Securities and Exchange Commission v. Standford International Bank, Ltd. et al

Filing 1

SECOND AMENDED ORDER APPOINTING RECEIVER. Signed by David C. Godbey, United States District Judge, July 19, 2010. (Attachments: # 1 Summary, # 2 Preliminary Injunction and Other Equitable Relief as to R. Allen Stanford, # 3 Agreed Preliminary Injunction as to Stanford International Bank, LTD, Stanford Group Company and Stanford Capital Management, LLC and Agreed Order Granting Other Equitable Relief, # 4 Preliminary Injunction and Other Equitable Relief as to James M. Davis, # 5 Agreed Preliminary Injunction as to Laura Pendergest-Holt and Agreed Order Granting Other Equitable Relief)(lw)

S e c u r i t i e s and Exchange Commission v. Standford International Bank, Ltd. et al

Doc. 1

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Pas 0219/10 10ftu t*"jfir-tTTaoro 1130 Documont Flted cas 3:0e{v-00298-N
IN THE UNITED STATESDISTRICTCOIJRT

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.'

GLERK ctlBlsR,J0flNsfi'I,

DEPUTYfi-Eil(

AND SECTJRITIES H(CIIANGE C0MMISSION,

$ $ $ Plaintiffi $ $ v . $ $ BA}.II{, $ INTERNATIONAL STANFORD LTD,,efa1, $ $ Defendant, $
SBCOND

F s -l o ' l {
C i v i l ActionNo. 3;09-CV-298-N

motionfor entryof a eecond the 'C, ThisOrderadthesses S.E sndtheReceiver'sjoint ib thir receiver[958], OnFcbrurry17,2009 coun entered odef orderappointing amended order appointingreceiver [10]. On Mmch 12, 2009 this Court enteredits amended receiverI I 57]. nppointing for reenty ofthe otderis to allow him *ated mninprrrpose seeking TheReceiver'e shall, that of to comply with therequircmmts 28U,$.C.$ 754,twhichprovidee a'*receiver tTheReceivcr changes thc rcoeiveruhip to zub'stantive initiatly alm prtpoeedeeveral motion[986'99?'995'996' l00l' 1002]. parties to objected lhc Reoeivet's ordor ,Various the urd changes simplyasked Coun abafdoned ofhis requeeted nll In his rcply,theRecciver as Accordingly,thecourt overrules mootall the to rcenter orderfor secdon754purpoeea. ptopoeed changee' to ofthe objeotions the Reseiver's ordet'with orderis iahflticslto the ffrut ammded amsnded receivership Thieeecond (rEffwal of a provisionthatexpiredafter 180days,a clmifioation scvelalminorexceptions and may thattheReceiver not file forbmrkuptcyonbehalfofindividualdefendante' deletion .lelief tlefendsnf), Thecourt entgied fnst amcnded otdet u57l morethafl the of thetefln contertof to objections thesubstsnJive the ago. Aocordingty, Coun lmdsthatanSr oneyeaf, (otherthanobjections thc to this otder

ORD E R _ P A GEI

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and withm ten dnysaftertheentryofhis orderof appointncut,file copicsofihe complarnt in districtin whichpoperty ie located"' suchorderofappointment the distiot oourtfor each of has the The Reoeiver informed Courtthat aftertheexpirationof l0 fuys ffom the dates in roco,rds assete receiverrhip ordert,heidentifiedreotiveruhip and theoriginatrcoeivertlup havenot neceiver odet uppointing disticts in whichcopiesof the complaintsndamended juriedictioni these diBticte,the Counnow entelE beenfiled, Sothilt the Courtmayobtain rtceivet,z ameflded appointing ondcr this second IT IS THEREFORE ORDEREDthat: poesession ofthp assse, l. ThieCourtaesumes and excluaivejurirdiction tf,kss pru'perties, md permnal,tengibleandintangible, whatever real of kind eecudties, monies, anddeecription, wherever locateqendthe legallyreoognized fivilegee (with regardto the ofthe Defendants f,lI entities AeseteJ,and entities), and theyownor control("Receivership

