Securities and Exchange Commission v. Perryman

Filing 42

ORDER denying 25 Motion to Stay. After considering the above, Defendant's motion to stay the civil proceeding is DENIED. Defendant's current deadline to answer the complaint is September 3, 2024. Dkt. No. 19. However, on August 1 6, 2024, Defendant was granted an extension to surrender herself into custody until September 6, 2024, pending a motion for bond pending appeal. United States v. Perryman, No. 23-CR-117 (DLC) at Dkt. No. 150. The Second Circuit is scheduled to he ar oral argument on Defendant's motion for bond pending appeal on September 3, 2024. Id. Considering the imminent oral argument and possible surrender, Defendant's deadline to answer or file a motion to dismiss is extended until September 17, 2024. (Signed by Magistrate Judge Jennifer E. Willis on 8/30/2024) (tro)

UNITED STATES DISTRICT COURT
SOUTHERN DISTRICT OF NEW YORK
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SECURITIES AND EXCHANGE
COMMISSION,
ORDER

Plaintiff,

23-CV-10985 (LGS) (JW)

-againstLAURA TYLER PERRYMAN,

Defendant.
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JENNIFER E. WILLIS, United States Magistrate Judge:
On August 14, 2024, Laura Perryman (“Defendant”) filed a notice of motion to
stay both her deadline to answer the complaint and discovery pending the appeal of
her criminal conviction.

Dkt. No. 25.

On August 20, 2024, the Securities and

Exchange Commission (“SEC” or “Plaintiff”) opposed the motion to stay. Dkt. No. 35.
Courts have the discretion to stay civil proceedings when they deem the
interests of justice require such. In re Terrorist Attacks on Sept. 11, 2001, No. 03MDL-1570 (FM), 2011 WL 5913526, at *4 (S.D.N.Y. Nov. 22, 2011), objections
overruled, No. 02-CV-6977 (GBD), 2012 WL 104512 (S.D.N.Y. Jan. 11, 2012). When
considering whether to stay civil proceedings pending a parallel criminal action,
courts look the following six factor balancing test:
1) the extent to which the issues in the criminal case overlap with those
presented in the civil case; 2) the status of the case, including whether
the defendants have been indicted; 3) the private interests of the
plaintiffs in proceeding expeditiously weighed against the prejudice to
plaintiffs caused by the delay; 4) the private interests of and burden on
the defendants; 5) the interests of the courts; and 6) the public interest.

Louis Vuitton Malletier S.A. v. LY USA, Inc., 676 F.3d 83, 99 (2d Cir. 2012).
The first factor weighs in favor of a stay. The Parties agree that the facts of
the civil and criminal cases are identical. Dkt. No. 31 at 4–5; Dkt. No. 35 at 7.
The second and fourth factors weigh against a stay in the civil proceedings.
Defendant argues that because she asserted her fifth amendment right in the
criminal action, she will be faced with either: “(1) testifying and potentially giving the
DOJ information to use against her at a criminal trial; or (2) refusing to testify and
facing an adverse inference here.” Dkt. No. 31 at 6.
A defendant does not lose the right to assert their fifth amendment privilege
until the resolution of a pending appeal. See Sec. & Exch. Comm'n v. Pence, 323
F.R.D. 179, 188 (S.D.N.Y. 2017) (collecting cases). However, “[a] defendant has no
absolute right not to be forced to choose between testifying in a civil matter and
asserting his Fifth Amendment privilege.” Louis Vuitton, 676 F.3d at 98.
Furthermore, “courts have found that civil cases should not be stayed while a criminal
appeal is pending.” U.S. Commodity Futures Trading Comm'n v. Lamarco, No. 2:17CV-04087 (ADS) (AKT), 2018 WL 2103208, at *4 (E.D.N.Y. May 7, 2018) (collecting
cases).
Here, Defendant has already been tried, convicted, and sentenced in the
parallel criminal proceeding. See United States v. Perryman, No. 23-CR-117 (DLC)
(S.D.N.Y.). While her criminal action is currently awaiting appeal, that alone is not
enough to warrant a post-conviction stay of civil proceedings. See In re Terrorist
Attacks, 2011 WL 5913526, at *5; Bucalo v. Town of Southampton, No. 14-CV-7050
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(ADS) (ARL), 2016 WL 11673815, at *2 (E.D.N.Y. Apr. 22, 2016) (“Plaintiff's theory
that a successful appeal may result in a new trial, at which her right against selfincrimination would reattach, is too speculative to justify another prolonged period
of inactivity in this case.”).
In analyzing the third factor, the Court considers both the private interests of
the SEC in proceeding expeditiously and any potential prejudice to the SEC caused
by possible stay. Defendant fails to make a cognizable argument for this factor.
Plaintiff suggests that because it is federal agency tasked with overseeing the
securities market, its interests are heightened. Dkt. No. 35 at 8 (citing Lamarco,
2018 WL 2103208, at *6.). Given, the SEC’s interest in overseeing securities markets,
and the unknown timeline of Defendant’s appeal, the third factor weighs against
granting a stay.
The fifth and sixth factors do not conclusively weigh in favor of either side.
Defendant argues that because the civil trial is not “fast approaching,” the “public’s
interest in the criminal appeal takes precedent.” Dkt. No. 31 at 8. Defendant also
asserts that continuing with the civil proceedings will lead to “lead to unnecessary
disputes revolving around the refusal to provide discovery.” Id. at 7. Plaintiff makes
the blanket assertion that “in all cases, the Plaintiff, the Court, and the public have
an interest in the expeditious resolution of its case.” Dkt. No. 35 at 8 (citing Lamarco,
2018 WL 2103208, at *5.).
After considering the above, Defendant’s motion to stay the civil proceeding is
DENIED.
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Defendant’s current deadline to answer the complaint is September 3, 2024.
Dkt. No. 19. However, on August 16, 2024, Defendant was granted an extension to
surrender herself into custody until September 6, 2024, pending a motion for bond
pending appeal. United States v. Perryman, No. 23-CR-117 (DLC) at Dkt. No. 150.
The Second Circuit is scheduled to hear oral argument on Defendant’s motion for
bond pending appeal on September 3, 2024. Id. Considering the imminent oral
argument and possible surrender, Defendant’s deadline to answer or file a motion to
dismiss is extended until September 17, 2024.
SO ORDERED.
DATED:

New York, New York
August 30, 2024
______________________________
JENNIFER E. WILLIS
United States Magistrate Judge

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