Securities and Exchange Commission v. Borges
- George Daniels
- 1:20-cv-10051
- U.S. District Court · Southern District of New York
- 3
In Securities and Exchange Commission v. Borges, Judge Wang granted the Government’s request to intervene and stayed the civil case pending the parallel criminal case.
The ruling affects the Government, the SEC, Raquel Moura Borges, and Global Access Investment Advisor LLC by allowing the Government to join the civil action and pausing that action while the related criminal case proceeds.
What happened
Securities and Exchange Commission v. Borges concerns overlapping civil and criminal cases alleging that Raquel Moura Borges diverted investment clients’ funds and made misleading statements. The Government asked to join the civil case and pause it while the criminal case proceeded; Borges, Global Access Investment Advisor LLC, and the SEC did not oppose the request.
The court found substantial overlap between the two cases and noted that Borges had been indicted. It also concluded that pausing the civil case would avoid unnecessary discovery, protect the criminal discovery process, promote efficient use of the court’s resources, and cause no significant prejudice because no party opposed the stay.
Judge Wang granted the Government’s application, permitted it to intervene, and stayed the civil action until the criminal case is resolved. The parties must file joint status letters every three months, beginning December 2, 2022.
The detailed version
- Securities and Exchange Commission v. Borges · No. 1:20-cv-10051
- George Daniels
- Aug. 30, 2022
Background
The Securities and Exchange Commission brought a civil enforcement action against Raquel Moura Borges and Global Access Investment Advisor LLC. The opinion states that the civil action and a parallel criminal case charge Borges with securities fraud and investment-adviser fraud involving an alleged scheme to divert investment clients’ funds for personal and other purposes and to make material misrepresentations and omissions. The criminal case also includes a wire-fraud charge against Borges.
The United States Government asked to intervene in the civil case under Rule 24 of the Federal Rules of Civil Procedure and requested a stay, meaning a pause in the proceedings, until the criminal case ended. Borges and Global Access did not oppose the application, and the SEC took no position.
Court’s Analysis
The court stated that the Government could intervene as of right because it had an interest in the transactions involved in the civil action. Alternatively, the court concluded that permissive intervention was appropriate because the criminal case and civil action involved common questions of law and fact.
The court applied factors used to decide whether to stay a civil enforcement action while a related criminal prosecution proceeds. Those factors include the overlap between the two cases, the status of the criminal case, possible prejudice from delay, the defendants’ interests and burdens, the court’s interests, and the public interest.
The court found substantial factual overlap and emphasized that Borges had been indicted. It determined that the criminal case’s progress, including discussions about a possible resolution, strongly supported a stay. The court also found that no significant prejudice would result because no party opposed the stay. In addition, the court concluded that a stay would protect restrictions on criminal discovery, serve the public interest, simplify the civil action, and promote efficient judicial administration.
Disposition
The application was granted. The Government was permitted to intervene, and the civil action was stayed until resolution of the criminal case. The parties were ordered to file quarterly joint status letters beginning on December 2, 2022.
The order is signed by Ona T. Wang, although the submission was addressed to Judge George B. Daniels.
Read the full 3-page opinion on CourtListener, the free public archive maintained by the Free Law Project.