waNeo, zVmious ?54 oowiehavsheldthata districtcowt msyreset En-daySe+rtion clock the tre order, See, S.E.C.v. VlslonCunmE'ns, e.9., Inc,,74F.3d287 by reentcring receiveruhip , ('otr ltfffi$d, thc oourtmayrcappoint rEoeivEr starttheten-d8y 291(D.C.cir, 1996) the ffid clockof $ 754ticking onceapin.'); S.E.C.v. AquacellBatHilffi,Izc., 2008WL 2915064, can at i3 (M.D. Fla, 2008)('[NJoncompliance with the etatute be 'curcd' by eubecquent frling afferrc-appointneflt theReceiver anyevcnt. . . ,"); Warffeld drpe, 2007WL of in v. at *l? (N,D, Tex,2W7) (Although the Fifth Cirtuit hs$rot spol(eron this 549467, particularimue,othercourtshaveheldthat a distict oourtmayreappoint federalequity a fraudcaee orderto 're$et'the l0-day olockrmder$ 754.'); Ierry in reoeivtrin a securitiee +3 havingaddrcssed issue this v. June,2001WL22125300, (W,D.Va. 2003)("[CJourts that unanimously suggest anordefof rcappoiffirentwill ffinewthc tendsy filing deadline WL mafld a teby Sectian754.\;SECv.HeadandGwup,ilnc.,2003 l030l5, ar 'r5(E.D. d ('-f[lhe court can easily correct this feihle to file such a olaim by merely Ill, 2003) the reappointing Receiver therebyutarting l&day time petiod uder $ 754 tioking the and onccmore."). _PAGE2 ORDER

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documentt, and frnancial accounting thebooh sndrecords, statement$, client liste,aocount telephoes, Eefl/cr6 hard drivee,computsrdisks,intemetexchange computer8computer , peruonaldigital deviceesnd othsr informationalresources or in poesession the of of by of Defendantsor iseued Defendanto in possession any agentor efllploypeof tbe , dnd ('Reccivership Records'J, Defeudants 2, RalphS, Janveyof Dallas,Texas,is herebyappointod Receiverfor the Reoods(collectively,"Receiverehip AtsetsBndReceivership Estate'),with Receivership the full power of an equity receivetundsr commonlaw aewell ae euchpowersas ate errumeffitshereinasof thedateofthh Ordor. TheReceiver d to shallnot berequired pffit a bondunlessdire*ed by the Courtbut is heilTby to ordered well endfaithfutly pedormthe dutiesofhis ofEcc:to timely accormt all monies, reourities, otherproperties and for whioh may comeinto hie hands;andto abideby andperformall dutiesset forth in this Oder. E"rcepfor anactofwillful malfeasaflce grostnegligence, Receiver t or the shallflot beliable incuned by the Receiverehip Betate,of any of Defendante, for any loseor damage tle Defefldentsclicntsm associates, their suboidimics affiliatss,their offrcers,dircctore, ' or of agentsatrdenrployees, by anyofDefendants' , or fieditors or equityholders ofany' bccause act performedor not performedby him or hie rgentsor aseigns oonnectio,n thc in with ofhis dutiesandrooponeibilitiee discharge hereundor. 3. The dutiesof the Receiver rtlating shallbe epecifioally limited to matters to the Recsiverchip Eetate unsEttled and olsimsthereofrmainingin the poeeeesiofl ofthe ar Reooiver of the dateof this Onder.Nothing in this Ordershallbe oonstrued require to

ORDER - PAGE3

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liquidatedand/ordistributed Bstateassets holtoforg of furthet inveetigation Receiverehip prior to iszuance thie order' Howwer' this Estate of settled or claimeof the Reoeiverthip paragraph shall not be constuedto limit tlre powereof the Roceiverin any regardwith pdor to the ilateoflhis Oider' rcsputo taflssctionsthatmayhaveoccuned t or 4. Until the expirationdate of this Ord,Er furthu Oder of this Court, to Receivorie authorized immediatelytske nfld have completeand exclusivoconFol, to possession, cuetodyof tbs Receivership and to any assets trEceable essets and Eetete Bstate, ownedby the Recelveruhlp and i8 the 5,Aeofthe dateofentry ofthis Order, Receiver tpecificallydirccted authorized performthe following nctsanddutiee: to (a)Maintainfull oonuolof theReoeivership Estflte with thepowerto retainor or any remove, the Rsceiverdeems necessary advieable, officer,dirtctot, as Bstste; iadepe'rrdecontmfior,cmployoe agentof the BeceivffEhip nt or (b) Collect,marshal, takecuetody, md conrol, andpossession all thefunds, of accounfrmail,andotherflseete fi m theposeeseiot undertheoontrolo[, , of, o'r the Receivership Bstale, sssets teceabloto assete or ownedor conkolledby the Receivership Eetate, the wherwer situated, iflcomeandpnofirtherefrom and all eurtrs moneynow or heresfterdue or owing to the Receivership of Estatewith full power to colleot,receive,end take poteesrionof wilhout limitation, all goods,chattel,rights, oredift, monies,effec'te, lands,leases, bookeand records,work papers,recordsof aocount,inoluding computr

