United States Securities and Exchange Commission v. Qin

Background

Robert A. Musiala, Jr. of Baker & Hostetler LLP was appointed receiver in the action on January 21, 2022. On June 29, 2023, the receiver filed the Ninth Fee Application, seeking approval of fees and expenses incurred during the period from January 1 through March 31, 2023.

The application requested payment of $784,995.42 to BakerHostetler; $453,290.12 to Ankura Consulting Group, LLC; $375.00 to the Law Office of Dennis O. Cohen, PLLC; $1,012.50 to Nelsons Attorneys-at-Law, Ltd.; and $1,502.20 to Miller Kaplan Arase, LLP. These entities were collectively identified as the Receiver Team. The receiver and the Receiver Team submitted invoices describing their work.

Court’s analysis

The court explained that a receiver who reasonably and diligently performs court-assigned duties is entitled to fair compensation for services and expenses. The court evaluates the reasonableness of a fee application in its discretion, including the reasonableness of the hourly rates and the number of hours billed. Relevant factors include the complexity of the problems, the benefits to the receivership estate, the quality of the work, and the time records.

The Securities and Exchange Commission reviewed and approved the fee application and invoices. The court stated that the agency’s approval receives significant weight in evaluating a receiver’s requested compensation and reimbursement. The application and billing records showed that the Receiver Team performed complex and time-intensive work beneficial to the receivership. That work included collecting and analyzing data; negotiating with third parties; executing settlement agreements; collecting receivership property; investigating claims to potential cryptocurrency assets; converting cryptocurrency assets into U.S. dollars; interviewing and deposing witnesses; issuing subpoenas; and operating an electronic claims portal. The hourly rates were substantially discounted from the receiver’s and Ankura’s ordinary rates, and the application reflected fee discounts and write-offs.

Ruling

Judge Jessica G. L. Clarke ordered that the Ninth Fee Application was GRANTED. The receiver was authorized to make payments for the total amounts requested in the application.

Classification

This is a procedural order because it approved compensation and expense payments for a court-appointed receiver. The order did not decide the underlying claims in the enforcement action.