The U.S. District Court for the District of Colorado refused Jan. 17 to sign off on a proposed settlement of a Securities and Exchange Commission enforcement action against two Colorado men and their company who allegedly defrauded investors of more than $6 million in a Ponzi scheme (SEC v. Bridge Premium Finance LLC, D. Colo., No. 1:12-cv-02131-JLK-BNB, 1/18/13).
In August 2012, the commission obtained emergency relief temporarily halting the alleged scheme (158 SLD, 8/16/12).
Without detailing the underlying accord, Judge John L. Kane Jr. said he “refuse[s] to approve penalties against a defendant who remains defiantly mute as to the veracity of the allegations against him.”
“A defendant's options in this regard are binary; he may admit the allegations or he may go to trial.”
Kane also objected to language in which the defendants waived their right to the entry of factual findings and legal conclusions pursuant to Fed.R.Civ.P. 52 and their right to appeal. “These findings are important to inform the public and the appellate courts,” the court wrote.
Kane is not the first judge to object to an SEC settlement in which the alleged wrongdoer neither admits nor denies misconduct. The agency currently is embroiled in litigation over the refusal of Judge Jed Rakoff, U.S. District Court for the Southern District of New York, to sign off on a proposed $285 million pact with (C) Citigroup Global Markets Inc. (see, e.g., 06 SLD, 1/9/13).
To see the decision, go to /uploadedFiles/Content/News/Legal_and_Business/Bloomberg_Law/Legal_Reports/bridge(1).pdf.
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