.
Here’s how that argument held up:
North Carolina law holds that a constructive trust may be requested as a claim or in the prayer for relief.
The Court finds that the Receiver has properly requested a constructive trust, regardless of whether it is technically considered a claim or a remedy.
The issue of whether or not the net-winners engaged in any wrongdoing was also raised in this argument. The matter was addressed as follows:
Defendants further contend that the Complaint fails to allege any wrongdoing by any of the named Defendants sufficient to give rise to the imposition of a constructive trust.
“A constructive trust . . . is a trust by operation of law which arises contrary to intention . . . against one who . . . in any way against equity and good conscience, either has obtained or holds the legal right to property which he ought not, in equity and good conscience, hold and enjoy.” Roper v. Edwards, 373 S.E.2d 423, 425 (N.C. 1988)
Defendants’ argument that they should not be subjected to the imposition of a constructive trust because their own fraud is not the subject of the complaint fails.
The Complaint sets forth allegations sufficient to show that “some other circumstance” makes it inequitable for these Defendants to retain the funds they received.
This “other circumstance” is that Defendants received the funds from an admitted Ponzi and pyramid scheme, and that the funds are nothing more than other people’s money wrongfully diverted from RVG.
Therefore, Defendants have received property which they “ought not, in equity and good conscience, hold and enjoy.”
Key is that the issue of whether they engaged in fraud (wrongdoing) is infact a non-issue for the purpose of establishing collective trust. The mere fact that they received new investor funds in a Ponzi scheme is sufficient enough.
Lastly, Defendants argue that a constructive trust is an equitable remedy that is only available if there is no adequate legal remedy.
Defendants contend that the Receiver’s allegation that he has “no adequate remedy at law” is a naked legal conclusion, and must be supported by factual allegations to be viable.
Judge Mullen yet again shoots down the net-winners’ argument:
Contrary to Defendants’ argument, a review of the Complaint reveals that the Receiver has alleged sufficient facts which, viewed in the light most favorable to the Receiver, demonstrate that there is no adequate remedy at law.
Defendants, as some of the top-dollar ZeekRewards net winners, were early adopters of the ZeekRewards scheme.
As a result, these named Defendants may have already dissipated much of their net winnings, which without a constructive trust would be impossible for the Receiver to trace and secure.
The Receivership will likely never be able to pay victims of the ZeekRewards scheme the full amount of their losses.
Without a constructive trust and the ability to trace fraudulently transferred Receivership Assets, the Receiver’s remedy at law is inadequate.
Therefore, the Complaint contains sufficient allegations to warrant the imposition of a constructive trust against the Defendants.
All in all, not one argument raised by the net-winners in their motions to dismiss was upheld. The motions were dismissed in their entirety.
So, what happens now?
As I understand it, discovery will now take place and the case will move forward. I don’t see any other roadblocks in place (these motions to dismiss have been hanging over the case for nearly six months), so hopefully we’ll see things move along at a much faster speed.
As to the Ponzi pimps themselves; You had a good run and although all of your arguments were poorly thought out and presented, did manage to stall proceedings against you for half a year.
Time to pay up.
Buried in a footnote in Judge Mullen’s order is, what I believe, a taste to come:
The Defendants themselves have not admitted that ZeekRewards was a Ponzi or pyramid scheme.
However, the principal, Paul Burks, and certain insiders have made such an admission and have agreed to plead guilty to securities fraud.
But please net-winners, feel free to continue the “Zeek Rewards wasn’t a Ponzi scheme” charade. I’ve stocked up on the popcorn and am entirely looking forward to the next episode of “disillusioned Ponzi pimps meet reality”.
Stay tuned…
Footnote: Our thanks to Don @ ASDUpdates for providing a copy of Judge Mullen’s December 8th order.
Update 11th December 2014 – An amended order was issued by Judge Mullen yesterday, slightly changing the wording of the last quote appearing in the above article.
It now reads:
To be clear, the Defendants themselves have not admitted that ZeekRewards was a Ponzi or pyramid scheme.
However, the principal, Paul Burks, and certain insiders have made such an admission. In addition, management insiders Dawn Wright-Olivares and Danny Olivares have pleaded guilty to engaging in a securities fraud conspiracy.
Update 12th December 2014 – Another amended order has been published today, further correcting the above footnote.
It now reads:
To be clear, the Defendants themselves have not admitted that ZeekRewards was a Ponzi or pyramid scheme.
However, certain insiders have made such an admission. In addition, management insiders Dawn Wright-Olivares and Danny Olivares have pleaded guilty to engaging in a securities fraud conspiracy.
The issue seems to be whether or not Paul Burks has made an admission that Zeek Rewards was a Ponzi scheme.
Whether Judge Mullen made a mistake in acknowledging Burks had made an admission or accidentally revealed the contents of otherwise sealed court filings is unclear.
Whaat !! is it all over then ?
Waaaah !
ps: does this mean the jurisdiction debate is OVER ? what about the discovery allowed to defendants in bell vs disner.
no no no Waaaah !
It was over in 2012, when the SEC filed charges.
I’ve been trying to tell you that for some time.
well, why should anybody go around listening to you ? 🙂
now judge mullen i can believe.
kickass order by judge mullen, deserves a second reading.
howey is the boss and gilmond got the toss.
what can i say! good show.
If you carefully read the decision a few times, you will probably find SOMETHING you can focus on, something where you gradually can replace the reality with your own version of it (e.g. “The Judge didn’t sound very confident in his statements, so he will probably reverse his judgment in that part.”).
That method has worked before, so it will probably work again. If it doesn’t work, try to rewrite it into a transcript from an oral hearing?
The ponzi pimps will now spread bogosity such as Judge never said we didn’t work for our money (gross misinterpretation).
That was “access to material”, not “discovery”. It was decided already in the initial hearing in April 2014 that the Receiver would have to give the Defendants access to material, and would need to host the database and pay the expenses for it. But the details were not decided then.
I believe it was mentioned in 86-1.pdf (transcript from hearing) and 05.pdf (plan for status conference).
The Motion To Dismiss procedure was decided in the same hearing, WHEN to file it etc. but not the details. Several other procedures were decided at the same time.
I would have thrown my $0.02 into into the debate, if it wasn’t so long. I knew there was no damn way they there going to get past the Howey Test. That whole debate was Too Long / Did Not Waste Time. Figured someone else would mention Howey or already did.
Expect Anjalitroll to be out of action for a while.
She’ll doubtlessly be too busy trying to come up with an analysis of the liquid substance she claimed was found on the floor of Judge Mullens’ courtroom following the SEC complaint hearing.
It obviously wasn’t what she implied it was, goodness knows what she’ll dream up as to its’ origin.
as far as i remember from the transcript of the second hearing of bell vs disner, sorkins said that his clients cannot argue the jurisdiction issue till they had discovery. the judge allowed discovery.
the judge allowed them time for studying the material and preparing their case.
so where this Kaboom! came from is not clear to me yet.
You Wish !!
isn’t the above Factually wrong ?
1]burks/rex civil consent agreement : no admission,no denial of guilt
2]burks criminal case: pleading of not guilty
3]the olivares: plea bargain pleading guilty
the order might have said , paul burks ‘effectively’ pleaded guilty in the civil settlement.
saying “Paul Burks,… have ‘made such an admission’ and have ‘agreed to plead guilty’ to securities fraud “—— is stretching, No ?
very funny! judge mullen just mopped up the whole court, so no analysis is possible now. move along !
@anjali
I think the problem perhaps lies with your memory…
It’s of no consequence any longer.
The window of opportunity you had to confuse the victims and add to the HYIP ponzi promoters campaign has well and truly slammed shut.
Somebody would have to be trying really, really hard to ignore reality for you to be anything more than that one ant you find at every picnic.
Annoying, for sure, but not worth anything more than a passing thought.
If Gilmond or her co defendants want to argue that Bell has no authority to clawback funds due to lack of SEC jurisdiction they can make the argument. The determination of jurisdiction will be based on the “merits.” Here’s what Mullen said about that…
“The Defendants themselves have not admitted that ZeekRewards was a Ponzi or pyramid scheme.” This is another way of saying that the defendant’s dispute the SEC has jurisdiction.
Mullen’s denial of the defendant’s Motion to Dismiss is not a finding based on the “merits,” but expresses the Court’s opinion (based on the Twombly factors) that there is a reasonable likelihood that the Plaintiff could prevail. Accordingly, the plaintiff’s clawback action is not dismissed. That is all. The case moves forward and the defendant’s can assert whatever defenses they want…including jurisdiction.
However, given the judge’s reasoning for denying the Motion to Dismiss, its pretty clear that the “work peformed” by the defendants is going to be viewed as insignificant, these were investment contracts and the the SEC has jurisdiction.
No, its not over, but the trajectory is clear.
Technically yes. In the context of why the judge is denying the Motion to dismiss…inconsequential.
got it. thanks.
so the twombly factors [claim should be plausible], are similar to what we call prima facie evidence in india.
i hope gilmond’s attorneys will be giving some statement about how they plan to move forward.
because, in the second court hearing transcript [86-1] judge mullen asked terpening : are you guys here to fight?
and terpening said – yessir, we’re here to fight.
i hope they will give us enough drama, why be boring?
anjali: isn’t the above Factually wrong ?
hoss: Technically yes.
so, if i give you a slice of cake, and you find LRM’s picnic ant on it, what’s to stop you from thinking that there are more ants in the rest of the cake?
logically speaking.
He has admitted the factual description, “in major” rather than in detail. He has neither denied nor admitted any wrongdoing.
I used the expression “in major” to indicate that it was based on the facts known at that time, e.g. based on missing books. The amount has changed from $600 million to $850 million, and most other details have probably changed in a similar way.
Yes. Given the amount of money involved and the defendant’s ability to share the cost of defense it was virtually assured that they would choose to resist. They have little to lose and everything to gain.
You’re probably correct. My point wasn’t about the details, but about WHEN something was decided.
The difference between “access to material” and “discovery” is that the first one will allow the defendant’s attorneys to browse through the material themselves, rather than having it sent as copies. It will allow them to filter away unimportant material and focus on more important parts.
If the Receiver is hosting the material in a searchable database, it’s usually “access to material”. If the Receiver is sending the documents on request, it’s “discovery”.
“It’s isn’t about what you call something, it’s about the nature of it”. Sorkin may have called it discovery, but they were mostly talking about 3-400 Gb of data in a searchable database.
The judge is never wrong (excepting appeals.) If he says Burks admitted guilt then there’s probably justification for the statement.
well , norway , even the court called it ‘discovery’
“COURT : Discovery will end the end of February. We’re done with all discovery by the end of February. You ain’t getting more than 15 and the named defendants. You can have 20. That’s all you need”
there is talk about trial dates and expert testimony. are merits of the jurisdiction debate going to be addressed at trial ?
who wants ‘justification’, show me a document where burks has admitted guilt and says he wants to plead guilty.
You can probably interpret it to “Do you represent the whole class for as long as it takes?”, even if he didn’t ask specifically about that.
Individual main defendants will usually use the same lawfirm and share the expenses. If enough of them use the same lawfirm, that lawfirm will also indirectly represent the whole class as the “main lawfirm”.
no, whether terpening and his firm Nexsen Pruet, would be willing to ‘represent the class’, was a different discussion , and judge mullen encouraged terpening to represent the ‘class’, if it came to that.
the question : are you guys here to fight?, was addressed to the idea, that the defendants, gilmond et all wouldn’t bail out after wasting court time on discovery etc.
It’s more than 2 weeks since I looked at that transcript, and I only looked at the main points. I have no intention of discussng the details there.
The meaning of something will usually come from the context, e.g. WHEN the Judge asked about it. He will usually try to get a quick overview before going into details, e.g. WHO are the attorneys and WHO do they represent, and HOW do they do it?
It was a “kickoff meeting” for a whole case with multiple defendants. You must see it in that context. “Are you here to fight?” doesn’t make any logical sense if you interpret it too literally. It’s more likely a type of “court slang” than a literal question.
I already explained no lo contendere and how a person is considered guilty without admitting guilt in a criminal setting. Accept that the principal may apply in a civil setting or don’t but for heaven’s sake don’t pretend that there is a document that will satisfy your neccessities.
Literally? Like fists, forks and knives, guns and nuclear weapons. I realize you have trouble but come on nobody is taking it that literally. Fight…. as in fight the clawback. Man sometimes…
Nope, more about how motivated they were than about the type of weapon. “Are you motivated for a fight?” doesn’t make much sense as a question in the initial phase of a “kickoff meeting”. The judge isn’t a “personal coach”, he’s more like a “case organizer”.
Here’s the paragraph you quoted:
The context was partly explained in the same paragraph, partly explained in the rest of the post.
Your consistent use of swear words is somewhat offensive. It makes you sound ridiculous by using foul language, in the respect of being objective and professional. It makes your reporting sound as if you have a personal vendetta against the entire issue.
Take it easy bro, be a “Practicing Idealist” and loose the nasty language, you will feel better about your outstanding professionalism that way. Just a suggestion.
I mentioned 2 types, and there you have the second type. It’s clearly a formal type of discovery, limited by a number of requests. That type is a standard pre-trial procedure.
You can see the answer to one of them in 88-1.pdf, Trudy Gilmond’s answer to interrogatories from the Receiver. It doesn’t contain any meaningful answers other than the first one, but you can see the TYPE of questions.
My main point was that you must look at the context rather than the words.
* Was Judge Graham C. Mullen’s intention with the “fight question” to check how motivated the attorneys were, or did he try to get a quick overview?
* Were people talking about access to documents stored in a database there, or were they talking about a formal discovery procedure?
I had already partly covered that in the “whole class” statement?
The operative part was “for as long as it takes”. It was covered in the context, e.g. that main defendants could “join forces” and use the same lawfirm, etc., etc.
One of the duties of the court is to check that unnamed class members will be properly represented during the whole trial, that at least one lawfirm is in “for the long run”. The question was probably about that, not about the attorney’s eagerness to fight.
The Order was amended today, Doc 91, which changes the wording of footnote 3 to say this:
Wow… the Judge’s clerk must have read Anjali’s comment. Thanks Don.
He specified this part to not include Paul Burks, and to be specific about which insiders:
People have already made some comments about it, e.g. Anjali in post #10. That probably means that Judge Graham C. Mullen is partly relying on her legal expertise as an additional source for corrections? 🙂
I tried to limit the scope, e.g. “partly relying”, “additional source”, one specific judge rather than the entire system.
Thanks for the update guys.
i wouldn’t believe that even if you held a gun to my head! 🙂
“However, the principal, Paul Burks, and certain insiders have made such an admission.”…… is still not correct.
paul burks has not made any admission. if the court considers burks acquiescence to the SEC, an admission , the wording should convey that , ie, ‘by entering a consent agreement with the SEC paul burks effectively or virtually admits guilt’.
there is a reason, civil settlements, give defendants a choice to admit or deny guilt. if a civil settlement converts to ‘automatic admission of guilt’, why give the choice at all.
Soooooo… another amended order tomorrow?
*pulls out hair*
i hope burks lawyers take it up with the judge! his lawyers are representing his interests in this case.
saying he has admitted guilt, may have an effect on his criminal case.
no lo contendere, does not apply in civil settings, so why must anyone extend the principal to civil cases?
why should i not expect a document, which clearly shows burks has admitted guilt ?
court orders generally have three types of information:
1] based on precedent [previous case orders]
2] based on actual case documents
3] based on judge’s opinion
“However, the principal, Paul Burks…. have made such an admission.”……….. in which category can you fix this statement ?
point 2] seems like the only rational explanation. so, lets see the document.
when the court, admitted the burks/SEC settlement, the very first para clearly notes that the defendant has not admitted or denied allegations.
how does this get translated to “Paul Burks…. have made such an admission”, is baffling.
“”Judgment as to defendant Paul Burks : consented to the [proposed]judgement as to burks without admitting or denying the allegations of the complaint [except as to jurisdiction]…”
don of ASDupdates, may know if burks has made any later filing ‘admitting guilt’:
drive.google.com/viewerng/viewer?a=v&pid=sites&srcid=YXNkdXBkYXRlcy5jb218ZmlsZXMtd2Vic2l0ZXxneDo1YjQwMTAxMzY4MWM1MGNm
Some docs have been filed sealed IIRC. Might be the Judge has access to docs we don’t (yet).
According to Anjalitroll Burks must have the worst legal representation in history.
He rolled over and gave up all he did without actually being guilty.
Mind you, a more sensible and practical view might be he didn’t admit guilt in the civil case, knowing it would be used against him in the ensuing criminal case.
It’s a good thing Anjalitroll knows what is REALLY going on, otherwise readers might jump to conclusions and start to believe Zeek, Burks, RVG and the top pimps are trussed up like Christmas turkeys.
It sure is fun watching her make up stories to fit the facts, though.
How can you say that with any certainty ??
Unless you have inside information, you have no clue what is going on or has gone on.
None of the parties involved have any obligation to make such information public at this time.
As usual you are making things up.
if some docs have been filed under seal, the judge cannot divulge information from those documents in an order. the documents under seal are for the courts eyes only.
Well I’m out of ideas then.
Judge Mullen is batman?
yes, he may not have admitted guilt in the civil case because he was planning to plead ‘not guilty’ in the criminal case.
so, the conclusion that he did not admit guilt in the civil case, stands. it cannot be interpreted any other way.
judge mullen made a boo boo ?
Once maybe, but twice?
Let’s see if anything comes of it.
Perhaps the answer is as simple as:
“Anjalitroll is an amateur whose only experience of US civil law is what she has seen on TV, IOW, none, but who is pretending she knows what she’s talking about”
Given that Anjalitroll is the only person doing any interpreting, who cares what she “interprets”
It is what it is AT THIS MOMENT
Anything else is pure speculation and, in Anjalitrolls case, uninformed and inexperienced speculation.
There’s a very good reason most law schools in the USA require a bachelor’s degree, a satisfactory undergraduate grade point average (GPA), and a satisfactory score on the Law School Admission Test (LSAT) as prerequisites for admission and then a further three years of study.
That reason, believe it or not, is so they can learn how to consult Google and Wikipedia for anything remotely concerned with a subject under discussion, as is the case with Anjalitroll
Anjalitroll might provide a minute amount of entertainment value, but she sure as h*** shouldn’t be the first person consulted when seeking legal opinion, ESPECIALLY with her history.
I suggest you focus your curiosity on the legal implications of the word “consented” in this passage
“Judgment as to defendant Paul Burks : consented to the [proposed]judgement as to burks without admitting or denying the allegations of the complaint [except as to jurisdiction]…”
and how to unfocus from :’as to burks without admitting or denying the allegations of the complaint’
where do we stuff this phrase? it does not nonexist.
Wanna bet ??
I’ll bet your hero, Ira Sorkin could come up with a dozen other interpretations without raising a sweat.
For example this might apply. There are certain writings under seal from what I recall.
from wiki:
we know paul burks has filed some information under seal, and we know there is no court order for publicizing it.
so, judge mullen could not have included sealed information in a public court order.
Under the principal of cognovit actionem Burks could very well have admitted that Zeek was a ponzi while making no admission of guilt.
The shoe fits.
Yada yada yada. Demand a retraction.
I only suggested it may have been under seal not that it was, and in any event if he “confessed to the action” as I suggest, disclosing that Burks admitted that Zeek was a ponzi is of no prejudice to him, since he concurrently made no admission of guilt.
Burks admission is rightly a factor to be considered by Mullen in denying the Gilmond’s Motion to Dismiss and that is how it was used.
so, the sole owner of zeek rewards, who administered zeek rewards, sidles up to the civil court judge, and admits he ran a ponzi scheme, but is still innocent.
is the civil court a church confessional? is judge mullen a priest? 🙂
meanwhile, in the criminal case, burks attorney noel tin, tells the press that his client ‘did not commit any crime’.
except that running a ponzi scheme is a crime, which according to hoss, burks has admitted to the civil court, because ….
hoss, why would burks confess he ran a ponzi scheme to the civil court?
Who knows, Anjalitroll who knows ??
Stranger things have happened.
Anjalitroll not being able to come up with a reason he would do so is beside the point.
It’s up to you to prove or disprove your theories.
what? are you only good for finding picnic ants, then ?
unless we can See a court document where burks has admitted that zeek was a ponzi , i am going to treat “However, the principal, Paul Burks,… have made such an admission” purely as INFERENCE of the court.
burks has not himself, in writing, made any such admission, but because of the consent agreement and consequently the settlement with the receiver bell, the court infers, that burks has made the admission .
if it is inference, then it is a court ‘opinion’ and can and should be challenged.
Paging don@ASDupdates for relevant document information !
Maybe it was in his best interest. He attested to the fact that he consented under no coercion, by his own free will and without mental reservation.
Maybe the man had a guilty conscience or he was sick to death with worry. Who knows, some people hate uncertainty.
Good on you.
As for the everyone else, we’ll just accept the status quo.
Good luck with that. Judge’s are paid to have opinions and in this case his opinion is apparently that Burks admitted that Zeek was a ponzi.
The affiliates can still argue to the contrary. Nobody’s rights have been abridged.
No. Does not admit guilt. That different. Read no lo contendere.
really hoss? and then he went and pleaded ‘not guilty’ in the criminal case? did he leave his guilty conscience and worries, in the civil court parking lot, hoss?
no.
no lo contendere has no role in the civil suit.
no lo contendere has no role in the criminal case because he pleaded ‘not guilty’ there.
You would have to ask him to know the answer to that.
The fact you can’t imagine it happening says more about you and your lack of knowledge and experience than it does about anything else.
now, who’s going to travel all the way over there to ask him LRM ? be practical.
if burks has admitted to the civil court that he ran a ponzi scheme, there will be a document to that effect. find it and support your stand, or stop blabbering.
Hey, you’re the one making stuff up.
Once again, you’re the one telling the story.
There “will be a document” is not a truth, it’s merely the opinion of a non-US citizen with no experience of the law or civil cases, and who has never even been inside the courtroom as a civil case is being heard, so has absolutely no idea how many circumstances exist under which the judge could make the statement he did
There are many documents under seal in this case, with only the the lawyers and Judge able to see them.
It has been alluded to that Burks has made a settlement, and it is quite possible that Judge Mullen’s clerk may have made the “Footnote 3” mistake, and it was later caught by the Judge or defendant’s lawyer.
(All of my legal opinions come from watching Judge Judy, Judge Milian, and Judge Dredd movies)
1] one settlement with SEC — burks clearly did not admit anything.
2] one settlement with bell ——burks has no need to admit anything to a receiver except for settling the cash amount payable.
3] after these two settlements burks has No Requirement to admit anything under seal, he’s all done and settled.
4] burks is not buttcrazy to admit anything in the civil action, because he has to protect himself in his criminal case.
5] IT DOES NOT ADD UP . i think burks has not made an admission that zeek was a ponzi, this is the inference of the court.
6] i’m afraid ASDupdates will have a different legal viewpoint from me, because we are differently educated. i rely on reruns of ‘the practice’ mainly .
He has only admitted not to contest the validity, amount and enforceability of his Confession of Judgment.
as we can see ^^^ a confession of judgement admitting ‘liability’ has nothing to do with admitting ‘ponzi’ or ‘guilt’.
1] there is a document.
2] the judge has used ‘inference’, and has stated his personal opinion.
LRM you may choose whichever answer suits your cause best. if there is third possibility, please do share.
Very obviously that is true, but if you ponder how “no contest” applies in criminal matters you may see related applications in a civil setting.
A plea of No contest requires “No admission of guilt” but that is not to say that it means “not guilty,” or innocent. Quite to the contrary the defendant is held to be guilty.
Civilly, a defendant may admit to the facts (i.e., its a ponzi… without admitting guilt )but that does not mean the defendant is not guilty.
For all you know Paul Burks will assert that he had no scienter, no knowledge of guilt or any intention to defraud and it was only when the SEC arrived and educated him that he understood and acknowledged that Zeek was a ponzi. He admitted the facts but is he criminally guilty? It really comes back to what kind of representations he made and his state of mind when he made them.
We may never know why Burks capitulated but admitting the facts without admitting guilt is a justifiable position to take under the circumstances… and especially if Burks attorney believed criminal charges were possible.
I think you have missed the point. Burks is not admitting liability, he is only admitting the facts without admitting guilt.
Guessing again, Anjalitroll you don’t know
To you, maybe, Anjalitroll to me it’s perfectly clear
And I think he has.
Prove your theory is any more credible than mine, or be quiet.
Citation please or it doesn’t exist
1] the SEC does not and did not offer no lo contendere to burks, because that’s NOT what the SEC offers. so whether a pleading of ‘no contest’ means guilt or not, is not relevant here.
2] the SEC offers no admit, no denial, and that’s the only issue relevant here.
3] no admit,no deny, does NOT mean an admission of guilt
4] the SEC has just changed its rules demanding ‘admission of guilt’ in some seriously fraudulent matters. this proves that no admit, no deny, DOES NOT translate to admission of guilt.
Burks has only agreed to Liability with the receiver. he has admitted No Facts to the receiver.
burks has Not admitted to any Facts or any admission of Guilt in his SEC settlement either.
The above relates to what may have been Burks’ admission of facts not these money judgments insiders and net winners entered into with the Receiver.
where is this ‘Secret’ admission of facts, by burks.
has it been sent to mars on a shuttle, for safekeeping?
WHY would burks make an admission of Any Facts, AFTER settling his civil case with the SEC and the Receiver.
and if it is So Secret, the court cannot use it carelessly in an open court order.
Document 7 Paul Burks Consent Order when taken in part or in whole leaves no doubt that the judge has justification for opining that Burks admitted that RVG/Zeekler was a ponzi. No secret documents, under seal are needed.
Generally Burks agrees that the SEC has jurisdiction, which is in itself an admission that securities were involved and
Item 16 states that Burks agrees that he may not deny the allegations in the Complaint, i.e., Allegation #1 in particular that Zeek was a ponzi.
That should be rather obvious, if you’re talking about criminal charges.
Paul Burks signed a Consent Decree in the “SEC v. Paul Burks”, and they will automatically be of the type “neither denying nor admitting any guilt”, because the facts haven’t been tried in court.
It also PREVENTS findings of facts. That’s why the finding of securities was “missing”, leading to theories about “unlawful shutdown” / “the SEC didn’t find any securities because RVG didn’t involve any”, later leading to “SEC didn’t have any jurisdiction, and neither did the Court!”, leading to “We must fight the evil gubmint!”.
In “Bell v. Paul Burks et al”, none of the defendants admitted any wrongdoing they hadn’t already admitted in a criminal case (Dawn Wright-Olivares, Daniel Olivares). Alexandre De Brantes admitted to have “unknowingly” received fraudulent transfers / breach of fiduciary duty.
Who knows,
you certainly have no idea, one way or the other and no way of finding out, so stop inventing theories.
If it were generally available, it wouldn’t be a secret, would it ???
You’re the only one saying it’s secret.
The fact an anonymous internet blogger can’t find it doesn’t make it a secret
Believe it or not, courts are under no obligation to clarify the situation for anonymous internet bloggers, neither do they care if Anjalitroll is convinced something has or has not taken place.
Take the provisions of the Consent order in combination and it is exactly “as if” Burks entered a plea of no lo contendere to the civil charges. He does not dispute the allegations which in the eyes of the law is an admission that the allegations are true. Same same. This legally valid admission is not binding on Gilmond et al, but can be cited as a reason to deny her Motion to Dismiss.
Another Amended Order, Doc 92:
So anjali has been emailing the court then?
Anjali owns Mullen.
Soooo…..
….
…anjali is batman?
Man, if only she was this vigilant during the whole Speak Asia fiasco.
The shit we could have got done…
I’m glad I didn’t actively try to discuss it. 🙂
On a second thought, it could have been fun if I had discussed it actively against her, too.
“It’s hard to admit it, but you were absolutely right. There WAS actually a flaw in footnote 3, page 15 in a court document”. 🙂
You do realize, I hope that Anjalitroll is going to be able to live off this for years.
