usfia-logoFollowing a Joint Report filed by the SEC, USFIA and Steve Chen, a trial date has been scheduled for January 10th, 2017

Note that this is the SEC civil action against USFIA and Chen, with details of criminal proceedings yet to surface.

The Joint Report was filed on April 11th and is a run down of what we can expect in the lead up to the scheduled January 2017 trial.

Here’s what we’ve learned;

The SEC and Chen disagree on discovery scheduling

The SEC want to get discovery over by November 18th, 2016. Steve Chen wants discovery completed in “phases”, ‘with discovery of Chen conducted last‘.

The SEC object to Chen’s proposal on the grounds Chen’s testimony ‘might well point to the need to take other or further discovery’.

Chen’s position is that, given the wide breadth of the allegations in this case, and the conflicting interests raised by the matters addressed in the Motion to Stay, a November 2016 discovery cut-off is not realistic.

If Chen had his way, discovery would stretch well into 2017 with a trial likely to take place towards the end of the year.

Steve Chen still thinks USFIA’s amber is worth something

Despite the Receiver establishing that USFIA’s amber reserves had “limited intrinsic value“, Chen

has requested that the receiver preserve all amber or gem stones seized from USFIA.

Why Chen wants the amber preserved was not disclosed.

I suspect Chen might want to trot out a friend third-party to re-value the amber, which will invariable conclude it to be infact the most valuable resource in the known galaxy.

The defense that follows will probably be “See, we gave investors something of great value!”

Chen’s lawyers might wind up on chopping block

Despite asserting his Fifth Amendment Right, Chen nonetheless included eleven affirmative defenses in his answer to the SEC’s complaint.

One of those defenses was “good faith reliance on legal professionals”.

To the extent Chen continues to rely on such a defense, the SEC’s position is that it will seek discovery of any otherwise privileged communications relied upon by Chen in support of this affirmative defense, to the extent permissible by law.

We don’t what Chen’s lawyer’s advised him, but there’s a good chance if it was bogus pseudo-compliance nonsense, either the Receiver or the SEC (or both) might take action against them.

Communications between Chen and his lawyers are currently under the control of the Receiver.

The Receiver has the ability to waive attorney-client privilege regarding the data, however if it comes to that it’s expected Chen will object.

That probably means there’s lots of juicy details within, so hopefully Chen’s objections are ultimately overruled.


As I mentioned earlier, criminal proceedings against Chen have yet to be made public. Can’t say for sure but hopefully we’ll have details before January 2017.

Stay tuned…