ORDER-PAGE4

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moniee handifl batrks on frnncial records, informdtion, contrects, maintained of and other financial initiations, and olher papersand docunrents othet partnerships, oorporations are or whoscinterests nowheldby or individuals, poesession, Eet*e; custody, controlofthe Roceivemhip or und,ethedireotion, r a trust obtain to (c) Iilstitutesuchactio{sor proceedings impose constuctivE judgmantwith respect perso'Ds entitieswho to or poeseesion, and/orrocovet Estate' All euch or receivedassets recordstaceable to the Receivership actionsshnllbe filed in this Courtl (d) Obtain, Hteentation accorrnts, by boola,records, ofthis Ordor,documents, within the cuetody contmlof any or ot depositstestimony, otherinfotmation , properties, liabilitioe,cauees person ontit5t of or sufficientto identifuaccounh, E$tate. attetdance person or action,or employeoe ofthe Rec+iveruhip The ofa may and/orproduution documents becompelled of in entity for exammation rhe a mamerprovidedin Rule45, Feil, R. Civ. P., or aeprovidedund.er lawr of any foreign country whore suohdocumente, booh, records,accormts, maybelocated; depositsor testimony , (e)trlVithout with the and,ifneceesary, theflssistsnce locdl of breaching peace ary peaceofficers or UnrtedSlatesrrarghals enterafld $ecurc premises, to locatdor sitrated,iu ordetto takeposeessiofl, oustody, contol or wherever or Estlte aesets of, or to identif the locationor existeflce Receivership of recorde;

*PAGB 5 ORDER

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(0 Make zuoh otdinary and nececefiy paymente,disttibutions, and fldvisable properfot themarshaling' or de+ms disbursements theReoeiver aF is Estate' Receiver furthet ofthe Receivemhip mdnlcnanoeor preservation , authorized to cofltmst a[d tregotiste with any claimants egafustthe for (hcluding, withoutlimitation,creditoru) thepurpose Eutste Receivership in in or of complomieing sottlinganyclaim. To thir purpose, thoseinstanoes fieditom, thc Bstate88set8 8s $erve coll4temlto sscured which Receiverrhip to Reoeiverhas the authority to sunendersuch assete seoucd crcditots, ofcollateral; conditiouauponthe wniverof anydoficianoy t (g) Performfi,ll actsneoessary conserve, the to and hold, manage, preserve Estate,in order to prtvent any irreparrblelosr, value of the Receivership damageandinjury to theEstate; , (h) Enterinto suchagrcements conncction with the admini8trBtion ofthe in of Estate,itrcludif,g,but not limited.to, the employment euch Receiverthip iuvestigators,attorneys,and marragersagents,custodians,consultatrts, , to as neoeesafy pelfoffi theduties forth in this set udges flocountant8 Receiverj themfrom theReccivership Ascets; Orderandto comperuate partyto (i) Institute,prosecutei adjust,intervene or beoome in, comprcmise, federal, fore4n oourts theReceiver thal or or in suchactions proaeedings state, the ard deemsneooeeary advisabk to preservo value of the Receivership ncaessary advisable carry out tlE to and Estate, that the Receiver or deems

