Una breve descripción de cada punto en la apelación de Stanford

I. si la Securities and Exchange Commission (SEC) tenía jurisdicción y autoridad reguladora sobre Stanford International Bank Limited (SIB), o sus certificados de depósito (CD). Y si, después de la acción civil de la SEC, la acusación penal del Departamento de Justicia (DOJ) era defectuoso.

No creemos que el gobierno puso en evidencia o demostró que la SEC tenía autoridad para investigar Stanford International Bank, que era un banco offshore.

En primer lugar, la SEC no tiene la autoridad para investigar los bancos en general, mucho menos un banco offshore [extranjero]. Así que no tuvieron ninguna autoridad legal para exigir al Sr. Stanford para participar o colaborar con una investigación de su banco, para lo cual no tenían ninguna autoridad legal para investigar.

El 18 de julio de 2014, en la 'Securities and Exchange Commission v. Securities Investor ProtectionCorporation'. (SEC v. SIPC) (caso Nº 12-5286) el D.C. circuito determinó concluyentemente y ordenó concluyente, que los CDsofrecidos por el Banco extranjeroInternacional de Stanford fueron; (a) no "valores" como definición por, o regulación bajo las leyes federales de valores de Estados Unidos y en cambio eran; (b) “obligaciones de deuda"del banco, que eran; (c) no "vendido" a través de, o por Stanford Group Company y por lo tanto; (d) los compradores de esos CDs no fueron "clientes" del SGC y por lo tanto nunca estaban bajo la jurisdicción o sujetos a la autoridad reguladora de la U.S. Securities and Exchange Commission.

El 05 de septiembre de 2014 la Securities and Exchange Commission concedió a los hechos antes mencionados como lo decidió el Tribunal de circuito de D.C. y decidió que no apelaría dicha decisión.

Más allá de la cuestión de la extraterritorialidad - que es que Estados Unidos nunca tuvo jurisdicción ni autoridad reguladora sobre el Stanford International Bank - el Departamento de justicia amplió su nueva acusación reemplazando las fechas de las supuestas ofensas desde 1999-2009 (en su acusación del 18 de junio de 2009)(Doc. 1) hasta 1990-2010 (doc. 422). Este incremento (desde el año 1990hasta el año 2010) no sólo ocasiona que esta acusación sea "defectuosa", sino que también representa otro objetivo del DOJ que es el "fraude a la corte".

Para comenzar con - y más allá del hecho de que en febrero de 2010 el acusado Stanford había estado bajo custodia federal un total de ocho meses - en 1990 el estadounidense (Broker/Dealer) Stanford Group Company aun no existía.

Contrariamente a sus afirmaciones en la nueva acusación, AUSA Costa sabía que los CD emitidos por SIB no fueron "ofrecidos" por SIB ni "sugeridos" por SGC a ciudadanos estadounidenses o residentes hasta el año 1998 - un completo ocho años más allá del marco de tiempo alegado en la acusación.

En la elaboración de su nueva acusación, el Departamento de justicia se dio cuenta que una gran cantidad de riqueza del demandado Stanford fue creada a través de empresas de bienes raíces antes de 1998-el año de su presentación "Reglamento D" ante la SEC y mucho antes de que SIB comenzara a "ofrecer" y la SGC comenzaraa "sugerir" los CDs a los ciudadanos estadounidenses.

Al expandir el año del "esquema fraudulento" desde 1990, el Departamento de justicia entonces fue capaz de afirmar que esa riqueza pre-1998, "justifica" su liquidación ilegal por parte del receptor y evita que el acusado Stanford pueda acceder a cualquiera de esos activos para utilizarlos en su defensa. Y lo más importante, al expandirse el año del "esquema fraudulento" adelante a 2010, pudieron crear la apariencia que el acusado era culpable por las pérdidas que se produjeron un año después de la fecha de la TRO (Orden de restricción temporal) - un momento cuando el receptor designado por el Tribunal estaba en control, y cuando Stanford era incapaz (prohibido por el gobierno) de honrar las obligaciones de SIB.

II. si los simultáneos juicios civiles y penales (y sanciones), basado en los mismos eventos subyacentes, eran violaciones de la cláusula de debido proceso de la Quinta y Octava enmiendas, y de la protección del acusado Stanford debido a doble juzgado.

El 16 de febrero de 2009 la Securities and Exchange Commission (SEC) presentó una denuncia civil en el distrito norte de Texas (División de Dallas) y solicitó una orden de restricción temporal (TRO) para hacerse con el control de todos los activos globales del demandado Stanford, tanto personales como corporativos. La SEC solicitó el nombramiento de un síndico/receptor Ralph S. Janvey.

El receptor fue específicamente dirigido y autorizado para:

"Realizar todos los actos necesarios para conservar, mantener, administrar y preservar el valor del Banco, con el fin de evitar cualquier irreparable pérdida, daños o lesiones al Banco".

Antes de cualquier hallazgo de irregularidades, ya sea civil o criminal, en febrero 24 del 2010, el Tribunal Civil de Dallas había aprobado la venta de dos buques propiedad del acusadoStanford. En la aprobación de esta venta, juez Godbey ordenó al receptor "secuestrar” la mitad del producto de ambas ventas.

Esto y otras prematuras ventas y desembolsos de sus activos, fueron una presunción de culpabilidad, un verdadero hecho consumado inconstitucional.

"Este receptor y su equipo han pasado importantes cantidades de tiempo en estas actividades, las principales actividades han sido coordinación con la SEC, el FBI y el Departamento de justicia en la identificación y reuniendo grandes cantidades de documentos e información relevante para sus investigaciones en curso y responder a numerosas y extensas solicitudes de la SEC, el FBI y el Departamento de justicia para analizar y proporcionar información y documentos."

"Una parte importante del trabajo de FTI (Karyl Van Tassel) involucró la recopilación de información a petición de la SEC, el FBI y el Departamento de justicia en relación con sus investigaciones, utilizando numerosas bases de datos complejas, correos electrónicos, registros contables, documentos financieros y archivos encontrados".

De hecho, los informes de investigación generados por esta firma FTI, y financiado por la administración judicial de Stanford, fueron utilizados por el gobierno como la Fundación de todo su caso.

El acusado Stanford presentaría que esto es sin lugar a dudas "apoyo" de su argumento de que las investigaciones civiles y criminales fueron efectivamente una acción concertada y llevado a cabo como uno solo.

Janvey y FTI en realidad estaban realizando "una parte significativa" de lasinvestigaciones del SEC, el FBI y el Departamento de justicia.

