SECURITIES AND EXCHANGE COMMISSION v. VEROS PARTNERS, INC et al

Filing 229

ORDER - Mr. Senefeld's 189 Motion for Summary Judgment is DENIED. The Court requests that the Magistrate Judge confer with the SEC and Mr. Senefeld to address the possibility of an agreed resolution, or to establish a schedule for trial. (See Order.) Signed by Judge Jane Magnus-Stinson on 6/22/2016. (GSO)

UNITED STATES DISTRICT COURT
SOUTHERN DISTRICT OF INDIANA
INDIANAPOLIS DIVISION
UNITED STATES SECURITIES
COMMISSION,

EXCHANGE )
)
)
Plaintiff,
)
)
vs.
)
)
VEROS PARTNERS, INC., MATTHEW HAAB, JEF- )
FERY B. RISINGER, VEROS FARM LOAN HOLDING )
LLC, TOBIN J. SENEFELD, FARMGROWCAP )
LLC, PINCAP LLC, and PIN FINANCIAL LLC,
)
)
)
Defendants.
AND

No. 1:15-cv-00659-JMS-MJD

ORDER
Presently pending before the Court in this case brought under the Securities Act of 1933
(the “Securities Act”) and the Securities Exchange Act of 1934 (the “Exchange Act”) is Defendant
Tobin Senefeld’s Motion for Summary Judgment, [Filing No. 189].
I.
STANDARD OF REVIEW
A motion for summary judgment asks the Court to find that a trial is unnecessary because
there is no genuine dispute as to any material fact and, instead, the movant is entitled to judgment
as a matter of law. See Fed. R. Civ. P. 56(a). Whether a party asserts that a fact is undisputed or
genuinely disputed, the party must support the asserted fact by citing to particular parts of the
record, including depositions, documents, or affidavits. Fed. R. Civ. P. 56(c)(1)(A). A party can
also support a fact by showing that the materials cited do not establish the absence or presence of
a genuine dispute or that the adverse party cannot produce admissible evidence to support the fact.
Fed. R. Civ. P. 56(c)(1)(B). Affidavits or declarations must be made on personal knowledge, set
out facts that would be admissible in evidence, and show that the affiant is competent to testify on
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matters stated. Fed. R. Civ. P. 56(c)(4). Failure to properly support a fact in opposition to a
movant’s factual assertion can result in the movant’s fact being considered undisputed, and potentially in the grant of summary judgment. Fed. R. Civ. P. 56(e).
In deciding a motion for summary judgment, the Court need only consider disputed facts
that are material to the decision. A disputed fact is material if it might affect the outcome of the
suit under the governing law. Hampton v. Ford Motor Co., 561 F.3d 709, 713 (7th Cir. 2009). In
other words, while there may be facts that are in dispute, summary judgment is appropriate if those
facts are not outcome determinative. Harper v. Vigilant Ins. Co., 433 F.3d 521, 525 (7th Cir.
2005). Fact disputes that are irrelevant to the legal question will not be considered. Anderson v.
Liberty Lobby, Inc., 477 U.S. 242, 248, 106 S. Ct. 2505, 91 L.Ed. 202 (1986).
On summary judgment, a party must show the Court what evidence it has that would convince a trier of fact to accept its version of the events. Johnson v. Cambridge Indus., 325 F.3d
892, 901 (7th Cir. 2003). The moving party is entitled to summary judgment if no reasonable factfinder could return a verdict for the non-moving party. Nelson v. Miller, 570 F.3d 868, 875 (7th
Cir. 2009). The Court views the record in the light most favorable to the non-moving party and
draws all reasonable inferences in that party’s favor. Darst v. Interstate Brands Corp., 512 F.3d
903, 907 (7th Cir. 2008). It cannot weigh evidence or make credibility determinations on summary
judgment because those tasks are left to the fact-finder. O’Leary v. Accretive Health, Inc., 657
F.3d 625, 630 (7th Cir. 2011). The Court need only consider the cited materials, Fed. R. Civ. P.
56(c)(3), and the Seventh Circuit Court of Appeals has “repeatedly assured the district courts that
they are not required to scour every inch of the record for evidence that is potentially relevant to
the summary judgment motion before them,” Johnson, 325 F.3d at 898. Any doubt as to the