Every time there’s a judgement released, Anjalitroll can interject with “It’s not true. It’s a mistake. It can happen, you know”
Life as we know it has changed forever.
I think I better just shut down the blog before she wakes up…
BehindMLM is over people. RIP.
UNBELIEVABLE !!!
did you guys know i was this smart? i didn’t 🙂
i’m in a bit of a shock.
but the sad part is, i’m going to hold this entire order at a distance from my mind, and treat it with a pinch of salt.
not enough due diligence people! hurried scurried order!
so, who’s the Boss LRM eh? eh ?
i had a clear as day dream last night , that i would wake up and find the order amended.
so i’m intuitive too? i just cant deal with myself right now!
🙂
i saw 88-1.pdf, and found nothing wrong with her answers.
she’s pretty strongly convinced zeek rewards was not a ponzi/pyramid.
the court has allowed defendants 15/20 depositions in their favor, for the upcoming trial[?]
kaplan and grimes will have to explain why zeek was not a ponzi scheme.
“Trudy Gilmond states that Hemy Kaplan and Kevin Grimes have relevant information.” [related to her defenses] —-88-1.pdf
the interrogatory questions from bell, were a bit silly, considering that gilmond has no access to back office info of zeek, whereas he has full access.
You can be glad you didn’t focus specifically on footnote 3 in the article.
“i’m in a bit of a shock. but the sad part is, i’m going to hold this entire
orderarticle at a distance from my mind, and treat it with a pinch of salt.” 🙂You are truly Queen for a Day. Pray tell Majesty,
Which ” insiders” made admissions and are they under seal? Did Burks admit the ponzi?
What really is the deal?
I mentioned some in post #75, but there the focus was on whether Paul Burks had admitted any wrongdoing. Source for that post was ZeekDoc259-main.pdf.
spoken like a true miser. how about a week??? how about some gratitude???
norway has already given the details of insiders who have pleaded negligence [olivares] and daftness [unknowingly].
the amendments the court made in the order, were regarding paul burks only.
first they removed the untruth that —burks wanted to plead guilty
second they removed the untruth that —burks has admitted zeek was a ponzi.
the truth is that burks has admitted, nothing, nothing, nothing, and the truth is that burks has pleaded not guilty in his criminal case . anything beyond this is Inference.
Yes, for “in camera review” only.
hoss : are they under seal?
norway : Yes, for “in camera review” only.
He has obviously admitted SOME facts, e.g. who he is and the position he held in RVG / Zeek Rewards etc., and probably the amount he personally took out, when Zeek Rewards was started and other relevant background information.
What he hasn’t admitted are the legal allegations, e.g. that Zeek Rewards was fraudulent. That means he hasn’t admitted any fiduciary breach of duty either, other than indirectly indicating that he accepts “something” through his settlement (he confessed to not dispute amount or validity of the settlement).
That was beyond your “nothing, nothing, nothing” version. You will eventually learn how to live with it. 🙂
Burks has admitted nothing but handed over, what was it, four million bucks and control of his company.
Yep, admitting nothing, nothing, nothing sure as he*** made a lot of material difference to the outcome of the civil proceedings.
It was a donation for the fine work they’ve done so far. LMAO!
Not the same as filed under seal.
yep , burks settled the entire civil case against him, with NO prejudice to him.
the SEC trotted around, smirking away, as though they had bagged the entire deal.
the material difference to the outcome of the case is that the SEC will have to prove its case as judge mullens noted: “To be clear, the Defendants themselves have not admitted that ZeekRewards was a Ponzi or pyramid scheme.”
FAT lot of good the SEC’s settlement did them! now they have to work for their salary, and prove their case! did i hear judge mullen talk about a trial? yeah o yeah! BringItOn!
But Majesty, thou knowest not what hast been filed under seal.
May we not as likely infer that a blundering clerk hast written of that which should not have been written?
Methinks the unexpurgated version strikes closer to the heart.
It shut down the ponzi/pyramid. Installed a Receiver who has returned about eleventy million dollars to net losers and is suing the rest for another eleventy million dollars.
Seems like things are going pretty well.
It wasn’t presented as “exactly the same” either. If they had been exactly the same, I could simply have answered “NO” without specifying “in camera”.
You must look at how well your 4 questions were answered (in 2 posts) rather than at “additional details”.
* Which insiders made admissions? #1
* are they under seal? #2
* Did Burks admit the Ponzi? #1
* What really is the deal? #1 and #2
The Receiver will need to prove his case. SEC won’t be involved in that?
The Order Denying Motion To Dismiss has already looked at the main aspects of the case, and have found that he has a reasonable chance to prove his case.
You have probably followed my advice in post #4.
Putting SEC into that position IS a reality-change.
The answer is yes or no, not that the Receiver’s settlements were reviewed in camera. We know the basics and existence of those in camera settlements because they are NOT SEALED. .
My question was in effect did Burks admit that Zeek was a ponzi in some document that IS under seal.
Whomever, wrote the Order got the idea that Burks admitted Zeek was a ponzi from somewhere…. and it clearly was not from the Consent Order or the in camera Receiver settlements that you cited…so where did the idea come from?
“NO” would have been completely misleading. It would have required much more details than the “YES” answer to become meaningful.
“Yes, for “in camera review” only” told you the most important parts in a very short statement. You could pick up the meaning of “in camera” from its context in the quote, or google it yourself for additional details. Anjali managed to do it …
“In camera” is a type of extended version of “under seal”, so “NO” would have been completely misleading.
“Whomever, wrote the Order” should normally be Judge Graham C. Mullen himself, maybe with the assistance of the Magistrate Judge.
You can’t seriously expect me to answer that? I would immediately have pointed out that the question was meaningless if you had asked it. You know perfectly well that nobody here have access to sealed documents.
Now you really have lost the plot, Anjalitroll
Prove which case against whom ??
A case which may (or may not) eventuate at some time in the future ???
Any other “proving” which needs to be done is up to the receiver, which means it will, in effect, be paid for by the victims.
As Hoss clearly pointed out:
You can dance around with your fingers in your ears singing “la la la” all you like and gazing into your crystal ball predicting what could happen.
Doesn’t change what “IS” one little bit
You could have at least understood that in camera is not the same as filed under seal.
Now you must slander the judge? It was only last week that he was your working class hero. I guess nobody likes to be jilted, so if it helps you, keep repeating Sorkin’s absurdly disconnected argument that; “its not a penny stock auction… so it can not be a security.”
The Order denying the Motion to Dismiss thoroughly exposed the affiliate’s hollow arguments…and yours with it, so quit chest thumping and claiming that the mistake of a junior law clerk has anything to do with anything.
The big picture here, in case you forgot, is that Mullen signed an Order that handed the defendant’s asses to them in a bucket. Why don’t you try to explain that instead of maligning the judge for the mistakes of his law clerk.
The Order Denying Motion To Dismiss, relies on the SEC’s replies regarding the securities questions.
The Order Denying Motion To Dismiss, relies on receiver bells replies to address the questions regarding fraudulent transfers, definition of constructive trust etc.
this order is the prima facie observation of the court, and shows involvement of both SEC and receiver.
so, when it comes to proving the case on merits [trial], i would assume, the SEC and receiver both will have to prove their points?
receiver cannot answer questions based on SEC’s jurisdiction?
never, when did i do that?
i’m sure the order will be appealed. relax and watch the show. just because your’e on the winning side, no need to chest thump.
You are now talking absolute nonsense and basing your questions on the observations of an inexperienced, biased and untrained observer of a situation and system about which you have no clue.
You are continually jumping backward and forward between separate issues involving the SEC, the receiver and the DoJ then comparing civil and criminal proceedings while ignoring the glaring differences between the two.
Throw in the fact you are assuming each separate proceeding (including those related to third parties) will have an influence on all of the others and it’s not hard to see the reason for your demonstrable complete lack of understanding.
Further, you are demanding answers to questions based on the conspiracy theory based rantings of a notorious internet troll which have little (if anything) to do with what IS
It IS funny watching you so desperately trying to save face, though, so please continue.
stop blabbering and answer my question, or own up that You Don’t Know.
i did not even mention the criminal proceedings in my post. are you alright today ?
Well for starters you twice stated that “first they removed the untruth….
second they removed the untruth that…… presumably “they” in your statements is the judge who signed the order, and his clerk who probably wrote the order or perhaps you have included the SEC who argued the law or who you beilieve is manipulating the order or the Receiver who is doing God knows what untruthful things.
I do not know how far your anti-establishment paranoia extends but accusing someone or something of untruthfulness when error or mistake is just as likely is hostile and shows preconception.
You demand high impartiality from the judiciary, but fail by your own standards.
I did understand that, that’s why I specified “in camera” to make it become more correct. The answer was correct for all practical purposes, e.g. for looking at the documents.
Anjali gave an additional explanation in post #112:
“In camera” and “under seal” were similar enough to make the answer become valid “for practical purposes”. The legal differences didn’t seem to be important to the type of question. If legal differences were important, then I have failed to see it.
That would be a waste of time, which means they will probably give it a try, but Mullen’s reasoning and justifications seem sound. Meanwhile the process marches on and the clawback litigation approaches.
‘burks wants to plead guilty”— is it true or untrue?
‘burks admits zeek was a ponzi’—is this true or untrue?
saying something is ‘untrue’is as far from slander, as you are from clear thinking.
the fact that some untruths found their way into the order, could be an error or could be lack of due diligence.
there is no slander in stating a fact.
errors in court documents happen all the time, and people don’t usually break out in rashes or get all sensitive about it.
Just get it right and save the long excuses.
No. “A litigating party is said to have a prima facie case when the evidence in his favor is sufficiently strong for his opponent to be called on to answer it.
A prima facie case, then, is one which is established by sufficient evidence, and can be overthrown only by rebutting evidence adduced on the other side. (The defendant’s failed to do so)
They call Mullen a judge because and he is supposed to judge. This Order is more than his “first impression” it reflects his judgment as to whether the The Receiver/SEC “made their case” and they did in spades. Forward to trial.
A prima facie case, then, is one which is established by sufficient evidence —– which judge mullen found after reading the briefs, put forward by the defendants [sorkin] , the SEC, and the receiver.
and can be overthrown only by rebutting evidence adduced on the other side—— and this overthrowing rebuttal evidence is to be produced by the defendants at trial, to contest the prima facie case established against them.
Which trial ??
You wrote untruthful NOT untrue which has a completely different meaning. Don’t act the wiggle worm, your better than that.
Synonyms for untruthful
adj dishonest
deceitful deceptive false fraudulent misleading untrustworthy corrupt crooked deceiving disreputable
Sorkin would not present prima facie evidence, his would be the rebutting evidence and in any event he did not argue or make the Motion for Dismissal.
He’s out of the picture unless they bring him back to make the “Zeek is not a penny stock auction therefore there are no stocks argument
” again (and seriously…. why would they) Did you read anything in the denial that addressed that red herring? No and that fish didn’t swim the first time around anyway.
Read what the judge said about the Howey test… The Supreme Court has removed the word “solely” from the efforts of others’ from point #4 of the test, meaning there is little doubt that the Sorkin’s ” Gilmond performed work so there’s no security ” argument is going anywhere but down in flames.
Plus +++ the defendant’s technical arguments of law based on the North Carolina Uniform Transfer Act have already been digested by Mullen and crapped on. Nothing’s going to change there unless North Carolina rewrites the code and makes it retroactive…. and that is not going to happen.
Anyway there’s a long way to go. Just forming the class should be as big or bigger a fight than what we have discussed so far.
Otherwise
Try to correct your OWN misinterpretations first? It may be that part you have failed to correct, if you still believe there was “something wrong”.
I can probably help you find some of them? 🙂
Trial? Hearings? I don’t know how they are handling the clawback litigation. I assume it will be a bench trial. There’s supposed to be discovery and evidence and all. That’s sounds like a trial? Maybe not?
i wrote ‘untruth’ which means ‘untrue’.
did i say anyone was being untruthful?
i said an error can be due to lack of due diligence. there was an error Twice. i can express my doubts.
why are you wiggling around trying to cover for the court? the ‘establishment’ is not your boyfriend that you have to cover its faults. a mistake is a mistake, own it!
littleroundman: Which trial ??
so, LRM if there’s talk of trial dates, discovery, expert testimony , it sounds like a trial or some version of it ?
i have been asking this question forever, and no one responds ?
Don’t look at me for an answer.
Anjalitroll is the one who keeps throwing the word around and seamlessly interchanging civil actions, criminal trials, proposed actions, indictments and evidentiary hearings
It was her to whom the question was aimed.
She wrote “untruth”. You have quoted her in post #125, and described it in post #130. Her original post is #110:
status hearing: According to the U.S. Supreme Court, a status hearing is a meeting between the plaintiff and the defendant and their legal representation, as well as a judge or meditating party. Their goal is to get people to talk before trial to see if the issue can be settled out of court.
Pretrial conference: A conference held prior to trial to consider and resolve important issues in a given case and promote the fair and speedy trial of the case.
in this case, by reading the transcript, we can see that discussions are not directed towards an out of court settlement.
so, the only other explanation is that it is a pre trial conference.
The case is currently in a pre-trial phase, e.g. with discovery, certification of class, etc.
I’m not familiar with class actions, so I can’t answer any details. You already have some details, e.g. discovery is PLANNED finished in February 2015. The real trial will come after that date.
a–a–a–n–d,
There, can we now consider that particular nit to have been picked ???
a–a–a–n–d,
my usage of untruth = false statement
i think, we can now consider this particular nit, to have been picked, cleaned and dried and pickled.
How do you come to the conclusion that is what people are trying to do ??
Pointing out the errors in Anjalitrolls logic and thinking does not equate to covering for the court.
Another prime example of your lack of understanding of the matter/s at hand.
You keep speaking of “the trial” when there is no “the trial” YET
There may well be the intention to have “the trial” at sometime in the future, but, at this stage, there isn’t even a tentative date.
Even your own quote, minus the Anjalitroll spin, shows Judge Mullen adds necessary criteria to be met before he will even move to set dates for “a trial”
See that ???
ONCE THAT’S DONE
and it definitely can’t be before February 2015, unless, of course you can come up with some way for a trial to proceed before discovery.
but, the court is speaking about the trial. so why cant i?
how silly of you.
and, you can thank me for informing you about an upcoming trial, because, obviously you had no bloody idea about it.
yeah , that’s what pretrial conferences are for :
“Pretrial conference: A conference held prior to trial to consider and resolve important issues in a given case and promote the fair and speedy trial of the case.”
are you getting this LRM?
as i’ve said before, even the supreme court is in a muddle about ‘commonality’ in the howey second prong.
different circuit courts interpret howeys differently , and often contrarily.
the supreme court removed the word “‘solely’ from the efforts of others”, but allowed only minimal efforts of the investors themselves.
the managerial efforts of burks/rex, could ensure collection and distribution of funds, BUT could not be the GENERATOR of funds. they were not generating the profits which were shared, the affiliates were ensuring generation of funds from their work.
howeys, essentially demands that the investors make profits, which are ‘generated’ by the efforts of the promoters/owners.
A mistake “is” a mistake but its not an “untruth”
Even a dog knows the difference between being kicked and being tripped over but not you….you just want to bite. I have a rash, its because you’re rabid. If you’re going to call the game, at least call it fairly
[ ˌənˈtro͞oTH ]
noun
noun: untruth · plural noun: untruths
a lie or false statement (often used euphemistically):
“they go off and tell untruths about organizations for which they worked”
synonyms: falsity · falsehood · falseness · untruthfulness · fictitiousness · fabrication · dishonesty · deceit · deceitfulness · inaccuracy · unreliability
Right. Thank you for making my point, because that was an inadvertent mistake…not an untruth or a lie or a false representation.
It was a Rule 26(f) conference, an Initial Conference. So you have identified it correctly there. Written report from the conference can be found in 13.pdf, and potentially in 14.pdf (I haven’t looked at that one).
Bell will need to prove Fraudulent Transfers, i.e. he will not need to prove a Ponzi scheme but to prove that the money derived from other investors rather than from legitimate business activity.
yes, bell as receiver, has to only prove fraudulent transfers ie mechanics of the ponzi scheme.
however in the initial motion to intervene, the court had got bell and the SEC to admit that the question of SEC jurisdiction would be decided on ‘merits’
as bell, is not answerable to the question of ‘securities’, the SEC will have to participate in the ‘merits’ discussion.
Oh, and when the money is derived from other investors its called what? A cake? A blanket? A fish? A ponzi? A Fred?
Perhaps Burks was running a Fred rather than a ponzi scheme.
Rule 26(f) conference, an Initial Conference [pretrial]:
That was actually the point there. “Ponzi scheme” is simply a descriptive term, not a legal definition. You can’t “prove” something if it isn’t clearly defined, if there can be tens or hundreds different descriptions to be found.
It’s possible to prove the fraudulent ACTIVITIES, e.g. misrepresentations of profit from the penny auction and how it was “paid out” to the back office, etc., etc., and how a false profit was paid out to net winners.
Or it can be possible to prove that revenue from the penny auctions was too insignificant to support any profit.
Or there are other ways to prove fraudulent transfers. But Bell must indirectly prove some fraudulent activity, he can’t just “declare” the transactions to be fraudulent.
Well pretty obviously someone around here knows what a ponzi is, even if don’t.
“Ultimately, the Receiver’s clawback litigation is
likely to be a combination of individual actions, group actions, defendant class actions, and other alternative dispute resolutions as approved by the Court. Such proceedings will establish the key FINDINGS applicable to most, if not all, recipients of fraudulently transferred funds (findings such as the existence of a PONZI and/or pyramid scheme)”
Document 121
Lets call it a Fred.
the court made a ‘mistake’ of including first Two, then One, ‘untruths’ in it’s order.
since the court is Not a Rabid Dog, it immediately corrected it’s stance.
nobody kicked or bit the court, the court is an intellectual institution, and can make mistakes and rectify them, promptly.
moses did not bring the judiciary down the mountain, on a stone slab, we all have to just run our judiciary and improve it All The Time!
Fair enough.
I have got a question. There was a list posted by the receiver earlier this year showing all the people who made money and where they lived.
It was a list of some 9000 people who made money in Zeek but had not settled and paid anything back. My understanding is all of those people were being sued in court by the receiver.
I know a handful of people on that list personally. I have spoken with them all and a couple of of them on more than one occasion. I asked them how all of that was going and they all told me that they have not heard anything at all yet.
I am wondering, are they lying to me because they do not want to tell me what specifics may be going on?
I am thinking of the receiver filed in court on this then those people would have been served notice that they were being sued in court and would retain an attorney to help them with this in most cases. But now I wonder if they have even been served at all.
Some of these people made a lot of money in Zeek, others not very much at all. Any thoughts on whether they should have been served by now?
They are listed on the Bell v Disner et al Complaint but have not been served, therefore are not yet joined to the suit, but they will be.
About a dozen of their co-defendants have been served and responded with a Motion to Dismiss which was denied. The suit will proceed.
The Receiver will next attempt to certify all net winners as a class of defendants. Once he does that your acquaintances should be notified that they are putative class members and have the right to dispute the formation of the class and/or their inclusion in it.
Presumably the class will eventually be formed and one or more of those who responded through counsel will act as class representive(s) for the whole.
I believe that
At least some unnamed net winners received some information in early 2014. I have answered questions about it a long time ago by linking to relevant information found on the Receivership website.
Only the named net winners, the proposed class representatives, have been sued personally. The others have probably only received a letter (March 3 2014?) about an upcoming lawsuit, but nothing more than that (they haven’t been formally sued yet).
There isn’t much information to be found there, but here’s the updates from the Receiver. Relevant info March 3 2014, July 30 2014.
NOLINK://www.zeekrewardsreceivership.com/receiver
Next step in the pre-trial process seems to be either discovery or certification of class (or both). They will probably receive some formal information when the class has been certified.
Court documents can be found here:
NOLINK://sites.google.com/a/asdupdates.com/files-website/zeek-rewards-sec-case/bell-v-disner-et-al
The July 30 2014 update:
Unnamed net winners seem to currently have the status as “proposed net winner class members” = not formally sued yet.
The most relevant court document is 90.pdf, the Order Denying Motion To Dismiss (the one mentioned in this article). It shows that the lawsuit has survived its first major “test” and have a fair chance of success.
It’s not “good news” for your friends, but it’s the truth.
The primary defense has been shot down, the “Zeek Rewards didn’t involve any securities, so the SEC didn’t have the authority to shut it down, and so the Court doesn’t have the correct subject matter jurisdiction”. That defense strategy has now failed 2 times.
If your friends plan to use a lawyer, they should probably start NOW (e.g. after Christmas / early January) to prepare him for the case / get some initial advices.
Most relevant documents for a “quick overview”:
March 3 Original Complaint
April 15 Pretrial Order and Case Management Plan (17.pdf)
* July 30 MOTION to Certify Class by Kenneth D. Bell (68-main.pdf)
* Sept. 26 MOTION TO STAY DISCOVERY (83.pdf)
Dec. 9 ORDER Denying Motions to Dismiss (90.pdf)
Explantion of the “quick overview”:
Original Complaint show where and when the case started, what the case is about and what the plaintiff is asking for.
Pretrial Order and Case Management Plan explains itself.
* The 2 next documents were included as examples for 2 currently unresolved disputes. The class hasn’t been certified yet. The defendants are trying to stay discovery until Motion To Dismiss has been resolved (and it has been resolved now).
ORDER Denying Motions to Dismiss show where the case currently is.
the court had asked the receiver and the defendants to file their replies to the ‘class action’, in april 2014, and the replies have been filed. i think the next ruling from judge mullens court will be on the ‘class action’ status. and i think, the defendants are going to get awarded class status.
judge mullen asked terpening of nexsen pruet to represent the class, and terpening mostly agreed to do so, if the receiver paid him his fee. terpening is representing the chief defendants in this case ie trudy gilmond et all.
from the transcript of the pretrial conference 86-1.pdf :
“They [9000 netwinners] are not being personally accused of fraud or illegal conduct on their own at this point. They just won money in a rigged game and they’ve got to pay it back. The difference among the net winners is simply how much they won.
So the key factual issue in both cases is the same.Was there a Ponzi scheme? If there was, then the insidershave to pay back money and damages and the net winners have to pay back the money –”
so after class certification, and discovery, this moves to trial to ascertain ‘was there a ponzi scheme, and should the class of defendants have to payback?’
according to the written order of the pretrial conference of april, 2014, it appears the civil trial will be late next year, 2015 :
only after july, 2015, people!
what a wonderful sentence from SEC vs howey [1946] :
so, while considering whether the definition of investment contract applies in a particular case, you have to stick to the three prongs of the howey test, without contemplating the ‘value’ of the product/security being sold.
whether the product involved is an empty can-of-air or a can- of-caviar, you have to ignore this distinction ,and focus only on whether the investments satisfy howey’s three prong test. yeah !
Because any product bundled with the offering of securities is irrelevant.
If a product was indeed being bought and sold (to retail customers) there wouldn’t be a problem in the first place.
In United Housing Foundation v. Forman, 421 U.S. 837 (1975) the Supreme Court stated:
The word “SOLELY” was conspicuously omitted.
The word “SOLELY” was conspicuously omitted—-LRM [United Housing Foundation v. Forman]
zeek went viral , because of the efforts of the investors themselves. the promoters were not generating any profit from any independent business they ran from investor money.
the investors were arranging the investments not the promoters. without the investors there would be no profit.
in transcript A of the MTI, the SEC said something to the effect : if we remove gilmond from the mix, it would make no difference to the scheme of zeek rewards.
BUT, if we remove gilmond she takes her whole downline with her. without gilmonds [and others] work in establishing and managing her downline how could zeek run ?
because the court understands that old investors were being paid with new investor money, it should not carelessly term the work of affiliates as ‘valueless’. work is work, even in a failed business.
if i tell LRM to dig a canal, to bring water from point A to B, and the poor thing works day and night at it, and then i tell him, there’s no water at point A at all, and that i had fooled him, does his work become valueless because my enterprise was fraudulent? [i’ll pay you LRM, don’t worry]
to determine the value of LRM’s work, you first have to disregard the legality or fraudulence of the enterprise. this resonates with point 4 of SEC vs Howey ie, it is immaterial whether there is intrinsic value in the enterprise [post#170].
it is clear as day, that without LRM’s canal, water could never flow from point A to point B, and we could never share the profits from selling the water.
the moment you understand the immense contribution of LRM’s efforts to the enterprise, you cannot say he was in an ‘investment contract’ relationship. it clearly becomes a ‘business contract’ of some kind.
Explaining the intricacies of the Howey Test and the number of times it has been challenged through the courts since 1946 is akin to trying to explain Quantum Physics to someone who still believes the sun rotates around the earth and really does rise form the ocean each morning.
Canal ??? Water ???
More irrelevant analogies from Anjalitroll
Every time I see Anjalitroll scrabbling around trying to find which she hopes will be a Brownie point winning argument about the Howey Test, I am reminded of the quotation:
(bolding mine)
Yet, here we have our resident Howey Test expert trolling Wikipedia relentlessly hoping to come up with her own reinterpretation of every single word which would make her version of events “right” and every one else “wrong”
Sorry to have to be the one to tell you this, Anjalitroll but it’s already been done countless times since 1946, including being referred to the Supreme Court on numerous occasions.
Your efforts are just plain funny.
Your analogy is unfit and incomplete.
That’s an excellent description of a ponzi/pyramid.
You have made the SEC’s case.
There wasn’t any profit WITH the investors either? They all focused on the wrong part of the business, on recruiting more investors rather than on selling retail bids to retail customers. So the idea of having investors promoting the penny auction was rather useless.
It wouldn’t make much difference. She didn’t bring in much profit through her sale of retail bids anyway.
That’s worth something for a fraud, but it isn’t worth much for a legitimate business. A court will strictly look at the legitimate value of the work.
if its been done countless times since 1946, let it get done once more under the stewardship of ira sorkin [hopefully].
the few orders i glanced through, seem to say because something is pyramid/ponzi the work of ‘investors’ is valueless. that seems to be a chicken/egg kind of argument.
how?
in SEC vs howey, howey was found to be an investment contract because the investors who bought plots of a citrus orchard, just paid an initial investment and then a monthly maintenance. all the work of the orchard was handled by howey itself.
if the orchard owners had to tend their own plots, grow their trees, pluck the fruit and then pool all the money and share it on a prorata basis, would the court still find it an investment contract?
are you saying, zeek was making a lot of money through sale of retail bids and her share was minuscule?
i’m saying any money zeek collected,legal or fraudulent, depended greatly on her efforts.
the definition of ‘investment contract’ does not address the ‘legality’ of the business ? that is the secondary question.
i used the word ‘investment’ repeatedly in context to ‘investment contracts’.
otherwise i could say affiliates were buying bids which were usable. so it was not an investment.
It sounded like an employment contract. He didn’t have to invest anything. You didn’t offer him any profit from investment. You paid him for the work he did. You defrauded yourself only (you now own a useless canal with no water).
Now you’re trying to go Gerry Nehra on everyone.
Yeah not going to happen because affiliates weren’t buying bids, they were investing. Whatever was bundled with those investments was irrelevant.
Who cares – they didn’t
shucks norway, your’e supposed to infer some things. of course LRM paid upfront for the opportunity and of course i promised profit and of course i held an umbrella over his head [managerial], all the time.
If you remove Trudy Gilmond from the mix, with her entire downline, two things would have happened:
1. The total loss of Zeek Rewards would have been reduced.
2. Trudy Gilmond’s personal gain would have been reduced to zero.
Her work only brought in more investments, but it didn’t bring in any profit. She contributed to the fraudulent part of the business rather than to the legitimate part (based on her own description, “reading between the lines” in all the vagueness).
this time it’s sorkin and terpening who are yanking the chain 🙂
now your’e going all righteous and moral.
the question was only about the ‘value’ of the work of gilmond and her friends versus the work of burks/rex.
first define the ‘investment contract’ and after that you may describe how it was ‘fraudulent’.
Why ???
