Securities & Exchange Commission v. Banc de Binary Ltd.

Filing 65

ORDER Granting 62 Plaintiff's Motion to Permit Appearance of Government Attorneys. Signed by Judge Robert C. Jones on 05/27/2014. (Copies have been distributed pursuant to the NEF - AC)

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UNITED STATES DISTRICT COURT

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DISTRICT OF NEVADA

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SECURITIES AND EXCHANGE
COMMISSION,

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Plaintiff,
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vs.
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BANC DE BINARY LTD.,
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Defendant.
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________________________________________ )

2:13-cv-00993-RCJ-VCF
ORDER

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This case arises out of the alleged trading of unregistered securities. The Court has

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entered a preliminary injunction, ruling that although they are not in fact options, the “binary

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options” Defendant is alleged to sell are “securities” under the Securities Exchange Act of 1934,

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as amended.

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Attorneys Berry and Hakala previously asked to appear pro hac vice on behalf of the

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SEC. The Court noted it would permit those attorneys to appear if they submitted declarations

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indicating their review of and assent to the Nevada Rules of Professional Conduct. the Court

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also requested that Attorney Longo, previously admitted pro hac vice also submit such a

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declaration. The Court explained that it would require the declarations in fairness to the

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opposing parties. See EEOC v. Wells Fargo Bank, N.A., No. 3:13-cv-528, 2014 WL 258560, at

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*2 (D. Nev. Jan. 23, 2014) (Jones, J.) (“[T]he Court will not permit the attorneys in this case to

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be governed by different sets of ethical rules.”). The Court also noted that it would require

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Plaintiff to show that the U.S. Attorney’s Office in this District is incapable of litigating the

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present matter either by statute or due to a lack of manpower or subject-matter experience.

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The three attorneys have renewed the motion and have filed the relevant declarations,

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with which the Court is satisfied. Movants also argue that the local U.S. Attorney’s Office is

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incapable of litigating the matter because the SEC has statutory authority to bring civil

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enforcement actions. See 15 U.S.C. § 77t(b) (“Whenever it shall appear to the Commission that

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any person is engaged or about to engage in any acts or practices which constitute or will

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constitute a violation of the provisions of this subchapter, or of any rule or regulation prescribed

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under authority thereof, the Commission may, in its discretion, bring an action . . . .”); id.

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§ 78u(d)(1) (“Whenever it shall appear to the Commission that any person is engaged or is about

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to engage in acts or practices constituting a violation of any provision of this chapter, the rules or

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regulations thereunder, the rules of a national securities exchange or registered securities

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association of which such person is a member or a person associated with a member, the rules of

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a registered clearing agency in which such person is a participant, the rules of the Public

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Company Accounting Oversight Board, of which such person is a registered public accounting

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firm or a person associated with such a firm, or the rules of the Municipal Securities Rulemaking

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Board, it may in its discretion bring an action . . . .”).

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The SEC’s authorization to bring the present civil enforcement action does not mean that

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only the SEC’s own attorneys may do so, such that the U.S. Attorney cannot represent the United

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States or the SEC in this action. That may be the usual practice of the SEC and the DOJ, but this

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Court needn’t conform its admission policies and practices to the practices of the SEC and the

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DOJ in filing cases. The Court of Appeals has stated, in a civil immigration case where it was

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fiercely contested whether a promise by an assistant U.S. attorney could bind the INS, that:

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Except as otherwise authorized by law, the Attorney General of the United
States supervises all litigation to which the United States or an agency thereof is a
party. 28 U.S.C. § 516. . . . If the Attorney General wished to limit the incidental
authority of United States Attorneys in this respect, she could easily do so with a
section in the Code of Federal Regulations, but she has not chosen to do that.
Page 2 of 4

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Thomas v. INS, 35 F.3d 1332, 1340–41 (9th Cir. 1994). The Thomas court noted that “[e]xcept
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as otherwise provided by law, each United States attorney, within his district, shall . . . .
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prosecute or defend, for the Government, all civil actions, suits or proceedings in which the
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United States is concerned . . . .” Id. at 1338 (quoting 28 U.S.C. § 547) (internal quotation marks
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omitted); see also § 516 (“Except as otherwise authorized by law, the conduct of litigation in
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which the United States, an agency, or officer thereof is a party, or is interested, and securing
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evidence therefor, is reserved to officers of the Department of Justice, under the direction of the
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Attorney General.” (emphasis added)); Marshall v. Gibson Prods., Inc. of Plano, 584 F.2d 668,
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676 (5th Cir. 1978). In other words, the DOJ (via the Attorney General and the U.S. Attorneys)
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has by statute default exclusive authority to represent the United States and its agencies;
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however, where authorized by law, others may also have that authority. The representational
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authority granted to the DOJ under § 516 (and the accompanying duty imposed under § 547 to
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utilize that authority) would only be countermanded by a statute giving another entity exclusive
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authority or otherwise explicitly limiting the DOJ’s authority. The statutes movants cite don’t
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even come close. They merely give the SEC the authority to bring a civil enforcement action.
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Even the ability of the SEC to use its own attorneys (as opposed to the DOJ’s) when it does bring
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such an action has to be inferred from the statutes Movants cite. So there’s certainly no way to
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conclude that those statutes oust the default statutory authority of the DOJ to represent the United
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States and the SEC in such actions.
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In summary, Movants have identified no statute or regulation restricting the ability of the
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U.S. Attorney to represent the United States or the SEC in civil securities enforcement actions.
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Still, although Movants do not explicitly state that the local U.S. Attorney’s Office lacks the
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manpower or expertise to prosecute the present case, that is the clear implication from the
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continued motion. The Court therefore grants the motion.
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CONCLUSION

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IT IS HEREBY ORDERED that the Motion for Leave to Appear (ECF No. 62) is

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GRANTED.
IT IS SO ORDERED.
Dated this 27th day of May, 2014.

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_____________________________________
ROBERT C. JONES
United States District Judge

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