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existence of a genuine issue for trial is resolved against the moving party. Ponsetti v. GE Pension
Plan, 614 F.3d 684, 691 (7th Cir. 2010).
As discussed below, the Court finds that numerous genuine issues of fact exist, making
summary judgment in favor of Mr. Senefeld inappropriate. In reaching that conclusion, the Court
need not address every factual discrepancy the SEC enumerates, but will discuss the key factual
disputes that preclude summary judgment. The Court will first set forth background information
regarding the dispute between the parties and a brief summary of relevant securities law, before
discussing the fact issues that exist.
II.
BACKGROUND 1
Veros Partners, Inc. (“Veros”) is an SEC-registered investment advisor located in Indianapolis, Indiana. [Filing No. 57 at 1.] Defendant Matthew Haab is Veros’ President and Defendant
Jeffrey Risinger is an attorney who has performed legal work for Veros and Mr. Haab. [Filing No.
57 at 5.] Pin Financial LLC (“Pin Financial”), a Relief Defendant in this matter, has been the
placement agent for certain private offerings made to Veros’ advisory clients, and Mr. Senefeld is
the Chief Executive Officer of, and a registered representative with, Pin Financial. [Filing No. 57
at 5.] Defendant Veros Farm Loan Holding LLC (“VFLH”) is an issuer of securities, and is managed by Veros. [Filing No. 57 at 5.] Defendants FarmGrowCap LLC (“FarmGrowCap”) and
PinCap LLC (“PinCap”) are also issuers of securities, and are based out of Mr. Risinger’s law
office in Carmel, Indiana. [Filing No. 57 at 5-7.]

1

These background facts are taken in part from the Amended Complaint, [Filing No. 57], as they
are basic background facts that are undisputed by the parties. The Court will discuss the facts
relevant to the pending motion, including Mr. Senefeld’s specific role in connection with the investments in question, later in this opinion.
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Veros had approximately 300 advisory clients in June 2015. [Filing No. 57 at 6.] Mr.
Haab and Adam Decker founded Veros and were majority owners. [Filing No. 191-1 at 5.] In
2009, Mr. Senefeld approached Mr. Haab with a farm loan opportunity that was subsequently
offered to Veros clients and other investors through a private offering. [Filing No. 9-4 at 18-19;
Filing No. 198-5 at 10-11.] This was followed by other farm loan opportunities which Mr. Senefeld presented to Mr. Haab, and which were ultimately offered to Veros clients or other investors.
[Filing No. 9-4 at 19; Filing No. 9-4 at 25; Filing No. 10-1 at 8-9; Filing No. 198-5 at 11.] These
private offerings included:
•

Crossroads Family Farms 2012 Loan: $3,370,000 was raised from investors,
the stated rate of return for investors was 12% annually, and the investors were
supposed to be repaid their principal and interest by March 30, 2013. [Filing
No. 31-1 at 1];

•

Kirbach Farms 2012 Loan: $1,430,000 was raised from investors, the stated
rate of return for investors was 11.5% annually, and the investors were supposed to be repaid their principal and interest by March 30, 2013. [Filing No.
31-1 at 1];

•

VFLH Offering: $9,664,000 was raised from investors, the stated rate of return
for investors was 10% annually, and the investors were supposed to be repaid
their principal and interest by April 30, 2014. [Filing No. 31-1 at 1];

•

PinCap Interim Financing Offering: $5,200,000 was raised from investors, the
stated rate of return for investors was 1.5% per month, and the investors were
supposed to be repaid their principal and interest by April 30, 2014. [Filing No.
31-1 at 2.]

•

FarmGrowCap Offering: $11,045,482 was raised from investors, the stated rate
of return for investors was 9% annually, and the investors were supposed to be
repaid their principal and interest by April 30, 2015. [Filing No. 31-1 at 2.]