What difference will it make to anything if Anjalitroll is convinced or otherwise, ESPECIALLY with her history of disingenuousness and obfuscation
Nope, but her share only supported her own personal profit from fraudulent transfers of other investors’ money. Zeek itself didn’t make a lot of profit on her work.
That’s correct, she contributed to the fraudulent part, increasing the losses.
You’re absolutely correct. The Howey test isn’t used the way you THINK it’s being used. It doesn’t separate between legitimate investment contracts and fraudulent ones, it will see all investment contracts as the same.
The Court used the Howey test to check its own subject matter jurisdiction = “Did Zeek Rewards involve any sale of securities in the form of investment contracts?”. The answer to that was “YES” = the Court did find it had jurisdiction under the Securities and Exchange Acts (Federal question jurisdiction).
the court SHOULD see all investment contracts as the Same, because the definition of investment contract does Not address the question of legitimacy of the scheme involved.
INSTEAD, the court first acknowledges the Fraud and then uses this information to de-value the work of the investors.
EITHER change howey OR don’t use howey in ponzi/pyramid cases. howey cannot be chewing gum to be be stuck on everything.
there’s enough criticism and disagreement about howey already, that it’s expanded from an evening dress to a tent.
No, that’s what Anjalitroll SAYS the court does
What the court actually does is completely different.
My focus was on the realities, not on moralistic ideas.
Zeek sold for $6.3 million worth of Retail Bids to retail customers of ANY TYPE (affiliates AND external consumers). That type of work generated a legitimate profit (or it could have generated a profit if the amount had been higher). That was the legitimate part of the business.
Her work didn’t have much value for that part. Burks’ work didn’t have much value either, but he was the main organizer of the fraudulent part of the business. Without him, Trudy Gilmond wouldn’t have been paid at all.
Trudy Gilmond contributed primarily to the illegitimate part of Zeek (and so did the other investors). The court can’t use other people’s money to reward her for that type of work?
The court must try to redistribute the illegitimate profit she received back to the rightful owners, i.e. it can’t let her deduct expenses either even if she had some
But that’s exactly how it has been used all the time?
You will need a different test to separate between legitimate investment contracts and fraudulent ones. So the Howey test isn’t used in that way either.
Different test:
* Does the profit come from a real, legitimate business venture?
* Or does it only pretend to come from one, using other investors’ money to simulate a profit from a real business venture?
That test will separate between real, legitimate investment contracts (as long as they’re registered with SEC) and fraudulent ones.
my focus was on the definition of ‘investment contract’, because that was the subject of discussion.
so, say if there is a brokerage firm that employs a hundred sales staff, and these sales guys go out and collect investments in the form of investment contacts, and receive sales bonuses on their clientele’s investments.
the brokerage firm is supposedly investing this money and accruing profit which it is sharing prorata with the investors.
after 5 years , it comes to light that the brokerage was actually a ponzi, and old investors were being paid with new investors money.
since the sales staff had enjoyed bonuses on all their investment sales should they be sued for clawback ? since their ‘work’ was ‘worthless’ as the managerial efforts were greater than theirs, should they disgorge their salaries and benefits, because , how could they be paid for ‘valueless’ work in a fraudulent scheme?
There is no such thing as an investment contract in communist utopias.
Would you like to bring the discussion back down to Earth or shall we discuss life in Lilliput.
no. howeys test is not used ‘honestly’ in my opinion.
if the court smells ponzi , it misuses the fourth prong of howeys, which deals with the ‘value’ of ‘work’.
terpening can spend five minutes in court and get paid thousand of dollars.
a man can sit on the sidewalk the whole day long and sell two pairs of socks worth 5 dollars.
‘value of work’ is a very ‘subjective’ thing.
i say, use howeys honestly. then prove the fraud.
if howey don’t fit, why stretch it across the universe? there should be enough ways to get fraud, without creating muddy waters and encouraging nehra, sorkin, terpening et all ?
Change Howey.
BUT, MLM is based on the idea of tending one’s own plot, and encouraging others to do the same, and sharing profits.
MLM is COMMUNIST !!
how Evil !!
As usual, you have twisted reality so badly, you are now operating in a virtual parallel universe.
Howey is not “used” in ponzi / pyramid cases the way you are suggesting
Howey is used to determine whether or not the SEC has jurisdiction i.e. are investment contracts / securities involved.
If the Howey test is applied, and the court finds securities / investments are involved, the SEC then has jurisdiction to move forward with whatever further charges it may decide.
If, on the other hand, a court applies the Howey test and finds the defendants actions do not fulfill the requirements, then the SEC does not have jurisdiction and cannot proceed further at that time.
Once jurisdiction has been settled, the SEC can then proceed to lay out its’ case, without the need to refer to Howey
a-a-a-n-d , therein lies the Whole Problem
there are arguments, disagreements, contrary rulings, and muddling right from the supreme court down to the different circuit courts regarding the various prongs of howeys.
howey is not Set in Stone as you imagine. it’s waiting for the Right Argument to melt.
the thing with case law, is that it is Fluid. howeys is based on an Undefined investment contract, the definition of which is based on evolving case law.
what happened to omnitritions definition of the koscot ‘teeth’? [ultimate users are only outside the marketing plan]
it took twenty years, but case law was Reversed, when DSA put up a strong argument.
same ways with everybody’s boyfriend ‘howeys’. somebody’s got to put him on the straight and narrow.
MLM is as bourgeois as it gets.
Jurisdiction doesn’t work that way, i.e. you don’t need to prove it in court. You can dispute it in court, but that’s another story.
A court can FIND that it has subject matter jurisdiction by examining the type of case / what the case involves, and find that it is (or isn’t) the right type of court for that type of case. It’s about examining and finding, not about proving it.
The court examined its own jurisdiction ONLY. It didn’t examine SEC’s jurisdiction. I don’t believe it has the authority to examine SEC’s jurisdiction either.
The court has jurisdiction until it has been disproved by the facts (the type of case, what it involves, etc.). Even then, it will still have the jurisdiction to dismiss the case, transfer it to another court, reverse its own orders, etc.
SEC has a similar jurisdiction. It has the authority and powers to handle certain types of cases / do certain types of regulatory work. It has the authority to examine its own jurisdiction, it won’t need to prove it in court first.
norway, if your’e alive, you will realize that the court has NO jurisdiction in this matter Unless it agrees the SEC has jurisdiction in this matter.
if the court cannot examine whether the SEC has jurisdiction – who will ?
so, the court has prima facie concluded the SEC, and itself, has jurisdiction.
rest at trial. OK ?
RiiiiiiGHT!
so, at least we can rest contented, that MLM/ponzi/pyramid is NOT hurting the ‘Have Not’s’.
you are a virtual encyclopedia of ‘truths’, hoss !
Uh…if its disputed then it needs to be proven there Billy
A hired workforce of employees will normally be protected by normal employment laws, e.g. people are being paid for the total amount of work they’re doing, and provides an equal amount of work in exchange for the money they receive.
“Good faith / provided an equal value in exchange” is accepted as a fair deal. Exaggerated bonuses can probably be clawed back. The people you were talking about were also educated as investment advisors, but they didn’t sound qualified for that type of work.
You exaggerated the number of sales people, so I’m not sure you were talking about employees there? An independent agent will need to do some due diligence, i.e. money can be clawed back from independent agents.
The difference with Trudy Gilmond was that she was an investor herself, and profited from bringing in other investors. She could reasonably know that work like that wouldn’t generate any profit for the business. She focused on her OWN profit rather than on Zeek’s profit.
No it doesn’t. It will need to be examined and found / not found, by examining the type of case and what it involves.
The jurisdiction dispute wasn’t about proof. It was about whether or not the type of case belonged under that court’s jurisdiction, whether it had the authority to handle the case.
The Court found that Zeek Rewards involved sale of securities in the form of investment contracts by applying the Howey test, so it found that it had Federal Question jurisdiction (alternatively diversity jurisdiction, but it didn’t need to examine that).
The difference is that it didn’t need to examine evidence, it could only examine the TYPE of case and what it involved. Even if the case DID involve some work, it wouldn’t affect the jurisdiction.
Here’s the conclusion from that dispute, after it has been examined by the court:
The court didn’t PROVE it had jurisdiction, i.e. it didn’t look at any type of evidence, only at the description of the dispute and the description of the case.
* What the dispute was about and what it involved.
* What the case was about and what it involved.
The court then applied the Howey test as a test method to check whether the case involved securities in the form of investment contracts = federal securities statutes = Federal question jurisdiction.
Here’s what the dispute was about:
The dispute is actually about the facts of the case rather than about jurisdiction. It has been brought in as a jurisdiction dispute for the purpose of getting the case dismissed at an early stage (facts will need to be tried during the trial, so it couldn’t be used in a pre-trial Motion To Dismiss).
Thank you for the few comments above in regards to my question about net winners being sued.
It sounds to me from the answers that were given that list of some 9000 have not been served as of yet. So it is entirely possible that the ones that I know who are on the list are telling the truth about not getting anything yet.
I honestly was not believing them but never said anything to them personally. Perhaps it could happen in 2015. More fun to come.
Yes and yes. Currently they’re “proposed class members”, if I have interpreted it correctly.
Anjali estimated the date for trial = end February + 90 days + 45 days = mid June or mid July 2015 (as the earliest date), in post #169.
I tried to tell WHERE to find court documents, plus I was trying to give a quick overview of the most relevant ones, in post #167.
* the Complaint
* the plan
* the current status
The SEC asserted jurisdiction, and PRESENTED EVIDENCE of this to the court that it did. The Zeekers disputed it. After considering the EVIDENCE the Court found that the SEC had jurisdiction, thus the Court has subject matter jurisdiction.
Nobody ever contended that this chain of events demonstrates that the Court proved its own jurisdiction. That’s laughable. The SEC proved it and the Court agreed.
Right that’s why the first third of the Order is entitled Factual Background.
It was the glove that don’t fit.
Question for you.
In the Denial of Motion to Dismiss the judge appears to have decided the Court had subject matter jurisdiction even while footnoting that the defendant parties do not admit that Zeek was a ponzi. Is subject matter jurisdiction subject to overturn? If so, why make the ruling now ?
I don’t believe it is, but I’m not 100% sure. Courts or agencies will normally analyse their OWN jurisdiction, but only when there’s disputes or doubts about it.
When you have jurisdiction (power, authority) to analyse your own jurisdiction, there’s no need to have it “tested” by a third party authority (e.g. a higher court, a supervising agency).
Because it has been a “CORE argument”, and both the plaintiff and the defendants deserved to have it resolved.
It was the core argument in MTI, and now in the MTD, and also in the answers to the Complaint. Motion To Stay Discovery was based on it. Opposition against Class Certification was based on it. It simply was the right time for the Court to look into it.
The Federal Court’s jurisdiction comes from the U.S. Constitution Article III.
NOLINK://www.uscourts.gov/FederalCourts/UnderstandingtheFederalCourts/Jurisdiction.aspx
Jurisdiction isn’t about “proof”. It’s about having the power and authority to “excercise jurisdiction”, e.g. the right to hear cases and to make all types of relevant decisions.
sigh, which is precisely why I didn’t say it did.
For the matter to proceed, the SEC needs jurisdiction, just as the court needs jurisdiction
My response was to Anjalitrolls constant reference to the unfairness and application of the Howey test.
Question: Does the SEC have jurisdiction in matters related to securities and investments ??
Answer: yes, it does, provided such securities and investments fulfill the requirements of the Howey test
Question: does the court have to engage in a discussion and administer the Howey test each and every time a new SEC complaint is submitted ???
Answer: no it doesn’t
Question: why not
Answer: the SEC in it’s complaint lays out what it believes gives it and the court jurisdiction in the matter.
The question only arises when the subject of the complaint disagrees that the SEC has jurisdiction in the matter i.e. securities or investments are NOT involved.
He / she is then quite entitled to ask the court to apply the Howey test and subsequently appeal right up to the Supreme court. A situation which has arisen countless times since 1946
And, before you or Anjalitroll jump in and point out the extract says “the COURT has jurisdiction” and not “the SEC has jurisdiction” or “the court and the SEC have jurisdiction” in the real, non TV world, the court realizes the SEC has presented complaints once or twice before, so establishing its’ (SEC) credentials every time it appears may keep nit pickers happy, but, otherwise is a complete and utter waste of time.
In accordance with precedent (Twombly) the judge is “Taking all the Complaint’s allegations as true and drawing all reasonable inferences in Plaintiff’s favor”
I think the Order reads “as if” its decisive and final, but its not.
When the Order states …. ” the Court finds that it clearly has subject matter jurisdiction” it is only because the judge is writing as if “the Complaint’s allegations were true and he has drawn “all reasonable inferences in the Plaintiff’s favor.”
Whether the Court actually retains subject matter jurisdiction is an open issue to be decided “on the merits.” Which is to say a few months from now after discovery, testimony and argument. The Order Denying may be a strong indicator of future rulings but it is not a ruling in and of itself.
WE know that’s not true since Mullen’s decisions are subject to appeal.
Of course it is.
Goodness, man, there are a countless number of appeals made since 1946 in which the defendant argues his or her enterprise “passes” the Howey test and therefore the court and/or SEC have no jurisdiction.
But then the dispute probably was about something OTHER than subject matter jurisdiction?
I pointed out that the dispute actually was about the facts of the case = that the profit was based on legitimate profit from the penny auction, paid out to affiliates for the work they did. It can INDIRECTLY be brought in as a jurisdiction dispute, but in reality the dispute is about something else.
“but then” nothing.
Why get into any other reason if the court and or SEC don’t have jurisdiction ??
Give it up, mate, you’re way off base.
of course subject matter jurisdiction is subject to overturn.
in SEC vs Howey and United Housing Foundation v. Forman, the decisions were arrived at by overturning district court orders. in both cases the question was ‘whether the case involved securities’.
in the zeek case, i think the court has provided a prima facie opinion on the jurisdiction debate, in the interests of judicial speed. the motion to dismiss had to be addressed to move the process forward.
however, i am Not Sure if the defendants have to appeal this order in the appellate courts, or prove the merit at trial.
No such thing as a prima facie opinion. Start over.
The Denial is based on prima facie evidence. Based on that the judge signed an Order which by appearances (to the layman’s eye) seems to indicate he has retained subject matter jurisdiction.
The question is not whether his rulings are appealable. They obviously are. The question is has he actually ruled on the jurisdiction issue at all.
I don’t think he has and I don’t think he will until the merits are argued.
Yeah, but you don’t seem to understand what I meant by bourgeois. If you think you know about Communism you should know what a bourgeois is.
(in Marxist contexts) upholding the interests of capitalism; not communist.
synonyms:capitalistic, materialistic, money-oriented, commercial
antonyms: communist
MLM is a bourgeois as it gets and it hasn’t much to do with the French middle class other than Marx was German living in Paris when he wrote the Communist Manifesto.
yes,even i feel this is like an interim judgement to chase the case forward. there has been no proper argument on the merits, as the defendants did not even have full discovery.
the trial will provide the judgement on jurisdiction. seeing the mood of the court it’s quite apparent, there will be a finding of securities. after that, the matter can be appealed in the circuit court of appeals.
sounds right? this matter is going to take a couple of years.
if you meant bourgeois, as in upholding the interests of capitalism, then almost the whole bloody world is ‘bourgeois’.
why are you using ‘french’ words only for MLM ? 🙂
I googled “appeal subject matter jurisdiction”, and it has popped up as a “new” reason to appeal in the 1980-ies, as “exceptions to normal practice”. They’re usually about something else than jurisdiction.
The appeal courts have their OWN jurisdiction, “the right to hear ANY case they see as valid” (including jurisdiction based appeals). So appeal courts may clearly accept it.
Jurisdiction disputes can be heard ANY time during a trial. Other types of disputes may only be heard in the main parts of the trial. That’s probably why defense attorneys will try to label disputes as “jurisdiction disputes”, even if the disputes are based on something else.
the district court, atlanta, georgia, rejected the SEC’s argument that koscot was offering securities. the court, found the ‘work’ of the distributors ‘valuable’. the point to note here, is that the district court found koscot to be ‘fraudulent’, but yet refused to expand the definition of ‘investment contract’ to make the SEC’s life easier:
the SEC ran to the fifth circuit court of appeals, and got this order reversed.
to the best of my understanding, the appeals court gave a rather weak explanation for the reversal. it opined that the work of the distributors ie ‘sales’ was a ‘ministerial effort’ and not a ‘managerial effort’. by this explanation even franchising/distribution can be considered as an investment contract, because franchisees always have lesser role in management and are more ministerial.
so, the fourth prong of howey, was first ‘solely’ then it became a ‘modicum of efforts’ and then it’s ‘sales are low value work’. yeah, every business in the world relies on sales. business is sales. who cares who sweeps the office and hangs up the POP, no sale – no business.
Anything can be appealed. The Appeal Panel may refuse to hear it or take years to hear it. In the meantime, the ruling (s) stand.
The defendants would likely argue that execution of money judgments would do them irreparable harm and ask for a stay pending appeal which Mullen can deny… so at that point it gets very common-sensical or political because the Appeals Panel can ALWAYS find sufficient legal reason to deny the appelants a hearing. To get beyond that requires a trip to the Supreme Court.
So while the net winners have plenty of funds to run this thing out a long time,if Mullen does not grant them a stay pending appeal, the clawback judgements will be executable.
The United Housing Foundation v. Forman doesn’t seem to have been about jurisdiction issues?
You have probably used some “pattern recognizing part of the brain” here, and have identified 2 matching patterns to be “they’re both about the same thing”.
The legal issue in that case wasn’t about jurisdiction, but about “Whether shares of stock entitling a purchaser to lease an apartment in Co-op City… are ‘securities’ within the purview of the Securities Act of 1933.”
We will probably find many cases where the Howey test has been disputed, but people must have misinterpreted something if they believe ALL those cases were about jurisdiction.
“The United States courts of appeals are the intermediate federal appellate courts. They operate under a system of mandatory review which means they must hear all appeals of right from the lower courts”
if judge mullen does not grant the netwinners a stay pending appeal, cant they run to the appeals court and get a stay from there, regarding payback? they can say: once our money goes to the receiver, it will get distributed, and how can we ever reclaim it, if we win this appeal regarding jurisdiction ?
yes, your’e right. it was a case defining ‘what is not a security’.
also, it was a very silly case, because anybody can see that down payments on housing cannot be a security by any stretch, especially since the contract had no share like behavior.
but in zeek, it is clearly a question about jurisdiction.
You said MLM was COMMUNIST. I say its just the opposite. The sales pitch for these schemes often (or always) emphasizes the WE and the communal support that is organic to networks, and there is truth in that to a degree, but its not the whole story.
MLM is at heart a materialistic, money-oriented, commercial endeavor, and its very exploitive. Its hierarchical… not communal.
I think the net winners would ask for a writ of mandamus, which if approved allows the Appeals Panel to “reach through” and correct obvious and irreparable mistakes in the lower court, which is to say override Mullen and grant a stay, but that is an EXTRAORDINARY remedy and the rulings by Mullen would have to be so egregiously bad that the Appeals Panel would feel obliged to act.
If Mullen can justify Howey, he is on such firm legal ground its unimaginable that the Appeals Panel would intervene via a writ of mandamus.
Federal Judges like Mullen have lots of power. We give them lots of power. If after hearing all the evidence Mullen says pay back the money… no stay, then the net winners would be pretty much out of gas.
lets see. that was a Joke? because you said something silly about communist utopias ? Smile ?
first three points are common to any business endeavor.
the fourth point is a matter of perspective. there are good businesses/bad businesses, good films/bad films, good people/bad people, MLM does not have to carry the burden of ‘exploitative’ all by itself. some MLM may be exploitative, some may not.
i feel, even if the court does not grant a stay, it cannot take the risky step of distributing the funds, till the appeal is heard and ruled upon. at the most, the funds can be kept in some sort of escrow account pending final resolution of the case.
Oh, hahahahahahahahahaha,
You really have lost the plot, haven’t you Anjalitroll ???
What constitutes “the best of my understanding” when the “my” is an anonymous internet blogger with a history of defending ponzi fraud and fraudsters, a demonstrable lack of understanding of US securities,investment and criminal law and procedures and whose reference sources are Google and Wikipedia.
The Appeals Court members must be quaking in their collective boots knowing Anjalitroll is critiquing their decisions
if judge mullen can justify howeys, because he believes in defining howey in an extremely broad way, there are other courts which interpret howeys less broadly.
it depends on which court the appeal will be heard, and how that court interprets howey. i have given a clear example in post# 226, about how a court can interpret the fourth prong of howeys, quite differently.
the ‘value of work’ interpretation, can be overturned by skillfull defense, much in the way the MLM industries problems were resolved, with the reinterpretation of the koscot definition of ‘ultimate users’.
somehow, commonsense does not allow the stretching of ‘investment contract’ over businesses where so much necessary and substantial work is performed by the ‘investors’.
so, have you finished digging the canal already? i don’t pay shirkers!
so, have you Already Forgotten Who’s the Boss?
It was said in good humor but it was not intended to be silly. Your description of the orchardists working the land separately while sharing th profits prorata is a communal (communist) utopia. Do they own the land in common, do the rent it, what’s the method of governance.
There were a host of contradictions inherent in your example such that it could not actually exist (utopia- a place that does not exist)
I meant exploitive in this sense of : to utilize, especially for profit; turn to practical account:
to exploit a business opportunity.
Exploitive also means: selfishly for one’s own ends:as in
employers (say for example Paul Burks-Olivares,ever recruiting affiliate ) who exploit their workers/investors/friends and family for their own gain.
That is tantamount to a stay. You tend to forget there are about 80,000 creditors here, and they also deserve consideration.
Its not risky to distribute the funds if done after due process. Argument to the contrary is mooted by the distribution. It happens all the time, particularly in bankruptcies but it applies here as well.
From Wiki
The appeal if heard at all will be in HIS Circuit and his ruling will in all likelihood be consistent with precedents in that Circuit.
You would have the defendant’s venue shopping to find a sympathetic Appeals panel? It does not work that way.
Mullen is in District Four and that is where the appeal would be filed. ….
well, LRM we ARE in the Information Age. next step: the Age of Advanced Consciousness. it’s an evolutionary process, don’t vent at google and wiki.
not just the appeals court, every court, every institution, will have to come to terms with higher public intelligence and understanding.
it’s evolution, you cant do darn about it !!
The appeal if heard at all will be in HIS Circuit and his ruling will in all likelihood be consistent with precedents in that Circuit—-hoss
seriously, how can that even be justice!!
if justice is just various interpretations of the same subject , how can that be justice at all?
justice has to be ‘seriouser’ than That!
Anything to divert attention away from the fact you know nothing about the subject at hand and are digging yourself into a deeper and deeper hole with every post.
It IS funny watching you make a laughing stock of yourself, though, and it’s way past the time you can do any harm to victims, so please continue in the same vein.
Talk to God about it.
Get off this schtick.
There are dozens of other instruments that do not behave like stocks but are none the less securities. You are on A>>B Repeat and it hurts my head. Stop
Its a reflection that different regions of the country have, and are entitled to their own views. So long as the rulings are not inconsistent with Federal Law as construed by the Supreme Court then local variation is permissable.
To understand why this is, you should consider that the original 13 English American colonies voluntarily joined together to form the United States and in doing so each State gave up sovereignty to the central government while reserving more local concerns to themselves.
There are 94 Federal Districts and you simply can not expect the exact same rulings in every one of them because the character and concerns of the people in each district are different.
The Supreme Court keeps everyone moving in the same general direction but there is a lot of regional autonomy within the system.
The argument about execution of money judgment is flawed. There’s no money judgment here. The Order isn’t about that.
“Bell v. Disner et al” is currently in a pre-trial phase. “Motion To Dismiss” was an attempt to get the case dismissed before it even has been tried in court. The Order denying that motion isn’t about the legal dispute itself, but about whether or not the case should be tried in court.
There’s no action taken against any parties yet, “no rights have been affected”.
NOLINK://legal-dictionary.thefreedictionary.com/Right+to+Appeal
NOLINK://legal-dictionary.thefreedictionary.com/Interlocutory
That’s right Norway, now you can go back to sleep.
While you were asleep the conversation jumped ahead to what is likely to occur if Mullen finds in favor of the plaintiff and orders disgorgement of money by the net winner defendants and/or class.
what are you saying hoss? in this case, is the appeal of the defendants going to be moot ie the legal proceedings will have no effect? the order of the district court ‘could be overturned’.
this matter cannot be said to be beyond the reach of law , by any stretch of the imagination. do not misguide yourself.
if the funds are distributed, and the defendants prove the SEC has no jurisdiction at appeal, how will the receiver return their money to them. no sir, there will be no distribution till the ‘due process’ is completed, which includes the defendants right to appeal.
correct. correct . correct. and thanks.
god who?
what does it have to do with the judiciary and our self created confusion?
In that scenario, the defendants will first go through a complete trial and lose the case. Then they will appeal, using the argument “SEC didn’t have jurisdiction, because there wasn’t any securities”. Then Judge Mullen will order them to pay, and the Receiver will distribute the funds to victims. And then the defendants will win the appeal?
When I used the word “constructed”, it was exactly something like that I had in mind. 🙂
If I had to guess, I’d be looking at Mr Bell going down the path of “unjust enrichment” and leaving it up to the defendants / Zeek / RVG / Burks to squabble over the value of work issue.
norway , you got the order of events Wrong :
1] the defendants will first go through a complete trial and lose the case [it sounds like a bench trial, and we have already seen how judge mullen thinks, in his order in the MTD]
2] Then Judge Mullen will order them to pay
3] Then they will appeal, using the argument “SEC didn’t have jurisdiction, because there wasn’t any securities”.
WILL the Receiver then distribute the funds to victims, without knowing the outcome of the appeal? is he a crazy risk taker?
you all will be happy to know that it was the fourth circuit appeal court, which took the decision to reverse the money laundering charges against keith simmons, for which he had been awarded 20 years [ total sentence was 50 years].
the basis of the reversal was:
It is my contention that Bell will obtain judgments on every member of the class…. and in the main, sell the debt to a collection company who may or may not have holder in due course status. In any event the price paid will be based on collection risk. 10-20% on the dollar might be expected.
This monetizes the judgments for the benefit of the estate which distributes the funds to the creditors and liquidates. The estate no longer holds the judgments, nor does it have any assets so any reversal on appeal is moot as to it…beyond the reach of the law.
A reversal on appeal could effect the rights of the debt purchaser, but that’s part of his risk, and its a low one given the case, and because he will be discounting from judgment face value too. The debt portfolio will be liquidating pretty fast.
Lastly, though Bell has said he does not expect to do this, but he could bankrupt RVG, and with court BK Court authority sell judgment portfolio free and clear of all potential claims against it …meaning whoever buys the debt is also beyond the reach of the appeal as well.
That’s how mootness works. Don’t kid yourself that you understand it.
tell me, LRM how is bell is going to jump his horse over point 4.
also remember, that when bell told the court, at the initial MTI hearing and again at the MTD hearing, that he would argue fraudulent transfers and NOT jurisdiction, judge mullen cut him down the middle ruthlessly.
judge mullen said something like: i don’t want to be rude or interrupt you ….and bell began blabbering 🙂
You think were confused? the US only has about 225 years of conflicting precedent to deal with, Britain even more.
India, don’t even talk about India. After 700 years it got so bad in the Roman Empire that they scrapped all the laws and started over with the the Code of Justinian and then revamped the laws again with the Napoleanic Codes.
You have a very sour outlook on things. You might give a little credit to how well we have done after starting from bones and stone.
If you must have perfection, go contemplate a diety.
of course i did not understand it, and of course that wont happen.
the court/bell ain’t stealing any defendant money, until due process is completed.
What does this mean? They are particularly good as sniffing out bullshit and denying appeals? That would most certainly bring the average resolution time down wouldn’t it.
