Securities and Exchange Commission v. Bronson et al

Filing 241

ORDER: The Court will hold a hearing on June 3, 2021 at 1:30 P.M. to resolve the ongoing disputes regarding Edward Bronsons production of documents and the status of his compliance with the Courts January 19, 2021 Order. (Dkt. No. 223.) At a mini mum, Mr. Bronson and his wife, Dawn Bronson, should be prepared to testify under oath and respond to questions from the Court and the SEC. By no later than May 21, 2021, the SEC should notify the Court whether there are additional witnessessuch a s John Kellaswhom it wishes to question at the hearing, in which case the Court will order these additional witnesses to appear. Separately, the Court notes that although Mr. Bronson's counsel, Paul Rachmuth, provided approximately 200 docum ents to the Court for in camera review on May 1, 2021, Mr. Rachmuth failed to specify the basis for withholding each document as ordered by the Court on April 7, 2021. (Dkt. No. 238). Mr. Rachmuth is therefore instructed to provide the Court with supplemental documentation indicating the basis for withholding each document that was provided to the Court for in camera review. He should provide this supplemental documentation no later than May 21, 2021. Finally, Mr. Rachmuth is instructed to respond to the SEC's May 11, 2021 letter, (Dkt. No. 240), no later than May 21, 2021. In particular, Mr. Rachmuth should address the troubling allegation that Mr. Bronson is using Mr. Kellas as a nominee to control the Top Knot entities, an d is now "using Top Knot to fund [his] family expenses in much the way [he] used V2IP." (Id.) Mr. Rachmuth should also address the SEC's proposed payment plan. (See id.) SO ORDERED., Status Conference set for 6/3/2021 at 01:30 PM before Judge Kenneth M. Karas. (Signed by Judge Kenneth M. Karas on 5/14/2021) (rj)

Case 7:12-cv-06421-KMK Document 241 Filed 05/14/21 Page 1 of 2

UNITED STATES DISTRICT COURT
SOUTHERN DISTRICT OF NEW YORK
SECURITIES AND EXCHANGE COMMISSION,
Plaintiff,
-vEDWARD BRONSON and E-LIONHEART
ASSOCIATES, LLC, d/b/a FAIRHILLS CAPITAL
Defendants,

ORDER
No. 12-CV-6421 (KMK)

-andFAIRHILLS CAPITAL, INC.,
Relief Defendant.
KENNETH M. KARAS, United States District Judge:
The Court will hold a hearing on June 3, 2021 at 1:30 P.M. to resolve the ongoing
disputes regarding Edward Bronson’s production of documents and the status of his compliance
with the Court’s January 19, 2021 Order. (Dkt. No. 223.) At a minimum, Mr. Bronson and his
wife, Dawn Bronson, should be prepared to testify under oath and respond to questions from the
Court and the SEC. By no later than May 21, 2021, the SEC should notify the Court whether
there are additional witnesses—such as John Kellas—whom it wishes to question at the hearing,
in which case the Court will order these additional witnesses to appear.
Separately, the Court notes that although Mr. Bronson’s counsel, Paul Rachmuth,
provided approximately 200 documents to the Court for in camera review on May 1, 2021, Mr.
Rachmuth failed to specify the basis for withholding each document as ordered by the Court on
April 7, 2021. (Dkt. No. 238).1 Mr. Rachmuth is therefore instructed to provide the Court with

1

In his affirmation filed on April 30, 2021, Mr. Rachmuth suggests that the 151 emails
provided for in camera review were being withheld on the basis of relevance. (See Apr. 7

Case 7:12-cv-06421-KMK Document 241 Filed 05/14/21 Page 2 of 2

supplemental documentation indicating the basis for withholding each document that was
provided to the Court for in camera review. He should provide this supplemental documentation
no later than May 21, 2021.
Finally, Mr. Rachmuth is instructed to respond to the SEC’s May 11, 2021 letter, (Dkt.
No. 240), no later than May 21, 2021. In particular, Mr. Rachmuth should address the troubling
allegation that Mr. Bronson is using Mr. Kellas as a nominee to control the Top Knot entities,
and is now “using Top Knot to fund [his] family expenses in much the way [he] used V2IP.”
(Id.) Mr. Rachmuth should also address the SEC’s proposed payment plan. (See id.)

SO ORDERED.
DATED:

May 14, 2021
White Plains, New York
____________________________________
KENNETH M. KARAS
UNITED STATES DISTRICT JUDGE

Rachmuth Aff. ¶¶ 6–7 (Dkt. No. 239).) If that is the case, he should so state explicitly. As far as
the Court can discern, Mr. Rachmuth has not specified the basis for withholding the 41 bank
statements and seven additional financial documents that were submitted to the Court for in
camera review.
2