Securities & Exchange Commission v. Sirotka

Filing 12

ORDERED: The Government's Unopposed Application to Intervene and for a Complete Stay (Doc. #8) is GRANTED. This action is STAYED until the conclusion of all proceedings in United States v. Sirotka, S1 Cr. 454 (S.D.N.Y.). The Clerk is DIRECTED to add a stay flag on the docket. The parties must FILE a status report on or before October 31, 2022, and every ninety (90) days after. The parties must immediately notify the Court when the criminal proceedings conclude. Signed by Judge Sheri Polster Chappell on 8/1/2022. (AEH)

UNITED STATES DISTRICT COURT
MIDDLE DISTRICT OF FLORIDA
FORT MYERS DIVISION
SECURITIES & EXCHANGE
COMMISSION,
Plaintiff,
v.

Case No.: 2:22-cv-348-SPC-NPM

ANTHONY SIROTKA,
Defendant.
/
ORDER 1
Before the Court is the Government’s Application to Intervene and for a
Complete Stay, to which Defendant Anthony Sirotka consents. (Doc. 8). A few
months ago, a federal grand jury in New York indicted Defendant for securities
fraud and other charges in United States v. Sirotka, S1 Cr. 454 (S.D.N.Y.).
(the “Criminal Case”). Plaintiff Securities and Exchange Commission (“SEC”)
then filed this action (the “Civil Case”) here. Both suits involve the same
conduct—the Civil Case is the civil enforcement analogue to the criminal
prosecution through the Criminal Case. (Doc. 8 at 15).

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In the Criminal Case, Defendant has pleaded not guilty, the Government
has produced most of the discovery, and the Court set a status conference for
October. To avoid this action interfering with its criminal counterpart, the
Government wants to intervene and stay this Civil Case. All parties consent
to that outcome.
A party can intervene by right or permission. Fed. R. Civ. P. 24(a)-(b).
To intervene as a right, movants must show the following:
(1) their application to intervene is timely; (2) they have an
interest relating to the property or transaction which is the
subject of the action; (3) they are so situated that
disposition of the action, as a practical matter, may impede
or impair their ability to protect that interest; and (4) their
interest is represented inadequately by the existing parties
to the suit.

Tech Training Assocs., Inc. v. Buccaneers Ltd. P’ship, 874 F.3d 692, 695-96
(11th Cir. 2017) (cleaned up). The Government meets that test.
The Government filed this Motion early in both Cases. It also has a
strong interest to prosecute the Criminal Case—which largely involves the
same conduct at issue here—and enforce federal criminal laws. Given the
overlap, the Civil Case would likely impede the Government’s ability to protect
those interests. And no current party adequately represents them in this Civil
Case.
So the Government can intervene as a right. Even if the Government
doesn’t have the right, the Court still exercises its discretion to permit

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intervention. See SEC v. Martin, No. 6:17-cv-01385-RBD-GJK, Doc. 150 (M.D.
Fla. June 5, 2020) (allowing permissive intervention). The Civil and Criminal
Cases involve common issues of law and fact. What’s more, the Government’s
intervention will not unduly delay or prejudice any parties’ rights.
Having concluded the Government can intervene, the Court turns to its
request to stay.

A district “court must stay a civil proceeding pending

resolution of a related criminal prosecution only when ‘special circumstances’
so require in the ‘interests of justice.’” United States v. Lot 5, Fox Grove,
Alachua Cnty., Fla., 23 F.3d 359, 364 (11th Cir. 1994) (citation omitted). In
deciding whether to grant a stay, many courts consider a list of factors:
(1) the extent to which the defendant’s Fifth Amendment
rights are implicated; (2) the interest of the non-movants
in proceeding expeditiously with the litigation or any
particular aspect of it, and the potential prejudice to them
as a result of delay; (3) the burden which any particular
aspect of the proceedings may impose on movants; (4) the
convenience of the court in the management of its cases
and the efficient use of judicial resources; (5) the interests
of persons not parties to the civil litigation; (6) the interests
of the public in the pending civil and criminal litigation;
and (7) the extent to which issues in the criminal and civil
cases overlap.

SEC v. Huff, No. 09-20087-CIV-LENARD/GARBER, 2010 WL 11447249, at *4
(S.D. Fla. Jan. 19, 2010). Considering the factors, the Court finds a stay to be
appropriate. Defendant’s Fifth Amendment rights are at stake if the Civil
Case continues. A stay will not prejudice any party’s interest in proceeding
now as the Motion is unopposed. Discovery in the Civil Case will hamper the
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Government’s prosecution of the Criminal Case. Resolving the Criminal Case
will likely streamline the issues in this action. The public has a strong interest
in preventing the civil discovery rules from being used to circumvent the
criminal discovery rules in the Criminal Case. And both cases concern the
same conduct and seeks to enforce federal law from different angles (civil
versus criminal). In short, a stay is proper.
Accordingly, it is now ORDERED:
The Government’s Unopposed Application to Intervene and for a
Complete Stay (Doc. 8) is GRANTED.
1. This action is STAYED until the conclusion of all proceedings in
United States v. Sirotka, S1 Cr. 454 (S.D.N.Y.).
2. The Clerk is DIRECTED to add a stay flag on the docket
3. The parties must FILE a status report on or before October 31,
2022, and every ninety (90) days after.

The parties must

immediately notify the Court when the criminal proceedings
conclude.
DONE and ORDERED in Fort Myers, Florida on August 1, 2022.

Copies: All Parties of Record

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