These offerings were all separate investments with separate offering materials and separate groups
of investors. [Filing No. 9-4 at 19; Filing No. 9-4 at 50-51.]
On April 22, 2015, Plaintiff the United States Securities and Exchange Commission (the
“SEC”) filed this lawsuit against Mr. Senefeld, Mr. Haab, Mr. Risinger, VFLH, FarmGrowCap,
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Veros, and PinCap on April 22, 2015, [Filing No. 1], and filed the operative Amended Complaint
against the same Defendants on June 11, 2015, [Filing No. 57]. In the Amended Complaint, the
SEC alleges that investors purchased securities issued in 2013 by VFLH and in 2014 by
FarmGrowCap. [Filing No. 57 at 1.] The SEC alleges that both VFLH and FarmGrowCap are
controlled and operated by Mr. Haab, Mr. Risinger, and Mr. Senefeld. [Filing No. 57 at 2.] It
claims that the investors in the 2013 and 2014 offerings were told either orally or in writing by Mr.
Haab, and in the written offering documents, that “investor funds would be used to make shortterm operating loans to farmers for the 2013 and 2014 growing seasons.” [Filing No. 57 at 2.]
The SEC alleges that, instead, “significant portions of the loan proceeds were not used for current
farming operations but were used to cover the farms’ prior, unpaid debt. In addition, Haab,
Risinger, and Senefeld used money from the 2013 and 2014 Offerings to make approximately $7
million in payments to investors in other offerings and to pay themselves over $800,000 in undisclosed ‘success’ and ‘interest rate spread’ fees.” [Filing No. 57 at 2.]
The SEC sets forth several other actions taken by Mr. Haab, Mr. Risinger, and Mr. Senefeld
that they contend were improper. [Filing No. 57 at 2-3.] In particular, the SEC alleges that money
from the 2013 and 2014 offerings was used to repay investors from offerings made in the previous
year. [Filing No. 57 at 11; Filing No. 57 at 22.] The SEC asserts that amounts owed to investors
in connection with both the 2013 and 2014 offerings are past due. [See, e.g., Filing No. 57 at 2426 (alleging that farm loans funded by 2014 offering are past due with a $7 million shortfall).]
The SEC asserts claims for: (1) violations of Section 10(b) and Rule 10b-5 of the Exchange
Act against all Defendants; (2) violations of Section 17(a)(1) of the Securities Act against all Defendants; (3) violations of Sections 17(a)(2) and (a)(3) of the Securities Act against all Defendants;
(4) violations of Sections 206(1) and (2) of the Investment Advisers Act against Mr. Haab and

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Veros; (5) violations of Sections 206(4) of the Investment Advisers Act and Rule 206(4)-2 against
Veros; and (6) a claim against Relief Defendant Pin Financial, who allegedly “received improper
and illegal transfers of investor money from Defendants, even though it had no right to receive any
investor funds.” [Filing No. 57 at 26-30.]
III.
DISCUSSION
Mr. Senefeld argues that he is not liable for violations of § 10(b), as implemented by Rule
10b-5, as a matter of law because he was not the “maker” of any disclosures to investors, he did
not cause any misstatements to be made, and he did not have a fiduciary duty to the investors.
[Filing No. 190 at 23-26.] He also alleges that he did not engage in manipulative or deceptive acts,
and did not act with scienter. [Filing No. 190 at 26-31.] Similarly, Mr. Senefeld argues that the
SEC cannot show he was the “seller” or “offeror” of securities, which he contends is needed for a
§ 17(a) claim. [Filing No. 190 at 32.] He also contends that the SEC cannot show he employed a
“device, scheme or artifice to defraud,” or that he acted with scienter. [Filing No. 190 at 32-33.]
The SEC responds that Mr. Senefeld can be liable under § 17(a)(1) and (a)(3), § 10(b), and
Rule 10b-5 as a participant in a fraudulent scheme with other Defendants, and that he need not
have had direct contact with investors or made direct statements to investors. [Filing No. 197 at
27.] The SEC contends that Mr. Senefeld was “an important participant in a fraudulent scheme,”
and that he acted with scienter because he was “at least reckless in not knowing that the Defendants’ scheme, and his own conduct, defrauded investors….” [Filing No. 197 at 28-30.] The SEC
also argues that Mr. Senefeld may be found liable under § 17(a)(2) and (a)(3), § 10(b), and Rule
10b-5 because he used misleading statements in materials provided to investors in order to obtain
“success fees” that were not disclosed to investors. [Filing No. 197 at 31.] The SEC argues that,

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for purposes of its claims under § 17(a)(2) and (a)(3), Mr. Senefeld at least acted negligently because he “had knowledge and expertise regarding farm loans” and a reasonable trier of fact could
conclude that he “breached a duty of care by failing to advise the VFLH and FarmGrowCap investors that the 2012 and 2013 farm loans had not been profitable, and that Defendants’ plans to
repay prior investors with VFLH and FarmGrowCap offering funds made it less likely that the
new farm loans would ever be profitable.” [Filing No. 197 at 32-33.]
On reply, Mr. Senefeld argues that evidence the SEC submitted in response to his Motion
for Summary Judgment is inadmissible, including: (1) unauthenticated emails; (2) statements in
Declarations that contradict the declarant’s prior, sworn testimony; (3) evidence that constitutes
speculation; and (4) evidence that relates to facts not relevant to the SEC’s claims in this lawsuit.
[Filing No. 208 at 1-12.] Mr. Senefeld argues that the material facts remain undisputed, including
that he “did not write or control the content of the [private placement memoranda (“PPMs”)] or
other disclosures to investors and did not disseminate them to Veros investors,” Mr. Haab was in
control over what loans were offered as investments to investors, and Mr. Senefeld was responsible
for communicating with the farmers and not the investors. [Filing No. 208 at 12-13.] He asserts
that the SEC has not identified any actions he took that support liability for primary violations of
securities laws, that he was not the “maker” of disclosures to the investors, that the SEC cannot
establish that he caused Mr. Haab or Mr. Risinger to make any misleading statements, that the
SEC has not identified any deceptive acts by him, and that the SEC has not identified any duty he
owed to “[Mr.] Haab’s investors.” [Filing No. 208 at 14-20.]
In its surreply, the SEC argues that the emails in question are authentic and are not hearsay
because they are not offered to prove the truth of any statement within the email. [Filing No. 215
at 4-5.] The SEC also contends that Mr. Senefeld does not show any actual contradictions between

