Atlanta, Georgia (PRWEB) July 31, 2009
The Law Firm of Gregory Bartko, LLC announced today that a 29-page opinion and order was issued by Senior United States District Judge Marvin H. Shoob in an SEC civil enforcement action filed against Brentwood, Tennessee-based Merchant Capital, LLC and its two principals, Steven C. Wyer and Kurt V. Beasley, pending since November, 2002, in Securities and Exchange Commission v. Merchant Capital, LLC, et al., U.S. District Court--Northern District of Georgia, File No.: 1:02-cv-02984-MHS. Judge Shoob's opinion and order followed the reversal of his previous rulings on two occasions by the 11th Circuit Court of Appeals after the SEC appealed Judge Shoob's those earlier rulings.
The latest remand back to Judge Shoob by the 11th Circuit Court of Appeals decision in Securities and Exchange Commission v. Merchant Capital, LLC, et al., 11th Circuit Court of Appeals, File No.: 08-14551 (February 9, 2009) occurred following the Court of Appeal's finding that Judge Shoob was required to make certain findings of fact on whether Merchant Capital and its principals had acted in good faith, were negligent or were intentionally reckless in their management of Merchant Capital, LLC between 2000 and 2002, during which time they raised approximately $24 million dollars that was invested in the discounted purchase of credit card receivables debt.
Judge Shoob's lengthy ruling begins by pointing out that "While studiously ignoring Bernard Madoff and the largest Ponzi scheme in American history, plaintiff Securities and Exchange Commission (SEC) has relentlessly pursued defendants in this case." The court's ruling goes on to say "Nevertheless, after nearly seven years of litigation and the expenditure of untold resources that could have been better spent pursuing crooks like Mr. Madoff, the SEC is back before this Court demanding a permanent injunction as well as disgorgement, penalties, and interest in excess of $10 million. For the following reasons, the Court rejects the SEC's overreaching demands and concludes that neither injunctive relief nor disgorgement is appropriate."
The ruling is clear that any violations by Merchant Capital and its principals were not intentional, but rather were unintentional violations after they consulted with various securities lawyers and received multiple opinions that affirmed the structure of the Merchant Capital enterprises, which has since been liquidated. In addressing whether or not the SEC had proven that there was a likelihood of future violations of the Federal securities laws by the defendants necessitating a permanent injunction against them, Judge Shoob clearly disagreed by remarking that "Quite frankly, after what has happened in this case, defendants would have to be crazy to risk incurring the wrath of the SEC again." The ruling concludes by dismissing two counts of the SEC's complaint and entering judgment in favor of the SEC on three other counts. Even though the SEC sought millions of dollars in disgorgement, permanent injunctions and maximum civil penalties against the defendants, in light of Judge Shoob's findings, Mr. Beasley was fined $2,000 and Mr. Wyer was fined $6,000--based upon their respective ownership percentages in Merchant Capital. A full copy of the opinion and order can be found at http://www.secenforcementdefense.com.
The Law Office of Gregory Bartko, LLC has a team of experienced securities lawyers (transactional and litigation) that concentrate a portion of their law practice to the representation of "Middle Market" sized companies and their management, officers or directors--in all phases and aspects of securities regulatory inquiries, investigations or civil enforcement proceedings that may be brought by the SEC Division of Enforcement or other self-regulatory organizations like FINRA (formerly the NASD).
Contact: Law Office of Gregory Bartko, LLC