Find another straw to grasp at.
i said: what does it have to do with the judiciary and our self created confusion?
do you understand the concept of ‘our’ as in entire humanity?
all of us human beings on planet earth, have constructed many imperfect systems to administer ourselves, and we manage to muddle our way through.
let’s not get carried away and think we are not confused or that we are perfect. we keep trying to do a good job, and that is enough, because we are still on the ‘stupid’ side of evolution.
let’s not throw tantrums.
He can’t. That’s exactly why it would be moot. An appeal without a stay does not stop anything. If it did case after case, the entire court system would grind to halt with pending appeals.
This case has been essentially appeal free but many cases have multiple appeals running simultaneously and the filing of the appeal does not stop the proceedings.
The cases move forward and if it happens that by the time the appeal is due to be heard the matters are moot then so be it.
Remember, the person appealing is the one who LOST the argument after a fair hearing. The system makes provisions to correct error, but it does not stop everything in order to cater to the losers. The winners deserve that the case moves forward.
if the defendants lose the trial, and pay back, and the money is distributed, what the hell do they appeal for?
this effectively means that the judiciary has snatched their constitutional right to appeal a verdict against them?
the defendants case is : the SEC has no jurisdiction, the receiver has no right to clawback, don’t touch our money.
so, if their money is forcibly taken by the court, and lost to the ‘victims’, what is left for them to appeal?
and hello, the appeals courts are run, overrun, and then some, with appeals. one more case wont hurt.
It “aint stealing” if the judge rules for the plaintiffs.
The defendant’s may have the right to appeal but the prevailing party also has a right to his remedy and if the objections to an Order of Disgorgement are so flimsy that the judge will not grant a stay, nor the higher court reach through then judgments once obtained are assignable and sellable.
Nobody is denying the defendant’s right of appeal but neither is liquidation and distribution put on hold pending it (unless there is a stay) That is why mootness comes into play.
No point arguing it here, Anjalitroll
An appeal without an accompanying stay or injunction isn’t going to stop the receivership – end of story.
Good question. It would probably be a waste of time.
That’s certainly my feeling on it.
Nobody snatched anything. They would still have the right to appeal but the prevailing party is also due its remedies. Mootness is covered in the Constitution Article III too so everybody is getting their Constitutional cookie.
Its not his risk. He’ll ask the court for authority to make an interim or final distribution. If its approved he’ll do it. If anybody has a problem with it the can sue Mullen. Ha
Look at it objectively for a change.
A handful of Anjalitrolls could keep the process running for years filing meritless appeal after meritless appeal after meritless appeal ad infinitum.
As Hoss has pointed out several times, the prevailing parties have a legal right to remedy.
Added to which, if you had the slightest sense of history, or experience in watching similar cases, you would realize several of your hypothetical defenses have already been discussed and dismissed in previous cases.
They may be new or relevant to you, but you’re howling at the moon if you think they are going to prevail in a “real” court
nonsense, if the trial court orders clawback, the defendants can go to their circuit appeal court, and till the appeal is resolved, they do not have to pay and no money is distributed.
from the herald tribune, june, 2014. this is regarding a ponzi run by nadel, and a clawback action of the receiver wiand, against a sarasota resident lee, who was a net winner:
heraldtribune.com/article/20140603/ARTICLE/140609907?p=2&tc=pg&tc=ar
so, what have you learned today, hoss and LRM? the receiver gets no clawback money till the appeal is resolved.
commonsense would have told you this, but you wont listen.
no, judge mullen is fully aware of the rights of the defendants to appeal and will not tamper with their constitutional rights , because he’s a judge and not blogtrolls who misguide themselves with impunity. Ha
hoss, the only way your’e going to make the defendants right to appeal go away, is by shooting them.
are you willing to go that far?
this matter, is as far from mootness, as you are from clear thinking.
stop digging out irrelevant law, and keep your paws clean.
What I’ve learned is that Anjalitroll thinks if she speaks with an air of authority and digs up references even remotely resembling the Zeek case, she’ll do a little happy dance and high five herself until her hands bleed.
Meanwhile, back in the real world –
meanwhile, back in the real world :–
judge mullen : are you guys here to fight?
defendants : yessir we’re here to fight!
and everybody danced and high fived, because everybody loves a good fight!
Just a thought, but, I wonder if anyone at the SEC or Mr Bells’ office has ever bothered to check into the backgrounds of Trudy Gilmond, Trudy Gilmond, LLC, Jerry Napier, Darren Miller, Durant Brockett, Rhonda Gates, Innovation Marketing LLC, Aaron Andrews, Shara Andrews, Global Internet Formula, Inc., T. Lemont Silver, and Karen Silver to see whether or not Zeek was their first venture into HYIP ponzi fraud.
You know, seeing as they are claiming to be innocent victims who worked their fingers to the bone, only to be caught by surprise when it was revealed Zeek was a fraud all along.
“Been in a ponzi fraud before ??
Who, me ???
Nah, first time, scouts’ honour”
Let them file an appeal. Without a stay it hardly matters.
Prisons are full of people who have filed appeals and they serve out their time, and the appeals becomes moot.
Do Not Twist the Defendants Stance .
they are NOT claiming to be innocent ‘victims’.
they are saying :
1] zeek did not sell securities, and hence was not a ponzi
2] zeek was not a security as in ‘investment contract’, since they made no investments, and worked hard for their profit, and did not rely mostly on the efforts of the promoters,or a third party for realizing their profit.
uh, this is a civil case?
you are like a cat with a ball of wool, you seem to unravel and entwine a bit?
I learned that the article you cited says only that the judgment was upheld.
yeah , because that guy, lee, was protesting his own innocence. he was not questioning jurisdiction or the finding of the ‘ponzi’.
once a ponzi is established, it is difficult to fight clawback, unless your earnings are over two years old.
but hossboss, Do also notice, that receiver gets NO clawback till the appeal is resolved. pretty please ?
You don’t have to be a Federal Judge to know that and presumably Mullen also knows what happens when there is no stay pending appeal. Namely, Bell can pursue and/or sell off the judgments.
I think he will sell most of them off. YOu really should be arguing why Mullen is going to issue a stay because the rest what you have been saying is bunkum.
Nobody is taking away their right to appeal. Mootness occurs independently from that. If there is no stay, Bell can forge ahead.
I can think of no more irreparable harm than sending a man to prison. The comparison is apt. The penalty (civil or criminal)is exacted unless there is a stay pending appeal.
Simply filing an appeal does not stay the execution of a judgment any more than an appeal stays the incarceration of a man. Its the same principal.
The good part about baiting Anjalitroll is watching her become more and more confused until she starts contradicting her own arguments
There’s a book in this, I’m tellin’ ya.
A classic example:
I think he will sell most of them off— He [the receiver] cannot sell what is Not His. the judiciary is not a market.
YOu really should be arguing why Mullen is going to issue a stay because the rest what you have been saying is bunkum—-why fight? show me an example where pending an appeal, on the question of jurisdiction, and clawback, net winners have had to payback and those funds got Distributed?
do not throw away commonsense, with your daily garbage bag.
Why ????
You are Anjalitroll showing you anything is pointless.
An appeal without a stay or injunction means nothing, whether or not you choose to believe it or acknowledge it.
Courts have already ruled “Placing Ads” is not work. Again, whether or not you choose to believe it or acknowledge it, is irrelevant.
I sincerely hope Gilmond and the others go with the “we had to work hard at recruiting to earn the hundreds of thousands or millions we were paid by Zeek” argument, I really do.
You must be reading a different article than attaches to the link you posted. There is nothing indicating the Receiver could not have sold the judgment he held against Lee to a willing buyer or that said buyer could not have demanded payment from Lee.
Whether the court would have enforced payment of the debt if held by a third party purchaser was not at issue nor was the Receivers ability to sell the judgment to raise cash for the estate.
The debt was always valid and so upheld on appeal… demonstrating that had a distressed debt buyer bought Lee’s debt for pennies on the dollar the buyer would likely have profited handsomely, providing Lee had assets to attach.
The point is this. Bell can sell off the Zeeker’s judgment debt so long as there are buyers willing to assume the time risk of a stay (if there is one)and believe that ultimately the outcome of an appeal will sustain clawback judgments
If there is no stay Bell, or any assignee/purchaser can immediately attempt to collect on the judgments. Its not likely Bell would do so, but nothing prohibits him from selling the estate’s interest in the judgments.
You provided no evidence that there was any impediment to selling Lee’s debt, only that Lee contested its validity and lost.
If you were one of these debt buyers you might say, don’t buy that debt, those Zeeker people are going to win on appeal. You might be right but chances are someone else will see it diffeently and be willing to buy what Bell should be willing to sell.
I do not believe the Receivership is going to chase down 8000 judgment debtors.
An appeal on its own does not prohibit him from selling thanything….only a stay of the Order does.
Correction: Bell can sell the estate’s interest in the clawback amounts at any time to anybody, even right now…though no one would buy at this stage. Once Bell obtains judgments that will change if companies and hedge funds willing to bet the appeal has no merit.
You’re missing some important factors. To sell claims, he will first need an Order from the court, giving him leave to do so.
And before he can get that, he will first need a valid judgment on Prayer 1 “Enter a declaratory judgment”. And the he will need to contact the class members about the judgment and the individual amounts (give them a chance to respond or object to the proposed amount). And then he will need a judgment about the individual amounts (“which ones owe how much”).
There’s nothing indicating the opposite either, so none of you should find support in that article.
The appellate court reversed a judgment from the lower court.
$430,000 in interest indicates a high principal amount / long period of time (e.g. 8% annually / 4.8 years). That will support anjali’s version.
The estate has a chose in action. Bell can sell those rights at anytime. The chose will be converted into a judgment which he also has the right to sell. Why do think he submitted a Liquidation Plan if he could not sell what the estate has?
Your perception that the judiciary is a market is ill placed. The judiciary determines rights as between parties. If it is determined that the Receivership is by right entitled to collect money from the Zeekers the Court will enforece those rights.
Don’t start with that stupid line of reasoning again.
What it supports is that judgment was uncollectible not that it was invalid. Those are two distinctly different things. The judgment was valid.
That is not the question at issue. The issue is whether Bell can sell the judgments. He can… regardless of any pending appeal…. and the proceeds of the sale can be distributed to the creditors upon approval of the Court.
You keep wanting to make this an issue of whether he or his assignee can enforce and collect on the judgments while an appeal is pending. That is more ambiguous. On one hand the judgments are valid; Bell has a Court Order saying so. On the other there will probably be an appeal pending.
These judgments will be against individuals all over the US and the world. Are they collectible. Who knows?
Bell has already settled with numerous people without judgments. He may settle with more when he has judgments in hand. One thing is for certain he will have a Court Order with sums certain that back his demand if he prevails in the clawback suit.
That constitutes a valid judgment until and unless the Appeals Panel rules to the contrary.
Given the dubious arguments forwarded by Sorkin et al the likelihood of reversal is extremely low and that means the marketability of the judgments is very good.
“The chose will be converted into a judgment which he also has the right to sell”? I thought he needed an Order against the net winners? “Enter a declaratory Judgment against the Net Winner Class …”?
If he doesn’t need that judgment, he won’t need the class action lawsuit either. He could simply have filed a “Motion To Convert Chose Into Judgment, And To Sell That Judgment To A Third Party Debt Collector” directly.
No. the chose is only the right to bring the lawsuit its not the money judgment itself.
Bell could sell and assign his right to bring the lawsuit, but nobody wants to buy a lawsuit, so instead he pursues his cause of action, obtains a judgment and then sells the judgment which is s evidenced by an Order or Abstract of Judgment which is tangible evidence of the debt.
It can be traded, bought and sold and assigned. Its can also be filed with County Recorders in order to obtain a lien against property.
A chose is an intangible right of action.
That’s why I added the extra info about the reversed judgment, $430,000 in interest.
$430,000 in interest is close to 8% interest from a principal amount of $935,631 for 4.9 years (as an example).
To convert it to a judgment Bell must file suit, win, and obtain an money judgement. You can not do that in a single motion.
His cause of action is that he’s the Court Appointed Receiver for Rex Venture Group, and the court has ordered him to pursue clawback actions against net winners.
He can’t sell that (even as a judgment). You probably mean that he can sell the CLAIMS he has against the net winners? Debt collectors can buy claims against debtors.
They can buy claims + judgments too, e.g. a judgment from a court that the debtor(s) owe a specific amount of money to a creditor. That will require a judgment against the net winners to be valid.
That’s probably why he has filed the class action lawsuit against the net winners?
He will need:
1. A declatory judgment against the net winner class
4. Order to notify net winners about judgment and amount
5. A judgment against each class member with specific amount
6. Leave from the Court to sell the claims to a debt collector.
But then we’re back to my conclusion in post #291 = he can’t sell the claims now to a debt collector, many factors are missing.
This only more illustrates the box the Zeekers are in. The longer they putz around defending and appealing and trying to avoid paying back the money the more they end up owing. Pre judgment interest has already been accruing for 2.5 years.
That is exactly right.
RVG has a right of action. He can sell RVG’s rights of action any time, but nobody would buy them.
He sells judgments and to do so he must go through the steps you outlined.
That’s what I thought all the time, and that’s why I posted it in post #291.
He can’t SELL the claims before he has got the necessary judgments. I’m not sure he can sell it then either.
It’s not about “normal debt”, but about disgorgement of money through a court. You can’t BUY factors like “legal standing as a court appointed receiver”, a court must appoint you to that role.
I haven’t looked at that part. I only looked at “what’s needed to collect money from the net winners?”.
If he sell the Receivership’s rights, then the class action can truly be dismissed. He won’t have any valid claims against the net winners if he sell the claims to others. 🙂
The buyer won’t have valid claims either. 🙂
That’s right he would have sold the rights, but Bell can not realistically do that. The Purchaser/Assignee of the rights would have standing issues, he would nee to assert securities violations and on and on. This no place for a private party to assert RVG’s rights.
However, Purchasing and asserting the right to collect on judgments the Receiver has obtained is an entirely different matter. That’s what would be sold.
No, his cause of action is RVG’s cause of action. The Court does not grant a cause of action. The cause arises outside of the courtroom through the interplay between investor-affiliates and RVG itself.
I haven’t looked into any details there. I only identified it briefly as “not an ordinary claim, but a disgorgement of money based on fraudulent transfers”.
The question was about whether the Receiver could SELL the claims to a debt collector, after he has received judgments (as specified). He could have done it with ordinary claims, but the judgments are about more than that.
My guess is that he can’t sell the claims, e.g. he can’t sell the constructive trust, he can’t sell various rights to have disputes resolved by the same court. He can’t sell the right to stand in RVG’s shoes.
A money judgment is generic. A owes B $10 etc. Nothing more to it than that.
yes, AFTER the ‘appeal process’ is over, and if the judgement finalizes clawback, the receiver will have the authority to collect money from the net winners. the net winners will have to pay additional interest too.
at that point bell may choose to sell the debt, because his office may not have the wherewithal to pursue 9000 net winners.
but, lets avoid being stupid, and understand that at this stage of proceedings, or even after a trial judgement, the receiver cannot go around selling debt to a third party because a court wouldn’t allow it, before the appeal is settled. the trial court cannot peer into the future, and see the outcome of the appeal.
That’s why I identified those other elements in this case. It has 3 elements rather than one.
1. A declatory judgment against the net winner class
4. Order to notify net winners about judgment and amount
5. A judgment against each class member with specific amount
You can’t separate the money judgment from those other elements. Element for a specific purpose. The money judgment theory would have required element 5 alone.
You can try to set up a sales agreement to cover that one?
He will need to transfer more than just the right to collect money from a debtor.
latest news [dec 9,2014] from the second circuit appeal court, which was hearing an appeal against clawback in the madoff ponzi:
blogs.findlaw.com/second_circuit/2014/12/2nd-cir-limits-madoff-trustees-clawback-powers.html
uh, zeeklers could argue in the same vein, that they were buying bids [securities] and they believed zeeks business was profitable and the profit was real, and on top of it all, they ‘worked’ for their profit, so please leave their earnings alone ?
Sure, why not.
And then when they lose they’ll still have to return their stolen Ponzi funds.
Yay!
no point Yaying! in advance oz, the madoff clawback defendants WON their appeal! the receiver, picard, LOST his argument of fraudulent transfer.
yesterday, i came across a ruling of the fourth circuit appeal court, which made a similar finding in a ponzi case appealing clawback. back when i find it again!
Perhaps, but in Zeek the question of whether it was or wasn’t a Ponzi scheme is non-existant.
Any arguments built around an appeal are additionally shot down by what affiliates actually did to generate ROIs (invest).
We went through this in the other thread. It’ll take a while to play out but those top pimps will be handing back the money they stole.
It’s been a given since 2012, regardless of whatever crap they file in court to drag it out. You can already see it happening with the merchants who have similar ideas of keeping funds. Clawback affiliates are up next.
even madoff’s scheme, was established as ponzi.
yet the defendants won their clawback appeal, Inspite of that fact. that’s the point here.
Yeah, and how it was presented was entirely different to Zeek Rewards.
The frontend is what’s relevant in this decision, not the backend. The only thing Madoff and Zeek had in common was the Ponzi backend.
Is it just me or is Anjalitroll deliberately missing a glaringly obvious difference between the two cases ??
You know, like that little word “stockbroker” being in one case and not the other.
or the other mention: “established a customer-broker relationship”
madoff : we make investments for you, and pay you real profits
zeek : we run a penny auction, and pay you real profits.
(Ozedit: Spot the difference.)
Nice disingenuos cherrypicking there, Anjalitroll
Is it just me or is littleroundtroll deliberately missing a glaring sentence from the 2nd circuits order that :
And even this is crap. Affiliates were “paid to advertise”, yet it was their own investments that drove ROIs.
That’s why any bullshit arguments raised in court by clawback pimps will fail. What they claim (“we worked!”) and what they actually did (invest funds) do not match up.
There’s a marked difference on the frontend between Zeek and Madoff. The penny auction was neither here nor there.
the second circuit found that the investors were not aware of any fraudulent intent:
Added to which neither the Zeek winners or victims can “avail themselves of all the protections afforded to the clients of stockbrokers” or use the two year time limit imposed by the judge or even use “section 546(e) of the bankruptcy code, a “safe harbor” provision that protects customers who receive transfers from stockbrokers that are made “in connection with a securities contract” or are “settlement payments.”
yes, they can claim they ‘worked’ and believed they were receiving ‘real profits’ but unknown to them, they were selling securities, and please protect our ass under Section 546(e).
and lose because all that mattered towards their ROI was their own investment of funds.
Case closed.
READ post#322 AGAIN to understand the width of section 546 [e].
don’t get Stuck on the word stockbroker. the scope of section 546 extends to anything which is like a security .
So who is bankrupt ???
intellectually?
not zeek 🙂
you can enjoy your little brownie point and do a happy dance , because i found this:
i’m going to hope and pray on “While the Receiver indicated this decision remains under consideration”.
hope is everything !!
Why are you hoping those that collectively stole millions will get away with it?
For shame.
there is no shame in following any side of a court battle. the court is willing to hear them,and the world is full of defense lawyers, rooting for the defendant cause.
i wouldn’t have it any other way. innocent until proven guilty, and no shame At All.
should the second circuit court feel shame for allowing madoff (Ozedit: I’m going to cut you off there, as I’ve already explained to you the two cases are entirely different).
Amid all of Anjalitrolls nonsense, is the fact Zeek was, by all estimates, an $850 million dollar fraud perpetrated on hundreds of thousands of people worldwide.
“For shame” doesn’t even begin to cover the depths to which she is prepared to go with her trolling to “win” whatever battles exist in her mind.
You’re not just “following” though are you. You’re openly advocating that Ponzi thiefs be permitted to keep funds they stole from victims of the scheme.
Participated in a Ponzi scheme and profited from it? Innocent my ass.
If Mullen has concerns about an appeal he can issue a stay. If he doesn’t, monetization and collection of the judgments will move forward enforced by orders of the court. The future can take care of itself.
Exactly. Which is why an Order once issued (without a stay) is binding and effective.
The folly of your conception is that you expect the court to both make allowances for a future event which may never occur (the appeal) while not peering into the future.
I pointed out something similar to that for TelexFree, after a quick look at the bankruptcy rules. A court ordered receivership can be more flexible, more adjusted to the case itself than to a specific set of rules.
“This case currently needs …” is a better way to work than “the Bankruptcy Act requires …”, case oriented rather than rule oriented.
It can be seen in some of the details, e.g. standard claims forms had to be made available long before they were needed, even if they most likely were “the wrong type of solution to the wrong time” for that particular case.
of course he will have concerns about which way an appeal can go.
he’s not distributing any clawback, till he’s sure the defendants are done with appealing.
And the proof for that statement would be where, exactly
In the absence of a court ordered stay, you’re simply crystal ball gazing aka guessing.
In case of an appeal, Judge Mullen will most likely follow the correct procedure, e.g. analyse “which court currently decides what?”, and let the Appellate Court decide what it should decide.
It will be up to the parties to move for a stay / object to a stay, if I have understood it correctly. I haven’t exactly “studied” any rules.
Final judgments have a 28 day time period before they become final.
* Rule 59. New Trial; Altering or Amending a Judgment
Relief from judgments can be sought within not more than a year from the date of the final judgment. Void judgments can be attacked any time.
* Rule 60. Relief from a Judgment or Order
@anjali
You asked question / posted some theories about how Zeek was marketed and sold in the “Paul Burks indicted” thread.
I have found 1 “original ad” (a screenshot in an article):
NOLINK://patrickpretty.com/2014/07/01/editorial-on-the-war-in-zeekland-and-hyip-rabbit-holes/
It’s about “Make $ post free ads. We want YOU”, promoting Zeek Rewards as an income opportunity. That’s how it usually was promoted by most people, as an income opportunity with a profit sharing component.
Earth to Anjali. If he has “concerns” he will stay the Order pending appeal.
You don’t seem to understand that there is a difference between a stayed order and non-stayed order. You want to treat them the same, and they are not. If there is no stay the terms of the Order are carried out.
Here, Mullen should enter an Order to Disgorge Fraudulent Transers followed by Bell’s Motion to Obtain money judgments against each class member in favor of the RVG Receivership, its assigns or successors in interest. If this Motion is approved the judgments will be valid and enforceable.
If Bell sells those valid judgments he will obtain cash which can be distributed to creditors upon approval of the court.
Note: the net winners will not have paid anything to the estate and even if they won on appeal they would have no recourse against the estate. Their dispute would be with the assignee…..the debt collector who holds the right to collect on the judgments.
Will Bell sell the judgements? I don’t know. I think he will. It recovers a reasonable amount of money for the creditors in the least amount of time and leaves the risk of appeal and collection to others.
Why not argue they were buying magazine subscriptions and won the Publisher’s Clearing House Million Dollar Cash Bonanza….prorated according to how many magazine articles they read.
Of approximately 10 billion VIP Bids purchased by or awarded to investors, less than 0.25% have been actually used in auctions on the Zeekler penny auction website.
Good luck trying to convince “any reasonable person” much less an experienced Federal Court judge they were “buying bids”.
‘But, But, But Judge Mullen, Scout’s honour, we didn’t purchase bids to earn the 1.5% per day ROI, we bought 10 billion bids to use in the penny auctions and it’s just a coincidence we never got around to using them and there were only 0.025% of the 10 billion bids actually used in the penny auctions”
you do not seem to understand there is a thing called commonsense.
the moment defendants inform the court they want to appeal, any collection will be stayed. the money judgements etc will stand of course, but will not be implemented until the appeal is over.
i gave you the nadal ponzi and the delay in the clawback due to an appeal. you can show me an example of a clawback action where defendant money was distributed pending appeal?
What you “gave” is crap. Viand, the Receiver was denied clawback. Viand, the Receiver appealed the denial. Viand, the Receiver’s appeal was upheld and the net winner Lee was obliged to payback the money.
It was the Reciever appealing not the net winner.
Bullshit. An order is effective from the date on which it is made unless it provides otherwise. Its final when its docketed and it must be appealed within 21 days.
The Zeekers may petition for a stay of judgment but it does not have to be granted. If not the judgment is valid and enforceable regardless of the appeal process.
I am not going to lead you by the nose so I hope you have some ability to research this on your own. If you can refute the accuracy of the article linked below feel free to do so, but I’m certain you can’t.
NoLink://law.freeadvice.com/litigation/appeals/apeal_delay_judgment.htm
The reporter got it backwards…. but for the sake of argument, even if the appellant was Lee your assumptions do not take into account the possibility that Lee obtained a stay of judgment or purchased a supersedeas bond.
Instead you rashly assume that filing an appeal stays collection.
so, i will be gracious and lead you by your nose. read the nadal details Again Very Carefully:
“A federal appeals court has ‘upheld’ a nearly $1 million clawback judgment in the Arthur Nadel Ponzi scheme.
A federal magistrate ‘ruled for Wiand’ last year, and ‘Lee appealed’ to the U.S. Court of Appeals for the 11th District.
On Monday, that three-member court ‘affirmed the judgment’of $935,631 and, reversing the lower court, ordered further proceedings on more than $430,000 in interest that the receivership is seeking.”
so lee appealed clawback , which was granted to wiand by the district court. the court of appeals UPHELD the judgement of the district court, and also REVERSED it by adding $430,000 in interest.
what i learned via your link is that :
i will reiterate my position that no judge is crazy enough to distribute a defendants money out into the unknown world, while the defendant has appealed his judgement.
Correction: Lee appealed the District Court’s summary judgment of $935K in favor of the Receivership.
However, at the same time the court denied pre judgment interest to the Receiver stating Lee had “suffered enough” The Reciever cross appealed on the prejudgment interest claim.
Lee lost his summary judgment appeal and the Receiver prevailed on pre-judgment interest cross appeal.
Whether there was a stay pending appeal or a supesedeas bond that kept the Receiever from attempting to collect the judgement, and/or whether he first wanted to establish his right to the additional $400K in pre judgment interest before attempting collection is not ascertainable.
I will reiterate my argument that you were dead ass wrong when you claimed that filing an appeal in and of itself stayed collection and as to your other idea that “no judge is crazy enough to distribute a defendants money out into the unknown world…”
Its equally absurd because it founded on the same misconception that the money is “frozen simply because there is an appeal. Its not.
Once the judgment is entered the money is payable. By right it belongs to the Receiver and if he is able to collect it then there is no reason he can not distribute it.
A pending appeal means shit. Sorry.
Now you are arguing what YOU think the “no crazy” judge will do. Before you were arguing what Mullen MUST do by law. That’s not the same at all.
….without a stay or a bond, the judgment is collectible.
That’s what you learned. You don’t have to admit it. I know.
Of course he would, providing the judge is secure in his decision. He has after all decided in favor of the plaintiff and not issued a stay.
The appeal is not a consideration. (judges may have up to 150 open cases at any one time.) They don’t have time to agonize over what might happen on appeal.
Even if the Zeekers prevailed on some alternate interpretation of the law or mistake it would be moot if the money’s gone….so the judge gets his way, anyway.
See correction to same: there was also a cross appeal by the Reciever but Lee did file an appeal.
There was no reversal of the $935k judgement against Lee. That judgment was affirmed. What was reversed was the trial judge’s decision that pre judgment interest was not payable. It is. This has potential significance to the Zeekers since they have already accrued 2.5 years of interest.
Of additional significance is the finding that “I thought I was investing legitimately” is not a defense to clawback.
Let me amend that. You were previously arguing the law provided an automatic stay of judgment upon appeal. Now you are arguing that any sane judge will see things your way and issue a stay of judgment. Not the same Kit Kat.
i said filing an appeal, would mean, the judge would not distribute the defendants money to the victims, as, if the defendants won at appeal, the judge would have no way return their money to them, and he would cut a sorry ass picture, and would probably be tumbled off his bench. he may keep the money in an escrow account, i said, pending judgement in the appeal.
you want to use the words ‘stay’, ‘bond’ sure be my guest, always encourage yourself to learn, BUT it takes no meat out of what i said, shortly and succinctly, without using ‘legal words like ‘stay’ and ‘bond’.
i will reiterate my position that no judge is crazy enough to distribute a defendants money out into the unknown world, while the defendant has appealed his judgement. whydya need legal words to say this?
nobody’s money can go moot or disappear from the judicial system. if the defendant wins his appeal, his money [if in the courts safekeeping] HAS to be returned to him . no buts no if’s no mootness no dogshit.
