United States Securities and Exchange Commission v. Ahmed et al

Filing 2338

ORDER vacating 2308 Order granting Motion to Withdraw; granting in part and denying in part 2274 Motion to Withdraw; granting 2180 Motion for Electronic Filing Access; granting in part and denying in part 2313 Motion for Electronic Filing Access; striking in part 2312 Notice of Appearance; denying 2336 Motion to File Relief Defendants' Response to Receiver's Motion to Approve the Phase 1 Report by email. Signed by Judge Janet Bond Arterton on 9/16/2022. (Anderson, Colleen)

UNITED STATES DISTRICT COURT
DISTRICT OF CONNECTICUT

UNITED STATES SECURITIES AND EXCHANGE
COMMISSION,
Civil No. 3:15cv675 (JBA)
Plaintiff,
September 16, 2022
v.
IFTIKAR AHMED,
Defendant, and

IFTIKAR ALI AHMED SOLE PROP; I-CUBED
DOMAINS, LLC; SHALINI AHMED; SHALINI
AHMED 2014 GRANTOR RETAINED ANNUITY
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.

ENDORSEMENT ORDER
Shalini Ahmed filed a notice of appearance [Doc. # 2312] and a notice of support for

electronic filing and access [Doc. # 2313] to support her earlier motion for electronic filing
privileges [Doc. # 2180] after her former attorney Paul E. Knag’s motion for withdrawal on

behalf of himself and his firm Murtha Cullina was granted [Doc. # 2308]. In both notices, Ms.

Ahmed seeks permission to appear for and file on behalf of both herself and the remaining
Relief Defendants. (See Notice of Appearance [Doc. # 2312] at 1; Notice of Support for
Electronic Filing and Access [Doc. # 2313] at 1.) The SEC objects to both notices to the extent

Ms. Ahmed seeks to represent Relief Defendants other than herself. [Doc. # 2328]. For the

reasons set forth below, the Court vacates its prior order granting Murtha Cullina’s motion
for withdrawal [Doc. # 2308] in part, reinstates Murtha Cullina as counsel for all Relief

Defendants except Ms. Ahmed, and strikes the portion of both Ms. Ahmed’s notices [Doc. #
2312 and # 2313] by which she purports to represent parties other than herself.
I.

Procedural History

Attorney Paul E. Knag filed a motion on behalf of the Murtha Cullina firm to withdraw

from representing the Relief Defendants. [#2274]. Relief Defendant Shalini Ahmed

consented to the motion to withdraw, but the motion was silent as to the positions of the

remaining Relief Defendants: I-Cubed Domains, LLC, Shalini Ahmed 2014 Grantor Retained

Annuity Trust, DIYA Holdings, LLC, DIYA Real Holdings, LLC, and I.I. 1, I.I. 2, and I.I. 3 (the

Ahmed’s three children). (Id. at 3.) No party filed an opposition. The Court granted the

motion to withdraw with the understanding that Shalini Ahmed was consenting to the

withdrawal motion on behalf of all Relief Defendants, all of whom were “unable to
independently voice their view on the withdrawal motion” given their status as corporations
and minor children. [Doc. # 2308] at 3.

Following Murtha’s withdrawal, Ms. Ahmed filed a notice of appearance “on behalf of

herself; three minor children I.I. 1, I.I. 2, I.I. 3 as their next friend in this matter; I-Cubed

Domains, LLC; Shalini Ahmed 2014 Grantor Retained Annuity Trust; Diya Holdings, LLC; Diya
Real Holdings, LLC.” [Doc. # 2312]. She also filed a notice in support of her earlier motion for
electronic filing privileges asking that the privileges be granted “on behalf of herself, the

three minor children I.I. 1, I.I. 2, I.I. 3 as their next friend in this matter; and the Relief
Defendant entities, specifically I-Cubed Domains, LLC; Shalini Ahmed 2014 Grantor Retained
Annuity Trust; Diya Holdings, LLC; Diya Real Holdings, LLC.” [Doc. # 2313]. In both her

notices, Ms. Ahmed included a footnote stating that “the relief defendants comprising of the
three minor children and four entities did not consent to the withdrawal of Murtha Cullina
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as their counsel.” (See Notice of Appearance at 1; Notice of Support for E-Filing and Access at

1.) The SEC objects to Ms. Ahmed’s request to appear for and file on behalf of the remaining
Relief Defendants because while Ms. Ahmed has the “ability to speak on behalf of relief
defendants,” she may not “represent relief defendants in a court of law.” (SEC Object. at 4.)
II.