ORDER-PAGE 6

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or comprumise, Rcoeiver'e uilderthis Orderandlikewiseio defend, mflndate institiled of adjuetor otherwisedispose any or all actioneor pruoeedinge and againstthe Reociverehip Bstatethat the Receiverdeeml neoessary mffidatre advisable ctrry out the Receiver's rmderthis Order; to in the Eststeandminimizeoxpenees fintherance of fi) Preserve Receive$hip thereofto claimants; maximumandtimely disbrffsoment agEncies witlr tnd ft) Ptomptlypmvidethe Commiseion othergovernmental they may seekin conneotion witlt its all informationqfld documentstion or aotivitiee; rogulatory invesUgatory (l) Prepare and submitpenodicftports ts this Court and to the partier as by directed this Court; feee (m) File with thiuCourtrcquests approval rcaso,nable to bepaidto for of the Receiverandafly pereon entity retainedby him andinterim andfif,al or bccountingfor anyrcasonable s to expenses inourrcdatrdpaidpurzuant order of thie Court power and authorityto 6, The Rcceivetshsll havethe sole snd enclueive md and manage direotthe bueine$$ financialaffairsof the Defedants, includingwitlout powerurd authorityto pelition for relief undertheUnited limitation,thesoleandexclusive (the Bankuptoy 1l Code, U,S,C. l0l efseg. "BartlrupcyCode')for rry or all of Stste$ $$ without firrtlrcr Cou ordu, to the corporate DefendanB.The Rcceivgris not authorized, petitionfor rcliefunderthc Bankuptcy Codefor any ofthe IndividualDefcndante, Solely

7 ORDER-PAGE

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to with rcspcctto the suthorization file snd exefiItiofl of a petitronfor rclisf uaderthe law withoutlimiting anypowera ofthe Receiver underapplicsble andthie BarrkruptoCode; y corpoftteorymlaingdoouments, in of Orrderandineepective provisions anyDefendant's ; to to ngreemente, thelike, theReceiver ehallbedeemad succsed the or byJaws,partnership and the positionof andposeess authorityof anyprny with powerto authorize executs the llling of s petition for relief under the Banlnptcy Codq including without limiqtion general limitedprtrere, andmembers and oflimited liability companies. corporate directors, 6 the nnrst 7, Beforetakjng astionunderpsragroph of this Onder, Receiver providetheCommiseion theDefendmts dnys'writtennotice and with at leasttwo buoiness (unless or action by shortened lenglhened oourtorder)thst the Recciveris contemplatiflg underthe Banknrprcy Code;providedthatthe Rooeivwmay applyfor an orderundereeal require. To facilitateanefficientcoordination in or ahwring ln camen,ascircumBtanc,cs onedistricl ofall bsnlduptcies the ofthe Defendants, NorthemDistrict ofTaxa$shsllbethe principal plnceof business makingdecisione respeot operating and for in of Reoeiver'e assets, ard of dirposingof eaoh the Defendants lheir respective 8. Upon the requeut the Receiver, Uflited SlntesMarehsl'$Office is the of herebyordercd aesist Receiver carryingouthi$ dutiet to tskepoeeession, to in curtody, the or co,ntfol or itleltifu tbe locationof, anyReoeivership of, Eststeassebor records, 9, Creditors all otherpereons hereby are restainedanderrjoined from the and cquitable exceptin this Coufi,unless Court,consigtent gnneral this fotlowingactions, with principals in accordnnce its ancillaryequitablejrriidictionin thism'attqr, with and ordertthar

8 ORDER-PAGE

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in forumorjurisdiction; suchafiions maybe conduotod another (a)Thecommencemrdlt continueticrn, including issuance omployment the ol or agninet the of proocrs,of nny judicial, adminieretive,ot othgr Proceeding Receiveranyofthe defendante, Reoeivership , Estate, Enyageff,offlcer, or the to iverchip EBtate, arisingfromtheBubject rclated theRece mattEr or employee of thi8 civil sction;or (b) The Enforcement, agahstthe Receiver, any of the defendrnts, any or of jrrdgmeirt would attachto or encumber Reoeiver$hip that was the Estste that obtf,ined beforcthe qouunenaernent this proceeding, of 10.Creditors all othorpersons hereby and and me reetrained enjoined, without prior approval theCourt,fromr of (a) Any act to obtainposseeeion ofthe Receiverehip Estate assets; (b) Any f,rt to crtste, perfsct,or cnforceany lien ryainstthepropertyofthc Reoeiveror theReceivcrship , Estate; (c) Any aotto collcat,aesess, recovera olaimegainltthe Reoeiver thflt or or to wouldattach or enurmber Receivorship the Bstate; (d) ThesetDffofany debtowedby theReasiverlhip Estate secured the or by Estalesssets Receiverehip based any claim againstthe Receiveror the on Reoeivetship Eetete; or (e)Thefiling ofany oaae, petition,or motiqnundertheBunlruptcy complaint, Code(including,without limitation,the filing of m involuntarybankruptcy