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Mr. Haab’s and Mr. Risinger’s statements in their Declarations and their statements in their SEC
investigative testimony. [Filing No. 215 at 11.] Finally, the SEC argues that the Declarations do
not contain inadmissible speculation, and that the evidence Mr. Senefeld claims is irrelevant is not
because it contradicts facts offered by Mr. Senefeld. [Filing No. 215 at 16-19.]
A. Summary of Applicable Securities Law
The SEC alleges that Mr. Senefeld has violated Section 10(b) of the Securities Exchange
Act, which provides:
It shall be unlawful for any person, directly or indirectly, by the use of any means
or instrumentality of interstate commerce or of the mails, or of any facility of any
national securities exchange – (b) To use or employ, in connection with the purchase or sale of any security registered on a national securities exchange or any
security not so registered, or any securities-based swap agreement any manipulative
or deceptive device or contrivance in contravention of such rules and regulations as
the Commission may prescribe as necessary or appropriate in the public interest or
for the protection of investors.
15 U.S.C. § 78j(b).
The SEC alleges that Mr. Senefeld also violated Rule 10b-5, which states:
It shall be unlawful for any person, directly or indirectly, by the use of any means
or instrumentality of interstate commerce, or of the mails or of any facility of any
national securities exchange,
(a) To employ any device, scheme, or artifice to defraud,
(b) To make any untrue statement of a material fact or to omit to state a material
fact necessary in order to make the statements made, in the light of the circumstances under which they were made, not misleading, or
(c) To engage in any act, practice, or course of business which operates or would
operate as a fraud or deceit upon any person, in connection with the purchase
or sale of any security.
17 C.F.R. § 240.10b-5.
“Rule 10b-5 forbids a company or an individual ‘to make any untrue statement of a material
fact or to omit to state a material fact necessary in order to make the statements made, in the light
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of the circumstances under which they were made, not misleading.’” Makor Issues & Rights, Ltd.
v. Tellabs Inc., 513 F.3d 702, 704 (7th Cir. 2008) (quoting 17 C.F.R. § 240.10b-5(b)). In order to
establish a violation of § 10(b), the SEC must establish that Mr. Senefeld: “(1) made a material
misrepresentation or a material omission as to which he had a duty to speak, or used a fraudulent
device; (2) with scienter; (3) in connection with the purchase or sale of securities.” S.E.C. v. Bauer,
723 F.3d 758, 768-69 (7th Cir. 2013) (citations and quotations omitted). “[O]nly persons who act
with an intent to deceive or manipulate violate Rule 10b-5,” but “reckless disregard of the truth
counts as intent for this purpose.” S.E.C. v. Jakubowski, 150 F.3d 675, 681 (7th Cir. 1998) (citations omitted).
Section 17(a) of the Securities Act provides:
It shall be unlawful for any person in the offer or sale of any securities (including
security-based swaps) or any security-based swap agreement…by the use of any
means or instruments of transportation or communication in interstate commerce
or by use of the mails, directly or indirectly
(1) to employ any device, scheme, or artifice to defraud, or
(2) to obtain money or property by means of any untrue statement of a material fact
or any omission to state a material fact necessary in order to make the statements made, in light of the circumstances under which they were made, not
misleading; or
(3) to engage in any transaction, practice, or course of business which operates or
would operate as a fraud or deceit upon the purchaser.
15 U.S.C. § 77q.
The elements of claims for violations of § 10(b), Rule 10b-5, and § 17(a)(1) are substantially the same. See S.E.C. v. Maio, 51 F.3d 623, 631 (7th Cir. 1995); Teamsters Local 282 Pension
Trust Fund v. Angelos, 762 F.2d 522, 531 (7th Cir. 1985). “The principal difference is that § 10(b)
and Rule 10b-5 apply to acts committed in connection with a purchase or sale of securities while
§ 17(a) applies to acts committed in connection with an offer or sale of securities.” Maio, 51 F.3d
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at 631 (emphasis in original) (citing SEC v. International Loan Network, Inc., 770 F.Supp. 678,
694 (D.D.C. 1991)). Because the SEC here alleges claims under all of these provisions for conduct
related both to the purchase and sale of securities, and the offer and sale of securities, the Court
will address these sections together. The Court notes that the SEC need not establish that Mr.
Senefeld acted with scienter for its claims that he violated § 17(a)(2) and (a)(3).
While § 10(b) refers to liability for the maker of untrue statements, the Seventh Circuit
Court of Appeals has held that § 10(b) liability extends to “a defendant [who] is personally involved in a plan or scheme to market securities…, assuming that he has acted with the requisite
degree of intent.” S.E.C. v. Holschuh, 694 F.2d 130, 143 (7th Cir. 1982); see also U.S. S.E.C. v.
Lyttle, 538 F.3d 601, 604 (7th Cir. 2008) (“One doesn’t have to be the inventor of a lie to be
responsible for knowingly repeating it to a dupe. The defendants could not have thought that the
fact that [a co-defendant] told them something implausible (to put it mildly) made it true”).
B. Factual Disputes
1. Evidentiary Issues
As discussed below, the parties dispute many key facts in this case. Specifically, the SEC
presents evidence with its response brief which contradicts many of the facts set forth by Mr.
Senefeld. The evidence the Court relies upon from the SEC which demonstrates that factual disputes exist – which the SEC submitted with its response brief – include email messages either sent
or received by Mr. Senefeld, Mr. Risinger’s statements during the SEC investigation, and Declarations submitted by Mr. Haab, Mr. Risinger, and Shawn Gustafson (who worked for Mr. Senefeld
at FarmGrowCap, PinCap, and Pin Financial as a senior analyst). In his reply brief, Mr. Senefeld
argues that the Court should not consider any of this evidence. The Court will address each category of evidence before substantively discussing that evidence.