O, no, not so, gotta go.
Money does not “disappear from the legal system” and money does not “go moot.”
However, once multi millions of dollars are distributed to tens of thousands of people there is no practical way to recover it. Mullen is as aware of this as you are, but if he allows it, then he does.
He has sufficient reason and every right to do so and the fact that the Zeeker’s file an appeal is not a consideration. Everybody files an appeal when they don’t get what they want.
You obviously haven’t gotten the concept yet.
You think Mullen thinks like you do. He doesn’t. He knows that when the money is gone….its gone and no appeal panel is going to get it back. He gets paid for making that call.
“Stay” and “bond” is a part of the appeal process.
The appellant must file a Motion To Stay before the District Court (the trial court), along with the Notice of Appeal. Motion To Stay can also be filed to the Appellate Court if there’s a good cause to not file it before the District Court.
“Bond” is about something different, about a guarantee against financial losses for the Appellee if the Appellant loses the appeal.
It doesn’t seem to be any automatic stay of the execution of an Order. That would have allowed parties to unreasonably delay justice, so it wouldn’t have made any sense. A stay will need to be decided on a case-by-case basis to make any sense.
The Appellate Court will have its OWN jurisdiction over the case, over a part of it, the parts related to the appeal.
It will not take jurisdiction over the case as a whole if the appeal only is about a small part. That would have allowed intervenors to slow down a case based on minor disputes.
Where did you find your mootness theories? I believe you have interpreted the idea of mootness too far. Execution Orders CAN be reversed, they are not outside the legal reach of a court.
Once multi million dollars have been paid out to thousands of people, it will still be within the legal reach of a court to reverse that decision.
How to recover money will be a practical matter, but if a court can recover money from 9,000 net winners it surely can recover money from net losers too.
A court can even reverse a death sentence after it has been executed. It can’t use mootness as an excuse, e.g. “the party has already been executed, so any new evidence will be moot”.
Legal Information Institute (cornell.edu):
NOLINK://www.law.cornell.edu/wex/moot
“After the matter at issue has been resolved” doesn’t mean “once the payments have been made” or any other versions of “once the judgment has been executed”.
You have interpreted the idea of mootness too far. You have probably looked at some practical reasons rather than some legal reasons, e.g. “It will be impossible to reverse all those payments”.
A court can more easily order 150,000 net losers to pay back money than it can order 9,000 net winners to do it. There won’t be any disputes about it. If the net losers have accepted the first judgment allowing them the money, they clearly must accept modifications to it or accept having it reversed.
So you believe he thinks like YOU DO? 🙂
“When the money is gone….its gone and no appeal panel is going to get it back. I get paid for making this call. Other people simply haven’t got the concept yet. If I allow the payment, no appeal can reverse that decision or reverse the payment”. 🙂
The court doesn’t think like ANY of us do. That’s why we will need to make corrections to the ideas we already have, and why we will need to continue to make corrections.
Sure orders can be reversed but that’s not the point. If the original order permitted the money to be distributed and it was, how does reversing the order get the money back from tens of thousands of people all over the world? There is no way to put the toothpaste back in the tube.
What legal remedy remains for the defendant class members if they should win on appeal and they estate has no money left?
I don’t want to overstate the likelihood of it happening, but it may take years before an appeal is heard and in the meantime Bell is doing all he can to recover assets and make distributions. I can’t guess the timing of any of that.
I brought up mootness because its interesting but mainly to illustrate that filing an appeal is not the equivalent of obtaining a stay and distributions can and probably will take place before an appeal is heard.
I think Bell will accept deals, pursue a few of the largest judgments,and sell the rest. The estate won’t even recover that much from individuals that have a stake in the appeals (and there could be several on different issues.
Try to imagine a legal remedy and tell me what you come up with.
So you think Bell would commence a second class action lawsuit to clawback the distributions he just made to the net losers. Oye vay.
If the man is dead you can’t. its moot.
Yes
That is not what I said. A reversal on appeal would not be moot if there was still money in the estate because the Court could fashion a remedy. It could order the estate to pay back the money. It can’t do that if the money is gone.
Keep up the good work. Just don’t tell me that “the moment defendants inform the court they want to appeal, any collection will be stayed.” It makes me bitchy.
It doesn’t need any legal remedies, other than reversing the judgment and informing the affected parties about it, and then make the parties that owes money pay it back.
I haven’t said that? I said quite the opposite = “there will be no disputes about it”. It will simply be a new resolution to the same dispute.
But the court doesn’t THINK like you do, or like any of us do. Judge Carmen Mullins followed quite different ideas.
14 year old George Stinney Jr. was executed in 1944. Now, 70 years later, that judgment has been vacated by a court in South Carolina (Judge Carmen Mullins).
NOLINK://www.nbcnews.com/news/investigations/exonerated-after-execution-judge-tosses-teens-murder-conviction-n270176
You will probably need to make some corrections to your mootness ideas?
You should probably make some extensions to your idea of “Judge Mullen doesn’t think like Anjali”, too? Your argument there sounded like “Judge Mullen doesn’t think like you do, he thinks like I do!”. 🙂
Well… Didn’t the court just expunge the guilty sentence 70 years after a kid was executed?
OFFTOPIC, do NOT continue. 🙂
There’s no legal remedy for being dead.
In this discussion Who would owe the money?
I don’t think we will need to analyse that. It was only used as an example anyway, an example for “realities versus wrong legal theories”.
In the example there, the net losers will need to return the money they received. There won’t be any legal disputes about it, it will simply be a modification of the existing judgment.
What existing judgement? I have not heard of it.
The 40% distribution was based on a judgment (ZeekDoc229.pdf). Any distribution in the future will be based on similar judgments.
ZeekDoc229:
ORDER granting 210 MOTION to Authorize First Interim Distribution, Establish Record Dates and Set First Interim Distribution Date.
I haven’t READ that Order, I have only located where it can be found. It will be up to you if you want to check details. There may be some other judgments involved, but that one seems to be the main one for that distribution.
First off this is not a Judgment and yes the Receiver did distribute funds to the net losers. You reason that they would have to return money to the Receivership so that the Receiver could return funds to the net winners appelants.
It seems to me that the Receivership would owe money to the net winners, not that the net losers would owe the Receivership.
The net losers were properly paid on their creditor claims. There was no error. The funds they received are rightfully theirs. I see no grounds upon which the court could order the net losers to pay anything.
Bell wants your money hardly seems sufficient.
I guess not. Those people are now in rightful possession of the funds. The court can’t just say pay Bell because he wants you to. There would be a hell of a dispute.
At this stage the receiver intends to make at least three interim payments to eligible recipients.
He applied to the court for, and received an ORDER not a judgement, allowing him (the receiver) to make the first interim payment
He did that.
Now he will continue the work of tracing and recovering funds to enable him to make another application to the court allowing him to make a second / third / fourth / as many as is required interim distribution/s
Part of that “tracing and recovering funds” involves settling with net winners.
There is no need for any discussion about the possibility of the receiver being ordered to refund anyone.
Nothing he has done thus far is subject to reversal and everything else hasn’t happened.
That’s why discussions about hypotheticals only will make sense for a short period of time. There will always be some relevant “It seems to me” arguments that can be brought up, where none of us can prove that one idea will be more valid than other ideas.
The discussion has been about a hypothetical scenario, a discussion mostly between you and anjali. It has been about “What will happen if the net winner defendants lose the class action lawsuit, and are forced to pay money, and the money is being distributed to the net losers, and the net winners later will win the appeal?”.
I can’t prove which one will owe which other one money in that situation, and neither can you. We can always use “It seems to me” arguments.
“This is not a judgment”? Judgments usually come in the form of Orders, Decrees, Opinions, etc., and I referred to that type of document.
It has the required section “IT IS HEREBY FOUND, DETERMINED, ORDERED, ADJUDGED, AND DECREED, AS FOLLOWS:” 🙂
1. The notice of the Motion sent via electronic mail …
2. The Receiver is authorized, but not directed, to make …
3. The First Interim Distribution Record Date …
4. The First Interim Distribution Date …
5. The first Subsequent Record Date …
6. Additional Subsequent Record Dates …
7. The first Subsequent Distribution Date …
8. Additional Subsequent Distribution Dates …
9. The methodology for determining the amount …
10. The Receiver shall establish a reserve on account …
11. The Receiver shall not reserve on account of any …
12. The Receiver shall not reserve on account of any Claim …
13. The Receiver shall reserve sufficient funds to …
14. No Claimant has asserted a valid Claim that …
For me, that looks like a very detailed judgment. “It seems to me” that the First Interim Distribution largely was based on that judgment, but I clearly cannot prove it. 🙂
Its an Order (not a suggestion) See all the Shalls? those mean mandatory compliance required.
A judgment is more along the lines of an opinion for or against something or someone. A judge would use his judgment to judge and make and issue judgments based on that. Of course he did use his judgment to decide what to put in the Order. Confused?
Shall indicates an Order.
I’m going to be extremely charitable here and accept most of the misunderstandings in this thread are due to the “English is a second language” status of some of the participants.
ADJUDGED is not the same as JUDGEMENT
An ORDER is exactly that.
As in “you are ordered by the court to do xxxxxxx”
Not “it would be nice if you did” or “perhaps, if the mood takes you”
DO IT or face the wrath of the court
It takes a special sort of arrogance to predict that an experienced Judge / court / receiver / SEC MIGHT make an error at some future time based on the understanding of some random internet blogger of how things MAY pan out at some time in the future – perhaps.
Nonsense thread people, nonsense thread.
It’s still a hypothetical scenario, but a court can clearly modify, amend or reverse its own judgments. An Appellate Court can do the same. Even 70 year old death sentences can be vacated.
Your “rightful possession” theory was based on that the Receiver already had paid the money out, that a court can’t reverse something that already has been done.
A court can amend, modify or reverse the judgment itself, directly affecting the “rightful possession”. If the net losers no longer can claim “rightful possession” then the money can be ordered returned – WITHOUT raising any new disputes about it.
The main point was “A court can modify its own …”. A court can probably modify its own ORDERS too.
The discussion is actually about a final judgment in the class action lawsuit, about a hypothetical scenario described in the same post (currently #382).
There IS NO “final judgement” in the class action lawsuit.
Are you guys going to fill up every single minute until the class action is resolved with hypotheticals ??
How about we accept the fact that with the number of experienced professionals involved on both sides of the lawsuit, the hypotheticals of a bunch of internet bloggers are completely and utterly irrelevant ???
Yes but not always. It depends.
If I order your execution and you die, modifying, amending or reversing my order is not going to remedy your problem… which is to say your dead and your going to stay that way.
Do you suppose the boy came back to life?
guys hogging valuable blogspace never helped anybody!
allow the ‘master’ 🙂 to clarify your muddledness in a few short sentences:
1] if judge mullen orders clawback from net winners, they will get the judgement stayed, and file an appeal in the fourth circuit court.
2] judge mullen will stay the judgement[with conditions/bonds whatever], because its a question of clawback from 9000 people + named defendants, and he ain’t treating the matter lightly.
3] the defendants are questioning the crux of the issue ie whether zeek was a ponzi, and this is a a strongly appealable matter. judge mullen will never say, i have decided its ponzi and i’m sure the appeals court will not overturn my judgement.
4] the appeal may delay distribution by an year or so , but the defendants have their rights, they cannot be denied their appeal.
5] the receiver bell meanwhile is free to distribute the monies of the RGV estate and those monies he has received in the form of settlements with insiders and net winners.
6] when a court reverses the execution of a little 14 year old child, its definitely ‘moot’ but it is a way of apology and of keeping the record straight.
The good thing about it, Anjalitroll is that you can no longer do any damage.
* The receiver and the various blogs are doing a great job of keeping the victims informed.
* The numbers of people who still think Zeek can or will return is at or near zero.
* All Anjalitrolls “IF” scenarios are now so far removed from reality even the most uninformed casual observer couldn’t help but laugh.
Please carry on.
The world needs more laughter.
I used it as an example to shoot down your mootness theory. I have no intention of discussing various types of restitutions as a general topic.
A court may even modify footnotes. 🙂
The main point was still “A court can modify its own …”.
No, YOUR main point is “A court can still modify its’ own…”
The rest of the world was never interested in Anjalitroll and your hypotheticals in the first place and moved on long ago.
Exactly. There’s no significant difference between “the main point in that post” and “my main point in that post”, so both will be correct. They will express the same idea.
The hypothetical discussion belonged to Hoss and Anjali. I tried to shoot down some hypothetical theories / bring it back to reality.
The 2 theories I focused on were:
1. Hoss’ mootness theory. First attacked in post #364.
2. “Judge Mullen thinks …” theories. First attacked in post #366.
Both were fundamental parts of a discussion about hypotheticals. I tried to make those types of arguments become less useable.
The mootness theory was about that courts will find modifications (e.g. reversal of payments) “outside legal reach” once an Order has been EXECUTED (e.g. if money already has been paid out to parties). That theory didn’t reflect the realities.
The “Judge Mullen thinks” theory was about something different, about “superimposing a World View”, “Mind Projection” or something like that.
It’s about the idea that rational people like judges share exactly the same ideas we have. It’s usually expressed like “You simply haven’t got it! Judge Mullen doesn’t think like you do, he thinks like I do!”.
“sigh”
* The law can not restore the dead boy’s “right to life” is correct. So if you focus solely on what a court cannot do your idea will look correct enough.
* “The issue is beyond the reach of the law” is incorrect as an argument for mootness. You have simply “invented” a condition yourself. The real condition should have looked like “when the matter at issue has been resolved, leaving no live dispute for a court to resolve”.
* “The issue is moot” is a wrong conclusion. It’s partly based on a flawed theory. The fact that you have repeated a theory over and over again and have started to believe in it doesn’t make the theory more correct in itself.
“No live issue.” Figuratively and literally.
Dead 70 years. It doesn’t get much more moot than that.
“Live dispute” can be about something like this:
It can of course be about the person, too, e.g. some people can easily be classified as “live disputes” based on observation and experience. 🙂
This whole discussion has been moot
“7. an argument or discussion, esp. of a hypothetical legal case.”
If the money is gone and can’t be receoverd its moot.
If the man is dead and can’t be brought back to life its moot.
If LRM objects to this discussion its moot.
If Analogi thinks stocks are not “like” the Rev Pool its moot.
Cow is MoooooooooooT. You are moot.
Everything is moot.
Neither you or I know if the net winners “will get” a stay or not, but at least we both know they would need one.
@anjali
ZeekDoc296.pdf is an Order Denying Stay Pending Appeal from the appellate court USCA, denying stay in the “Belsome et al” appeal to “Attorney Charging Liens” notice.
That Motion To Stay must have been sent directly to the appellate court. The money will have been paid out, but the appellate court will most likely make a decision anyway (denying the appeal).
Belsome had asked Mullen for Reconsideration. Mullen denied.
Belsome Appealed. No stay. Belsome now waits and waits and waits. Meanwhile the net loser clients of the law firm are receiving their distributions directly from the Receiver contrary to Belsome’s position on appeal.
I am sure Belsome’s attorneys think they have the greatest case in the world, but it doesn’t mean anything if the Receiver has already sent the client’s distributions to Belsome before the appeal is heard. The issue Belsome raised would be moot.
belsome is a third party trying to collect his fees for representing zeek victims. the receiver bell, had said in his reply to belsomes demand for his fee cut, that the receiver cannot act as his collection agent . if belsome wins at appeal , he will have to sue his clients directly for his fee.
HIS money is not being distributed pending appeal.
the case of the 9000+named defendants is completely different.
of course, their money cannot be distributed to victims pending an appeal, because there would be no way to get it back, should they win at appeal.
No. Belsome is a net loser who along with others signed contingency agreements with Patrick Miller LLC….a lawfirm. The real party in interest is the lawfirm who used Belsome’s standing as a net loser to argue that it is entitled to collect Belsome’s distributions….presumably so it would be ensured its fees.
Its the law firms interest that would be mooted when the Reciever paid Belsome. Any reversal on appeal would result in a contradiction and one for which there is no legal remedy. Bell has been ordered to pay Belsome directly and he has done so. The money is no longer in the estate.
If an appeal panel later finds in favor of Patrick Miller the estate would not have the money to pay the lawfirm.
That’s why a stay is ALWAYS requested where money is concerned and as the Belsome appeal shows, a stay is not always approved. If the 9000 net winners can not obtain a stay, then collection, liquidation and distribution will proceed heedless of the net winners hopes on appeal. Everybody that loses appeals… The prisons are full of appellants. Without a stay….you pay.
so, in my post#405, you may replace ‘belsome’ with patrick miller LLC. this miller LLC is the third party here, who has nothing to do with the distribution of the assets of the RGV estate to net losers.
partick miller LLC has no money in this game, except ‘imagined’ money. he has some third party contracts with his clients, which has nothing to do with the RGV estate or the receiver.
why should the court grant a stay against net losers receiving their money ASAP, because of patrick miller LLC’s ‘imaginary’ money claims? miller LLC, can always approach their clients separately for their cut, they have their contracts with their clients, which they can claim against.
the zeek court is just refusing to be a collector for miller LLC, they are not saying miller cannot start collecting their cut from their clients directly. the court or the receiver have taken No money from miller LLC.
BUT, the 9000+named dependents will actually be shelling out REAL money to net losers through the court and receiver. if they win their appeal, they have to be reimbursed. their right to their REAL money, which the court takes from them through the receiver, can never be moot.
that is why, when a person appeals a money judgement, a stay will be given [terms and conditions, bonds whatever], or at the very least the money will not be distributed forward pending appeal.
this is really just commonsense, i wonder why you wont get it.
why should the court be bothered about what patrick miller LLC feels it is entitled to? the courts decision to appoint the receiver and distribute assets of the RGV estate to net losers, arises from the settlement of RGV/burks/SEC. it has nothing to do with patrick miller LLC and its private contracts with its clients.
it is not the courts or the receivers job, to enforce the contracts of miller LLC with its clients.
The Order Denying Stay Pending Appeal was only an example for stay motions to the appellate court.
Patrick Miller LLC lawfirm probably feel that it will suffer irreversible harm if money is paid directly to the net losers. It’s probably about some “Constitutional Rights” (“Marc Michaud didn’t get his law degree to be treated like that, this time they have messed with the wrong guy”, etc.).
well, examples should be relevant.
what i’m saying, is that a court will not distribute money COLLECTED from a defendant, IF the defendant appeals the judgement. in fact, a court may not COLLECT money from the defendant, till the appeal is decided.
courts can be trusted with our money. they are reliable that way.
That’s the position that the Receiver took, and Mullen agreed. He signed an Order didn’t he?
He said Bell may not pay Patrick Miller LLC….and Patrick Miller LLC appealed because its absolutely certain the judge made a mistake. Sounding familiar yet?
Miller LLC has asserted a right that has been denied….and appealed the decision without a stay.
Patrick Miller LLC’s money claims may be as “imaginary” as anything Trudi Gilmond can dream up but the lawfirm still has a right of appeal.
The underlying issue in Belsome is whether the Receiver is obligated to recognize Patrick Miller LLC’s right to collect money on behalf of its clients.
The Reciever shall – or shall not- pay Patrick Miller LLC? That is the issue under appeal isn’t it? Yes… it is.
It matters not whether the asserted right against the estate is from Patrick Miller, Trudi Gilmond or Porky Pig if the remedy is the payment of money and the estate has collected, liquidated and distributed its assets the outcome of an appeal is moot because there’s nothing to pay the appellant’s with even if they win. That’s why a stay is so important.
Exactly. So why should Mullen or an appeals panel grant Gilmond et al a stay which will only impede “the net losers receiving their money ASAP because of Trudi Gilmond’s imaginary rights?”
The theory is that the money the 9000 have in their possession does not belong to them and they have to give it back. This is not news.
Not always, maybe not in this case. Insiders have “admitted” it was a ponzi. No external sales. You know the story.
Your starting to sound like a real “law and order” gal. It suits you.
1] the estate has not collected any money from patrick miller LLC.
2] so, neither has the court collected or distributed any money of patrick LLC.
3] patrick miller LLC’s contracts with his clients still stand. he just has to resolve his case at a different forum, THIS forum may be moot as far as his money is concerned. he still has remedy in law, his case is not moot.
4] gilmond et all have to pay cold hard cash in.
5] their asserted case is that they should Not have to pay this cash in
6] till their case is not resolved at appeal, there is NO WAY a court can USE their money in any way.
7] if hoss/LRM have a dispute and hoss pays LRM some settlement money, and hoss turns to norway for a final appeal, can LRM spend a penny of hoss’s money till norway resolves the matter? LRM will have his butt kicked severely, if norway finds in favor of hoss.
By the same token the SEC and the receiver, and maybe the judge will decide its not their job to enforce invalid and illegal investment contracts that the net winners had with RVG. The blade cuts both ways.
I don’t think the Gilmond will get a stay. The knew the score. This is all just a subterfuge to keep the money and the court will view it as such, IMHO.
YAAYYYY!!!!
Why don’t you try sticking with what you know, Anjalitroll and leave the fortune telling to someone with a better crystal ball than yours ??
That’s right. If his clients did not pay him in accordance with the contingency agreement he would have to sue them in a complete different suit. I never said otherwise.
If an ORDER says Gilmond SHALL pay the money back and there is no stay and no supersedeas bond then the debt is immediately collectible. Your incredulous astonishment is beside the point.
If the estate has a right to the money, then so will the creditors and once it is marshalled it can be distributed to them upon further order of the court.
The fact that its REAL money and in possession of the promoters and other creeps is why this trial is happening in the first place….and lest you forget it is so that some of that REAL money can be given back to many innocent people who actually believed the crap that Zeek was dishing.
The net winners have had every opportunity to settle on extremely liberal terms and haven’t. If the court finds against them I would not expect a stay because I don’t believe there will be any question as to the law and their intransigence in the face of settlement proposals leaves little room for sympathy.
Giving them more time to dawdle and spend and hide cash should find little support from Mullen.
The denial of the Motion to Dismiss says everything you need to know.
yes, and the trial is about a complex appealable, matter about SEC jurisdiction.whether it was howey, koscot, forman etc which questioned the basis of the SEC actions, the cases were resolved at appeal.
nobody sat back and accepted the district courts trial judgement. in each case the trial judgement was overturned. i have not checked but if there was clawback in koscot, i dont think it was acted upon pending the appeal.
patrick miller LLC is a third party ‘claimant’, his claim is denied here. named defendants+9000, are alleged debtors here, asking them to part with their money , with no recourse in law, is simply astoundingly incredibly unbelievable. hence it cannot happen.
Poor, poor, Anjalitroll
First she lost the SpeakAsia battle, and now her favourite fraud and fraudsters have been nailed to the metaphorical wall and there’s nothing she can do about it.
whydya worry so much about winning or losing, you don’t know how to enjoy the journey?
speakasia remains unresolved, that’s like a ‘draw’ [game called off due to rain!].
zeek is long ways from over, your side is stronger than mine, but save your breath for the END.
a-a-n-d my herbalife stand is mostly on the money, it seems their ass will get saved.
One All, at this point LRM, do not misguide yourself into patting your own back, prematurely.
@anjali
SpeakAsia was a Ponzi scheme where millions of dollars was stolen from investors.
Zeek Rewards was a Ponzi scheme where millions of dollars was stolen from investors.
Both schemes are done and dusted. Thankfully US regulators handled their case much more efficiently their Indian counterparts.
(Ozedit: Courts of law dish out punishments for Ponzi schemes. A business model determines whether an MLM company is one or not. Both Zeek and Speak Asia were Ponzi schemes. End of story.)
Anjalitroll I don’t think i could adequately explain in words how little I care about winning or losing a debate with some random ‘net troll when discussing an $850 million fraud which left several hundred thousand victims in its’ wake.
You can dance around it all you like and drag up as many hypotheticals as you like, bottom line is, no civilized society can nor will tolerate fraud of that size being perpetrated on its’ citizens.
You and your rantings are no longer of any consequence.
You can’t do any damage now. It’s just fun watching you squirm.
why should the net winners settle, when they are not convinced about the SEC’s jurisdiction?
if the SEC had spent some time, taking RGV/burks to a civil trial and proving their case, this mess would not have been created.
everything would have gotten mopped up in one round. so, if SEC meant to save time and money, by not going to trial, time and money is being spent Now, AND it is victims money which is being spent here, to resolve issues.
your opinion is, courts will not have sympathy for the defendants rights, and my opinion is that the courts, sympathy or not, cannot deny the defendants their rights.
i gave you the nadal/lee example, but you have still not given me a relevant example about collection and distribution of clawback pending appeal.
i do not intend damage and i’m not squirming. i’m having fun following the court, and it’s great you’re having fun too. always have fun, i say ! 🙂
a report of the trustee in the madoff clawback (Ozedit: Madoff, nobody cares. Even less so when funds have already been distributed out to Zeek victims.)
The only mess is between your ears.
No one else is the least concerned things aren’t exactly as they should be and will turn out exactly as they should when dealing with an $850 million dollar fraud and the fraudsters behind it.
Nobody has suggested the net winner defendants will not be accorded their rights.
The “winners” were offered the chance to settle and they didn’t. When they lose they have the right to ask for a stay of judgment. It does not mean one will be granted. They have a right to a appeal. Let them. It does not mean they will win. They probably won’t.
In the meantime Bell will be marshalling assets and making interim distributions.
The SEC will be rearguing the merits and jamming the “winners” up at the appeal level for years, long enough to substantially liquidate the estate? Yes. Fully? Maybe, in which case the Appeals Panel would have sufficient reason to conclude that since the estate has no assets the subject matter of the appeal “has been deprived of practical significance or rendered purely academic.”
In cow talk that means mooooooot.
By making offers of settlement Bell has won sympathy, the net winners not. Will it tip the balance in favor of Bell and the SEC when the issue of a stay comes up? It can’t hurt.
They should have settled because no matter how convinced they are, they may be wrong. Being wrong in this case means having a judgment rendered for double or triple what they could have settled for.
Judge’s actively promote compromise, in part because it reduces their workload, but also because the consequences of being found entirely wrong can be quite severe, thus they admonish the parties to arbitrate and mediate for their own good.
The net winners are going the “all or nothing” route. If they lose, they will feel the full weight of it.
Lee Appealed – Appeal denied. Was there a stay? You don’t know. Was there a supersedeas bond? You don’t know. Your example illustrated that Reciever Wiand was happy to have the clawback ruling upheld that they Court did care what Lee thought he was investing in. Note to Gilmond: What you thought you invested in is irrelevant. See Wiand v Lee.
I have looked for clawback’s stayed. There are no hits. I assume this is because nobody stay’s clawbacks. Other wise its well settled that Federal judgments are final after 14 days unless stayed. You can search that find plenty Try Rule 62 Fed Rules of Procedure for starters. Tell me what you find.
if the net winners money is distributed, there rights have been snatched away. there is no appealable issue left. the case will become moot .
a case becomes moot only if there is no ‘case or controversy’ left.
i cannot imagine how an appeal about the SEC’s jurisdiction, can be viewed as a matter with ‘no case or controversy’. i cannot imagine that a court can force people to pay in, and then lock the door on them, making appeal moot.
maybe in the red queens court, down the rabbit hole, but in the real world, NoWayHosay.
the idea that people should capitulate, just to avoid severe backlash, is blackmail, not justice.
why should anyone settle, if they feel it is not justified.
if the income tax comes at you demanding xyz payment, would you just pay up under threat of severe fines etc, instead of fighting your case if you felt you had one? You May be Wrong in your stand, just pay up and compromise, why question ANYTHING?
if the net winners in zeek and putting their head on the chopping block, let them. it’s their funeral, not yours. let them assert their rights and ask their questions. why not?
Because Zeek Rewards was an $850 million Ponzi scheme and they are thieving scammers.
There is no justification.
