Securities and Exchange Commission v. Arias et al

Filing 47

ORDER ADOPTING REPORT AND RECOMMENDATIONS. The Court adopts the September 14, 2012 Report and Recommendation of Magistrate Judge Gary R. Brown as if set forth herein. The time for defendants Anthony Ciccone, Salvatore Ciccone, and Anthony Massaro t o answer the Complaint in this action is hereby stayed pending the outcome of the ongoing criminal matter in 12-CR-357. Should defendants Anthony Ciccone, Salvatore Ciccone, or Anthony Massaro wish to file a motion to dismiss this action, they must file a pre-motion conference letter, as required by my Individual Practice Rule 3(B), within fourteen (14) days of the date of this Order. Counsel for plaintiff is directed to serve a copy of this Order upon pro se defendant Salvatore Ciccone forthwith and file proof of service on ECF. Ordered by Judge Denis R. Hurley on 10/11/2012. (Monaco, Laura)

UNITED STATES DISTRICT COURT
EASTERN DISTRICT OF NEW YORK
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SECURITIES AND EXCHANGE
COMMISSION,
Plaintiff,

ORDER
12 CV 2937 (DRH) (GRB)

- against BRYAN ARIAS, HUGO A. ARIAS, ANTHONY
C. CICCONE, SALVATORE CICCONE, DIANE
KAYLOR, JASON A. KERYC, ANTHONY
MASSARO, CHRISTOPHER E. CURRAN,
RYAN K. DUNASKE, MICHAEL P. DUNNE,
MARTIN C. HARTMANN, III, MICHAEL D.
KERYC, RONALD R. ROALDSEN, JR., and
LAURA ANN TORDY,
Defendants.
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HURLEY, Senior District Judge:
This SEC enforcement action, commenced on June 12, 2012, stems from an extensive
Ponzi scheme operated by Nicholas Cosmo, who was convicted in connection with this scheme
and sentenced by this Court in October 2011 to 300 months’ imprisonment. (See Docket 09-CR0255.) Several of the defendants in this action are also named defendants in a separate criminal
action before this Court, having been charged in connection with their respective roles in that
Ponzi scheme. (See Docket 12-CR-0357.)
Several of the defendants in this action have moved to stay all proceedings pending the
resolution of the parallel criminal matter. By Order dated September 7, 2012, District Judge
Arthur D. Spatt, who was then presiding over this action, referred the application to Magistrate
Judge Gary R. Brown for a report and recommendation. On September 19, 2012, this case was
reassigned to me as it has been deemed to be related to the pending criminal action,12-CR-0357,

over which I am presiding.
Judge Brown held a motion hearing on September 10, 2012. (R&R at 3.) At the hearing,
Judge Brown granted an unopposed motion made by the United States to intervene in this action
for the purpose of seeking a stay of discovery, subject to certain limited exceptions, pending the
resolution of the related criminal prosecution. (R&R at 4.) The United States’s motion to stay
discovery was unopposed, and Judge Brown granted that motion during the September 10, 2012
hearing. (Id.) The remaining issue before Judge Brown, therefore, was the request made by
defendants Anthony Ciccone, Salvatore Ciccone, and Anthony Massaro (collectively,
“defendants”) “to stay this action in its entirety, based on concerns . . . that filing an answer
would also require them to compromise their Fifth Amendment rights against selfincrimination.” (Id.)1 The SEC opposed that application, “principally wishing to avoid
unnecessary delay, and wanting to compel the three defendants to file motions to dismiss if
appropriate.” (Id.)
On September 14, 2012, Judge Brown issued a Report and Recommendation
recommending that “defendants’ motion to stay their time to answer pending the resolution of the
related criminal proceeding be GRANTED, but that the motion be DENIED as to the defendants’
time to otherwise respond to the Complaint, including filing a motion to dismiss.” (R&R at 8.)
On September 14, 2012, all parties were served with a copy of the Report and
Recommendation. More than fourteen days have elapsed since service of the Report and

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Judge Brown noted that “[s]everal additional defendants have not answered or
otherwise appeared in this action; as such no recommendations contained [in the Report and
Recommendation] apply to those individuals or the plaintiff’s claims against those defendants.”
(R&R at 3 n.1.)
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Recommendation. No party has filed any objections.
Pursuant to 28 U.S.C. § 636(b) and Federal Rule of Civil Procedure 72, this Court has
reviewed the Report and Recommendation for clear error, and finding none, now concurs in both
its reasoning and its result. Accordingly, the Court adopts the September 14, 2012 Report and
Recommendation of Judge Brown as if set forth herein.
The time for defendants Anthony Ciccone, Salvatore Ciccone, and Anthony Massaro to
answer the Complaint in this action is hereby stayed pending the outcome of the ongoing
criminal matter in 12-CR-357. Should defendants Anthony Ciccone, Salvatore Ciccone, or
Anthony Massaro wish to file a motion to dismiss this action, they must file a pre-motion
conference letter, as required by my Individual Practice Rule 3(B), within fourteen (14) days of
the date of this Order.
Counsel for plaintiff is directed to serve a copy of this Order upon pro se defendant
Salvatore Ciccone forthwith and file proof of service on ECF.

SO ORDERED.
Dated: Central Islip, New York
October 11, 2012

/s/
Denis R. Hurley
Unites States District Judge

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