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a. Emails
Mr. Senefeld argues in his reply brief that the emails the SEC submits with its response
brief are unauthenticated and inadmissible. [Filing No. 208 at 1-4.] He also argues that the SEC
should have offered the emails to him at the investigative stage, so he could address them in his
testimony. [Filing No. 208 at 2.] Additionally, Mr. Senefeld contends that most of the emails only
copy him and do not contain statements that appear to be by or about him, and that the emails are
inadmissible hearsay. [Filing No. 208 at 3-4.]
In its surreply, the SEC submits a Declaration from Mr. Haab showing that he either authored or received the emails at issue. [Filing No. 215 at 2.] The SEC argues that “the Federal
Rules do not require that a party question an opposing party about an exhibit before using it in
opposition to a motion for summary judgment,” and that the cases Mr. Senefeld relies on for his
argument are inapposite. [Filing No. 215 at 3.] The SEC contends that Mr. Senefeld’s argument
that the SEC must establish that Mr. Senefeld received and read the emails on which he is copied
is incorrect, that several of the emails are from Mr. Senefeld, that Mr. Senefeld does not deny
sending, receiving, or reading the emails, and that Mr. Senefeld has admitted that the email addresses associated with the emails were his. [Filing No. 215 at 3-4.] The SEC also argues that the
emails are not hearsay because they are not offered to prove the truth of any statements within
them. [Filing No. 215 at 5-6.]
The emails the SEC submits in connection with its response brief are admissible. Even if
they are considered hearsay, they would be admissible under Fed. R. Evid. 807. See United States
v. Dumeisi, 424 F.3d 566, 576 (7th Cir. 2005) (“Rule 807 permits evidence to be admitted if it has
sufficient ‘circumstantial guarantees of trustworthiness’”); Brokaw v. Boeing Company, 137
F.Supp.3d 1082, 1094-95 (N.D. Ill. 2015) (finding emails were admissible under Fed. R. Evid. 807

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because they were “written under highly reliable circumstances” and “[t]he authors attest under
oath that the statements made in their emails are true and accurate”); Parker v. Four Seasons Hotels, Limited, 2014 WL 1292858, *3 (N.D. Ill. 2014) (finding email was admissible under Fed. R.
Evid. 807, and stating “courts have long recognized that the prohibition on hearsay is not intended
to be a mechanical bar on otherwise reliable evidence”). Additionally, emails that Mr. Senefeld
authored himself would also be admissible under Fed. R. Evid. 801(d)(2) as a statement “offered
against an opposing party and…made by the party in an individual or representative capacity.”
Fed. R. Evid. 801(d)(2)(A).
Importantly, Mr. Senefeld does not dispute that the accounts the emails went to which are
associated with his name are his. Further, the SEC was under no obligation to produce these emails
to Mr. Senefeld during its investigation. The emails were submitted to contradict statements in
Mr. Senefeld’s Declaration submitted in support of his Motion for Summary Judgment, which is
perfectly permissible under the Federal Rules of Civil Procedure. Further, any authentication issue
would be cured by Mr. Haab’s Declaration submitted with the SEC’s surreply. The court will
consider the emails the SEC submits with its response brief.
b. Declarations
Mr. Senefeld argues that statements Mr. Haab and Mr. Risinger made in their Declarations
which contradict their earlier sworn testimony should not be relied upon. [Filing No. 208 at 4.]
In its surreply, the SEC agrees that generally a party cannot create an issue of fact by submitting an affidavit which contradicts prior testimony, but argues that Mr. Senefeld has not identified any true contradictions between the statements Mr. Haab and Mr. Risinger made to the SEC
during its investigation, and the statements in their Declarations. [Filing No. 215 at 11-16.]