ORDER-FAGE9

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or petitionunderchapter or chaPter I ofthe BurlcuptcyCode, epetitionfo'r 7 I rmderchapter15of theBrukuptoy Code) of recognition forcignprooeeding to with resFect sny Defondont. and their sflal officeH,4gpn18, e ployees allpersons I I . Defondante, respeotive or in activeooncert pffticipetion wirh themwho receiw notice of this Orderby pcrsonal including,but not limited to, anyfinmrcialinstitution,broker-dealer, serviceor otherwise, privateequityfirnd or investmef,t bdnkingfrrn),andeachof them,8re irwestmcnadvieer, t herrcby orderedrestraine4andenjoinedfrom, directlyor indircotly,makingmy payment Estflteatretsth6t aft ownedby Deftndsntsor in the or expendin[eof any Receivership poeseeeion anyentity direorlyor indire+tlyownedor contolled or of actufllor oonttructive under oommon oofirl with the Receivetrhip Eetate, or effccting any sale, gifr,

transf,r, encumbrance, dissipatiofl, hlpotheoationassignmsnf, , coDveyance, disburseme'nt, and of A or co'ncealmcnt suchsseets. copyofthis Ordermaybeoovedonanybm q savings or institutiotr ttstain andenjoinany to loan,broker-dealer, anyothetfmancialor depouitory any assets, Uponprcsentment of suchinstitutionfrom dfuburuing ofthe Receivership EstEte including finarciel instinrtione,rhall prcvide accountbalanoe this Order, all persone, information, records any otherReceivership and Records Eaffaotionhisto es,all account to the Receiveror his afents, in the samemanneras they would be providedwere the ofl Receiver signstory the acoouflt. the and 12.Defcndantr, their reepective and sge,rts, officcts, andemployees ell perso,nin activeconcenor participation s finm doinganyact with themoreherebyenjoined

O R D E R - P A G E10

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or thing whatroeverto interfe,rewith the Reoeiver'staking oo'nttol,polsoseion,or or or Estate to in anywny interferewith the Receiver to management ofthe Receivership with the. or or harass interferewith the dutiesof tho Receiver to if,terferein any riranner juriediction of thie Court over the Receivership Estate,inoludingtho filmg or exclueive proeeoutif,g actionsor proceedings afly which involve the Receiveror whioh affect the initiated includingmy proceedif,g Assete Reoeivership Reootds, Receiveuhip or speoifrcally pursrffrnto the UnitedStates t ofthi8 Court. Bankruptoy Code,exceptwith the permission AffeB and Any actionsso authorizedto detorminedisputesrelating to Receivrship Rec+ive.rshRecorde ip shallbefiled in this Court, 13, agsnte, employees all poruons Defendants, re*peotive thefu offfccrs, and and in active oo,flcert participetiof,with them who rcoeiveactrnl notice of this Orderby or personaserrioeor otherwiee, l inoludinganyfmancialinstitution,broker-dealer, inwstment adviserprivateequityfinrd or invefimentbilking firm, andeachof ttremehall: , (t) To the extsntthey hav6poaeeeeion, provide cuetody, oof,trolof eflme, or ifi[nediete aocess and oontrulandpossession the Receivership to Estate of and includingsecuritiee, assets rccords, monies, propettyof anykind real and and penonal, includitg all keye, pesswords, entry codes,and all moniee to depocited any bankdepoeited the crcdit of thc Defendrnts, in wherever situatedandtheoriginalofall books,records, , conrputer documeDts, flccounts, printouh, dislce, thelike ofDcfendant to Re+eivet his duly authorizcd and or agents;