Discussion

A motion to withdraw under D. Conn. R. Civ. P. 7(e) “normally will not be granted

except upon a showing that other counsel has appeared or that the party whose counsel

seeks to withdraw may and has elected to proceed without counsel, and that the party has

received actual notice of the motion to withdraw." GEOMC Co. v. Calmare Therapeutics, Inc.,
No. 3:14-CV-1222 (VAB), 2020 WL 12880834, at *1 (D. Conn. Mar. 30, 2020). The Court’s

prior ruling was premised on the understanding that Shalini Ahmed had obtained effective

consent to the withdrawal motion on behalf of all Relief Defendants. However, she has now
advised the Court that this was not the case, changing the calculus under Rule 7(e). 1 While

non-payment of fees may be a sufficient ground for withdrawal, the Court must also weigh
“the impact of withdrawal” when considering such a motion. S.E.C. v. Gibraltar Glob. Sec.,

Inc., No. 13 CIV. 2575 GBD JCF, 2015 WL 2258173, at *1 (S.D.N.Y. May 8, 2015). Neither the
corporate nor the minor Relief Defendants can proceed pro se, nor can Ms. Ahmed

represent them, which poses a substantial and pressing issue with respect to the upcoming

September 21, 2022 deadline to file their responses to the Receiver’s Motion to Approve

the Phase 1 Report. See Millennium Pipeline Co., L.L.C. v. Acres of Land, Inc., No. 07-CV-6511,
2015 WL 13834659, at *1 (W.D.N.Y. Mar. 25, 2015) (“corporations must be represented by

1 As the S.E.C. observes, there has been some confusion as to whether Ms. Ahmed speaks only

for herself or for all Relief Defendants based on her representations in past motions. (See SEC
Object. at 5.) Ms. Ahmed is cautioned that she may not purport to be speaking on behalf of
the Relief Defendants in some instances but only for herself in others unless she notes such
distinction at the time the statement is made.
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counsel, and failure to appear with counsel may justify the entry of a default judgment

against a corporate defendant.”); Cheung v. Youth Orchestra Found. of Buffalo, Inc., 906 F.2d

59, 61 (2d Cir.1990) (“The choice to appear pro se is not a true choice for minors who
under state law, see Fed. R. Civ. P. 17(b), cannot determine their own legal actions.”);

Murphy v. Arlington Cent. Sch. Dist. Bd. of Educ., 297 F.3d 195, 201 (2d Cir.2002) (noting that
in the Second Circuit, “a non-attorney parent [like Ms. Ahmed] is precluded from

representing his or her child in federal court.”) Although the Court recognizes the financial

burden on Murtha Cullina, the resulting delay and disruption to the proceedings that would
be caused by leaving the remaining Relief Defendants unrepresented at this stage of the

litigation without their consent outweighs this burden. See Gibraltar Glob. Sec., Inc., 2015
WL 2258173 at *1 (denying a motion to withdraw despite nonpayment of fees when it
would disrupt the prosecution of the case and cause further delay.)

The Court thus sua sponte vacates its prior order granting the motion to withdraw,

and instead grants the motion to withdraw [Doc. # 2274] only as to the representation of
Shalini Ahmed but not the remaining Relief Defendants absent their proper consent.
III.

Conclusion

For the reasons discussed above, the Court VACATES the prior Order [Doc. # 2308]

granting Murtha Cullina’s motion to withdraw; GRANTS the motion to withdraw [Doc. #

2274] as to Shalini Ahmed only, and DENIES the motion as to the remaining Relief
Defendants.

The Court also GRANTS Ms. Ahmed’s motion for electronic filing privileges [Doc. #

2180] as to herself, DENIES her request to electronically file for the remaining Relief
Defendants, and it STRIKES IN PART Ms. Ahmed’s notice of appearance [Doc. # 2312] to the

extent it purports to be on behalf of the remaining Relief Defendants. In light of the foregoing,

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Ms. Ahmed’s motion to submit the Relief Defendants’ response to Receiver’s Phase 1 Report
via email [Doc. # 2336] is denied as moot.

IT IS SO ORDERED.

___________/s/______________________________

Janet Bond Arterton, U.S.D.J.

Dated at New Haven, Connecticut this 16th day of September, 2022

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