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The only paragraph from the Declarations that the Court relies upon below in its discussion
of the factual issues that are present in this case, and that Mr. Senefeld specifically argues is inadmissible, is Paragraph 32 from Mr. Haab’s Declaration. That paragraph states:
In ¶ 48 of the Senefeld Declaration, Senefeld states that “I did not draft any of the
[PPMs] or any other disclosures to investors.” However, Senefeld provided both
Risinger and me with information to be used in the PPMs and other disclosures that
were provided to investors. For example, in 2011 and 2012 Risinger and Senefeld
helped create a document entitled “The Case for Investing in Farms: A Summary
for Accredited Investors Only,” which was intended to be used in soliciting investors in farm loan investments…. Although the final draft was a group project, Senefeld and Risinger were the source of the information on the economics of farming,
collateral security and farm profitability, which is contained in this document. And
Senefeld was aware that I did use this document and provided it to investors and
potential investors. In addition, Risinger sent multiple drafts of the 2013 and 2014
PPMs to both Senefeld and me. Senefeld, Risinger, and I occasionally had calls to
discuss the draft PPMs. Based on my conversations and interactions with Senefeld,
I am confident that he knew the content of the PPMs that were provided to investors.
[Filing No. 198-3 at 11-12.]
Mr. Senefeld argues that these statements contradict Mr. Haab’s prior testimony to the
SEC, where he testified as follows:
Q: Is that a document called The Case For Investing in Farms?
A: Yes.
Q: And who authored that document?
A: Jeff Risinger.
Q: Did you review or edit it at all before sending it to your investors?
A: I definitely reviewed it. I may have provided a few comments or edits
to Jeff. But I definitely reviewed it before he finalized it.
Q: But Jeff drafted the document?
A: Yes.
[Filing No. 9-4 at 41.]
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The Court does not find Mr. Haab’s statements in his Declaration to contradict his testimony during the SEC’s investigation. The investigation testimony is more general in nature, but
Mr. Haab did not represent that Mr. Senefeld had no role at all in drafting the document in question.
His statements in his Declaration that Mr. Senefeld provided information which was used to create
the document does not contradict Mr. Haab’s earlier testimony that Mr. Risinger was the document’s author. 2
The Court need not address Mr. Senefeld’s additional arguments regarding other statements in either Mr. Haab’s, Mr. Risinger’s, or Mr. Gustafson’s Declarations, as it does not rely
upon those statements in reaching its conclusion below.
2. Specific Disputed Facts
It is clear from reviewing the SEC’s and Mr. Senefeld’s briefs that they have very different
views of Mr. Senefeld’s role in the allegedly fraudulent scheme that is at the center of this lawsuit.
The evidence submitted to support these different views precludes summary judgment. Even under Mr. Senefeld’s view of the applicable law, which is that the SEC must show he himself had
direct contact with investors and made fraudulent statements to them, summary judgment is inappropriate. The Court will not belabor all of the factual disputes that exist between the parties, but
instead sets forth some key facts that bear directly on Mr. Senefeld’s liability, and that are vigorously disputed. The following table reflects facts presented by Mr. Senefeld, and contradictory
facts set forth by the SEC (with supporting citations).

2

The Court does not rely upon the last sentence of ¶ 32 of Mr. Haab’s Declaration that “[b]ased
on my conversations and interactions with Senefeld, I am confident that he knew the content of
the PPMs that were provided to investors,” [Filing No. 198-3 at 12], so it need not consider whether
that statement is speculative and therefore inadmissible.
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MR. SENEFELD’S FACTS

THE SEC’S CONTRADICTORY FACTS

Mr. Senefeld “did not know •
the identities of the investors
and did not communicate with
them.” [Filing No. 190 at 10;
Filing No. 191-2 at 4.] Mr.
Senefeld did not “otherwise
communicate with investors.”
[Filing No. 191-2 at 7.]

