Securities and Exchange Commission v. Amerindo Investment Advisors Inc.

Background

The government asked the court to enter a settlement stipulation involving the United States, the trustees of the Amerindo Advisors (UK) Limited Retirement Benefits Scheme, the Securities and Exchange Commission, various Amerindo corporate entities, James Stableford, and Gary Tanaka. It also asked the court to vacate the Second Preliminary Order of Forfeiture as to Substitute Assets and terminate the Post-Conviction Restraining Order as to assets held in J.P. Morgan Chase brokerage account number 102-05012 MOD. The government stated that ending the restraint would allow the assets to be returned to the United Kingdom.

Alfred Heitkonig, Paul Marcus, several Marcus trusts, and Ronald Salvitti objected. The opinion collectively calls them the Claimants. They argued, among other things, that they should be able to pursue their interests in the assets through a proceeding connected to the criminal forfeiture case, that forfeiture was mandatory under 18 U.S.C. § 982(a)(1), and that the court had found the substitute assets consisted of Amerindo investors’ money.

Standing and Third-Party Claims

The court held that a non-party petitioner lacks standing—the legal right to challenge a court action—to oppose vacating a preliminary forfeiture order. It explained that a third party’s right under 21 U.S.C. § 853(n) to litigate an interest in property arises when the government seeks forfeiture of that property. Section 853 does not give a third party a right to litigate claims to property whose forfeiture the government no longer seeks.

The court rejected the Claimants’ reliance on the court’s earlier statements that their claims could be litigated in a later proceeding. Those statements addressed the stage when only the defendants’ interests were at issue and did not establish a right to a later proceeding for property the government no longer sought to forfeit. The court stated that vacating the forfeiture order would not prevent the Claimants from seeking relief in a separate proceeding.

Additional Arguments and Ruling

The court rejected Salvitti’s argument that forfeiture of the assets was mandatory under 18 U.S.C. § 982(a)(1), finding that there had been no allegation or finding that the assets were directly forfeitable under that provision. The court also rejected Heitkonig’s argument that prior findings about substitute assets controlled the dispute, because the assets at issue here were the Additional Assets and the court had never determined that they contained investor funds.

Judge Richard J. Sullivan granted the government’s motion to vacate the Second Preliminary Order of Forfeiture as to Substitute Assets and terminate the Post-Conviction Restraining Order as to the Additional Assets. The court ordered the government to submit a proposed Order of Vacatur by April 28, 2022, and directed the clerk to terminate the pending motion at docket number 992 in the criminal case.