Burton et al v. US Securities and Exchange Commission

Filing 3

MEMORANDUM DECISION AND ORDER re Movants' 2 Motion for an Order Pursuant to the Financial Privacy Act of 1978. Respondent United States Securities and Exchange Commission shall file a sworn response in accordance with 12 U.S.C. § 3410(b) within 14 days of this Order. Movant is directed to serve a copy of this Order on the SEC and file proof of service with the Court. Signed by Judge Ted Stewart on 5/16/2017. (eat)

IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF UTAH
MARK F. BURTON, SR., as Trustee of the
BRENDA H. BURTON TRUST; MARK F.
BURTON, individually; and BRENDA H.
BURTON, individually,

MEMORANDUM DECISION AND
ORDER RE: MOVANTS’ MOTION FOR
AN ORDER PURSUANT TO THE
FINANCIAL PRIVACY ACT OF 1978

Movants,
v.
UNITED STATES SECURITIES AND
EXCHANGE COMISSION,

Case No. 2:17-CV-395 TS
District Judge Ted Stewart

Respondent.

This matter is before the Court on Movants’ Motion for Order Pursuant to Customer
Challenge Provisions of the Right to Financial Privacy Act of 1978. For the reasons discussed
below, the Court will order the United States Securities and Exchange Commission (“SEC”) to
file a response in accordance with 12 U.S.C. § 3410(b).
On April 25, 2017, the SEC filed three subpoenas seeking access to Movants’ financial
records from Zions Bank. Within ten days of service, Movants filed the instant motion under 12
U.S.C. § 3410 to quash the subpoenas. Section 3410(a) provides that “[w]ithin ten days of
service . . . a customer may file a motion to quash.” Further,
Such motion or application shall contain an affidavit or sworn statement
(1) stating that the applicant is a customer of the financial institution from which
financial records pertaining to him have been sought; and (2) stating the
applicant’s reasons for believing that the financial records sought are not relevant
to the legitimate law enforcement inquiry stated by the Government authority in
its notice, or that there has not been substantial compliance with the provisions of
this chapter. 1
1

12 U.S.C. § 3410(a).

1

If an applicant complies with subsection (a), the court “shall order the Government
authority to file a sworn response, which may be filed in camera if the Government includes in
its response the reasons which make in camera review appropriate.” 2 Upon receiving the
Government’s response, the Court shall decide Movant’s motion “within seven calendar days of
the filing of the Government’s response.” 3
The Court finds that Movants have complied with Section 3410(a). Movants timely filed
their motion and attached affidavits stating that Movants are customers of Zions Bank and
believe the financial records sought are not relevant because Movants do not have, nor have ever
had, any interest in, ownership of, or any business or financial connection to Private Placement
Capital Notes II, LLC, the entity under investigation by the SEC. Further, Movants properly
served their motion on the SEC.
It is therefore
ORDERED that Respondent United States Securities and Exchange Commission shall
file a sworn response in accordance with 12 U.S.C. § 3410(b) within fourteen (14) days of this
Order. Movant is directed to serve a copy of this Order on the SEC and file proof of service with
the Court.
DATED this 16th day of May, 2017.
BY THE COURT:

Ted Stewart
United States District Judge
2

Id. § 3410(b).

3

Id.

2