En Estados Unidos v. Kordel, 397 US 1, 11 (1970), el Tribunal Supremo citó cinco situaciones en las que puede resultar una constatación de una violación del debido proceso. En el caso de Stanford encontramos tres de ellos:

1). Si el Gobierno realiza una acción civil únicamente para la obtención de pruebas para su enjuiciamiento penal.

2). Considerando que el acusado razonablemente teme perjuicio adverso de publicidad previa al juicio u otra lesión injusta.

3). Considerando que existe cualquier otra circunstancia especial que podría sugerir la inconstitucionalidad, o incluso la inconveniencia de un proceso penal.

III. si el Tribunal violó la Cuarta enmienda del demandado Stanford contra cateos ilegales y búsquedas al:

a)PERMITIENDO QUE LA ORDEN (CIVIL) DEL RECEPTOR FUERA UTILIZADO COMO UN "RECURSO DE ASISTENCIA"

El 17 de febrero de 2009, el receptor designado en materia civil, entró en las oficinas de Stanford FinancialGroup (en Houston y en otros lugares), con el propósito de agarrar el control de todoslos papeles y documentación electrónica indicados en la orden del receptor (vol. 6) (USCA5 1478-1488). Este receptor fue acompañado por U.S. Marshals, policías y agentes del FBI que, basado en la invitación aparente del receptor, eran libres para llevar a cabo un registro sin orden judicial e incautación de varios elementos en las instalaciones, de los cuales el Departamento de justicia utilizaría más adelante en la subsecuente investigación criminal y el enjuiciamiento.

El Tribunal (juez Hittner) - pero usted dice fue confiscado... se han incautado en una acción civil y el receptor en la acción civil entregó al gobierno.

Sr. Fazel - correcto. Pero estamos diciendo que la cuarta enmienda se aplica porque la acción del estado se produjo cuando los oficiales - oficiales de policía fueron interactuando con el receptor.

El Tribunal - cómo puedes volver y limpiarlo en una situación como ésta? Creo que es imposible, porque no tenían ninguna orden, eso es seguro.

Sr. Fazel - eso es seguro.

En violación de los derechos del acusado Stanford bajo la cuarta enmienda, la objeción del abogado fuéDENEGADA y la prueba 1500 (agenda de RAS con números telefónicos) - obtenida sin la orden de registro requerida - fue admitido como evidencia.

Más evidencia de que la orden de receptor fue utilizada como una orden general o "recurso de asistencia" puede encontrarse en el acceso y admisión de la prueba 616 del gobierno (2006 faxes y cartas entre Sr. King y Alvarado Re: proyecto de respuesta a ECCB).

"El baluarte de la protección de la cuarta enmienda" requiere que la "policía obtenga una orden de un magistrado neutral y desinteresado antes de embarcarse en una búsqueda" Franks v. 438 de Delaware, Estados Unidos 154 (1978). No importa si estos artículos fueron "puntualmente proporcionados" a las agencias gubernamentales o recogidos por ellos de manera independiente, ellos accedieron sin una orden judicial mediante la utilización de la orden del receptor como un "recurso de asistencia".

b)PERMITIENDO QUE EL RECEPTOR DESIGNADO ACTUARA FUERA DEL ALCANCE DE LA ORDEN DE RECEPTORIA.

El 06 de enero de 2012, el defensor Stanford presentó una "Moción para suprimir" y solicitar una audiencia probatoria. (vol. 5)(USCA5 1435-1474) Este movimiento también fue negado por el Tribunal (juez Hittner), y no se llevó a cabo ninguna audiencia probatoria.

Específicamente, la cuestión en este asunto preocupa al receptor por acceso no autorizado y difusión de información completa de las cuentas del cliente de Stanford International Bank que estaban almacenadas en las bases de datos 'Datos Pro' y 'Temenos' ubicado en Antigua y protegido por las leyes de secreto y privacidad de banco de Antigua y Barbuda (Bus Intl. 244(1)) CorpAct. Lo que supera el alcance de la orden del receptor y por lo tanto su autoridad, este acceso ilegal y no autorizado de información sobre las cuentas del cliente del SIB fue alcanzado por una "carta de autorización" por Ralph S. Janvey (receptor) al Sr. Sohil Merchant, el empleado de Stanford que había diseñado las bases de datos y por lo tanto sabía eludir el sistema de seguridad de las computadoras del banco.

Cuando esta información inesperadamente falló en producir una sola "víctima" y en cambio sirvió para desmentir completamente estas acusaciones de esquema Ponzi y exonerar al demandado Stanford, la compañía de contabilidad forense (FTI) secuestró esas Temenos/DataPro bases de datos en un almacén controlado por FTI y lejos de la defensa de Stanford -inaccesibles en Washington, D.C.

El acceso (ilegal) fue completado y como admitió el Director Gerente de FTI (Karyl Van Tassel), estas dos DataPro y Temenos bases de datos habían sido trasladados desde Houston a Washington, D.C., fuera de capacidad en presupuesto restringido de la defensa para accederlas.

Karyl Van Tassel:Nosotros tenemos una base de datos con la información del CD de SIB, Temenos y DataPro.

Michael Stanley (abogado): está bien. ¿Dónde están localizados?

Karyl Van Tassel:Yo diría que el Temenos y DataPro están en la oficina de Washington...

Con respecto al caso de Stanford, el 26 de febrero de 2009, y previo a este acceso ilegal de información de privacidad protegida por ley, el Tribunal superior de Antigua y Barbuda emitió una orden (vol. 6) (USCA5 1727-1750) en la que explícitamente dice:

"(1) no divulgación de información específica del cliente está autorizada sin más, o de otro, orden de la corte; y (2) No divulgación de información está permitida bajo esta orden a cualquier gobierno extranjero o un organismo regulador a menos que dicha divulgación está sujeta a obligacionesde divulgación mutuas. Para los propósitos de esta orden, información específica del cliente significa información suficiente de detalle para permitir identificar el cliente en cuestión, la dirección del cliente o el monto de tales créditos saldos u otras inversiones de las cuentas." (vol. 6)((JSCA5 1729-1730)

El Departamento de justicia estadounidense reconoce que búsquedas hechas en otro país y llevadas a cabo por 'estatales' (americanos) (o Ralph Janvey, actuando como un "oficial" de la corte del juez Godbey) deben realizarse con el consentimiento de los locales del país y sus leyes.

En este caso ninguno de estas instrucciones de la Corte Suprema o garantías relacionadas con los tratados o protocolos se adhirieron. Como es evidente, el receptor (Ralph Janvey) esgrimió la orden civil como un "recurso de asistencia" y superaba con creces su alcance. Además de su amplia investigación asistencia y coordinación con los investigadores (penales), mediante la emisión de esta "carta de autorización" para el acceso de datos, protegidos por la ley de privacidad, ubicados en Antigua, violó las leyes de la nación soberana de Antigua y Barbuda tanto las leyes del Tratado de los Estados Unidos.

