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

3