June 18, 2013 email from Mr. Senefeld to a principal of one
of the farms that borrowed money through private offerings, which states “I look forward to meeting you again this
Wednesday June 19th at 10:30 am and introducing you to
our clients Marty and Laura McFarland and my business
partner Matt Habb (sic). If I may answer any questions or
be of any assistance prior to our meeting please feel free to
contact me on my cell phone.” [Filing No. 198-9 at 2.]
Marty McFarland was an investor in the private offerings.
[See Filing No. 198-8 at 5-7 (Email from Jessica McGowan
at Veros to Mr. Senefeld stating “[a]ttached is the spreadsheet of wires, including the ones that are outstanding and
the ones that went directly to [PinCap],” and attaching
spreadsheet reflecting that Martin and Laura McFarland
sent a wire transfer to PinCap).]

•

June 28, 2013 email from Mr. Senefeld to Mr. Risinger, Mr.
Haab and others, stating “Great News. I dropped off Rick
Dennen’s check at Matt’s office with the Receptionist this
afternoon.” [Filing No. 198-12 at 2-3.] Mr. Dennen invested in the 2014 PinCap Interim Financing Offering. [See
Filing No. 198-8 at 4-7.]

•

February 24, 2014 email from Mr. Senefeld to Rick Dennen
which states “Let me know if you have any time available
to meet for coffee early one morning this week. I can will
(sic) fill you in on the details of our meeting with Marty
[McFarland] along with the opportunities we [are] presently
working on for 2014. I look forward to speaking with you
again soon.” [Filing No. 198-10 at 2.]

•

June 21, 2014 email from Mr. Senefeld to Mr. McFarland
stating “Thanks again Marty for your continued support &
involvement. Let me know if you have time early Mon
morning to meet for coffee before you head out.” [Filing
No. 198-7 at 3.] Mr. McFarland responded the next day
“Tobin – Thanks for the invite but unfortunately I’m tied
up with calls all morning. I will let you guys know where I
am on this deal tomorrow (Monday). I apologize but I was
not in a position to review this investment with Laura this
weekend as we were tied up with guests.” [Filing No. 1987 at 3.]

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•

Mr. Risinger stated in his Declaration that Mr. Senefeld
“was acquainted with and was responsible for introducing
at least five people who subsequently invested in the private
offerings. Senefeld…communicated directly with and met
with these individuals in order to solicit them to invest in
private offerings (other than FarmGrowCap).” [Filing No.
198-4 at 6.]

•

Mr. Haab stated in his Declaration that Mr. Senefeld “knew
certain investors in the private offerings such as Marty
McFarland and Rick Dennen. In fact, Senefeld communicated with these individuals and had meetings with them in
order to encourage them to invest in the private offerings.”
[Filing No. 198-3 at 6.]

Mr. Senefeld did not “dissem- •
inate any disclosures or offering materials to investors or
otherwise communicate with
investors.” [Filing No. 191-2
at 7; see also Filing No. 190 at
10 (Mr. Senefeld did not “disseminate any of the offering
materials or other disclosures
to Haab’s investors”).]

June 23, 2014 email from Mr. Senefeld to Mr. Haab, Mr.
Risinger, and others, stating “Please see the attached list of
my most recent contacts for the TBF 2014 deal. I have recently sent out offering documents out (sic) to the following
and will keep you updated. Matt please call me when you
have a moment and I can walk you through investment
amounts.” [Filing No. 198-11 at 2.]

Mr. Senefeld “did not know •
what agreements or representations Haab made to investors
about repayments of their investments or any farms’ refinancing debt.” [Filing No.
191-2 at 8.]

Mr. Senefeld is listed as a recipient of an October 7, 2013
email to “the Veros Farm Loan Holding LLC Lending
Group,” which states “Please see the attached file for an
update on the final loan fundings, the 2013 growing season and repayment plans for this year’s loan. We look
forward to working together with you related to this private loan investment and helping ensure this investment
meets its stated objectives. If you have any questions regarding anything related to your investment please do not
hesitate to contact us at anytime.” [Filing No. 198-15 at
2.] The email includes a three-page attachment which
states “Wanted to provide another interim update on the
various operating loan fundings to the various farming organizations (the Farms) that have been completed as well
as the final potential fundings being evaluated for the 2013
crop year,” and then includes a “[s]ummary of 2013 Operating Loan Fundings,” a “[s]ummary of Operating Loan
Fundings Completed Since Last Update,” a “[s]ummary of
Operating Loan Fundings Previously Completed,” a “Security Collateral Summary,” a “[s]ummary of Investor
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Fundings,” an “Update on the Farms 2013 Corps & Harvest,” a “Repayment of Loans” section, and a “Repayment
Options” section. [Filing No. 198-15 at 3-5.]
•

Mr. Senefeld is also listed as a recipient on similar emails,
sent April 3, 2013 and April 24, 2013 to the Veros Farm
Loan Holding LLC Lending Group, and containing similar
information for investors. [Filing No. 198-13; Filing No.
198-14.]