Finalmente y lo más importante en estos procesos, como este ilegal acceso, (justificativo) Temenos y DataPro base de datos, se prestó al FBI y muy claramente y de forma selectiva fue utilizado por el gobierno en el juicio, bajo Brady v. Maryland Estados Unidos (1963) debería haber sido, pero nunca fue, proporcionado a la defensa.

Por lo tanto, en su semblante de este acto, seguido por el uso de esta información y fallapara ser proporcionada a la defensa, los fiscales de Estados Unidos violaron, de la manera más atroz, tanto la normativa de los descubrimientos y la cuarta enmienda del demandado Stanford al debido proceso y protección desde cateos ilegales y confiscaciones.

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Appeal of Robert Allen Stanford - Sep. 10, 2014

Following part of the appeal of Stanford.

STATEMENT OF ISSUES

I. Whether the Securities and Exchange Commission (SEC) had jurisdiction and regulatory authority over Stanford International Bank Limited (SIB), or its Certificates of Deposit (CDs). And whether, following the SEC's civil action, the Department of Justice's (DOJ) criminal Indictment was defective.

II. Whether the simultaneous civil and criminal prosecutions (and sanctions imposed), based on the same underlying events, were violations of the DueProcess Clause of the Fifth and Eighth Amendments, and defendant Stanford's protection from Double Jeopardy.

III.Whether the Trial Court violated defendant Stanford's Fourth Amendment protection from illegal searches and seizures.

IV. Whether the District Court abused its discretion when it failed to hold a pre-trial Hearing to determine whether defendant Stanford had any "untainted" funds that could be used to pay for his defense.

V. Whether the Trial Court abused its discretion by (a) disqualifying defendant Stanford's competent counsel of choice, and; (b) forcing ill-prepared appointed counsel to proceed to trial.

VI. Whether the Trial Court violated defendant Stanford's Sixth Amendment right to a fair trial, by failing to provide appropriate responses to Jury Notes Two and Three.

VII. Whether defendant Stanford was deprived of his Sixth Amendment right to a fair trial, because pre-trial publicity precluded the assembly of an impartial jury.

VIII. Whether the Trial Court abused its discretion by first deeming defendant Stanford competent, and then failing to grant him adequate time to prepare an effective defense, assist his counsel, or prepare to testify on his own behalf; in violation of the Due Process Clause of the Fourteenth Amendment, as well as his Fifth and Sixth Amendment rights to a fair trial.

IX. Whether the Trial Court abused its discretion by denying defendant Stanford adequate time to prepare an effective defense.

X. Whether the Trial Court violated defendant Stanford's Sixth Amendment right to a fair trial by failing to provide the jury with a "unanimity of theory" instruction specific to which "misrepresentation" (element), on each of the mail fraud and/or wire fraud Counts constituted the overall "scheme to defraud."

XI. Whether the Trial Court violated the Due Process Clause of the Fourteenth Amendment, by proceeding with evidence which was insufficient to prove the essential elements of the mail fraud statute.

XII. Whether the Trial Court violated defendant Stanford's Sixth Amendment right to a fair trial by issuing a modified "Allen charge" that was coercive.

XIII. Whether the Trial Court abused its discretion by enhancing defendant Stanford's sentence based on information not found in any Count of the Indictment, and that was neither entered into evidence, nor submitted to the jury and proven beyond a reasonable doubt.

XIV. Whether the Trial Court, through its rulings, demonstrated a partiality in favor of the Government that denied defendant Stanford an opportunity to present an adequate defense, in violation of his Fifth Amendment right to Due Process, and his Sixth Amendment right to a fair trial.

XV. Whether under the Cumulative Error Doctrine the issues presented here amount to a denial of defendant Stanford's Constitutional right to a fair trial, and thus undermined the reliability of the verdict.

STATEMENT I

Mr. McGuire: Specifically, as to Count 12, which is the Conspiracy to Obstruct the SEC Investigation; we don't believe the Government put on any evidence or showed that the SEC had authority to investigate Stafford International Bank, which was an offshore bank.

First of all, the SEC does not have the authority to investigate banks in general, much less an offshore [foreign] bank. So, they had no lawful authority to require Mr. Stanford to participate in or cooperate with an investigation of his bank, for which they had no lawful authority to investigate... (vol. 56)(USCA5 11534-11535)

For instance, at a pre-trial Hearing where the Government was requesting a Motion in Limine, barring any discussion about SIB's eligibility or ineligibility to access federal bailout money (TARP Funds), the prosecution pointed out the following:

AUSA Stellmach: There are two points, Judge; one, we just want to preclude any suggestion that the SIB was ever eligible. Foreign banks only received funds if they had U.S. subsidiaries, which Mr. Stanford's bank did not, because he didn't want to subject it to U.S. regulations. So it was never eligible for the TARP or any bailout funds. So it would be misleading to the jury to suggest otherwise... (vol. 36)(USCA5 15453)

Ultimately, the Trial Judge (Hittner) would grant this Motion in Limine (vol. 5)(USCA5 1381-1392)(Doc. 585) and, in the process, would further confirm the SEC's lack of jurisdiction over the bank by stating:

"[T]he allegation about TARP funds which foreign banks like SIB was not eligible to receive, is GRANTED at this time..." (vol. 36)(USCA5 15469)

AUSA Costa: [w]ho directly regulated Stanford International Bank throughout its histories?

Mr. Young: The FSRC.

AUSA Costa: Which is just in Antigua?

Mr. Young: Yes.

(vol. 50)(USCA5 7697-7698)

The most definitive proof of all, however, is found in the Superseding Indictment itself, under Section (5), which states: Although SIB marketed and sold its CDs within the United States, SIB was an Antiguan-based bank, and was not regulated by any United States banking authority. Instead, SIB was regulated by an agency of the Antiguan Government known as the Financial Services Regulatory Commission (the "Antiguan Regulatory Commission") which claimed to conduct inspections to determine the solvency of banks, to review the quality of bank's investments, and to confirm the accuracy of bank's reported returns. (Doc. 422)

In a related case, the Fifth Circuit has concluded that the Certificates of Deposit offered by SIB were not "covered securities" within the meaning of the preclusion provisions to the Securities Litigation Uniform Standard Act (SLUSA), specified in 15 U.S.C. § 78bb(F)(1)(A).

