Securities and Exchange Commission v. Churchville et al
Filing
110
MEMORANDUM AND ORDER denying 100 Motion for TRO (to Enforce Stay and for Injunctive Relief). So Ordered by Chief Judge William E. Smith on 8/1/2017. (Jackson, Ryan)
UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF RHODE ISLAND
________________________________________
)
SECURITIES AND EXCHANGE COMMISSION,
)
)
Plaintiff,
)
)
v.
)
)
PATRICK CHURCHVILLE,
)
CLEARPATH WEALTH MANAGEMENT, LLC,
)
)
Defendants,
)
)
and
)
)
CLEARPATH MULTI-STRATEGY FUND I, LP
)
CLEARPATH MULTI-STRATEGY FUND II, LP
)
CLEARPATH MULTI-STRATEGY FUND III, LP
)
HCR VALUE FUND, LP,
)
)
Relief Defendants.
)
________________________________________)
C.A. No. 15-191 S
MEMORANDUM AND ORDER
WILLIAM E. SMITH, Chief Judge.
Spire
Securities
L.L.C.
(“Spire”)
requests
that
the
Court stay two arbitration proceedings currently before the
Financial Industry Regulatory Authority (“FINRA”). (Mot. to
Enforce Stay and for Injunctive Relief, ECF No. 100.) The
FINRA
claimants
allege
that
Spire
failed
to
properly
supervise Patrick Churchville (“Churchville”) and ClearPath
Wealth Management, LLC (“ClearPath”) causing approximately
1
twenty-two million dollars in damages. (Id. at 2-3.) Several
of
those
FINRA
claimants
are
also
victims
in
a
case
currently before this Court involving a lawsuit brought by
the Securities and Exchange Commission against Churchville
and Clearpath. (See C.A. No. 15-191.) According to Spire,
the FINRA proceedings are “inextricably linked” to that case
and should therefore be stayed under the Court’s July 30
Order. (Mot. to Enforce Stay and for Injunctive Relief 1,
ECF
No.
100
(citing
Order
on
July
30,
2015
(“July
30
Order”), ECF No. 16).)
The Court’s July 30 Order “stayed until further Order
of this Court” certain arbitration proceedings that would
negatively
affect
the
ability
of
the
Court-appointed
Receiver to recover funds. (July 30 Order ¶ 32, ECF No. 16.)
However, the two FINRA arbitration proceedings at issue do
not fall within the ambit of that Order. (See id. ¶¶ 32-34
(listing categories of cases to be stayed).) As noted by the
Receiver and the Securities and Exchange Commission in their
oppositions to Spire’s motion1, the purpose of the July 30
Order
is
to
facilitate
the
collection
of
funds
by
the
Receiver on behalf of the Court and for the benefit of the
victims of Churchville and Clearpath. Prohibiting various
Receiver’s Opp’n. to Application for a Temporary
Restraining Order, ECF No. 103; SEC’s Opp’n. to Application for
a Temporary Restraining Order, ECF No. 104.
1
2
victims from seeking independent causes of action against
Spire
would
hinder,
rather
than
further,
that
purpose.
Spire’s Motion to Enforce Stay and for Injunctive Relief
(ECF No. 100) is therefore DENIED.
IT IS SO ORDERED.
William E. Smith
Chief Judge
Date: August 1, 2017
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