I found that 14 days could be applied to:
62(a) Automatic Stay; Exceptions for Injunctions, Receiverships, and Patent Accountings.
In most other scenarios, the judgment will be final after 28 days.
But the Appellate Court will also have its own jurisdiction, and can stay execution of a judgment for as long as it takes.
That dispute is meant to be resolved during the trial?
If the defendants don’t raise a dispute about “SEC’s jurisdiction / the Receiver’s authority to sue them” during the trial, there won’t be anything to appeal about it either.
And around and around Anjalitroll goes, refusing to recognize we are talking about an $850 million dollar fraud and no amount of ifs, buts, hypotheticals or invalid comparisons with irrelevant cases negates that fact and no white knight TV lawyer is going to arrive to save the (defendants) day by quoting a long forgotten precedent.
It’s simple,
if you run, enable or participate in a fraud of that size based in the USA, you are not gonna walk away unscathed, nor should you.
after reading the article, it is obvious lee did not pay before his appeal was denied. maybe there was a bond. who knows, who cares.
my point was the receiver in that case did not get to distribute lee’s money before lee’s appeal ended. otherwise the receiver would have commented: ‘we have already distributed the money, but anyways, great to win a moot appeal’.
let us be clear. a clawback may not be stayed, BUT distribution of the money will definitely be stayed, if defendants appeal. you may use any legal language to express this idea.
you cannot find ONE example of ‘clawback being distributed’ pending appeal? hmmm, wonder what that means?
i found the nadal ponzi and then some information in the madoff trusteeship, which clearly shows that pending appeals and litigation, clawback was not distributed.
HUH? if the defendants are not questioning the SEC’s jurisdiction or the receivership’s authority, WHAT is the trial going to be about? the color of chair mary jo’s jacket?
blah blah blah
no one said there will be an automatic stay
no one said clawback cannot be collected under final judgement
but, no one is ‘distributing defendants clawback’, when defendant is in appeal.
show me case, to fit your proposition.
Nah, why would I bother, Anjalitroll ???
You’re so discredited now, even Santas’ reindeer are laughing at your trolling.
in November 2014, receiver bell requested the court to order plastic cash international to deposit approx 8 million with the receiver, as a counterclaim against PLC’s claim of 14 million from the RGV estate. the receiver claims the 8 mil is fraudulent transfer, whereas, PLC claims it is a legitimate, industry norm, earning, for a service provided. bells motion says:
“In the alternative, the Court should order the PCI Parties to deposit at least $8,323,673 with the Receiver to be held in a segregated account ‘pending final resolution’ of this dispute to safeguard the funds for the protection of all parties and the RVG victims.”
i would assume ‘pending final resolution’ to include the appeals process?
so, if clawback defendants lose their jurisdiction argument at the district court trial, and within the 14/28 day period, file an appeal, i would expect a similar kind of handling, ie keep funds segregated till final resolution But No Distribution.
this would be acceptable, and the appeal would not be moot, and everybody’s ass would be protected.
if you cannot be bothered to do anything, why don’t you take your trolly ass for a ride with santa’s reindeer, laughing hysterically All The Way ?
What makes you think the receiver had any of Lee’s money? There’s no evidence of that.
Your original assertion was that Wiand had no right to collect or sell Lee’s judgment pending appeal. You have not proved this is true. You now assert that Wiand could not have distributed Lee’s money pending appeal. You have not proved that’s true either.
All we “know” from the facts given is that Lee appealed a valid judgment, lost and Wiand was happy. Everything else you have written about this is pure supposition.
Horse shit.
I would express it like this. Bell will ask for approval to make a distribution, the defendants will ask for a stay and Mullen will deny it because he has no reason to disapprove Bell’s request absent a contravening Order of Stay issued by the Appeal’s Panel.
Nobody, not even you, knows what the Appeal Panel will do. Mullen will not try to guess. Having made his rulings he will move the case forward in accordance with law, and in the manner he considers best. Intervention by the Appeals Panel is the only thing that can change this. Intervention in this instance being the issuance of a stay or a reversal of one of Mullen’s rulings before the relevant issues become mooted by the distribution of the estate’s assets.
my original assertion is that wiand cannot collect lee’s money, and even if he collects lee’s money he cannot distribute it pending appeal.
did you read the article? you had a problem interpreting it once already, it seems this article has caught your blindside again.
if wiand had already gotten hold of lee’s money and distributed it, wouldn’t that be a very highly reportable matter?
reporter: the point is lee lost his appeal, but his appeal was anyways moot, because wiand already digested his money. the appeals court had some free time, and decided to hear a moot case.
okay, since spoonfeeding is the demand of the hour read this:
so, when matters are under appeal, litigation, money associated with that motion, is not distributed. if you need clearer proof than this, you will just have to trudge down to all the 90 odd district courts, and go through all documentation, about whether defendants money can be distributed, while the defendant has appealed the judgement. easypeasy.
You should not assume that. This Motion asks Mullen to decide a specific issue. By design, and if at all possible,issues are decided at the lowest possible level….the trial court.
One step at a time.
If at some future date the money is determined by Mullen to be the property of the estate it may be distributed absent a stay or supersedeas bond. There is little doubt that PCI would ask for reconsideration, ask for a stay pending appeal, file an appeal, ask for another stay etc but absent such relief Mullen can order the distribution of the funds.
PCI would have to deal with the mootness issue if its appeal was ever heard. Same old story.
Nah, it’s way too much fun hanging around here watching Anjalitroll go down in flames along with all her fellow Zeek Rewards apologists.
“Burton Wiand v. Vernon Lee et al” was about the net winnings from the Ponzi scheme, $935,631, and about pre-judgment interests of $437,000 calculated from the dates when Lee first started to receive net winnings.
13-10448 BURTON WIAND V. VERNON LEE et al
NOLINK://www.gpo.gov/fdsys/granule/USCOURTS-ca11-13-10448/USCOURTS-ca11-13-10448-0
NOLINK://www.gpo.gov/fdsys/pkg/USCOURTS-ca11-13-10448/pdf/USCOURTS-ca11-13-10448-0.pdf
It doesn’t say anything about whether the money had been collected or distributed. But it identifies the interest amount to be about pre- rather than post-judgment.
Hoss mootness theories are flawed, so you can’t use them as an indicator (“highly reportable matter”). The courts clearly don’t see it the same way he sees it, i.e. they may even reopen 70 year old death sentence cases.
I am not the reporter.
I don’t know if Wiand collected from Lee, sold the judgment to a debt collector or if he even tried. Neither do you. Nor do you know if there was a stay or a supersedeas bond. You have no case.
This is absolutely true IF IF IF the “matters under appeal are stay or bonded. It should go without saying that if a matter is still being litigated then there is no final ruling upon which to proceed.
Nothing you have provided is in the least convincing.
One of the dumbest things you have ever said.
Its a valid point. If Wiand had both collected and distributed the money the Appeals panel would have mooted the appeal. They did not. Therefore there must have been a stay or a supesedeas bond in effect, which is what I have been saying all along.
definitions.uslegal.com/s/stay-pending-appeal/
Why does it not stop the other party from enforcing? Because it doesn’t. Filing a Motion for Stay does not stop the proceedings….ONLY the Granting Of The Stay stops the proceedings.
++++++++++++++++++++++++
athenaroussoslaw.com/yahoo_site_admin/assets/docs/Daily_Recorder_Column_12.344162611.pdf
Stay of Execution:
lectlaw.com/def2/s175.htm
It took 15 seconds to find these. I could find many more.
There are situations where a stay is automatic pending appeal (death penalty for example) but the above states the general conditions for obtaining one.
The point there was that anjali can’t use the argument “wouldn’t it be a highly reportable matter, if … ?” as an indicator or conclusion. Her logic was flawed, i.e. she can’t mix in your mootness theory as an argument.
Even if the money had been collected and had been distributed to victims, there would still have been a legal dispute to resolve in that case.
FLAWED MOOTNESS THEORY?
I have said in multiple posts that your mootness theory was flawed. It has been disproved by realities, e.g. by the vacation of a 70 year old death sentence after the sentence had been executed.
You have failed to prove the opposite, you have only managed to come up with more “theories”.
If you strongly believe that the courts see it in the same way you do, then point to some sources showing that they actually do that? Your theory was primarily based on “outside legal reach of a court”, e.g. once money had been paid out (or a death sentence had been executed), there wouldn’t be anything to resolve.
I have pointed to the 70 year old case in support of a different mootness theory, showing that judgments can be vacated even if a death sentence already has been executed.
Vacating the Order was a symbolic gesture. The matter itself had “been deprived of practical significance” long ago.
We have a real case we can look at, “SEC v. Paul Burks and RVG”, to see how stay of the execution of an Order works in reality.
The Receiver filed a Motion For Temporary Restraining Order against non-party Preferred Merchants Solutions LLC. That Order was stayed by the court itself.
The TRO Order was stayed by the Court itself (no separate Motion To Stay can be found), pending a hearing of the dispute.
The Motion to Dissolve resulted in stay. Doc 279 says so.
The Court didn’t see it as a “symbolic gesture”? The 77 year old sister didn’t see it that way either. News agencies didn’t mention “symbolic gesture” either, they saw it as an important case.
My point is that your mootness theories didn’t have much support in realities. There was still a “live legal dispute” in that case, a dispute that could be resolved by the court.
The fact that YOU see it as a “symbolic gesture” doesn’t mean THE COURT saw it that way. You have failed to prove that the court saw it that way. I have proved that the case was important enough to be reopened and vacated.
You have failed to prove that “outside legal reach of the court” is the correct logic to use in a mootness theory, i.e. that a case will be moot when an Order already has been executed. You have failed to prove the correctness of the different elements in that theory.
The defendant/appellant’s interests were mooted by his death. Nothing the court could have done thereafter could have any “practical significance” to the dead boy.
News agencies thought is “important” and did not mention symbolic, well that’s of utterly no relevance at all.
Tell me Norway, what importance did it have to the dead boy? Did it bring him back to life?
There is no legal remedy for dead.
Look at the realitries? If the case really had been mooted by the execution of the death sentence, any motions or appeals 70 years later would have been dismissed as moot.
It may have had a “practical significance” to the boy’s sister (7 years old then, 77 years old now), to other family members, to “Human Rights” groups, to the court itself. Your own ideas may be too narrow-minded.
The last sentence there answered the rest of your arguments.
She is not, and never was a party to the case. The defendant is dead by order of the court. Once dead there is nothing of any practical significance that the court can do for him. He is beyond the reach of the law.
There’s moot and there is stupid.
Let’s just put this down to M_Norways’ pedantic nature combining with the fact English is not his first language.
Whether or not a court declares the case of the executed boy “moot” or not, the word “moot” applies.
Someone got killed by zeek?
The point was that your mootness theory failed to work for that case. That theory has one major flaw, so it will fail more often than it will work.
You can probably test your mootness theory on ZeekDoc115.pdf ORDER denying as moot Woods’ Motion to Quash. It was based on ZeekDoc73.pdf Non-Party Motion to Quash Subpoena, by Nathaniel Woods. It may work there. And if it doesn’t work there ….. 🙂
Nonsense it perfectly parallels a situtation where life/money is gone and can not be retrieved. This BS you keep bringing up has nothing to do with mootness. You have as usual run the conversation into a ditch full of Norwegian excrement.
The discussion was about legal mootness, a reason to deny a motion as moot.
There’s a very big distinction between what M_Norway would like the discussion to be about, or thinks the discussion is about or where he thinks he is leading the discussion and what the rest of the readers perceive the discussion to be about.
The fact M_Norway vacillates to suit his purpose only confuses the situation even more than his lack of understanding of the subtleties of the English language.
A court doesn’t have to issue a declaration a matter is “moot” to make it so.
Reasonable people i.e those not like M_Norway or Anjalitroll , can see and understand a subject is “moot” without needing a court to issue an edict declaring it so.
In the matter of the executed boy, as far as the boy is concerned, any further discussion after the event is “moot” in that it is: “having little or no practical relevance.
That is not to say it has “little or no practical relevance” to his surviving relatives, but, it is still “moot”
Which may be relevant, except for the fact this is a blog and not a court, M_Norway is a blogger, not a lawyer and his ability to “win” a point rests on his Google abilities and not his experience or training.
Money isn’t “gone” when it’s paid out? Then the money would have been “gone” in the clawback litigation too, and “Bell v. Disner et al” would have been a moot case.
This has now gone from a situation where it was possible that M_Norway perhaps had a lack of understanding of the vagaries of US law as it relates to fraud, to a situation where M_Norway is being deliberately obtuse.
Just think,
if history is any guide and Burks doesn’t plead guilty, we are in for another two years of this before the Burks case even makes it into court and if Anjalitrolls theories hold true, we can look forward to the receivership never ending because of the countless appeals holding it up.
Lord, spare us
i don’t blame you for thinking that.
anybody reading the ^^^ discussion could freely think that zeek is going around killing people and making stuff ‘moot’.
these guys go off topic like a speeding derailed train wreck, i tell ya.
Anyone got a mirror handy for Anjalitroll ???
Then you should probably check the relevance of your own posts? 🙂
Your error is to think that cases become moot. They do not. A case may be reopened, a verdict vacated. However, specific issues within a case often become moot.
Can the court vacate the boys death penalty. Sure. Does that have any practical effect? No, because the boy is already dead. Likewise, reversals on appeal may have no practical effect if the money at issue has already been distributed.
In the context of a discussion about clawbacks the concept of mootness is hardly off topic. Injecting a 70 year old murder case into the discussion while trying to prove there is no such thing as mootness is.
That was about the specific scenario “money is gone when paid out”. I pointed out that theories like that will be flawed. If it had been true, the whole clawback litigation would become meaningless because the money already is “gone” (no money to claw back).
You have used the same theory as a basis for multiple comments / multiple discussions, but you have failed to prove the correctness of that theory.
In that scenario, PCI will first lose in trial court, appeal the decision, pay money to the Receiver, the Receiver will distribute the money.
The Appellate Court will then rule in favor of PCI, and send the decision back to the trial court. Judge Mullen will then find the decision to be moot “because the money already has been distributed”.
The alternative scenario there is that the appellate court will find the appeal to be moot, “because the money already has been distributed to third parties”.
A core element in your mootness theory is the “outside legal reach of the court” element. That element is probably heavily flawed.
That element places the execution of an Order as an “irreversible action” even for actions that actually are reversible. Distribution of money should normally be seen as possible to reverse or modify.
I know your MO is to speak with an air of authority and browbeat people into submission, but you simply have no idea what anyone “WILL” do or the direction a case or cases will take.
You are not a lawyer, and you have zero experience with ponzi fraud cases in the USA.
In fact, I don’t think I would be far wrong in saying even your observation of the prevention and prosecution of ‘net based fraud and money laundering is only recent and extremely limited in scope.
As for your understanding of US civil and criminal law, quite frankly, yours is both limited and flawed.
For goodness sakes, man, you can’t understand a simple word like “moot” and its’ multiple uses and application and yet, you’re prognosticating in post after post as if you have some sort of insight into criminal and civil law.
A death sentence may be irreversible in itself when it first has been executed, but distribution of money should not be seen as irreversible.
If it had been irreversible, then the distribution of profit from Zeek Rewards to net winners would have been irreversible too. The clawback litigation wouldn’t have had any practical effect “because the money at issue already has been distributed to third parties”.
hoss has not been able to provide a single example, of a defendants clawback money being distributed out, pending appeal. yet, he puts out, as if this happens everyday, and mootness is a regular feature of court life. actually ‘mootness’ is a rare event.
moot: Because Federal Courts only have constitutional authority to resolve actual disputes (see Case or Controversy) legal actions cannot be brought or continued after the ‘matter at issue has been resolved, leaving no live dispute for a court to resolve’.
In such a case, the matter is said to be “moot”.
norway is right, because the definition of mootness does not deal with the aliveness of the defendant but of ‘the issue’.
in the 70 year reversed order , the boy is dead, but the issue of his sentence remains an open live issue, which can be re examined by the court, which it did, and ‘resolved the issue’, by overturning the previous order.
in the case of clawback of zeek defendants, if the receiver is stupid enough to distribute their money forward, pending appeal, the defendants can appeal the matter, and the issue will NOT be moot.
even though the money is distributed, the issue of who the money really belongs to, is still alive and not resolved, and hence NOT moot. the receiver will have to recollect all the money, if he loses. which is why, he will never be stupid enough, to distribute it in the first place.
i stand by my commonsense, which tells me that the clawback cannot be distributed, if there is an appeal. whether it takes a stay, or cash bond, or supersedeas bond, or whether the trial court grants it, or the appeals court grants it, these are all pesky details. the courts and lawyers will work out the details.
BUT no distribution pending appeal.
of course a court has to declare a matter to be ‘legally moot’, to make it so.
otherwise we can go around believing certain matters are moot, and certain matters are unmoot, without being certain, until someone asks the court, and the court says: yes, that’s moot, and no, that’s not moot.
legal mootness can only be declared by the court, and not blog trollers like LRM, who is definitely not a lawyer, and is mostly ill-informed.
LRM, your talents are restricted to ad hominem attacks, whyfore are you trying to raise yourself above that, by making half assed arguments?
Umm, the Zeek clawbacks are not complete. The “money at issue” is in a pool
Which “money at issue”?
The clawbacks against Gilmond et al had no effect on the distribution carried out so far. The “pool” is fluid, but not finalized.
Look at my previous “distribution of money” post to see if I need any legal insight for that conclusion?
I have simply pointed out a logical flaw in a theory.
It simply didn’t make any sense to suddenly switch to multiple uses when I already had specified a specific use earlier in this thread (post #365). It made more sense pointing out that specific use one more time, to avoid confusion about it.
The “multiple uses” idea will only make it become more vague. There’s no reason to be vague when you can be specific about something.
That post was about Hoss’ hypothetical scenario, where money would become irreversible unavailable to the court once the money had been distributed to third parties (and so an appeal would be moot). It wasn’t about the current distribution but about a hypothetical one.
and around and around we go.
Hypothetical after bloody hypothetical and not a fact to be seen.
The money being clawed back is in possession of net winners. The estate is attempting to recover money from them. The issues are not moot . Attempting to recover money from a completely liquidated Receivership five or six years from now, could well be.
No. What actually happens is that the Appeals Panel refuses to consider the appeal or drops consideration of it based on mootness. It saves everybody time.
why will the clawback of gilmond et all have an effect on the distribution carried out so far? they are unrelated.
the money distributed so far, is all settlement money, not litigated and collected money. the clawback is expected to raise 200 million, out of which, only around 2 million[approx] has been collected via settlements.
and the ‘pool’ of money may be fluid, but every dollar note in that pool will have a post-it stuck across it’s face: this is unlitigated/unappealed money give it away, this is litigated/appealed money dontcha touch it!
When did we bring in “completely liquidated receivership, five or six years from now”? Most appeals can probably be resolved much faster.
You’re actually trying to make it become even more hypothetical and less realistic?
how can a receivership be liquidated, when there are live appeals pending?
the fourth circuit court takes approx 7 months to decide an appeal. that’s not a horrendously long time in a case of this size?
OMG!… We get it. Enough already with all this Zeek BS. Can we move on please?
Not really. There is an inherent contradiction between an order executed in 2015 and one that is overturned in 2025. One says yes the other says no. If by 2025 the estate’s money has been distributed to those who by the 2015 order were entitled to receive it then too bad for the appellants. All they could win on appeal would be the right to collect money from a zero asset receivership. The appelants have no cause of action against anybody else.
Only if there is a stay or a bond, otherwise all collections are commingled and subject to distribution by order of the court.
2015 …..to….2025 !!!
are we stretching things a tad bit?
we could have a meteor strike before that, and everything will be ‘MOOOOOOOOOOT’, even without a single cow around to say it!
i said that hoss, many many times.
let it take a stay or a bond or a fist fight, but No Money Will Be Distributed if the Defendants Appeal.
When did we bring in the year 2025 into this discussion?
It looks like you’re trying to protect a flawed idea by making changes to the hypothetical scenario. First you didn’t have any time frame, then you suddenly added “five to six years from now”, and now you have increased it to “ten years from now”.
To be absolutely sure, you shoud probably expand it to 2050, 35 years from now. At that point in time, most of the defendants will be dead anyway (or too old to remember what the appeal was about).
You can also add other factors like “a collapsed court system”, “a world taken over by aliens from outer space”, and conclude that it will be highly unlikely for anyone to collect any money under those circumstances.
The hypothetical scenario wasn’t my scenario. I simply replied to Hoss’ post.
I have actually tried to make it become less hypothetical by refusing to accept some hypothetical ideas. I brought in a definition for mootness to make that part become less hypothetical when you brought in “multiple uses” and “the subtleties of English language”.
I refused to accept the idea of a “completely dissolved Receivership, five or six years into the future”, and the extension of that idea to 2025.
That is simply not true.
Then try and exercising some self discipline and leave it alone.
There’s no winning or losing to be done here.
Why are you clogging up the blog with endless back and forward nit picking ??
Other than what “IS” today, it is all speculation, and, uninformed speculation at that.
Unless you are prepared to argue Zeek wasn’t an $850 million dollar fraud and those currently subject to clawback are entitled to their earnings, this is all stuff and nonsense.
There were two issues before the court in 1944. First, was the boy guilty and, secondly, shall we execute him? Both issues were answered at the time. The matter of guilt remained within the reach of the law and a you know the verdict was vacated.
The issue of “shall we execute him” can not be taken up again. Even if the answer was no, there is no legal remedy of any practical significance the court can fashion. The boy is dead. The issue is moot. Any further discussion on the matter is frivolous.
If you can cite an article that says by order of the court George Stinney (the boy) has been restored to life I will reconsider my opinion.
I would expect the Zeek appeal to take about a week.If it takes any longer it could take years.
eh?
have you heard the saying about, ‘practice what you preach’?
if you remove All you Nonsensical comments from this thread, you will find the thread much more Sensible, and Informative.
Sparring, is more likely to bring out interesting, relevant information , than just a ‘narrow minded reportage’.
what can i say hoss, you are a man of extremes.
meanwhile, the fourth circuit court has a studied, documented record of finalizing appeals in 7 months [give or take a few months, be comfortable!].
Use whatever time frame you like. The longer the appeal stretches out the more likely the issue’s raised by the Zeekers will be moot.
Absent a glaring procedural mistake by Mullins I don’t think the Appeals Panel will agree to hear the Zeeker’s “its not a security” argument. Howey has been tested over and over and Mullin understands it as well as the next judge.
If the Appeals Panel wants to hear arguments, the SEC will be raising counter arguments every step of the way, and that will take up time. If the Zeekers lose at that point its over anyway and the very issue of mootness is moot.
If on the other hand the Zeeker’s prevail, the SEC will appeal and ask for a hearing at the Supreme Court which could take another ten years if the Supreme Court even decides to hear it. Without a stay The Zeekers are cooked.
Anjali agonizes… have you ever heard of clawbacks not being stayed? Answer: Yes many times. A clawback is just a generic money judgment by another name and there are infinite numbers of money judgments that have not been stayed.
If the Zeekers lose at trial, stick a fork in them, they are done.
Because money judgments are immediately collectible unless the trial judge stays them and the trial judge has complete control over the case (including distributions) unless a higher court intervenes.
A pending appeal does not mean shit to a trial judge…. only orders from the Appeal Panel do.
no. i ask repeatedly: have you heard of clawback “DISTRIBUTION” taking place, while defendants have appealed?
just one example, hoss. shouldn’t be difficult if it happens all the time?
why? in other cases like howey, koscot, forman, madoff, the appeals court has admitted appeals and heard them, from either side. why not in this case?
any particular reason, or just a premonition?
howey has been tested over and over and has led to contradictory judgements in different courts, and overturning on appeals, too.
i gave you the example of koscot. the district court did not find it to be a ‘security’ under howey, under the ‘efforts of others’ prong of the howey test. the appeals court overturned the district courts order.
how can you be certain that a different appeals court will not interpret the ‘efforts of others’ prong differently in the zeek case too? this is a debated issue, i don’t think the supreme court has expressed a final opinion on this:
Come on out and say it, Anjalitroll
You believe Zeek wasn’t an $850 million dollar fraud and everyone but you has got it wrong.
who said that?
the question has always been, is zeek a securities fraud as defined by howey’s, and does the SEC have any jurisdiction?
if it is some ‘other’ type of fraud, it should be litigated/treated in that ‘other’ way.
what’s wrong in asking the law to uphold itself?
D. AUTHORITIES
In the March 2009 Order Appointing Receiver, the Court found it was “necessary and appropriate in order to prevent waste and dissipation of the assets . . . to the detriment of the investors” to appoint the Receiver.
In overseeing and administering an equitable receivership such as the instant case, this Court’s discretion in approving the Plan is given great deference and may be disturbed on appeal only upon the showing of an abuse of discretion. See SEC v. Sharp Capital, Inc., 315 F.3d 541, 545 (5th Cir. 2003).
The plan of distribution proposed by the Receiver is consistent with plans approved by the SEC in other cases. See SEC v. Great White Marina & Rec., Inc., 428 F.3d 553, 556 (5th Cir. 2005); SEC v. Forex Asset Mgmt. LLC, 242 F.3d 325, 331 (5th Cir. 2001).
hoss, this ^^^^ is undecipherable.
please handover the link ?
If that’s what you were doing, nothing would be wrong with it.
But, we all know that’s not the reason an Anjalitroll trolls, don’t we ??
So why keep up the illusion.
Which seems to say that Mullen may approve distribution of funds obtained through the sale of the judgment debt or collection of clawback amounts unless the Zeekers appeal the distribution order and prevail, based ONLY on a showing that Mullen abused his discretion.
In other words Mullen decides, subject to appeal. He can find its a ponzi (Zeekers appeal) Deny a stay of judgment (Zeekers appeal) Approve distribution (Zeekers appeal)
But here you change the scenario itself to protect your theory?
It effectively shows that your mootness theory didn’t hold water. It will need certain conditions where the defendants lose the appeal anyway, or where the time frame is being stretched into absurdity, or where “extraordinary circumstances” will make it highly unlikely for anyone to collect any money through the court system.
Like Anjali said: “Practice what you preach”.
your above quote is about ‘liquidation plan’ not specifically ‘clawback’.
clawback has been appealed in the nadal ponzi and the madoff ponzi, and the appeals court heard them both.
the nadal clawback appeal was based on the ‘good faith’ argument. the madoff clawback appeal was based on technicalities of the bankruptcy law regarding ‘securities’.
in the case of zeek, the very core issue of ‘ponzi’ is being disputed. to say that such an issue is not appealable, especially when howeys fourth prong is a disputed, unresolved matter, even by the supreme court, is plain silly.
what will the appeals court say?: “we refuse to hear this unresolved issue because …..”
in UHF vs forman, on page 10, footnote 16, of the supreme court order, the SC clearly takes note that the ninth circuit court has relaxed the meaning of ‘solely’, to include those schemes that are securities in ‘substance rather than form’. the SC says: “we express no view, however, as to the holding of this case”
so, the zeek matter is a fit case for the supreme court. the supreme court does not hear all matters, but only those that demand legal clarifications of the subject matter. since the SC has withheld its opinion on howeys fourth prong, can they refuse the question, when asked directly?
invigorlaw.com/wp-content/uploads/2014/01/United-Housing-Foundation-v-Forman-421_U.S._837-01.30.14.pdf
There’s nothing in the law preventing a distribution to take place, “pending an appeal”.
Defendants will typically try to stay the execution of an order against them = the Order forcing them to pay money to the other party. They don’t really have a case against a hypothetical distribution of money before the money actually has been collected.
If the money first have been collected, there’s nothing to prevent a distribution of it other than a decision from the trial court (the distribution can be stayed), or a decision from the appellate court (staying the execution of the trial court’s distribution order).
WEAK CASE VERSUS SUBSTANTIAL ARGUMENTS
If the appellants have a rather weak case, neither the trial court nor the appellate court will interfere with a distribution of money / execution of other Orders. It can be seen in the USCA Order Denying Stay Pending Appeal, when the appellate court denied a stay of distribution to the “Belsome et al” clients.