In yet another Stanford related case (Chadbourne& Parke, LLP v. Samuel Troice, et. al. 134 S.Ct. 1058 (2014) - recently before the Supreme Court), on theissue of "in connection with" and "covered securities", Justices Scalia, Kagan and Breyer noted the following:

JUSTICE SCALIA

"I had assumed that the purpose of the securities laws was to protect the purchasers and sellers of covered securities. There is no purchaser - or seller of a covered security involved here. It's.. .it's a purchaser of not-covered securities who is being defrauded, if anyone...why...why would the Federal Securities Laws protect that person?"

JUSTICE KAGAN

"In all our cases, there's been something to say when somebody asks the question: how has this affected a potential purchaser or seller in the market for the relevant securities?" "And here there's nothing to say."

On July 18, 2014, in 'Securities and Exchange Commission v. Securities Investor Protection Corporation'. (SEC v. SIPC) (case no. 12-5286) the D.C. Circuit conclusively determined, and conclusively ruled, that the CDs offered by the foreign-incorporated and foreign-domiciled Stanford International Bank were; (a) not "securities" as defined by, or regulated under, the federal securities laws of the United States, and instead were; (b) "debt obligations" of the Bank, which were; (c) not "sold" through, or by, Stanford Group Company, and thus; (d) the purchasers of those CDs were not "customers" of SGC, and were therefore never under the jurisdiction or subject to the regulatory authority of the U.S. Securities and Exchange Commission.

"The [District] Court reasoned that the investors obtained the Antiguan bank's CDs by depositing funds with the bank itself, not with SGC, and they thus cannot be considered customers of the latter.

We agree that the CD investors do not qualify as customers of SGC under the operative statutory definition."

On September 5, 2014 the Securities and Exchange Commission conceded to the aforementioned facts as found by the D.C. Circuit Court, and decided that they would not appeal the decision any further.

Beyond the extraterritoriality issue - which is that the United States never had jurisdiction nor regulatory authority over the foreign-incorporated and foreigndomiciled Stanford International Bank - in their new Superseding Indictment the DOJ broadened the dates of the alleged offenses from 1999-2009 (in their June 18, 2009 Indictment)(Doc. 1) to 1990-2010 (Doc. 422). This reach-back (to the year 1990) and forward (to the year 2010) not only renders the Indictment "defective", it is representative of another DOJ goal, and is a "fraud upon the Court".

To begin with - and beyond the fact that by February of 2010 defendant Stanford had been in federal custody a full eight months - in 1990 the U.S.-based (Broker/Dealer) Stanford Group Company did not yet exist.

Contrary to his assertions in the Superseding Indictment, AUSA Costa knew that the CDs issued by SIB were neither "offered" by SIB nor "suggested" by SGC to any American citizens or residents until the year 1998 - a full eight years beyond the time frame alleged in the Indictment.

In crafting their new Superseding Indictment, the DOJ realized that a vast amount of defendant Stanford's wealth was created through real estate ventures prior to 1998- the year of his "Regulation D" filing with the SEC, and long before SIB began "offering" and SGC began "suggesting" the CDs to U.S. citizens.

By their expanding the year of the "fraudulent scheme" back to 1990, the DOJ was then able to lay claim to that pre-1998 wealth, "justify" the Receiver's unlawful liquidations of pre-1998 assets, and thereby prevent defendant Stanford from accessing any of these assets to utilize in his defense. And more importantly, by expanding the year of the "fraudulent scheme" forward to 2010, they were able (as detailed in ISSUE XIII) to create the appearance that defendant Stanford was culpable for losses which occurred a full year beyond the date of the TRO - a time when the Court-appointed Receiver was in control, and when Stanford was incapable (prohibited by the Government) of honoring SIB 's obligations.

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Apelacion de Robert Allen Stanford - Sep. 10, 2014

A continuación parte de la apelación de Stanford.

DECLARACIÓN DE TEMAS

I. si la Securities and Exchange Commission (SEC) tenía jurisdicción y autoridad reguladora sobre Stanford International Bank Limited (SIB), o sus certificados de depósito (CD). Y si, después de la acción civil de la SEC, la acusación penal del Departamento de Justicia (DOJ) era defectuoso.

II. si los simultáneos juicios civiles y penales (y sanciones), basado en los mismos eventos subyacentes, eran violaciones de la cláusula de debido proceso de la Quinta y Octava enmiendas, y de la protección del acusado Stanford debido a doble juzgado.

III. si el Tribunal violó la Cuarta enmienda del demandado Stanford contra cateos ilegales y búsquedas.

IV. si el Tribunal de distrito abusó de su discreción al no celebrar una audiencia previa al juicio para determinar si el acusado Stanford tenía fondos "no relacionados con el caso" que podrían utilizarse para pagar su defensa.

V. si el Tribunal abusó de su discreción por (a) descalificación del demandado Stanford para elegir a un Asesor competente, y; (b) obligando al nombrado abogado para preparar yproceder con el juicio.

VI. si el Tribunal violó el derecho de enmienda Sexta del acusado Stanford a un juicio justo, por no dar respuestas apropiadas a jurado notas 2 y 3.

VII. si demandado Stanford fue privado de su derecho a la Sexta enmienda a un juicio justo, porque la publicidad previa al juicio imposibilitó el montaje de un jurado imparcial.

VIII. si el Tribunal abusó de su discreción por primero atribuiral demandado Stanford competente y luego al no concederle el tiempo adecuado para preparar una defensa eficaz, ayudar a su abogado, o preparar a testificar en su propia defensa; en violación de la cláusula de debido proceso de la Decimocuarta Enmienda, así como sus Quinta y Sexta enmienda de los derechos a un juicio justo.

IX. si el Tribunal abusó de su discreción al negar al demandado Stanfordun tiempo adecuado para preparar una defensa efectiva.

X. si el Tribunal violó el derecho de enmienda Sexta del acusado Stanford a un juicio justo por no proporcionar al jurado con una instrucción de "unanimidad de teoría" específica para la "tergiversación" (elemento), en cada uno delos fraude que constituyeron en general el "esquema para defraudar".

XI. si el Tribunal violó la cláusula de debido proceso de la Decimocuarta Enmienda, procediendo con la evidencia que era insuficiente para probar los elementos esenciales de la ley de fraude de correo.

XII. si el Tribunal violó el derecho de enmienda Sexta del acusado Stanford a un juicio justo mediante la emisión de una modificada"acusaciónpara Allen" que fue coercitivo.

XIII. si el Tribunal abusó de su discreción mejorando la frase del acusado Stanford en base a información no encontrada en ningún cargo de la acusación, y que ni siquiera entró en evidencia, ni fue presentada al jurado y probado más allá de una duda razonable.

