United States Securities and Exchange Commission v. Qin

Background

On January 21, 2022, Robert A. Musiala, Jr. of BakerHostetler was appointed receiver in the action. A receiver is a person appointed by a court to manage property or other affairs involved in a case. On March 29, 2024, the receiver submitted the Twelfth Fee Application, seeking approval of fees and expenses incurred from October 1 through December 31, 2023.

The application sought $293,882.60 for BakerHostetler, $116,196.38 for Ankura Consulting Group, LLC, $1,687.50 for the Law Office of Dennis O. Cohen, PLLC, $810 for Nelsons, and $292.80 for Miller Kaplan Arase, LLP. The receiver and the listed firms submitted invoices describing their work. The United States Securities and Exchange Commission reviewed and approved the application and invoices.

Work and fee analysis

The court found that the receiver’s team performed significant, complex, and time-intensive work that benefited the receivership. The work included seeking to freeze and classify digital assets as receivership property; negotiating with a foreign-based cryptocurrency exchange and other third parties; seeking documents and records; responding to claimant inquiries; and analyzing financial data concerning receivership assets and net recoveries.

The team also filed papers supporting a motion to compel the turnover of assets, opposed Respondents’ motion to strike portions of the Porter Declaration, and defended Porter’s deposition. In the turnover proceeding, the court granted turnover of approximately $529,000 but denied turnover of approximately $3 million because the receiver had not adequately demonstrated that the larger amount was receivership property.

The court noted that the hourly rates for the receiver and Ankura were substantially discounted. For the application period, the combined discount and fee write-off was $244,033.50 for the receiver and $48,444.50 for Ankura. The court also considered the complexity of the work, its benefit to the receivership, the quality of the work, and the time records.

Ruling

The court granted in part and denied in part the Twelfth Fee Application. Because a substantial part of the billed work related to the turnover motion, and because the court had denied part of that motion, the court held back 20% of the fees and expenses in the application.

The receiver was authorized to pay BakerHostetler $235,106.08 and Ankura $92,957.10. The court authorized full payment of $1,687.50 to the Law Office of Dennis O. Cohen, $810 to Nelsons, and $292.80 to Miller Kaplan Arase because their invoices did not reflect work related to the turnover motion.