If the party / appellant has a rather solid case / substantial arguments (“looking at the surface of the case”), a court will most likely stay execution of an Order until the motion or appeal has been tried in court.
“Attorneys Charging Liens” was a rather weak case, based on vague theories. Neither the trial court nor the appellate court would allow the appeal to interfere with other people’s rights.
Motion To Dissolve TRO had some substantial arguments about status quo. The court immediately stayed the execution of the TRO until the dispute could be tried in court.
It was probably about the current 40% distribution, but since he didn’t refer to the actual court document it will be impossible to see the context.
“Distribution plan” is mentioned later in the quoted text:
Hoss’ argumentation there was valid. It wasn’t directly about clawbacks, but the same principles can probably be applied to any type of distribution. It doesn’t seem to be an important factor whether money has been clawed back from banks or from net winners.
It will be up to the trial court to decide whether money can be distributed. It will be up to the appellate court to overrule a decision from the trial court, based on certain types of appeals.
Speed it up, slow it down the mechanism of mootness is the same. Try not to focus on the truly off topic and irrelevant (again)
I told you from the first day of this clawback discussion that I thought the Receiver would sell almost all the judgments en masse and be done with it. He can do that in three months.
You and anjali couldn’t seem to wrap your head around that, so the discussion migrated over to what I view as the astronomically unlikely and hypothetical scenario where Bell does his own collections.
I don’t think any of what we’ve been discussing will happen (except the sale of the debt) but everything I have said could hypothetically happen given the right set of circumstances over time.
How much time? Whatever hypothetical amount of time I choose if it illustrates the point.
A liquidation plan accomodates interim through final distributions. The assets of the estate can be from any source including funds recovered through clawbacks.
Here we can see that the source of the funds is immaterial so long as the judge does not abuse his discretion when he allows the distribution to take place.
That is exactly correct. Specifically… the Order for Distribution must be appealed and the appellants must show that the judge abused his discretion. That is the only way to stop the distribution and it gets very very subjective.
yeah, because the world is full of stupid debt buyers, who buy appealed judgments, which deal with questions of law, which have been lying unresolved for over 40 years.
in dead ponzi cases, where the promoters/affiliates go away quietly into the night, i can understand debt purchase, but in a livewire case like zeek?
did the nadal ponzi receiver sell judgments? did the madoff trustee sell judgments/debt even after approx 6 years?
you make it sound so easy hoss, and a bit crazy! – judges/ receivers can distribute clawback pending appeal!, receivers can sell judgments at a drop of a hat, in fiercely fought cases!
have you lost your clear thinking cap, again hoss?
By no means is it assured. By no means at all.
en.wikipedia.org/wiki/Standard_of_review
I first pointed out that you changed the timeframe. Then I pointed out that you substantially changed the scenario itself, e.g. the appellants didn’t win their appeals in the new scenario.
Your mootness theory didn’t hold water, and you have failed to prove that it actually does. All you have proved is that claims can fail because of “other reasons”, that it can be impossible to collect money under certain “other circumstances”, e.g. if the appellants lose their appeals.
And I proved that he couldn’t sell the claims, in post #291 (IIRC). He would first need some decisions from the court. Currently he doesn’t hold any valid (court approved) claims against the net winners.
He can’t sell his rights as a plaintiff to another party, e.g. his legal standing in the case.
Are you trying to back up a flawed theory with other flawed theories?
“Questioning SEC Jurisdiction” based on unresolved interpretations of Howeys test—- would this be a substantial argument to stay distribution of defendants funds, Or Not?
this question has a clear path leading to the Supreme Court. it is a question of federal law, it is about the definition of ‘securities’ in law.
what are you guys waffling about?
And I proved the opposite in post #291 – #301, with the conclusion in post #301.
The only factors that are correct in your statement there are “I have told …” and “I have thought …”, and none of those have been disputed. People have only questioned the soundness of your conclusions, not the fact that you have told or thought something.
If he can’t sell it now, he can’t sell it 3 months into the future either. A part of the dispute (or the whole dispute) will first need to be tried in court. I’m not sure about whether he can sell it then either.
The distribution of money won’t become a dispute before much later in the case.
* The facts will first need to be tried in court. Both parties will need to prove their own versions.
* Then you will have a findings of fact / conclusions of law, leading up to a Declaratory Judgment about the findings of fraudulent transfers.
* That Declaratory Judgment can probably be appealed.
* Then you will have an Order directing the Receiver to inform the individual defendants about the Declaratory Judgment, and about the individual claims (giving the individual defendant a chance to respond to the claim / object to the amount / settle the claim).
* Then you will have individual judgments about individual amounts.
* Then you will have collection of money from the individual defendants.
* And first then will you have distribution of money to third parties.
At that point in time, a dispute about the distribution of money will probably have very little relevance. Any dispute will primarily be about the Declaratory Judgment, about the collection of money or about the individual amounts.
A dispute about the distribution of money will be extremely hypothetical.
That makes no sense at all. The appellants don’t win or lose, in fact they can not win or lose because It does not matter if the issue is moot.
You do not understand this, which is why you get all wierd when a immaterial parameter changes. You see it as CH”AN”GE!!!! which is different and that is all.
At least you register that much, but its really not enough to continue.
In the first scenario, the appeal became moot because the money already had been distributed, and the money would be outside the legal reach of the court.
In the second scenario, further proceedings became moot because the appellants lost their appeal (or due to similar circumstances).
It clearly shows that your mootness theory was flawed. All those “certain circumstances” didn’t exist in your first scenario. You have simply added new “circumstances” to make your theory sound more plausible.
We can reasonably conclude that your first theory was flawed. It actually had multiple flaws:
* Wrong logical condition for mootness = “beyond legal reach of the court”. The correct condition should be “no remaining dispute to resolve for a court”.
* Wrong interpretation of the court’s “legal reach”. If money has been distributed through a judgment, it will still be within the legal reach of a court, e.g. for modifications or reversals of the same judgment.
I understand you are stuck on the idea that because the court can reverse an order or enter a new one that it rules out mootness. This is not true. The court does not have a magic powers. The boy is still dead even if the Court reverses the Order of Execution.
That is why mootness is defined in part by whether the court can do anything of “practical significance” for the parties.
There is nothing of any practical significance the court can do for the dead boy. It can not order him to walk.
By the same token the court can not wave its magic wand and order the Receivership to have money.
Your solution to this dilemma is for the Court to wave its magic wand and order several hundred thousand people to send donations to the Receiver…and I deliberately say donations for you have proposed no rationale for why they owe the Receivership anything.
The net losers were induced by fraudulent means to invest with RVG. The RVG Receivership was able to recover and pay them a percentage of their investment back. They are still net out of pocket.
Under what theory of equity or law do they owe the RVG receivership anything????
EVEN IF the appeals court found that Zeek was not selling securities. How does the court fashion an Order that can recover distributed funds from the IRS, state taxing authorities, county tax authorities, the Receiver’s attorneys, forensic accountants, auctioneers, web hosting companies, a myriad of unknown creditors and consultants etc etc in any fair and equitable way?
How long would it take? What percentage of recovery could be expected. Would it require another class action? Under what premise does the Court even reconstitute a closed RVG receivership?
The court can DIRECTLY order people to pay money back, if the initial Order needs to be modified or reversed. It won’t need to file a clawback case against them.
So it will not be outside “the legal reach of the court” to reverse a distribution judgment. Your idea of “legal reach of a court” seems to have serious flaws.
But then you have cases where people haven’t been executed yet, but have spent decades in prison waiting for the death sentence to be executed. A court can’t bring back years in prison either. Those cases will have major moot parts.
Most of them will be entitled to a restitution. They won’t be entitled to restitution if the dispute is moot. Restitution for wrongful incarceration won’t exist. Articles about it would most likely not exist.
NOLINK://www.cbsnews.com/news/how-the-wrongfully-convicted-are-compensated/
BTW, next time it will be easier if you test your own theories at an earlier stage, rather than spending all your energy on defending them. You can’t base your life on flawed ideas.
It would be about a modification of a previous Order, reducing the amount that legally could be distributed, using exactly the same “Rising Tide” method.
The theory will be “if anyone have received more than they have been entitled to receive, that amount will need to be returned”.
Maybe you have too complicated theories?
The question was about money clawed back from net winners, and distributed to net losers. It wasn’t about the case as a whole.
No it is exactly about the “case as a whole.” If there is no stay of judgment or sequestration as was approved for PCI then all funds collected are commingled. Once commingled all funds are common assets of the Receivership and once spent they reduce the assets available for the Receivership to pay back the netwinners who have an appeal pending.
The question YOU must answer is how the court equitably retrieves money already spent by the estate and distributed to creditors.
This is where your logic is supposed to shine….where show how there will be “no dispute,” and where all parties will willingly just send a donation to the Receiver so he can pay back the net winners.
Good luck explaining how the court does that.
Its already been heard. Its already clear. Your attempts to circumvent the obvious meaning of prior rulings has a certain Quixotic character which is marginally credible but the weight of opinion is very much against your interpretation and the serious minded pay them no mind.
Your interpretations lead to disastrous consequences and should, and I hope will, be dismissed out of hand.
tklaw.com/files/uploads/Receiverships//ReportofReceiverNovember2012.pdf
The distribution is based on an Order from the court, not on a decision by the Receiver. The money is still within legal reach of the court, e.g. for modifications or additional distributions (that will also include reductions).
We’re not talking about “money owed to the Receivership” here, but about correcting a Court Order. If people have received too much according to the corrected Order, they will need to return it.
The scenario is hypothetical and not very realistic, but I wasn’t the one who brought it up either.
I didn’t try to make it shine, only to make it simple enough to be understandable.
The Court Order about distribution is for the whole process of distributing funds to net losers.
My “no dispute” argument was based on that Order. It will be very difficult to find any valid legal arguments against a correction of that Order, e.g. against a reduction of one of the future distributions.
The distributions will be based on what the Receivership successfully have been able to recover from various sources. If one of those attempts turns out to be unsuccessful, the amount will need to be reduced. Any amount that wrongfully have been paid out will need to be returned.
It’s difficult to dispute that. Or at least I haven’t found any good arguments to use in that type of dispute.
I have used the logic “Does any one of them, the Court or the Receiver, need to have their decisions approved by the other?”.
The Receiver will need to have most of his decisions approved by the Court. Some decisions will need to be approved by the SEC, too.
A couple of examples:
—————————-
RECEIVER’S MOTION FOR ORDER SEEKING APPROVAL OF (1) CLAIMS PROCESS, (2) SETTING OF BAR DATE, AND (3) CERTAIN NOTICE PROCEDURES
ORDER Approving (1) Claims Process, (2) Bar Date, and (3) Notice Procedures
—————————-
Receiver’s Motion to Approve Settlement Agreements and Settlements
ORDER Approving Settlements
—————————-
I can’t find any examples showing the Court seeking approval from the Receiver, like what you can find in a decision making process where 2 parties both have similar rights to make decisions.
Any disputes, like the hypothetical dispute where net losers will need to return some of the money, will need to address the main decision / the main decision maker = the Order approving the distribution, plus the Order making corrections to it.
I only had a quick look at it before I found out that it would be difficult to find any valid legal arguments to use in a dispute. My “no dispute” argument was based on that quick look.
right. it will be incredibly difficult for the court to recover distributed funds.
thus, the court will not be incredibly stupid and distribute funds, if clawback defendants appeal.
court cases take time. look at the madoff case, 6 years on, still going strong. only a small percentage of money has been recovered and distributed, everything else is being litigated and appealed to hell and back. courts have no choice but to follow due process of law, and if this means distribution delays, live with it.
No, how about YOU look at the Madoff case, Anjalitroll
As for the rest of us, we’ll continue to believe Zeek Rewards is a completely separate case with more differences than similarities.
umm, the IDEA of receivership/trusteeship, and collecting and distributing Funds of the Estate, to net losers is the same.
the scenario of net winners fighting clawback, third parties fighting payback, is the same.
the madoff case is taking time to unravel and so will the zeek case. gilmond et all are going to stretch this. PCI will stretch it. the guys who won default judgments, are going to stretch it. wait and see.
Your “no dispute” argument was based on your pathological need to contest everything anyone else says.
It matters not to you whether what you say makes any sense but only that it contradicts another. When challenged you back down by saying. I only looked at it quickly or some such rubbish.
what has been heard?
the question of SEC jurisdiction has not been heard on its merits till now. it hasn’t been appealed yet. it hasn’t gone to the SC yet. long ways to go, and yet you are basing all your ideas on a prima facie interlocutory order, which says SEC has jurisdiction, in an order, which already had two clear-as-day flaws.
the weight of opinion may be very much against me, but these are the opinions of laypersons like you. i’m waiting for the court, especially the SC, to give its opinion on whether SEC has jurisdiction in a scheme like zeek. this question is long overdue now.
I didn’t “back down”? I only needed a quick look at it to find out that it would be difficult to find valid legal arguments.
You got a rather complete logic, e.g. “Which one of them, the Receiver or the Court, will need to get decisions approved by the other?”, “Which one of them will the party need to address in a dispute?”.
The distributions are based on a Court Order. They are not based on decisions made by the Receiver, because he will need to get his decisions approved by the court. People will be addressing “the wrong authority” if they complain directly to the Receiver, since he doesn’t have the authority to decide anything on his own.
Based on the theories of a known internet troll ???
Nah, I’ll just move on with things and allow what’s going to happen happen.
Bottom line: it’s an $850 million dollar fraudulent scheme and if a known internet troll wants to believe some of its’ enablers are going to walk away with over a million bucks of other peoples’ money, then more power to you and your scamming mates.
Madoff ran a ponzi for 40 years. The Madoff estate has dozens upon dozens of entities it is pursuing for clawbacks, its interfacing with the bankruptcy court and involves about $40 billion dollars of investor money. Zeek ran for a year is based on a single easy to understand lie, has no bankruptcy considerations.
The Receiver is pursuing a single clawback defendant. BIG difference. Distribution will be at the discretion of the same judge who just heard the lies.
Mullen will distribute. He would have to be stupid not to.
I have no idea what you are talking about or to who or why or what difference it makes. You have wandered off into obscurity and prattle.
Not stupid. That’s how Anjali would describe it, but timid and indecisive. I am hoping for more than that from Mullen. The case is clear cut. Work for ROI is hogwash.
Yeah….stretch it all the way mootville.
madoff pled guilty and did not challenge the ‘ponziness’ of his scheme. that’s a whole long war deleted from the timeframe without any bloodshed. even then clawback is already in the 6th year and the end is not in sight with everybody squabbling.
it is clear from the trustees report that i referred to in post#447, that litigated/appealed money is NOT distributed.
in zeek the sheer numbers for clawback 9000+ named defendants is an uphill task. the question of SEC jurisdiction can be stretched all the way to the supreme court. care to calculate the time frame of that?
no way judge mullen is distributing a single dollar that is under dispute. you may write this down for future reference.
uh, hoss, your moot and mootville theories are a tad ‘stupid?’.
show an example of a defendants money becoming moot because of distribution, while under appeal, or cease and desist!
That’s one possibility. The other is that the appeals panel finds that RVG has been dissolved and the appelants can only be creditors of an extinct estate and everyone makes cow sounds.
One of the reasons watching Anjalitroll floundering around is so funny is that she has no sense of the history or evolution of the way ‘net fraud has been handled over time.
Instead, she constantly refers to Wikipedia for her legal opinions or Googles for anything even remotely ponzi related and naively believes that fraudsters simply changing words or descriptions somehow alters things.
For example, “clicking” or “placing ads” or any of the other meaningless tasks fraud promoters require their victim / members to do is not “work” and any appeal which depends on such tasks being legitimate “work” is doomed to fail before it begins.
Paying a ROI, fixed or not which is outside what could be considered the “norm” for the same or similar tasks, immediately eliminates the task as being legitimate. An appeal on those grounds would likewise fail.
The Howey test is broad enough to ensure the type of verbal gymnastics used by the HYIP ponzi “industry” amount to nothing
Call it what you will “AdPacks” “Advertising credits” “Banners” “Paid Autosurfing” “Surfingless autosurfing” “clicking on ads”
It’s all been done before.
Unlike Anjalitroll courts aren’t stupid enough to believe changing a tasks’ name makes it suddenly legitimate.
Unlike Anjalitroll courts and politicians aren’t stupid enough to make a test like the Howey test so restrictive as to be useful once.
It’s designed to be flexible.
It’s flexibility has been noted by courts countless times since its’ inception
Likewise, “recruiting” people into fraudulent schemes as is done by HYIP ponzi recruiters is not “work” and has been discounted as being so repeatedly over time.
“You claim you worked very hard at recruiting people into what turned out to be a fraudulent scheme ???
You accepted money for doing so – you therefore knew OR SHOULD HAVE KNOWN that what you were recommending was a fraudulent scheme.
YOU accepted money, so, show us the steps you took to ascertain what you were recommending was legal.
In the USA and most western countries, people simply cannot take over a million dollars in recruiting fees without first ascertaining the legality or otherwise of the opportunity being recommended.
Do yourself a favour, Anjalitroll go back and read up on the history of “HYIP ponzi schemes” starting with the first of the “modern” autosurfs, 12DailyPro and then read forward, paying close attention to the evolution of how the authorities have handles successive frauds.
Forget about quoting Maddoff and other vaguely related fraudulent schemes.
Instead look at how virtually every single hypothetical situation Anjalitroll has proposed “might” happen has already been entered, appealed and discarded in the real world treatment of multi million dollar fraud.
show me a supreme court ruling based on a broad interpretation of howey.
some circuits use a broad definition of howey and some still use the ‘solely’ or ‘modicum of effort’ definition.
a child could read UHF Vs forman and see it is not a security.
the district court said : no security, the appeals court said: security, and then the SC said : no security.
in koscot vs SEC, district court said : no security, appeals court said: security, SC said : ????
in stock generation vs SEC, district court said: no security, appeals court said : security, SC said ???
some ^^^ questions are lying unanswered!
you say , the sales work [ recruiting/ selling] of affiliates is worthless, because the scheme is illegitimate.
you forget again, that the definition of an investment contract, is on the based on the ‘nature of the contract’ and not ‘legitimacy’ of the contract.
zeek is fraudulent! so let’s clobber it with anything!
no, any clobbering you want to do, should be done with the right weapon. is the SEC the right legitimate weapon here? let the SC clear this once and for all!
LRM, Show me a Supreme Court Ruling Based on a Broad Interpretation of Howey or don’t pretend to be a silly KnowAll.
so, effectively it means the court and receiver, in tandem, stole the defendants money and gave it away, and the appeals panel will make some soothing sounds and tell the defendants to go home, robbed?
are the court and the receiver, robin hoods to steal from one party and give to another?
you have a rather poor opinion of court and justice, hoss!
The “guys who won default judgments” is Bell and the RVG estate, and the judgments were effective upon entry.
You just kill me. Do you think you are the only one who recognizes they will try ?
That’s why stays pending appeal are not automatic (as you thought)…. why the Appeals panel can refuse to hear a case…. why the trial judge has discretion on distributions…. and why mootness matters.
You’ve worked yourself into a “Howey Test high” of comic dimensions and don’t realize the game is already over.
I applied some of the facts, e.g. the fact that the Receiver can’t make decisions on his own, he will need to have his decisions approved by the court.
You used the opposite logic in post #379, i.e. you based your logic on some “it seems to me” theories rather than on facts.
“It seems to me” theories can simply jump to which conclusion they want to be true, using argument like “I see no grounds …”.
If some net losers are ordered by the court to pay some of the money back in a hypothetical scenario like the one discussed, they can of course try your hypothetical arguments “It seems to us that we don’t owe any money”, “It seems to us that we have been legally paid on our creditor claims”, “It seems to us that the Receiver will need to find other sources than us if he want to pay money back to some other parties”.
I didn’t include any arguments like that when I looked for valid legal arguments. They are “expressions of viewpoints” rather than valid legal arguments. Your theory was based solely on ideas like “It seems to me” and “I see no grounds”.
Observing that the Reciever must obtain approval from the Court is hardly a legal argument. The fact is you have no argument. You have no theory. You do not anticipate. Your great skill is confusion and contradiction.
Believe me, the chances of a Norwegian ex salesman with no access to a legal library and whose main research tool is Google coming up with any definitive “legal arguments” range from slim to none.
It’s a blog, for goodness’ sake.
It’s ALL opinion.
quit with the personal attacks LRM. using google is perfectly fine. doctors, lawyers, professors all use google. hell, even dumbasses like you, use google. google loves us all equally.
everybody knows that. everybody’s discussing their opinions.
there’s nothing wrong with that, unless your’e from north korea. if you have opinions to express, go ahead, or stop blabbering utter bullshit.
I focused on the realities rather than on hypothetical theories. Even if the scenario itself was hypothetical, SOME facts could still be identified
We have used completely opposite methods. You focused on “It seems to me” theories with very little substance. I tried to identify some realities.
Theories will need to be tested against realities to see if they hold water. They will need to be backed up by some factors from the reality. Your theory was only backed up by “It seems to me” theories.
Here’s some realities:
* The distributions of money to net losers are all based on Orders from the Court. None of the distributions are based solely on decisions by the Receiver. The Receiver doesn’t have the authority to make decisions like that on his own.
* The hypothetical payback will be based on the same, e.g. on a corrected Order from the court. If anyone want to dispute the hypothetical payback, they will need to dispute a Court Order. They can’t dispute the Receiver’s decisions if he is simply following a Court Order.
* A dispute about a Court Order can be brought in before the trial court itself or to an appellate court. I didn’t find any valid legal arguments that easily could be used to dispute an Order like that. I tested your “It seems to me” arguments, but they didn’t have much substance. Valid legal arguments will need SOME substance.
You can of course dispute my “findings of facts” or add your own facts.
OK, I do not dispute the fact that the Receiver must receive court approval for his actions. What now? Got any other big insights you would like to share?
You didn’t put up any rational explanations, so why should we believe you? You released some hypothetical theories about “research tools”, but you didn’t provide any details to support your own theories.
BTW, I do actually have access to some type of “Legal Library” in the cornell.edu Legal Information Institute, so you can probably recalculate some of your theories. 🙂
I’m not asking anyone to believe me.
I’m not taking a position of authority and not claiming my “logic’ to be the only form of logic.
My opinion / statement / observation remains.
Come back and tell us after you have done five years university reading law, three or four years clerking and have researched several hundred cases.
Using Google to search a “type of” online law library just doesn’t cut it, I’m afraid, especially when there’s an element of “winning” pointless debates involved and no repercussions for getting it wrong.. The chances of their being no confirmation bias being involved when the searcher is both untrained and inexperienced are too high to calculate.
There’s no need for me to recalculate anything.
We have only seen the FIRST interim distribution to net losers, so we don’t know whether that Order was an approval of the first distribution only, or if it approves subsequent distributions too, i.e. we don’t know anything about followup Orders.
The hypothetical payback scenario will be based on a SECOND, THIRD or FOURTH distribution of money. Any payback Order will most likely be a correction to the related distribution Order.
Here’s one possible scenario:
1. The net winners lose in trial court.
2. The Order is appealed to an appellate court. No stay.
3. The Order against them is executed, collecting money.
4. The money collected is being distributed to net losers.
5. The net winners win their appeal.
6. The trial court will need to reverse its distribution Order.
7. Potential dispute about that correction.
It was very difficult to find any valid legal arguments for that potential dispute. The trial court CAN make and SHOULD make corrections to its own Orders when required. If money has incorrectly been paid out, it will need to order people to pay it back.
The opponent in that scenario will be the trial court itself. It will effectively limit the types of arguments that can be used in a dispute. “It seems to me” arguments will have very little substance, they will either need to be backed up by valid facts or valid legal theories.
nah hossboss. never.
the right statement would be, that various courts interpretations of howeys, has reached an unwieldy comic level.
howeys has gone, from an Evening Dress to a Tent Size. from a structurally safe building to an building with So many Whimsical Additions, that it threatens the very foundations of the building.
if Howeys begins to interpret value of work, on a comparative basis, between affiliate’s and the central management, then even franchising and distributorship should easily become a security as in ‘investment contract’. the idea is not much of a stretch.
so, howeys has to draw the line somewhere. various courts have been drawing their own lines, it’s time for the supreme court to draw the final line.
@ the various idiots who think, this discussion is about Winning or Losing, understand this.
this is only about questioning.
You must give some reasonable explanations for WHY that is needed, you can’t simply just SAY it’s needed and expect people to believe in it. Try to add some substance to it?
But then I should have exactly the right type of background and experience? Sales people will regularly use OTHER PEOPLE’s knowledge. They know where to find it and how to identify the relevance, but they don’t have the detailed knowledge themselves.
Generally speaking, you won’t find many other groups of people that are more trained for that type of work than sales people.
The distribution order(s) were made when the estate had money. “Reversing” does nothing.
Executed boys, like Executed Orders are not like movies that you can rewind and watch in reverse until you get back to the beginning. Sometimes there’s no putting the toothpaste back in the tube. There are practical limits.
Apparently, you understand that there would be very significant disputes if the Court even considered such a course.
Here you have an example, the Supreme Court of India reversing the complete Writ 383/2011 “Solomon James & Others versus Government of India”:
NOLINK://behindmlm.com/companies/speak-asia-online/the-particulars-of-the-solomon-james-writ-383/#comment-104414
The Supreme Court of India reversed each and every Order for the whole case, when it found out that it didn’t have the correct jurisdiction after a one year trial. The case had incorrectly been presented as a “Human Rights / Constitutional case”, but it turned out to be about crimnal matters.
The Supreme Court of India doesn’t have original jurisdiction for criminal cases. The case as a whole would need to find its own path through the lower parts of the court system first before the Supreme Court could get the correct jurisdiction.
A distribution of money isn’t that type of “practical limit”. If it had been, the clawback litigation would have become meaningless. The money has already been distributed to net winners.
The main issue here is that the scenario is hypothetical. We can’t know for sure that I have identified each and every step correctly. That’s why I identified it as “one possible scenario”.
The difficulties in finding valid legal arguments will heavily reduce the chances for a legal dispute about it. There will be plenty of emotional resistance, but no real legal dispute.
People may potentially try some “It seems to us” logic, but I didn’t find any valid legal arguments that easily could be used in that particular scenario.
just too dumb to answer.
You should probably try to come up with SOMETHING.
Distribution of money wasn’t a “practical limit” for the clawback litigation. Why has it suddenly become a “practical limit” for the other type of distribution?
Since the scenario itself is hypothetical, then we don’t know anything about WHEN the hypothetical distribution would have happened, e.g. the SECOND, THIRD or FOURTH interim distribution. We don’t know anything about WHEN the distribution could have been corrected either. So we should probably assume that the distribution and correction will be relatively “fresh”.
A “fresh” distribution / correction will prevent too many hypothetical arguments, mostly the irrelevant ones, and make it easier to identify the relevant factors.
Why has the distribution of money suddenly become a “practical limit”?
…because the practical limit applies to the court’s inability to fashion a legally enforceable order that would permit a dissolved Receivership that has no assets to pursue and recover previously distributed funds from net losers, federal agencies, attorneys, accountants, taxing authorities, lawyers, former employees and your mother (if you have a mother).
I feel certain you will not understand what I just wrote so…..
I understood it. It was all about hypothetical problems, not about the distribution of money in itself.
I tried to limit the scope to the SECOND, THIRD or FOURTH distribution of money. No federal agencies, attorneys, accountants, tax authorities, lawyers, former employees or my mother will receive anything from any of those distributions. It will only be the net losers.
The Receivership hasn’t been dissolved yet. That was yet another hypothetical factor. “No assets” doesn’t reflect the reality either.
The only practical limit here will then be the court’s inability to fashion a legally enforceable Order.
I’m all for this, including the paper equivalent of tactical nuclear weapons. I submit you should be for it, too, anjali. Given a chance, the scammers will try to pick your country clean because they’re running out of options in the United States.