XIV. si el Tribunal, a través de sus resoluciones, demostró una parcialidad a favor del gobierno que negó al acusado Stanford una oportunidad para presentar una defensa adecuada, en violación de su Quinta Enmiendade derecho al debido proceso y su Sexta enmienda de derecho a un juicio justo.

XV. ya sea bajo la doctrina de Error acumulado sobre los temas presentados aquí,entre otros a una negación del derecho constitucional del acusado Stanford a un juicio justo, y de esta manera minó la fiabilidad del veredicto.

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INITIAL REPLY BRIEF OF THE SECURITIES AND EXCHANGE COMMISSION, APPELLANT

By Michael L. Post

In its opening brief, the Securities and Exchange Commission established that the district court erred both in incorrectly applying a preponderance standard of proof in this preliminary, summary proceeding and in applying an unduly narrow construction of the statutory term "customer" to preclude the possibility of coverage under the Securities Investor Protection Act of 1970 ("SIPA" or the "Act") for investors in the Stanford Ponzi scheme. The arguments made by the Securities Investor Protection Corporation ("SIPC") in response are based on an incorrect view of the nature of this proceeding and a misreading of the relevant statutory scheme, applicable case law, and underlying facts.

Contrary to SIPC's contention, this proceeding will not lead to a final determination of the key question at issue-whether any of the Stanford victims qualify as "customers" under SIPA. Nor did Congress confer greater discretion on SIPC than on the Commission to make the determination whether to seek to initiate a SIPA liquidation proceeding. Given the preliminary nature of the proceeding here, and the statutory relationship between the parties, a probable cause standard of proof is appropriate. Moreover, SIPC's formalistic construction of the term "customer" to preclude the potential for SIPA coverage here erroneously gives effect to both the fraudulent corporate boundaries designed by Allen Stanford to USCA Case #12-5286 Document #1437933 Filed: 05/24/2013 Page 9 of 40 facilitate his scheme and the illegitimate securities sent to investors in furtherance of that scheme.

Nor will the Commission's interpretation of the statutory definition of a "customer" undermine the statutory scheme as SIPC and its amici contend. The Commission is not advocating that every customer of every Stanford entity would have customer status under SIPA. See Brief of the SEC at 49 ("SEC __"). Rather, its position is that in the rare circumstances presented here-where the Stanford entities (including Stanford International Bank, Ltd. ("SIBL") and Stanford Group Company ("SGC")) were operated as a single fraudulent enterprise ignoring corporate boundaries, SGC accountholders who purchased SIBL CDs were solicited by SGC and dealt substantially with SGC employees, and the purported securities issued by SIBL were in reality interests in a Ponzi scheme-SGC accountholders who purchased SIBL CDs through SGC should be deemed to have deposited funds with SGC. This interpretation is the correct one; and it is at least a reasonable one that is entitled to deference.

Even apart from the lack of separateness of SGC and SIBL, the Commission's application should be granted under the Old Naples and Primeline cases.

The Commission's position here is also supported by two court of appeals cases expressly holding that customer status under SIPA "does not … depend simply on to whom the claimant handed her cash or made her check payable, or even where the funds were initially deposited." Old Naples, 223 F.3d at 1302; see Primeline, 295 F.3d at 1107. Relying on a different opinion's erroneous description of those cases, SIPC argues that the customers in those case provided money "to an ostensible agent of a broker-debtor." Br. 50 (quoting In re Bernard L. Madoff Inv. Secs., LLC, 708 F.3d 422, 428 (2d Cir. 2013)). In fact, the claimants in Old Naples provided money to a "separate company" that was owned by the same person who owned the SIPC-member introducing broker. 223 F.3d at 1299-1300. And in Primeline, at least some of the claimants provided money directly to companies separately owned by a sales representative of the broker-dealer. See 295 F.3d at 1104.

SIPC also argues that Old Naples and Primeline are distinguishable because they involved a broker that failed to clear a transaction with its clearing broker. Br. 50. But this is a distinction without a difference. As the Commission concluded, what matters is that depositing money with SIBL was "in reality no different than depositing it with SGC." Analysis at 8-9; see SEC 51-54.

Similarly unpersuasive is SIPC's attempt to distinguish Old Naples and Primeline on the ground that the investors there "never received the securities they intended to purchase." Br. 50. The court in Primeline expressly noted that some investors "received fraudulent 'Debenture Certificates'" "[i]n exchange for their cash." 295 F.3d at 1109. Moreover, the physical CDs should be disregarded here. See SEC 54.

Finally, SIPC urges this Court to reject Old Naples and Primeline as being against the supposed "weight of authority." Br. 51. But those cases involved facts most similar to those presented in this case, and SIPC points to no contrary authority in analogous circumstances. For example, in Aozora Bank Ltd., 480 B.R. 117 (S.D.N.Y. 2012), aff'd, 708 F.3. 422 (2d Cir. 2013), cited by SIPC, the investors at issue did not have accounts with the broker-dealer, and did not intend to open accounts with the broker-dealer. See 480 B.R. at 123-24, 128. Rather, their dealings were with independent entities which were not under common ownership and control with the broker-dealer. See id. at 121; see also SEC v. Kenneth Bove & Co., Inc., 378 F. Supp. 697, 698-99 (S.D.N.Y. 1974) (claimants, allegedly at debtor's direction, sent shares of stock to an independent, third-party broker). The Ninth Circuit's decision in Brentwood Securities-which both Old Naples (223 F.3d at 1300) and Primeline (295 F.3d at 1106) cited-is similarly far afield. Unlike here, the investor funds in Brentwood Securities did not get funneled back to the broker-dealer and "[n]othing in the record establishe[d]" that the broker-dealer "had any role at all" in the transactions at issue. 925 F.2d at 328.

SIPC and its amici argue that ruling in the Commission's favor would "transform SIPC into an insurer against every fraudulent scheme implicating a broker-dealer." Br. 47; see SIFMA Br. 20-21; Law Professors Br. 19-20. But the Commission's position depends on the rare factual situation where, among other circumstances, there is a sufficient basis both (1) to disregard the corporate form of the broker-dealer and (2) to disregard the issuance of the purported security to the investor. Moreover, this scenario is substantially similar to recognized "customer" situations, such as where a broker-dealer misappropriates cash deposited with the broker-dealer or takes a deposit of cash but does not purchase any securities for the depositor. See, e.g., In re Bernard L. Madoff Inv. Secs. LLC, 654 F.3d 229, 236 (2d Cir. 2011). Amicus Financial Services Institute ("FSI") contends that covering "all" of the SIBL CD investors' losses would exhaust SIPC's reserve fund (FSI Br. 5), but FSI fails to take account of the facts that (1) many investors did not buy SIBL CDs through SGC and (2) the statute caps at $500,000 each customer's potential SIPC advancement (see 15 U.S.C. 78fff-3(a)).