Mr. Senefeld “did not know •
what disclosures Haab made
to his investors.” [Filing No.
190 at 10.]

Mr. Risinger stated as part of the SEC investigation that
Mr. Senefeld assisted with drafting the offerings materials.
[Filing No. 10-1 at 16 (“Q: And did anybody assist you
with [drafting the offering materials]? A: I would get
help from Tobin [Senefeld] and Shawn [Gustafson] in
terms of information that I would need to do it, but I wrote
them. I would go through several drafts, multiple drafts
each time, I would write it. Then I would send it out to
Tobin [Senefeld] and Matt [Haab] and Shawn [Gustafson]
and say, here is draft number two, here is draft number
three, here is draft number four, red line to show you the
changes, and making sure that everybody was up to speed
with me. But I was the writer”).]

•

Shawn Gustafson, who worked for Mr. Senefeld at
FarmGrowCap, PinCap, and Pin Financial as a senior analyst, stated in his Declaration that “Risinger drafted the offering documents for the 2012 Crossroads and Kirbach
farms offerings, the 2013 Veros Farm Loan Holding offering, the 2014 bridge loan offering, and the 2014
FarmGrowCap offering. I am familiar with those documents because Risinger provided them to me, and to Senefeld and Haab, for our review and comments before they
were finalized.” [Filing No. 198-2 at 4.]

•

Similarly, Mr. Haab stated in his Declaration that “Senefeld was provided with copies of the draft and final
[PPMs]…for his review and comment…. Senefeld provided both Risinger and me with information to be used in
the PPMs and other disclosures that were provided to investors. For example, in 2011 and 2012 Risinger and Senefeld helped create a document entitled ‘The Case for Investing in Farms: A Summary for Accredited Investors
Only,’ which was intended to be used in soliciting investors in farm loan investments…. Although the final draft
was a group project, Senefeld and Risinger were the
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source of the information on the economics of farming,
collateral security and farm profitability, which is contained in this document. And Senefeld was aware that I
did use this document and provided it to investors and potential investors….” [Filing No. 198-3 at 11-12.]
“[Mr.] Haab was responsible •
for designing the deal structure based on a combination of
meeting the farmers’ needs
balanced with the understanding of what it would take to
raise the investor capital
needed.” [Filing No. 190 at 5- •
6.]

Mr. Risinger stated in his Declaration that “Senefeld negotiated directly with the farmer on the amount of the loan,
the interest rate, and the origination fee, which he instructed Gustafson to include in a term sheet which became a template for the discussion and evaluation of the
loan.” [Filing No. 198-4 at 6.]
Mr. Haab stated in his Declaration that “Senefeld had an
equal say in making the decision on whether to make a
loan, and was instrumental in determining the interest rate
to be charged to the farm and the necessary collateral. He
actually was the one who negotiated the amount of the
loan, interest rate, and origination fee with the farms.”
[Filing No. 198-3 at 7.]

The factual disputes detailed above relate directly to the elements of the claims the SEC
asserts against Mr. Senefeld. For example, whether and to what extent Mr. Senefeld had direct
contact with investors goes to whether he “employ[ed] a device, scheme, or artifice to defraud.”
See 17 C.F.R. § 240.10b-5; 15 U.S.C. § 77q. Similarly, whether Mr. Senefeld was aware of the
information being presented to potential investors through offering materials is key to determining
whether he possessed the requisite scienter for the SEC to establish violations of § 10(b) and §
17(a)(1).
Because of the factual disputes that exist, the Court cannot conclude that Mr. Senefeld is
not liable as a matter of law. Indeed, a reasonable jury could reach the opposite conclusions based
on the evidence thus far. The Court is not endorsing either side’s version of the events, but is
simply finding that numerous key factual disputes exist which preclude summary judgment in

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favor of Mr. Senefeld. Accordingly, Mr. Senefeld’s Motion for Summary Judgment, [Filing No.
189], is denied.
IV.
CONCLUSION
For the foregoing reasons, Mr. Senefeld’s Motion for Summary Judgment, [Filing No.
189], is DENIED. The Court requests that the Magistrate Judge confer with the SEC and Mr.
Senefeld to address the possibility of an agreed resolution, or to establish a schedule for trial.

_______________________________

Date: June 22, 2016

Hon. Jane Magnus-Stinson, Judge
United States District Court
Southern District of Indiana

Distribution via ECF only to all counsel of record

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