United States Securities and Exchange Commission v. Ahmed et al

Filing 2366

ORDER denying 2260 Motion Lift Litigation Stay; denying as moot 2276 Motion to Compel; denying as moot 2298 Motion to Compel. Signed by Judge Janet Bond Arterton on 10/24/2022. (Anderson, Colleen)

Case 3:15-cv-00675-JBA Document 2366 Filed 10/24/22 Page 1 of 4

UNITED STATES DISTRICT COURT
DISTRICT OF CONNECTICUT

UNITED STATES SECURITIES AND EXCHANGE
COMMISSION,
Plaintiff,
v.
IFTIKAR AHMED,
Defendant, and

Civil No. 3:15cv675 (JBA)
October 24, 2022

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.

RULING ON OMC’S MOTION TO LIFT THE LITIGATION STAY
Oak Management Corporation (“OMC”) moves to lift the litigation stay entered

by the Court (1) to domesticate an arbitration award and the judgment issued by a

New York state court to NMRE, assigned to OMC following a private settlement

agreement; and (2) to obtain a prejudgment remedy against the Ahmed property 505
North Street, Greenwich, Connecticut. (Mot. to Lift Lit. Stay [Doc. # 2260].) Receiver

takes no position on the request to domesticate the judgments, and takes no position
on allowing OMC to pursue a prejudgment remedy “provided that, if this Court grants

such relief, this Court also orders that OMC shall not take any action (including, but
not limited to, through the enforcement of its judgment or the creation, perfection, or
enforcement of any attachment, garnishment, lien, or other encumbrance) against

Case 3:15-cv-00675-JBA Document 2366 Filed 10/24/22 Page 2 of 4

any assets within the Receivership Estate absent further order of this Court.”

(Response to the Motion to Lift Lit. Stay by Receiver [Doc. # 2269])(emphasis in
original). Defendant Iftikar Ahmed and Relief Defendants object; the SEC has no

objection. (See SEC Response [Doc. # 2270]; Relief Defendants’ Objection [Doc. #
2281]; Mem. in Opp. by Iftikar Ahmed [Doc. # 2282].)

On July 26, 2022, Relief Defendants directed a subpoena to OMC for “[t]he final

executed settlement agreement detailing the terms of the settlement agreement

entered into between OMC and NMR e-Tailing in the case NMR e-Tailing v. Oak

Investment Partners, et al, Index No 656450/2017 in the Supreme Court of the State

of New York, New York County,” which they allege is relevant to the pending motion
to lift the litigation stay. (Mot. to Compel Ex. 1 [Doc. # 2276-1].) OMC did not comply
with the subpoena. (Mot. to Compel Ex. 2 [Doc. # 2276-2].) Relief Defendants moved
to compel disclosure, [Doc. # 2276], and Defendant Iftikar Ahmed filed an emergency
motion to compel as well. [Doc. # 2298].
I.

Discussion

A.

Domestication of the Arbitration Award and NMRE Judgment

The Court has previously set out the standard to lift a litigation stay and the

construction of the stay itself. (See Order [Doc. # 2361].)

Domestication of a judgment results in a judgment that is “treated in the same

manner as a judgment of a court” of the state it is domesticated in, meaning that it
“has the same effect, and is subject to the same procedures, defenses and proceedings
for reopening, vacating or staying as a judgment of a court of this state and may be

enforced or satisfied in like manner.” Conn. Gen. Stat. § 52-605. Domestication is not
an enforcement action, which is why domestication of other confirmed awards have

not interfered with the Receiver’s work thus far, nor have those parties run afoul of
the litigation stay by not seeking this Court’s permission to do so. (Id.) (citing Harris
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St. Laurent LLP, n/k/a Harris St. Laurent & Weschler LLP v. Ahmed, et al., Case No. FSTCV21-4031979-S, which domesticated a confirmed arbitration award against Relief

Defendants.) OMC also explicitly states that it will not seek to enforce the
domesticated award by seeking to collect; the domestication merely holds OMC’s

place in line among Defendant’s creditors. (See OMC’s Mot. at 6.) As previously ruled,

actions like domestication do not seek “to obtain possession of property of the
Receivership Estate,” and are instead administrative steps that do not affect any of
the Receivership Assets. (See [Doc. # 2361].)

The Court clarifies that the litigation stay in force here does not apply to the

domestication of the NMRE judgment and OMC’s arbitration award and the motion to

lift the stay for this purpose is thus denied as moot.
B.

Obtaining a Pre-Judgment Remedy against 505 North

The Court does not read OMC’s motion as seeking permission to file writs of

attachment against or otherwise disturb any assets that are part of the receivership
estate—only 505 North St., which is not a receivership asset. (OMC’s Reply at 3)
(“OMC’s Motion does not seek to attach any frozen assets that have been marked for
liquidation to satisfy the SEC’s judgment against Mr. Ahmed.”); (see also OMC’s Mot.

at 9). The litigation stay and preliminary injunction prohibit only actions that
interfere with the asset freeze order and that “impact the property and assets subject
to” the order. Because 505 North St. has never been covered by the asset freeze order,

nor is it subject to liquidation by the Receiver, it is not “subject to” either the stay or
the preliminary injunction, and thus the Court lacks jurisdiction over this property.
C.

Motions to Compel

Relief Defendant’s argument that the Court should not rule on the motion to

lift the stay until its subpoena to compel the settlement agreement between OMC and

NMRE can be enforced is misplaced. OMC’s motion to lift the stay to domesticate the
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NMRE judgment does not rely in any part on the substance of the settlement

agreement. (See OMC’s Mem. in Support of Lifting Stay.) Because the Court has no
basis for lifting the stay, as described above, the motions to compel are both denied

as moot.
II.

Conclusion

The Court DENIES the motion to lift the litigation stay to domesticate the

arbitration award and NMRE judgment, and to file a prejudgment remedy against 505

North St., as moot [Doc. # 2260] and DENIES the motion to compel [Doc. # 2276] and

the emergency motion to compel [Doc. # 2298] as moot.

IT IS SO ORDERED.

______/s/___________________________
Janet Bond Arterton, U.S.D.J.

Dated at New Haven, Connecticut this 24th day of October 2022.

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