Read the complete SEC Reply to SIPC in SEC vs SIPC.

Related article (Nonmember affiliate company were also granted with SIPC cover): Forensic accountant gives Stanford investors a little hope

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Canadian lawyer sues U.S. government over Allen Stanford ponzi scheme

	May 7, 2013 By Drew Hasselback Investors lost billions in the ponzi scheme orchestrated by Texas tycoon Allen Stanford, and now a Canadian lawyer believes he has an innovative legal strategy to recover funds for victims of the fraud who reside outside the United States. Todd Weiler, who specializes in international law, believes that "unconscionable negligence and/or manifest incompetence" on the part of U.S. regulators may have breached the foreign investor protection provisions of several international trade treaties signed by the U.S. government.
Todd Weiler claims the U.S. government breached international trade treaties by failing to protect foreign investors from Allen Stanford's $7-billion ponzi scheme. Peter J. Thompson/National Post
If this had happened to Americans in Mexico, there'd be no doubt that those Americans would be bringing a NAFTA claim against Mexico A request for arbitration and statement of claim the London, Ont. lawyer has delivered to the U.S. Department of State alleges that the U.S. Securities and Exchange Commission was aware of problems at the Stanford Group of Companies (SGC) and at Stanford Financial Group (SFG) as early as 1997. Yet in a "shocking and egregious failure," SEC officials failed to shut Stanford down until 2009, the claim alleges. Mr. Weiler alleges that the U.S. refused to take steps to shut Stanford down earlier because U.S. officials believed the majority of Stanford's victims were not U.S. nationals. The Canadian lawyer argues that international trade treaties, among them the North American Free Trade Agreement, require that the U.S. government treat investors from all signatory countries equally, regardless of their residency. "If this had happened to Americans in Mexico, there'd be no doubt that those Americans would be bringing a NAFTA claim against Mexico, and that they would deserve to win," Mr. Weiler said in an interview. "The Americans have for 100 years used these agreements and other policies to bring other governments to heel and make sure they get this kind of protection and legal security." The U.S. State Department web site shows that it has received notice of legal actions Mr. Weiler has filed on behalf of Stanford victims from Guatemala, Costa Rica, Dominican Republic, Uruguay, Chile and Peru, and which are brought under various trade agreements the U.S. has signed with those countries. However, the U.S. government has not yet acknowledged on the web site that it has received the NAFTA claim that Mr. Weiler has filed on behalf of Mexican and Canadian residents. All the claims contain allegations that have yet to be proven at a hearing. A high-flying Texas businessman who built a series of financial institutions in the United States and the Caribbean, Stanford was eventually arrested and charged with fraud in 2009. He had been known as "Sir Allen Stanford" in recognition of his services to the government of Antigua and Barbuda. He was tried in U.S. federal court and sentenced to 110 years in prison upon his conviction for fraud in 2012. His knighthood was revoked in 2010. Investors who placed funds with Stanford International Bank received "certificates of deposit" or CDs that were supposed to be low risk investments that offered generous returns. The scheme took in more than US$7-billion. Some 21,000 investors from around the world were taken in. SEC officials, who are responsible for protecting the investments of investors, acted with unconscionable negligence
	Stanford's activities caught the attention of U.S. regulators as early as 1997, a mere two years after the Stanford Group of Companies registered with the SEC in 1995, according to a report completed in 2010 by David Kotz, who was at the time the SEC's inspector general. The NAFTA claim filed by Mr. Weiler relies on that report, which concluded that the SEC could have sought legal action to shut down Stanford years earlier than it did.
A high-flying Texas businessman who built a series of financial institutions in the United States and the Caribbean, Stanford was eventually arrested and charged with fraud in 2009. Aaron M. Sprecher/Bloomberg
"SEC officials, who are responsible for protecting the investments of investors such as the claimants against criminal enterprises such as SFG, acted with unconscionable negligence and or manifest incompetence, causing millions of dollars of losses to the claimants as a result," the claim states. Because Mr. Weiler's claim is structured as a proposed international arbitration, the legal action is open only to non-U.S. residents from countries with which the U.S. has signed trade agreements. Mr. Weiler says the action, which he is bringing in conjunction with several other lawyers from the United States, could include "several thousand" clients. Other third parties have been targeted for their connection to Stanford. Liquidators of Stanford International Bank have sued Toronto-Dominion bank in Quebec and other jurisdictions on the theory that, as Stanford's banker, TD should have known the Texan businessman was up to no good. TD denies the allegation.

Source.

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SEC Order Against Stanford

April 25, 2013
By U.S. District Judge David C. Godbey

Securities and Exchange Commission, Plaintiff, vs. Stanford International Bank LTD., et al. Defendants. Civil Action No. 3:09-CV-0298-N

This Order addresses Plaintiff Security and Exchange Commission's ("SEC") motion for partial summary judgment [1779]. The Court grants the motion. The Court also denies Defendant R. Allen Stanford's motion for extension of time [1807].

The Court grants the SEC's motion for summary judgment. The Court enjoins Stanford from violating the Exchange Act § 10(b), Rule 10b-5, the Securities Act § 17(a), and the Advisers Act § 206(1) and (2), enjoins Davis violating the Exchange Act § 10(b), Rule 10b-5, the Securities Act § 17(a), and enjoins SGC and SIB from violating the Exchange Act § 10(b), Rule 10b-5, the Securities Act § 17(a), the Advisers Act § 206(1) and (2), and the Investment Company Act § 7(d). The Court finds Stanford, Davis, SGC, and SIB jointly and severally liable to disgorge the $5.9 billion fraudulently acquired by Stanford's scheme. The Court adds $861,189,969.06 of prejudgment interest to this total, for a total disgorgement liability of $6,761,189,969.06. Finally, the Court imposes a civil penalty of $5.9 billion on Stanford and $5 million on Davis.

Read the complete Order of U.S. District Judge David C. Godbey.

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Stanford investors' lawsuit heads to federal court

March 12, 2013
By Bill Lodge

Eighty-nine investors defrauded by now-imprisoned Houston financier Robert Allen Stanford want $115 million from seven insurance companies in addition to claims that could total as much as $1 billion against the Louisiana Office of Financial Institutions and SEI Investments Co.

But six of the insurers responded Monday by transferring the investors' 4-year-old state court suit to Baton Rouge federal court, action the investors have fought hard in the past.

