Securities and Exchange Commission v. Santillo
- John Koeltl
- 1:18-cv-05491
- U.S. District Court · Southern District of New York
- 3
In Securities and Exchange Commission v. Santillo, the SEC asked Judge Koeltl to modify an asset freeze, but this text shows no ruling.
The request concerned the SEC, defendant Paul A. LaRocco, the Florida property’s mortgage holders Charles Ruse, Jr. and Barbara Ruse, and investors allegedly affected by the scheme. The provided text does not show a court ruling affecting their legal rights.
What happened
In Securities and Exchange Commission v. Santillo, the Securities and Exchange Commission asked the court to change an existing order freezing Paul A. LaRocco’s assets. The SEC wanted permission to sell Florida property in which LaRocco had an interest.
The SEC said the property had no equity because a mortgage lien allegedly had priority over the SEC’s lien. It reported that the property was valued at either $55,000 or $58,032, while the mortgage balance was approximately $76,000. The SEC argued that selling the property would not reduce money potentially available to investors.
Judge Koeltl is identified in the filing, but the provided text contains only the SEC’s request and does not show that Judge Koeltl granted or denied it.
The detailed version
- Securities and Exchange Commission v. Santillo · No. 1:18-cv-05491
- John Koeltl
- July 5, 2022
Nature of the document
The provided text is a letter-motion from the Securities and Exchange Commission (SEC), not a court order stating a disposition. The SEC asked the court to modify the stipulated order for a preliminary injunction, asset freeze, and other relief entered on June 29, 2018, as to defendant Paul A. LaRocco.
Background
The SEC said it had sued LaRocco and other defendants over an alleged fraudulent Ponzi scheme that raised more than $102 million from more than 600 investors. The 2018 asset-freeze order covered LaRocco’s assets. The SEC also recorded a notice of pending litigation against a Florida condominium property in Marion County, Florida.
The filing states that Charles Ruse, Jr. and Barbara Ruse conducted a foreclosure sale involving the property in November 2021. They later filed a reforeclosure action against the SEC in Florida state court, and the SEC removed that action to the United States District Court for the Middle District of Florida. The filing says the mortgage lien was recorded before the SEC’s notice of pending litigation.
Requested modification
The SEC requested a carve-out allowing the Florida property to be sold despite the asset freeze. It argued that the mortgage lien was superior to the SEC’s lien and that the property had no equity. The filing gives a property value of $55,000 and a mortgage balance of approximately $76,000; a footnote separately states that a county property-appraiser website valued the property at $58,032 for 2021 property taxes.
The SEC relied on the court’s equitable authority to issue and modify an asset freeze. It argued that modification was appropriate because the sale would not affect any future payment to investors through disgorgement, a monetary remedy requiring a violator to give up alleged ill-gotten gains.
Disposition
The text ends with the SEC’s request that the court grant the motion. It does not state that Judge Koeltl granted, denied, or otherwise resolved the request.
Read the full 3-page opinion on CourtListener, the free public archive maintained by the Free Law Project.