II ORDER-PAGE

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agenlrby promptly (b) Cooperate with the Reoeiver his duly uuthorized mcl regarding for Rcceivership alt audhonoetlrespondingto mquerw informatron y Asstsand Recordr srd by promptly aclnowledgingto third padies the Estaie gnd by Receiver'sauthority to f,ct on behalf of the Receivetship prcvidingsuchauihorizauonr, atteststions, ac+ess and as releases, sigrmtucs, tbeReceiver hieduly authorieed agents request; ot mayreasonably (c) Provide Commiesion aprompt, uccournhg all Receivership ffrll of the with and which Fstrte a,B8ets docuflcntsouEidethe tenitory of tbeUilited States meheldeither {l) by therq (2) for their benefit,or (3) undertheir control; (d) Tmnsfer therenitory of theUnitedSts&sall Rspiveirhip t0 Estate assots in heldeither:(1) by thern,(2) for their betrefit, andrecords foreignoounhies ot (3) undcrthek control;and (e) Hold and retdn all such rspauistedReceivership ard Estete Bdsete or of document6ndFevent Enytransfer, e di$poeitio,n, dieeipation whateoever time re theymaybetrunsferted $nysuc.h sssct$ iloouments, suoh or until into theposseseiofl ofthe Receiver, priveteequity 14.Aay fuucial hstitution"bioker.dealer, invostnentddviser; firtrd or inve$tment bonkingfirm or personthat holds,coutrols,or mahtainsrccou ts or arsets or oubehalfof my Defenilant, hasheld,controlle{ or frairtained any acoount of or sinceJsruary I , I 990,sha[: or asset or on behalfof any defendant of

O R D B R . P A G E12

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(a) Hold andretainwithin ite confipl snd prohibit the witlrdrawrl"removal, encu-[*oce, disbursemerrt, assignmenttransfet,pledge, trypoihe+ation, , fimds, ofany ofthe assets, sale, dissipationconveruion, gift, ot otherdisposal , in or other property held by or on behalf of any deferrdant any account in in maintained the nameofor for the benefitof anydefendant wholeor in part exoept: (i) asdircctedby finthcr orderof this Coutt,or (ii) asdircciedin writing by the Receiver his agenft; or (b) Deny dcce$B any safedepoeit by boxesthat art subjectto access any to Defendantand ; mayobtain,by pretentation this Order, (c) The Commiesion Receiver and of information records, orothef, within the boolcs, aocounte, deposits, documents, cuetodyor control of any peffionor entity sufficient to idsfiiry accounts, propefrie$, liabilities, causes aclion, or employoes the Receiverehip of sf ptoduction and/or Egtste, attendsnce psrsoror entityfo'rexamination ofa The pruvided Rulc45,Fed,R, Civ. in in of documenls becompelled s manner mny the documents, P,or asprovided under lawsofany foreip oounty wheteeuch ftay belocated; deposits, testirnony or books,rrcotds,accoutrts, in and and I5, TtreDefendante, officcrs,agents, cmployees all persous lheir who or witlt themard otherpersons havenoticeof this Ordetby activeconoert participation mutilating, porsonal rcstainedandenjoined ftom destroying, servico otherwiso, hereby or ate

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altedng,tansferring, ot otherwisedrsposilg of, in any manncr,directly ot concealing, tapes' advertisements' computer indirecfly,anyconracts,sccomtingdat8,cottespondenc+, notes, handwritten reoords, booke, \a,ntten printedrecorde, or disksor othercomputerlzed and csnceled telepho,nlogs,telephone e soripts,receiptbooke,Iedgerl,personal businees appointnsntbooks,copicsof fedeml,shte' or and baflkstfltemertrt8, checks checkrcgi8ters, tax and or of incoffre property retums, otherdocuments records or localbusinese pErsonal or Bstate arerclwant to this sction' or anykind thst rclste in anyway to theReceive$hip arrtbodzed makeap,p,ropdate to notificatioflto the 16,TheReceiver hereby is or to Postal Service fotwarddclivcryofany mail addreeeed theDefendants, to Udted Statcs and to Bnycompany entityunderthedirection oontrolofthe Defendants, himself,Further, or to and all theReceiver hettby authonzed open inspeot suchmsil to deteffiinethelocetion is or and or identityof acsets theexistence amountof claim8. 17.Nothing in this Ordersballprohibitany fedemlor ststelaw enforcemetrt or an the or regulatory authorityfrom comnencing proeocuting actionsgainst Defendants, thek agents, offrc+n,or employees,

14 ORDER*PAGE

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Signed July 19,2010.

15 ORDER_PAGE