"We feel confident that this case should not be removed to federal court, because the state court has already ruled on it" and granted the investors class-action status, said Phillip W. Preis, Baton Rouge attorney for the investors.

Telephone and email requests for comment from three New Orleans attorneys for the insurance companies were not returned.

The investors sued OFI and Pennsylvania-based SEI in 19th Judicial District Court in Baton Rouge in 2009. That was soon after the Securities and Exchange Commission shut down Stanford's worldwide operations and alleged his investment program was nothing more than a fraudulent scheme.

But a federal judge in Dallas, where the SEC had filed its complaint, yanked the Louisiana investors' suit into his Texas court and then dismissed the case.

The Dallas judge ruled in 2011 that the Baton Rouge investors suit violated a Securities Litigation Uniform Standards Act prohibition against state court litigation that could negatively affect the nation's financial markets.

Last year, however, a three-judge panel of the U.S. 5th Circuit Court of Appeals overruled the Dallas judge and concluded that investors could pursue recovery of their losses in Baton Rouge state court.

That returned the investor claims to state District Judge Michael Caldwell, who held hearings on disputed allegations that OFI knew of Stanford's misdeeds and should have warned investors, as well as a complaint that SEI ignored a duty to tell investors that Stanford's assets were grossly overvalued. SEI's services were contracted by Stanford.

Caldwell issued a judgment last year that certified the investors' suit as a class action, meaning that all people who lost investments at Stanford Trust Co.'s Baton Rouge office could join the suit as plaintiffs against SEI, OFI and now SEI's seven insurers.

Caldwell has not yet scheduled a trial for the case.

The U.S. Supreme Court has agreed to hear arguments on appeals of related Stanford investor cases in October.

In Baton Rouge, attorneys for both SEI and OFI repeatedly have denied all allegations that their clients failed any responsibility to alert investors about Stanford's frauds.

"The role of the OFI is to regulate, not to ensure that those who invest in companies subject to OFI regulation will never lose money as a result of criminal behavior," OFI attorney David Latham told Caldwell in one court filing.

"SEI did not make any false statements" to Stanford investors, SEI attorney J. Gordon Cooney Jr. told Caldwell in September. Cooney later added: "SEI has not violated Louisiana securities law."

Court records show the investors added SEI's insurers to its list of defendants in an amended complaint that was filed Feb. 13 under seal.

Preis said Monday the amended complaint was filed under a nonpublic seal because it contains information related to OFI's exam reports on Stanford Trust, which Caldwell ruled earlier must remain confidential.

The six insurers that transferred the dispute Monday to U.S. District Judge James J. Brady are Allied World Assurance Co. (U.S.) Inc., Continental Casualty Co., Arch Insurance Co., Indian Harbor Insurance Co., Nutmeg Insurance Co. and certain underwriters at Lloyd's of London.

Those insurers told Brady a seventh firm — Endurance Specialty Insurance Ltd., of Bermuda — did not join their motion because Endurance officials had not yet been served with a copy of the investors' suit.

Stanford has been in federal custody since June 2009, when he was indicted by a federal grand jury in Houston for worldwide frauds alleged to exceed $7 billion. He was convicted on fraud charges last year and sentenced to a prison term of 115 years.

Source.

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The District Court Rules in Favor of the Receiver in His Claim to Recover Net Winnings Paid to Stanford "Net Winner" Investors

January 23, 2013
By U.S. Receiver (Ralph Janvey)

On January 23, 2013, the District Court entered a summary judgment order in favor of the Receiver finding that the Receiver is entitled to recover from Stanford investors any funds they were paid in excess of the principal they deposited in the Stanford fraud scheme. The Court ruled that the net winner investors' contracts with Stanford are void and unenforceable and that the investors did not provide value for amounts they received from Stanford in excess of the amounts they deposited. As a result, the Court held that that allowing the net winner investors "to keep their fraudulent above-market returns in addition to their principal would simply further victimize the true Stanford victims, whose money paid the fraudulent interest." Although the District Court's order is not a final judgment, the District Court certified the order for appeal, which means that it will likely be appealed in the near future to the US Court of Appeals for the Fifth Circuit.

The Receiver is pleased with the Court's ruling today that those investors who profited from the Stanford ponzi scheme do not have the right to retain those profits. This decision represents an important milestone in the very long and difficult process of unwinding the massive Stanford ponzi scheme. In his ruling, Judge Godbey agreed with the Receiver's position that the fictitious interest payments that Stanford made to investors on their Stanford International Bank certificates of deposit simply represented money taken from one set of investors and paid to another; it was just part of Stanford's efforts that kept the ponzi scheme going for well over a decade.

Based on his investigation, the Receiver identified over $220 million in net winnings or fictitious interest that was paid to over 800 investors. The Receiver intends to use this ruling to pursue recovery of these funds for the benefit of the thousands of investors who sustained significant losses on their Stanford CDs. Once recovered, these funds can be distributed to the victims of the Stanford fraud, which would be in addition to the $55 million that the Receiver has already proposed for distribution.

The Receiver is continuing to pursue recovery through litigation of other funds that can be distributed to victims, and he continues to work cooperatively with the U.S. Department of Justice and the Antiguan-appointed Liquidators to reach a final agreement to make available for distribution approximately $300 million in funds and assets currently frozen in foreign countries.

Click here to view the Order.

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STANFORD PONZI SCHEME VICTIMS TO RECOVER ONE PERCENT OF LOSSES

January 11, 2013
By U.S. Receiver (Ralph Janvey)

The Receiver requests that the Court order a first interim distribution of funds from the Receivership Estate for the benefit of defrauded investors in certificates of deposit ("CDs") issued by Stanford International Bank, Ltd. ("SIB"). These investors were the primary source of both the funds that fueled the Stanford Ponzi scheme and the funds recovered by the Receiver. They are also the primary victims of the Stanford fraud by both value and number of claims.

Treatment of Claims under the Interim Plan.

1. The Interim Distribution Amount shall be apportioned among Investor CD Claimants on a pro rata basis. Such Investor CD Claimants shall receive payments equal to a percentage (the "Distribution Percentage") of their Allowed Claim Amounts as reflected in their Notices of Determination. The Allowed Claim Amounts shall be based on the Investor CD Claimants' Net Losses. Any future distributions to Investor CD Claimants shall likewise be pro rata based on Investor CD Claimants' Allowed Claim Amounts.

