United States Securities and Exchange Commission v. Carebourn Capital, L.P.

Background

The parties had filed cross-motions for summary judgment, completed briefing, appeared at a hearing, and submitted the motions for the court’s decision. The Alternative Investment Management Association, Ltd., Trading and Markets Project, Inc., and National Association of Private Fund Managers, referred to together as the “Proposed Amici,” later asked for permission to file a friend-of-court brief supporting the defendants’ motion.

Reasoning

The court said permission to file such a brief was discretionary and considered the request’s timing, the usefulness of the proposed information, and whether the brief otherwise warranted consideration. The court found the request untimely because it was made more than two months after summary-judgment briefing had closed. It also found the delay particularly unwarranted because the Proposed Amici had known about the case before the briefing began and had referred to the Securities and Exchange Commission’s filings in a brief filed in an appeal involving a similar case.

The court further found that the proposed brief would be largely unhelpful because it repeated arguments already presented by the defendants. Both the Proposed Amici and the defendants argued that being a “dealer” under the relevant statute requires doing work for customers or clients, and both emphasized factors in the Securities and Exchange Commission’s guidance concerning activities that may require dealer registration.

Additional filings and ruling

The court also addressed continued filings after the summary-judgment hearing. It stated that the parties had submitted several documents beyond the limited information requested at the hearing, including unauthorized memoranda and arguments about supplemental authority. The court directed the parties to stop the further exchange of unauthorized arguments and warned that it would disregard future arguments not authorized by the local rules or expressly permitted by the court.

Judge Katherine Menendez ordered that the Proposed Amici’s motion for leave to file their brief in support of the defendants on the cross-motions for summary judgment was denied. The order did not decide the pending summary-judgment motions.