United States Securities and Exchange Commission v. Ahmed et al

Filing 1680

ORDER: For the reasons set forth in the attached ruling, Defendant's 1325 Motion to Alter Judgment is DENIED WITHOUT PREJUDICE. Signed by Judge Janet Bond Arterton on 11/5/20. (Brinn, Hope)

UNITED STATES DISTRICT COURT
DISTRICT OF CONNECTICUT

UNITED STATES SECURITIES AND EXCHANGE
COMMISSION,
Civil No. 3:15cv675 (JBA)
Plaintiff,
v.
IFTIKAR AHMED,
November 5th, 2020
Defendant, and
IFTIKAR ALI AHMED SOLE PROP; I-CUBED
DOMAINS, LLC; SHALINI AHMED; SHALINI AHMED
2014 GRANTOR RETAINED ANNUNITY TRUST;
DIYA HOLDINGS LLC; DIYA REAL HOLDINGS, LLC;
I.I. 1, a minor child, by and through his next friends
IFTIKAR and SHALINI AHMED, his parents; I.I. 2, a
minor child, by and through his next friends
IFTIKAR and SHALINI AHMED, his parents; and I.I.
3, a minor child, by and through his next friends
IFTIKAR and SHALINI AHMED, his parents,
Relief Defendants.

RULING DENYING DEFENDANT’S MOTION TO REDUCE DISGORGEMENT IN THIS CASE
FOR THE DEFAULT JUDGMENT ENTERED AGAINST HIM IN THE NMR E-TAILING NEW
YORK STATE PROCEEDING

Defendant requests that the Court reduce the disgorgement awarded in the instant case

“by the amount rendered against him (if so determined) in the New York Supreme Court case

NMR e-Tailing v. Oak, et. al, Index No. 656450/2017 (“NMR Case”).” (Def.’s Mot. [Doc. # 1325].)

Relief Defendants join Defendant’s Motion. ([Doc. # 1343].) The Securities and Exchange

Commission (“SEC”) opposes, arguing the motion is premature. ([Doc. # 1367].) The Receiver
takes no position. ([Doc. # 1358].) For the reasons that follow, Defendant’s motion is denied.

The Court assumes the parties’ familiarity with the history of this SEC enforcement
I.

Background

action, but will briefly review the background relevant to this motion. On October 18, 2017, NMR

filed suit against Oak Investment Partners and its related entities (“Oak”) and Defendant in the

New York Supreme Court. (NMR Case, Ex. A to NMR’s Mot. to Lift Lit. Stay [Doc. # 1097-1].) On

March 14, 2018, the New York Supreme Court entered a default judgment against Mr. Ahmed on

the issue of liability “as a result of his failing to answer or otherwise respond to NMR’s

complaint.” (NMR’s Mem. in Opp. [Doc. # 1368] at 2.) The issue of damages in the NMR Case is
reserved to trial, which is scheduled for November 2020. (Id. at 3.)

The doctrine of ripeness forbids the Court from deciding issues that are “mere
II.

Discussion

hypothetical questions.” AMSAT Cable Ltd. V. Cablevision of Conn., 6 F.3d 867, 872 (2d Cir. 1993).

In order for a case or controversy to be ripe, it cannot depend on “contingent future events that
may not occur as anticipated.” Thomas v. Union Carbide Agric. Prods. Co., 473 U.S. 568, 580 (1985).

“The doctrine’s major purpose ‘is to prevent the courts, through avoidance of premature

adjudication, from entangling themselves in abstract disagreements.’” National Organization for

Marriage, Inc. v. Walsh, 714 F.3d 682, 687 (2d Cir. 2013) (quoting Abbott Labs v. Gardner, 387

U.S. 136, 148 (1977), overruled on other grounds). While anticipated future injury generally

precludes a finding that a case is ripe for resolution, courts will sometimes recognize disputes as

ripe when fear of a future event may have an immediate impact on present affairs. See, e.g., Pierce

v. Society of Sisters, 268 U.S. 510 (1925). In such cases, a court may properly hear a dispute if

there is no reasonable likelihood that further factual development would “significantly advance

[the Court’s] ability to deal with the legal issues presented.” Nat’l Park Hospitality Assoc. v. Dep’t

of the Interior, 538 U.S. 803, 812 (2003).

The SEC asserts that Defendant’s motion is “plainly not ripe because it depends upon a

contingent future event,” namely “a monetary judgment in another case that may or may not be

imposed.” (SEC’s Mem. at 2.) The SEC further argues that “whether an offset could even be
arguably appropriate would necessarily depend on factors that have yet to be determined, such

as exactly how the judgment was styled, whether the judgment in that case does, in fact,
recompensate the same victims for the same conduct, etc.” (Id. at 2-3 (citing SEC v. Penn Central

Co., 425 F. Supp. 593, 599 (E.D. Pa. 1976)).)

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Defendant maintains that the doctrine of ripeness “actually totally supports the

Defendant’s position as both forms of ripeness, Constitutional Ripeness and Prudential Ripeness

(sic) are present here.” (Def.’s Reply [Doc. # 1384] at 2.) Defendant argues that since the New

York Supreme Court has already rendered a default judgment against him that there is therefore

an “actual or imminent” injury that is “not conjectural or hypothetical.” (Id.) He contends that

“[t]he factual issue of the amount of judgment that will be assessed in the NMR case is not

determinative of the legal issue that such amount must be offset against the disgorgement in this
case.” (Id. at 3.)

The Court agrees with the SEC and finds this motion to be premature. Defendant’s motion

specifically requests a reduction of disgorgement by the amount rendered against him in the

NMR Case only “if so determined.” Damages in the NMR Case have been reserved for trial and
the trial has not yet taken place. (NMR.’s Mem. in Opp. at 3.) Although Defendant insists that the

actual amount of damages awarded will have no impact on the legal dispute, this is not true. It is

possible, as Defendant acknowledges, that the New York Supreme Court could award no

damages to NMR in its lawsuit. In such a case, Defendant’s motion would be moot. Further factual

development in the NMR Case could therefore have a substantial impact on the Court’s resolution
of the legal issues, and the motion is thus not ripe for judicial resolution.

For the reasons set forth above, Defendant’s Motion to Reduce the Disgorgement [Doc. #
III.

Conclusion

1325] is DENIED as premature, without prejudice to renew.

IT IS SO ORDERED.

_______________________/s/________________________________
Janet Bond Arterton, U.S.D.J.

Dated at New Haven, Connecticut this 5th day of November 2020.

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