United States Securities and Exchange Commission v. Qin

Background

Court-appointed Receiver Robert A. Musiala, Jr., Esq., of Baker & Hostetler submitted the Fourth Fee Application. The application sought approval of fees and expenses incurred between October 1, 2021, and December 31, 2021.

The application requested approval of $621,540.90 for BakerHostetler, $256,214.52 for Ankura Consulting Group, and $1,298.70 for Nelsons Attorneys-at-Law, Ltd. It also requested approval of payments to Elliptic, Inc., and CipherTrace Inc. for three months of initial services. The receiver and the receiver team submitted invoices describing the work performed.

Court’s Analysis

The court explained that a receiver who reasonably and diligently performs the receiver’s duties is entitled to fair compensation for services and expenses. The reasonableness of a fee application is judged in the court’s discretion, including by considering the hourly rates and the number of hours billed. The court also considered the complexity of the problems faced, the benefits to the receivership estate, the quality of the work, and the time records.

The SEC reviewed and approved the application, which the court said deserved great weight. The billing records reflected substantial work involving asset analysis and recovery, forensic accounting, claims administration, cryptocurrency custody and liquidation, subpoenas and information requests, property sales and disposition, analysis of potential claims, investigation of financial institutions and cryptocurrency-exchange accounts, and witness interviews. The receiver and Ankura also applied significant discounts and fee write-offs during the application period.

Ruling

The court granted the Fourth Fee Application. It authorized the receiver to make the total payments requested, including payments to Elliptic and CipherTrace for their initial services.