Skatteforvaltningen v. The Stor Capital Consulting LLC 401K Plan
- Lewis Kaplan
- 1:18-cv-04434
- U.S. District Court · Southern District of New York
- 4
In Skatteforvaltningen v. The Stor Capital Consulting LLC 401K Plan, Judge Kaplan denied defendants’ motion to exclude accountant Bruce Dubinsky’s proposed expert testimony.
The ruling affects the plaintiff’s proposed expert testimony and the defendants who sought to exclude it. Dubinsky’s proposed testimony was not excluded, although the court indicated that the jury could receive an instruction distinguishing his accounting opinions from legal instructions and that the defendants could challenge his testimony through cross-examination.
What happened
In Skatteforvaltningen v. The Stor Capital Consulting LLC 401K Plan, the plaintiff offered accountant Bruce Dubinsky as a proposed expert witness. Dubinsky reviewed trading records and account statements involving the Solo custodians and certain defendants.
The defendants asked the court to exclude several parts of Dubinsky’s proposed testimony under Federal Rule of Evidence 702. They argued that he would improperly address legal ownership, lacked expertise concerning liquidity and structured transactions, and relied on unreliable records. The court rejected those arguments, explaining that Dubinsky’s conclusions about whether the shares existed were factual accounting opinions, his discussion of liquidity and creditworthiness was within his expertise, and the records were sufficiently reliable for an expert to use.
Judge Lewis A. Kaplan denied the defendants’ motion. The court noted that any weaknesses in Dubinsky’s qualifications or conclusions could be addressed through cross-examination, and it could instruct the jury not to treat his testimony as a definition of ownership under Danish or other law.
The detailed version
- Skatteforvaltningen v. The Stor Capital Consulting LLC 401K Plan · No. 1:18-cv-04434
- Lewis Kaplan
- Aug. 9, 2024
Background
The plaintiff retained accountant Bruce Dubinsky as a proposed expert witness. His work included reviewing trading records and account statements of the Solo custodians and certain defendants. Defendants moved to exclude his proposed reports, opinions, and testimony under Federal Rule of Evidence 702, which governs the admission of expert testimony.
Arguments and Analysis
The defendants first argued that Dubinsky should not be allowed to testify that the pension plans did not own Danish securities because ownership was a legal issue for the court to explain and the jury to decide. The court rejected the argument. It explained that an expert’s opinion is not automatically improper merely because it relates to an ultimate issue in the case. Dubinsky’s report concluded that the shares did not exist and, as a result, that the defendants could not have owned them as an accounting matter. The court viewed those as factual accounting conclusions rather than legal instructions. If necessary at trial, the court said it could instruct the jury not to treat Dubinsky’s testimony as defining ownership under Danish or any other law.
The defendants also argued that Dubinsky lacked expertise to testify about liquidity, creditworthiness, secured lending agreements, and complicated structured transactions. The court found that the challenged discussion of the plans’ capital, liquidity, and access to real credit was within Dubinsky’s areas of expertise. The court further concluded that the defendants’ criticisms of his qualifications and explanations were subjects for cross-examination, not sufficient grounds to exclude the testimony.
Finally, the defendants argued that Dubinsky relied on unreliable data, including purported trading records in the “Elysium Documents.” The court applied Federal Rule of Evidence 703, which permits an expert to rely on facts or data that experts in the field would reasonably use, even if those materials themselves are not admissible. The court found the Elysium Documents sufficiently reliable. It pointed to testimony that Elysium Global (Dubai) Ltd. had formerly been known as Solo Capital (Dubai) Ltd., as well as the fact that some trading records produced by defendants also appeared among records seized from Elysium companies.
Ruling
Judge Lewis A. Kaplan denied defendants’ motion to exclude Dubinsky’s proposed expert testimony. The court stated that it had considered the defendants’ other arguments and found each of them unpersuasive. This ruling addressed the admissibility of proposed expert evidence and did not decide the underlying claims on their merits.
Read the full 4-page opinion on CourtListener, the free public archive maintained by the Free Law Project.