2. The Distribution Percentage equals the Interim Distribution Amount divided by the sum of: (a) all Allowed Claim Amounts for non-deficient Investor CD Claims as of the filing of the Motion (the "Investors' Allowed Claim Amounts"), and (b) the Receiver's estimate of the Allowed Claim Amounts for all Investor CD Claims that are deficient (the "Investors' Deficient Claim Amounts"). The Distribution Percentage can be represented mathematically as:

Interim Distribution Amount
____________________________________________________________
(Investors' Allowed Claim Amounts) + (Investors' Deficient Claim Amounts)

3. As of January 2, 2012, the aggregate of the Investors' Allowed Claim Amounts equaled $4,237,737,851.75, and the aggregate of the Investors' Deficient Claim Amounts equaled $893,487,080.90. The Distribution Percentage, therefore, is calculated as follows:

$55,000,000.00
________________________ = 1%
$5,131,224,932.65

4. Investor CD Claimants will receive distributions under the Interim Plan equal to their Allowed Claim Amounts as reflected in their Notices of Determination multiplied by the Distribution Percentage. The amount of a given Investor CD Claimant's interim distribution can be represented mathematically as:

(Particular investor's Allowed Claim Amount) x (Distribution Percentage)

5. If an Investor CD Claimant serves and files a timely objection to a Notice of Determination, the Investor CD Claimant is not disqualified from receiving a distribution under the Interim Plan. However, the Investor CD Claimant shall participate in this interim distribution based initially on the original Allowed Claim Amount in the Notice of Determination. If the Investor CD Claimant ultimately succeeds in increasing the Allowed Claim Amount (either by stipulation with the Receiver or by Court order sustaining the Investor CD Claimant's objection), the claimant shall receive a supplemental payment representing 1% of the difference between the Allowed Claim Amount in the Notice of Determination and the Allowed Claim Amount after final resolution of the claimant's objection.

6. To the extent a claimant receives one or more collateral recoveries, the Receiver will reduce payments to such a claimant to the extent necessary to ensure that all the Investor CD Claimants are treated equally with respect to the percentage of their Allowed Claim Amounts they recover from all sources as of the date of the payments.

7. Each Investor CD Claimant's interim distribution shall be based solely on his Investor CD Claims and not on his other types of Claims, if any.

8. Nothing in this Order shall preclude future distributions to Investor CD Claimants or other Claimants under a different plan. Nor shall anything in this Order restrict the Receiver's authority to compromise and settle any Claim, or resolve any objection to a determination, at any time, as appropriate, without further order of this Court.

Source.

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THE SECURITIES AND EXCHANGE COMMISSION APPEAL AGAINST SIPC

January 11, 2013
By SEC

The Commission has shown that SIPC should be required to file an application for a protective decree as to Stanford Group Company in the District Court for the Northern District of Texas.

In denying the Commission's application, the district court made two reversible errors:
First, it incorrectly applied a heightened preponderance standard of proof to the Commission's application rather than the more appropriate probable cause standard. Congress created in SIPA a specific process, within the context of a SIPA liquidation, in which investors must prove their claims for coverage under the Act, including their "customer" status, by a preponderance of the evidence. It makes no sense to apply the same standard to the Commission in proving "customer" status on behalf of investors in this preliminary, summary proceeding.

Moreover, Congress's overarching goals of promoting investor confidence in the securities markets by providing speedy relief for investors indicate that a lesser standard of proof should apply to the initial question of whether SIPC should initiate a liquidation. Indeed, perhaps in recognition of this, SIPC itself is held to a lesser standard when it applies to begin a liquidation. The district court was therefore incorrect in applying a higher standard of proof to the Commission, which is SIPC's plenary supervisor.

The district court's error in this regard was based upon the mistaken belief that the application of the provisions of the Exchange Act to SIPA shows a congressional intent to apply the preponderance standard. But there is no sound basis to analogize plenary proceedings under Exchange Act Section 21(e)—used to finally determine whether a permanent injunction should be granted—to this preliminary, summary proceeding used to determine whether SIPC should be required to apply to begin a liquidation proceeding.

Second, the district court incorrectly interpreted SIPA's customer definition to exclude investors who, because of the unusual operation of the Stanford companies, should be deemed to have deposited cash with SGC. The record here provides at least probable cause to believe that the purported legal separateness of SGC and SIBL should be disregarded, such that, by depositing cash with SIBL, SGC accountholders who purchased SIBL CDs through SGC were effectively depositing cash with SGC. Courts facing similar circumstances have disregarded the corporate separateness of SIPC members and non-member affiliated companies, with SIPC's support. The district court's contrary approach improperly elevates form over substance by strictly adhering to the corporate boundaries of the Stanford entities which were designed to perpetrate an egregious fraud.

Even apart from the lack of genuine separateness of the corporate entities, SIPA's "customer" definition includes those who can be deemed to have deposited cash with a broker-dealer under the Old Naples and Primeline cases. Those cases rejected the notion that "customer" status requires that cash be deposited directly with the broker-dealer, and held that investors in certain circumstances fell within the "customer" definition. Those cases are materially indistinguishable from this one, and the district court's belief otherwise was based on a misunderstanding both of those cases and of the record here.

Finally, the Commission's interpretation of SIPA's "customer" definition is the correct one and is, at the very least, a reasonable one entitled to deference under Chevron. The district court declined to give such deference because it perceived an inconsistency between the interpretation and certain past statements of the Commission. The Commission's past statements, however, clearly state only a general presumption and are fully consistent with the Commission's interpretation in this matter.

INITIAL BRIEF OF THE SECURITIES AND EXCHANGE COMMISSION, APPELLANT.

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SEC MOTION TO INTERVENE AND TO SUSPEND THE MEMORANDUM OPINION AND ORDER OF JULY 3, 2012

August 22, 2012
By Matthew T. Martens

Applicant U.S. Securities and Exchange Commission ("SEC" or "Commission") respectfully submits this memorandum of law in response to Robert Cheatham's Motion To Intervene and To Suspend the Memorandum Opinion and Order of July 3, 2012 ("Motion To Intervene").

Mr. Cheatham contends that he may intervene as of right in this proceeding pursuant to Federal Rule of Civil Procedure 24(a)(2). That provision states that intervention must be granted as of right, "[o]n timely motion," to anyone who "claims an interest relating to the property or transaction that is the subject of the action, and is so situated that disposing of the action may as a practical matter impair or impede the movant's ability to protect its interest, unless existing parties adequately represent that interest." In other words, the right of a party to intervene depends on the following four factors:

(1) the timeliness of the motion; (2) whether the applicant "claims an interest relating to the property or transaction which is the subject of the action"; (3) whether "the applicant is so situated that the disposition of the action may as a practical matter impair or impede the applicant's ability to protect that interest"; and (4) whether "the applicant's interest is adequately represented by existing parties.".

SEC Motion To Intervene and To Suspend the Memorandum Opinion and Order.

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