Legal nukes are the only things that will work, because the scammers’ narratives expand to accommodate every conceivable unpleasant fact set. If no rational narratives exist, the scammers will create irrational ones.
The players are quick to retreat into an infinite set of fantastic contingencies, a veritable laboratory of linguistic idiocy.
When ASD and its promoters didn’t publicly get nuked back to the Stone Age, it gave rise to Zeek. And when Zeek didn’t get nuked back to the Stone Age, it emboldened TelexFree.
Here’s the approximate intake math:
$119 million (ASD) >> $897 million (Zeek) >> $1.2 billion (TelexFree).
With this fact set in play, TelexFree received the pièce de résistance of legal nukings, with the Feds coming after them with almost every conceivable weapon: SEC actions against the “program,” insiders and promoters, asset-forfeiture actions, attacks on the bankruptcy venue, interventions to force the appointment of a trustee, a material-witness warrant against the wife of one of the operators, criminal charges and a criminal indictment.
There even was a reference to cult-like behavior. It was not accidental, and clearly was designed to send a strong message.
My take continues to be that no U.S. federal judge will be willing to go down in history as the judge who legalized cross-border MLM HYIP Ponzi schemes that collect billions of dollars.
That’s really what the scamming players want, and it ain’t gonna happen.
Left unchecked, these scams are going to have the same devastating effect as the mortgage meltdown in 2007/08 that led to a world recession and, in some places, a depression.
For what? So Paul Burks can live some sort of Libertarian fantasy as political extremists, anarchists and “sovereign citizens” board his train? So Dawn Wright-Olivares can melt some more minds with her speech on reversing toilet-paper dispensing habits to demonstrate coachability?
Zeek’s greatest incongruity is that it caused freedom to contract, not expand. Other “programs” are doing the same thing. The legal nukes cannot come fast enough.
This wing of MLM has no shame. It is about serial criminality, cunning, disingenuousness, naked greed and dangerous assaults on the U.S. financial system. As Lynn E. says, it is robbery with a keyboard instead of a gun.
If it weren’t so tragic, it almost would be funny when they try to hide behind disclaimers such as “we’re not offering investments.”
Good luck to the apologists who believe Howey isn’t elastic enough to rope in the Zeeks of the world and the serial hucksters who are nothing but voracious sharks in search of prey.
The MLM lawyers for these insidious schemes desperately need to re-read “To Kill a Mockingbird” to remind themselves what it means to be a noble attorney.
By doing that alone, they might take some work away from defense attorneys who necessarily owe their clients an aggressive courtroom showing while making sure due process is not violated.
I’m not sure that even HYIP critics get all worked up when defendants get their Constitutional due. Regardless, it’s a shame it ever comes to that, given that Scout Finch would have spotted the Zeek fraud as a precocious 6-year-old buddying around with Jem and Dill. Her Dad, Atticus, would have prevented the indictment for a bag of hickory nuts while using very few words:
“Don’t do it, Mr. Burks, I implore you. Not even disclaimers and so-called ‘compliance courses’ will work. You won’t get to keep any of this money and you’ll put people you care about in a terrible situation. You could even go to jail and take them with you.”
PPBlog
P.S. One of Zeek’s most fantastic idiots is an alleged winner who once claimed in pitches for the Data Network Affiliates “program” that he was trying to turn the sale of “Funeral Caskets” into an MLM.
Obviously you didn’t because the problem lies in the recovery of funds not in thier distribution. The estate can not distribute what it does not have.
Right. The application of the law reflects politics and even though Federal judges are appointed for life ruling in favor of the Zeekers would amount to political suicide.
Of course I can,
I just did.
Ain’t free speech grand.
You get to talk nonsense and I get to point it out.
Speaking of talking nonsense:
SERIOUSLY ???
You dig up an example of a completely unrelated case involving the INDIAN Supreme Court and use in an attempt to prove a point so far removed from the Zeek Rewards matter it might as well be from a parallel universe and at the same time dare to lecture others on what they should or shouldn’t do.
This really has gone from the sublime to the ridiculous.
That’s why I mentioned “reversal / correction” of a specific court order.
The scenario was hypothetical, but we CAN try to add some substance to it based on facts. It shouldn’t be more difficult to recover money wrongfully paid out to net losers than it will be to claw back money fraudulently paid out to net winners.
Point 5 will reverse the trial court’s clawback decision. It isn’t very realistic, but it can happen.
The trial court will need to respond to the appellate court’s decision in point 6. It will need to reverse the Orders related to that decision = it will need to reverse the wrongful collection of money and the wrongful distribution of money in a specific distribution.
Currently, the only problem seems to be the court’s inability to fashion legally enforceable Orders against the net losers.
The main point was “You must give some reasonable explanations for WHY that is needed, you can’t simply just SAY it’s needed and expect people to believe in it. Try to add some substance to it?”.
And it was meant rationally rather than literally, e.g. “what people can be expected to believe in” isn’t really a point.
Correct. I identified it to be an example for reversal of court orders, and I specifically mentioned that it was from the Supreme Court of INDIA. So that shouldn’t come as a surprise to you?
It clearly wasn’t my intention to cause some hysterical reactions to the “adult content” an INDIAN court order may contain. 🙂
…which is a signficant disability, one which may lead to a finding of mootness if the legal conflicts are insurmoutable.
Post #574 delivered exactly what it promised to deliver? I even described it in some details. What exactly did you expect to find there?
See, there is the problem I’m having with your communication style.
You may “think” you’re communicating clearly and you may “think” explaining things to within an inch of their life is what is necessary and you may “think” your intentions are clear, but, that isn’t the case.
It may well have been what you intended the main point to be, but it certainly wasn’t the way I read it or understood it.
IOW, communication fail.
The measure of clear communication is in the result it obtains and most definitely NOT in the intent of the communicator
Of course I can.
Unlike you and those that use a similar communication style, I prefer to believe the great majority of people are quite capable of coming to their own conclusions without having endless amounts of minor details rammed down their throats.
Put the information in front of them and let them come to their own conclusions.
After all, this isn’t a court, readers are not members of a jury and there’s no Brownie points on offer
I was here for the brownies damn it.
The main problem is that the whole scenario is hypothetical. “The court’s inability to fashion legally enforceable Orders against the net losers” isn’t really a problem, it’s a hypothetical one.
Points #1 and #2 are realistic, if I make the “No stay” optional:
1. The net winners lose in trial court.
2. The Order is appealed to an appellate court. (No stay).
Points #3 – #4 are realistic enough.
3. The Order against them is executed, collecting money.
4. The money collected is being distributed to net losers.
Point #5 isn’t very realistic. The trial court should normally detect any reasonably “solid” cause for appeal during the trial.
5. The net winners win their appeal.
Points #6 and #7 are dependant on point #5.
6. The trial court will need to reverse its distribution Order.
7. Potential dispute about that correction
The weak part of the hypothetical scenario seems to be point #5. The winning legal argument should normally be detected during the main trial. It should normally not pop up late in an appeal.
Thank goodness one of the motions wasn’t upheld.
Can you imagine how many hypotheticals could have been generated if THAT had happened.
We’d never hear the end of it.
All this reminds me of the AdSurf Daily prosecution.
Four years after it was shutdown and months after Bowdoin began his sentence, armchair experts were STILL arguing the finer points of the case
the supreme court of india , even returned the money to a foreign bank account of the defendants speakasia, when they reversed the mediation proceedings and sent the case to the lower criminal courts.
courts do not steal money.
the district court of north carolina will like wise not steal any defendant money, when the defendants appeal a clawback judgment. the clawback may not be stayed, but distribution will definitely be stayed pending appeal.
@hoss, why complicate the matter with mootness and expired receiverships and alien landings, when the ^^solution is simple?
er, it was a federal judge who found koscot was not a security. [overturned later on appeal]
it was a federal judge who found that stock generation was not a security. [overturned later on appeal]
what happened to the politics of these two federal judges. were they kicked off the bench ?
firstly i’m all for getting scammers, but under the relevant law.
secondly india has so many self developed scammers, we don’t need to import any, Seriously!
the govt and govt agencies, MUST follow the law. just because they are dealing with scammers, is NO excuse for misuse of any law. judges have repeatedly warned about the state overstepping it’s boundaries, and cautioned them to stay within the limits of the law.
in zeek, we have a question about the SEC jurisdiction, which is a debated question with merit. it is important to find out whether the securities law fits a scheme like zeek, or have the authorities have overstepped the boundaries in their zeal to get the scammers.
if you get stopped for DUI (Ozedit: Waaaaaaaay offtopic.)
oz , the DUI example was a simple way of showing why law should be followed? is the comparison wrong?
Most of what you typed is just effortless nonsense. So yes, it was.
There’s no question about whether securities laws fits Zeek. Only in your head.
There’s no question about whether securities laws fits Zeek. Only in your head—-oz
then judge mullen should disallow any discussion on the merits of this Immediately!
and the SC must immediately remove footnote 16 from the UHF vs Forman order, where they have noticed the question, and refused to comment on it !
apparently its All In My Head. but the courts know better that me! why is it in Their Head?
That’s not how courts work. Every idiotic argument has its day.
The filing of said idiotic arguments however does not change the facts. That being Zeek were engaged in the offering of unregistered securities.
Judge Mullen might have to sit there and listen to idiotic arguments on the matter, me and the rest of the BehindMLM readerbase however…
the DUI example was just one sentence. Of course it was effortless! but it was not a nonsense comparison.
Once again, no, it won’t.
What is happening is distributionS take place, as in: more than one.
The receiver places more money into the pool. Then when he considers there is enough money in the pool to warrant a distribution, he applies to the court for permission to do so.
He does NOT include future possible clawbacks in the pool.
The defendants in these actions haven’t yet been subject to clawbacks.
There is no need for any distribution to be halted.
None of the disputed money is in the hands of the receiver.
All the receiver has to do is include the disputed amounts in a later distribution. The only people inconvenienced are the victims.
Any further costs will come from the estate, not the receivers’ pocket.
Speculating the defendants may or may not institute further appeals is pure crystal ball stuff and exists only in your head.
UHF vs Forman isn’t SEC vs Burks, RVG et al.
“57 residents of Co-op City bringing a private action against the United Housing Foundation alleging, inter alia, violations of the antifraud provisions of the Securities Act of 1933 and of the Securities Exchange Act of 1934 (hereafter collectively Securities Acts), in connection with the sale to respondents of shares of the common stock of the cooperative housing corporation “
is so far removed from the case against the owners and organizers of an $850 million dollar ‘net based fraudulent scheme that it may as well be happening on another planet.
uh, Everybody knows that?
the points of relevance were
1] how the courts overturned each other , in ascertaining what was a ‘security’
2] footnote 16 of page 10 of the SC order, clearly takes note of the expansion of howey, by the appeals court, and the SC refused to comment on it. ie this question is in the mind of the SC reserved, for Another Day. this Another Day could well be the zeek case.
You’re right, everybody but Anjalitroll knows it.
Relevant compared to what ???
Just because a court declined to comment in a 1975 case unrelated in every regard, other than the fact that the word “securities” was involved doesn’t in any way make it relevant to Burks / RVG
Come back and tell us how many times an SEC action has failed based on improper usage of the term “securities” or that a court has applied the Howey test in an SEC related matter and denied the SEC position that the case involved securities and maybe you would have a point.
Otherwise, you simply don’t.
relevant to the court journey of zeek?
most ponzi cases have been shut down by pleas or settlements. ‘Proving the Case’ has lesser history, and a lot of overturning of court decisions.
BTW the SEC was a party in uhf vs forman, by filing an amicus brief, asking for a finding of a security in the case. the supreme court denied the SEC .
show me where the supreme court has allowed the SEC a finding of security in a broad definition of howey fourth prong?
so, since 1975, the SC has held it’s feelings about a large sized howey, close to its heart. so, the question remains Unresolved.
I don’t know what happens to Federal judges who make terrible decisions. Maybe they don’t get invited to Lincoln Center for Pavarotti Christmas concerts. One way or another I’m sure their peers take notice.
Black Ice on a bridge “isn’t really a problem”, until its time to cross the bridge.
Ponder the vast wisdom embodied in that statement before assuming something you can not see has no relevance.
Given the United Housing Foundation, Inc. v. Forman, 421 U.S. 837 case was in 1975 and the average (and median) age of active U.S. circuit court judges in 2013 was 62.7 while the average age of US Supreme court judges in 2009 was 69, I’m thinking the chances of the Zeek case being the “another day” of which you speak are slim to none.
oh, so what? you’re expecting the judge who wrote the footnote 16 in uhf vs forman, to be hanging around, to resolve the point raised by footnote 16.
hahaha! tell me you’re not serious! hahaha!
so, you don’t know about ‘politics ruling judgments’ either.
and what happens to judges of the appeals courts who overturn orders of district court judges? do they settle their ‘political differences’ in the parking lot with rolled up sleeves?
That is a whole different discussion than he can’t.
Do not be so conceited as to think you have any advantage in this discussion. Ultimately the people decide what they want not a judge and not even the law for the people can change the law and override a judge. That is politics.
Read up honey bunch you have a lot to learn.
so, you’re contending that the SC has reserved its’ decision for 39 years.
Your words, Anjalitoll your words.
how do the people decide hoss. is there a plebiscite on each question?
no, people decide through the institutions they have created, like the judiciary.
do a quick net check on the controversies surrounding howeys and the question, about whether MLM should fall under the interpretation of ‘investment contract’.
the judicial system [ courts+lawyers], has definitely put up a strong case for the supreme court to clear the air about howeys and ‘investment contracts’
i’m hoping gilmond et all, will do us all a favor by taking this case upto to the SC. whether they win, or get their butt kicked, is not as important as getting howey a thorough check up, so it can run along smoothly and nicely for a long time to come.
40 years of inaction, is a bit too much, i say!
mlmlaw.com/library/guides/securities4.html
yes, i’m contending the SC has reserved it’s decision for 39 years. my words, littleroundtroll, my words.
You can call it “inaction”
The rest of society calls it “working as intended”
If it ain’t broke, don’t fix it.
really! then why are legal minds falling over each other, writing whole treatises, about why the SC should step in and clamp down on howey once and for all? time to pull out your head LRM?
this is similar to what i said in an older post. howey gets stretched to reach an outcome preferred by that particular court, that particular judge, and his view of justness.
this explains why howey cases keep getting overturned, because the the interpretation is not on a firm basis of law, but on the judge’s liberal/unliberal viewpoint. very dangerous!
mostly, like in glenn turner or koscot, the court saw a fraudulent scheme and stretched howeys to fit over it . in zeek, the court sees a fraudulent scheme, and decides to stretch howey over it, by thinly arguing that sales work by affiliates is unworthy. very dangerous!
ir.lawnet.fordham.edu/cgi/viewcontent.cgi?article=3173&context=flr
one way to solidify howey, could be to introduce a factor of ‘legitimacy of the investment contract’ into the four prongs. example the third prong could read :
3] expectation of ‘legitimate’ profits.
done and done??
Investment in Ponzi schemes is not work. Neither is recruitment of new investors.
Tcherepnin v. Knight (1967), 389 U.S. 332
that securities legislation must be broadly construed:
“…in searching for the meaning and scope of the word “security” in the Act, form should be disregarded for substance and the emphasis should be on economic reality.”
According to the Supreme Court, Congress painted with a broad brush in defining the scope of the market that it wished to regulate. Howey, 328 U.S. at 299. It recognized the virtually limitless scope of human ingenuity, especially in the creation of “countless and variable schemes devised by those who seek the use of the money of others on the promise of profits.” Id.
So the Court concluded that Congress determined that the best way to achieve its goal of protecting investors was to define the term “security” in “sufficiently broad and general terms so as to include within that definition the many types of instruments that in our commercial world fall within the ordinary concept of a security.”
United Hous. Found. v. Forman, 421 U.S. 837, 847-48 (1975) (quoting H.R. REP. NO. 73-85, at 11 (1933)). “Congress therefore did not attempt precisely to cabin the scope of the Securities Acts. Rather, it enacted a definition of ‘security’ sufficiently broad to encompass virtually any instrument that might be sold as an investment.” Reves v. Ernst & Young, 494 U.S. 56, 61 (1990).
yes, so in uhf vs forman, even though the word ‘stocks’ was used to describe deposits in the housing society, the SC saw the ‘economic reality’, underlying the arrangement, and tossed ‘form’ out, and embraced the ‘substance’, and decided it was not a security.
in MLM the ‘economic reality’ is that , affiliates have to ‘work’ for their individual earnings,without the work of the affiliates the MLM wont exist. look at this idea, without dragging in the legitimacy of the business, and you will see it has merit.
so, either don’t use howey for MLM, or change howey to introduce some factor of legitimacy in the test, and whack every ponzi/pyramid scheme with it, left right and center, without confusion.
Citation please.
How many are overturned in comparison with the number of cases in which the Howey test is used ??
Can you also please explain your usage of the word “overturned’? Overturned by whom ???
Overturned by final judgement or overturned by a district court, Appeals court – who ??
Can you please also provide evidence of whether the “overturnings” were later reversed on appeal or became final judgements.
@post#621, LRM
yes, that’s why the definition of securities includes the instrument called ‘investment contract’ so that the base becomes broad.
but i’m sure neither did congress intent for ‘securities’ to become all encompassing, covering all instruments of economic exchanges in society. at some point, you have to say stop!
so, let the SC paint the stop sign, and tell the SEC where the road ends. do you see any harm in that?
Here we have a perfect example of the wisdom of the Congress and courts in demanding flexibility in the Howey legislation.
Anjalitroll and Burks calling Zeek Rewards an MLM company is precisely the type of “virtually limitless scope of human ingenuity, especially in the creation of “countless and variable schemes devised by those who seek the use of the money of others on the promise of profits” that Congress and the Courts set out to prosecute.
How are you sure ???
You just made that up.
well, oz has covered zeek from the beginning of time, As An MLM Company.
call it a fraudulent illegal MLM if you like, but it used the MLM compensation system, dint it?
really LRM! are you going to copy paste your way into unintelligible hell ?
if congress intended EVERY INVESTOR to have balanced, non fraudulent information, then every business contract including partnerships, franchisee ships, distributorships would be a security.
yeah , just invite the SEC to live with you instead!
Congress intended, no Anjalitroll ifs or buts or hypothetical what ifs.
Congress intended to protect investors following the severity of the abuses leading to the stock market crash and Depression.
That Anjalitroll doesn’t think investors deserve to be protected from the likes of Burks and Gilmond et al is neither surprising nor unexpected
Let the law of the jungle prevail and only the strongest and more devious survive, Eh, Anjalitroll
Emotive stuff there, Anjalitroll
The reality is, there are currently in excess of 320 million people in the USA.
The likelihood of more than a few thousand of them having any interaction with the SEC in their lifetime is negligible.
Of those few thousands, the number who will be prosecuted for securities violations is less than negligible.
Of THEM the number charged with running $850 million dollar fraudulent schemes is so negligible as to be able to be counted without having to remove your shoes so you can use your toes.
Not really much chance of finding the SEC in my house, really.
and what does ponzi/pyramid fraud have to do with stock market crashes and depressions?
protect with the ‘right laws’, or be prepared to be attacked with the ‘wrong laws’. look at long term protection, don’t get carried away because you want to kill burks.
that’s just silly. the only way to prevent the law of the jungle from prevailing, is to make sure Everyone adheres to the law. when you start slipping, the jungle reaches in to grab your throat.
What would US society would look like without the securities laws and the Howey test that evolved out of the 1929 stock market crash and subsequent Great Depression.
The effects of several hundred “Paul Burks” running loose with their activities being defended by an even larger amount of Anjalitroll clones doesn’t doesn’t bear thinking about
well, first of all, all advanced societies, have laws in place, and this is why they advance.
well, second of all, if these advanced societies don’t protect the sanctity of the laws they use, they will step back into unadvancement.
fair equitable honest use of law, is as important as having laws, otherwise why have laws at all, if you’re just going to wrangle them any which way?
Exactly, which is why the USA has the securities laws it does.
Exactly, Which is why the US courts have ratified and re-ratified its’ securities laws
Exactly, which is why the USA has a system of courts and review courts, all of which have ratified and re-ratified its’ securities laws.
You’re getting better at understanding how the real world operates, Anjalitroll
howeys itself, was not determined as a security by either the district court or the appeals court. the SC overturned the ruling of both the lower courts, and found howey to be an investment contract. the SC bench that found howey to be an investment contract, was not unanimous either. there were 1 or 2 dissenting opinions.
uhf vs forman, was found not to be a security by the district court, this was overturned by the appeals court, which found it to be a security, and finally the SC overturned the appeals court, in finding uhf not to be a security.
koscot was found not be a security by the district court, the appeals court found it to be a security, and 40 years on, we await the SC’s opinion on this. which way will the SC go? hmm? hmm?
the SC, will be more interested in protecting the ‘Law’ itself, than pandering to emotive pleas for ‘social justice’ and forcefitting laws on crimes.
judge rakoff decided that, clawback from madoff netwinners was less important than protecting the sanctity of the financial markets.
the SC may decide, retaining the essence of howey, is more important than a clawback effort in a fraudulent scheme.
there’s emotion and then, – there is Wisdom.
The legitimate factor here being what? Labor? Its the same tired and spurious argument the Supreme Court heard 40 years ago and there’s bee nothing new for the court to consider in all that time, not even a new wrinkle on the old argument. Its no wonder they haven’t taken it up.
You and the other Sorkinists need to come up with a new theory or you will never get beyond the trial court…and you don’t deserve to, since you have added nothing remotely fresh, or compelling to the debate.
Are you an Orwellian? I thought you were a Sorkinist?
the ‘legitimate factor’ here is that the profits expected by investors are from a legitimate enterprise ie true profits.
‘labor’ as in selling anything, is the same for any business, legal, fraudulent or failed.
did you know even omnitrition was found NOT to be a security by the district trial court, on the basis of ‘labor’ put in by affiliates? the appeals court just sent the case back to the district court, without giving a final opinion. that also remained unresolved.
It’s easy to tell when an apologist for internet fraudsters has lost an argument.
We have been lead from discussing the Paul Burks’ and Zeek Rewards $850 million dollar fraud and its’ hundreds of thousands of victims, to a pointless discussion about the US legal system and laws which have not only been in existence for forty plus years, but have been challenged and ratified countless times.
And ????
It remains in existence.
Were UHF or Forman $850 million dollar ‘net based frauds ??
No, to be precise, Anjalitroll waits for the Supreme Court decision.
The rest of the USA seems to have got along fine without the decision.
Maybe it’s just me, but two possibilities spring to mind, other than that Anjalitroll has assumed to be true.
1) After 40 years, one isn’t coming
2) Anjalitroll has misread the significance of the Supreme Court not returning an opinion on the matter
How amazing would it be if Anjalitrolls discovery reminded the Supreme Court it had totally forgotten to clarify its’ decision of forty years ago and it sprang into immediate action, delivering what will doubtless become known as the “Anjalitroll decision”
Personally, I think I’ll go with “Anjalitroll is attempting to create something out of nothing”
yeah, about that ‘victim theory’, legal opinion is divided there too.
if zeek had run for one more year, most of the people you define as ‘victims’ would have been net winners.
so what really differentiates the net winners from the so called victms? Luck and Time.
should people be classified as winners or losers based on concepts of Luck and Time, neither of which is in their control?
But it didn’t,
next
@anjali
Absolute bloody horseshit.
Zeek was hemorrhaging money in its last months. From memory money in vs money out gave them 1 or 2 months at best when the SEC shut them down.
It was a sinking ship heading straight for collapse with or without SEC intervention.
okay, so what if zeek had been halted 6 months before? how would the netwinner/victim statistics have stood then?
the legal argument about categorizing net winners vs net losers, is not based on zeek, but in general.
July 2012 saw $160 million paid out and only $162 million come in. They had $200 and something million in reserve and were awarding some $45 million a day in monopoly money (the bulk of which was being re-invested).
The ratio of new investment and payouts had been shrinking for some months. July saw it close in on 1:1, August would have likely been in the red.
Compound those ROIs and payouts and they had no hope in hell of seeing the end of the year out.
Less total affiliates, same distribution.
Early investors cash out, later investors lose.
Time doesn’t change the fundamentals of a Ponzi scheme, it only gives you a reference point between launch and the inevitable collapse.
i disagree, BUT-
(Ozedit: Disagree?! Disagree with WHAT? The SEC provided hard numbers garnered from Zeek’s own bank accounts!
No more Zeek commentary from you until you’ve read every single Zeek article published on here, twice. Then perhaps the utterly ridiculous comments, scenarios, assertions and hypotheticals might finally cease.)
The difference is that the net winners withdrew more money than they had paid in themselves, “stolen from the net losers”. The net losers withdrew less money than they had paid in themselves.
Clawback actions will simply try to redistribute stolen funds back to the net losers.
A valid defense argument against clawback is the “Good faith / provided reasonably equal amount of value” argument, if it can be backed up by facts.
* The daily profit sharing pool was fraudulent, so money derived from that shouldn’t be counted among “provided equal amount of value”.
* The scheme itself was fraudulent, so money derived from “Founders Positions” shouldn’t be counted either. The “Sweet 16” participants shouldn’t argue about the importance and value of that. 🙂
* It won’t be easy to get a court to accept the work of recruiting additional investors as “provided equal amount of value”. But it isn’t impossible either, a court can potentially accept “something” if people push the right buttons.
* A court will most likely accept sale of Retail Bids as “provided equal amount of value” in SOME cases.
* Some types of work, e.g. Chris “self development guru” Molinari’s work may be seen as that. She co-hosted leadership calls, but she wasn’t directly involved in organizing the scheme.
* Internet Dynamo Inc. got a lump sum of $425,000 in a settlement for the value it provided to Zeek, appr. 7% of its $6.2 million claim for “breach of contract”.
There’s nothing wrong in being a net winner in a Ponzi scheme, i.e. you will always find some “Good faith” investors in most schemes. But they will usually not refuse to pay money back either, they will most likely try to settle the claim ASAP.
The problem is all the investors who have the wrong type of “Good faith”, e.g. the “if we refuse to accept it …” type of good faith.
Aj. Really. After one more year another year would have been needed to make the previous years investors whole, and then another and another and another on to infinity.
Your belief or premise can only be that the auction would eventually have succeeded and been wildly profitable, but there is no business on earth that can pay dividends like Zeek was promising.
Like many schemes before it, Zeek’s auction business was an empty oil well, a salted gold mine used to separate investors from their money. Attaching an MLM compensation plan does not change that.
“Halted 6 months earlier”
The number of net winners woud have been reduced dramatically.
The individual amounts “won” would have been reduced dramatically.
The number of net losers would have been reduced dramatically.
The damages from clawbacks would have been reduced dramatically.
You would still have 5-10% net winners, and 90-95% net losers. The individual amount lost would have been the same.
“Dramatically” = reduced down to about 15-25%.
“What about 6 months longer?“
Zeek was about to lose momentum, so it wouldn’t have been able to continue for additional 6 months. It was already on the verge of a collapse when it was shut down.
It was about to run out of investors, money, banks, payment processors, etc. (it could of course have moved to India, but …).
In case you don’t know how these types of schemes work…. prospective investors are shown samples of Oil or gold that supposedly comes from a drill site or mine and are convinced that there are vast riches to be made if they will invest in drilling rigs and mining equipment.
The promoter collect the money but never drills or mines and runs off with the money.
Burks had to know that auction profits were insufficient to pay all who invested and yet he still took their money as fast as he could and would have taken more if the SEC had not stepped in. He also paid his founding early promoters extraordinary sums to perpetuate his lies.
Investor expectations should have nothing to do with whether an offer is a security. Doing so conflates reality and perception into a meaningless jumble. Maybe that is what you want, but you should not count on getting it.
Whether an investment contract has an expectation of legitimate profit or not, its still an investment contract by today’s standards.
What you seem to want is for an illegitimate (illegal) investment contract to not longer be defined as a security. I guess that’s one way to keep the SEC out of Burks office! Sorkin must love that logic.
Why not just abolish the SEC entirely while you’re at it?