United States District Court, D. Connecticut
RULING ON DEFENDANT'S AND RELIEF DEFENDANTS'
OBJECTIONS TO PLAINTIFF SEC'S PROPOSED FINAL
BOND ARTERTON, U.S.D.J.
to the Court's Ruling on Plaintiff's Motion for
Remedies and Judgment ([Doc. # 955] at 32, n.28, ) the SEC
filed a Proposed Final Judgment [Doc. # 960], to which
Defendant and Relief Defendants objected. The Court entered
Final Judgment [Doc. # 982] and now responds to the SEC's
proposed judgment and Defendant's and Relief
Defendants' objections thereto.
the SEC and Relief Defendants disagree on the appropriateness
of appointing of a receiver to distribute assets currently
subject to the Court's asset freeze and judgment. The SEC
sought inclusion of language regarding the potential
appointment of a receiver or establishment of a Fair Fund in
its Proposed Final Judgment. (Proposed Final J. [Doc. #
960-1] at 9.) Relief Defendants argued that inclusion of such
language would be "premature" and "object[ed]
to the liquidation of any such assets and / or the
distribution to a Fair Fund of any such frozen assets unless
and until all appeals are concluded or the parties have
reached a settlement agreement." (Rel. Defs.' Obj.
[Doc. # 962] at 6.) While the Court has noted that
appointment of a receiver and/or use of a Fair Fund maybe
appropriate, (Ruling on Remedies and J. at 29-30), the Final
Judgment does not include any directives regarding
appointment of a receiver or establishment of a Fair Fund, as
post-judgment procedures will be addressed at a future
the SEC sought inclusion of a provision mandating that
amounts paid pursuant to the Court's judgment be treated
as penalties paid to the government for all purposes and not
be treated as a "penalty offset" in any related
proceedings. (Proposed Final J. at 9-10.) Relief Defendants
opposed inclusion of that provision as it had been
"neither requested by the SEC in its remedies motion nor
ordered by this Court." (Rel. Defs.' Obj. at 7.) Mr.
Ahmed opposed that provision on similar grounds. (Defs Obj.
[Doc. # 963] at 6-7.) The Court agrees that there
has been no ruling on this issue and it is not addressed in
the Final Judgment.
the parties disagreed as to the proper amount of interest and
returns on frozen assets to be turned over by Mr. Ahmed. The
SEC's Proposed Final Judgment requests that Mr. Ahmed pay
interest and return on all frozen assets, (Proposed Final J.
at 5, ) while Defendant and Relief Defendants argue that Mr.
Ahmed should only turn over interest and returns on frozen
assets in the amount ordered to be disgorged. (Rel.
Defs.' Obj. at 2-3; Def.'s Obj. at 2-3.) The Final
Judgment states that interest and returns will be turned over
in an amount to be determined.
Defendant and Relief Defendants argue that entry of final
judgment will impermissibly continue the current asset freeze
in its current amount, and that the asset freeze should
continue only in the amount of the judgment against Mr.
Ahmed. (Rel. Defs.' Obj. at 4-5. Def.'s Obj. at 6.)
The Final Judgment includes no order on that issue because
the Court has not yet ruled on the proper sum subject to a
continuing asset freeze, taking into account actual
valuations, post-judgment administrative expenses, and other
factors affecting this determination.
the SEC sought inclusion of language finding that the assets
available to satisfy the judgment against Mr. Ahmed
"belong to" him "in whole or in part."
(Proposed Final J. at 5.) Defendant and Relief Defendants
objected to this language, arguing that it would amount to an
improper alteration of the parties' property ownership.
(Rel. Defs.' Obj. at 3-4; Def.'s Obj. at 4-5.) As the
Court has previously found that the assets in question
"are available to satisfy" the judgment against
Defendant, (Ruling on Remedies and J. at 31, ) the Final
Judgment reflects that finding.
Relief Defendants argue that the SEC's Proposed Final
Judgment "[i]mproperly [c]haracterizes Ms. Ahmed's
[p]rimary [r]esidence as [h]aving [b]een [f]orfeited."
(Rel. Defs.' Obj. at 6.) The Final Judgment does not
address that subject and does not include that residence
among the assets available to satisfy the judgment against
parties' arguments with regard to entry of judgment
reveal several issues not yet resolved: (1) the use of a
receiver or other process for asset distribution and/or
establishment of a Fair Fund; (2) Mr. Ahmed's entitlement
to a penalty offset; (3) the frozen assets whose interest and
returns Mr. Ahmed must turn over; and (4) the proper sum
subject to a continuing asset freeze. The parties'
analyses of any of these matters shall be filed by Tuesday,
October 16, 2018. Responses shall be filed by Tuesday,
October 23, 2018. A hearing on these issues will be commenced
Monday, October 29, 2018 at 3:30 p.m. in Courtroom 2, 141
Church Street, New Haven, CT ...