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BRADFORD, Pa. Sean Hvizdzak is working with federal officials to come to a resolution on a fraud complaint by the Securities and Exchange Commission, while his brother Shane appears to be pleading the Fifth Amendment in some aspects regarding accounting matters in the case.

Shane Hvizdzak, 32, of Bradford, and Sean Hvizdzak, 34, of St. Marys, were both named in an SEC complaint in June for allegedly defrauding investors in a cryptocurrency hedge fund scheme. Both have asked for more time to respond in the case, as Friday had been set as the deadline for responses to the complaint.

The brothers allegedly took money from investors, said it was being invested in digital assets and fabricated statements saying the investments were earning huge returns, the SEC alleged.

However, the SEC said the brothers took in the neighborhood of $26 million from investors, put it in their personal accounts and then moved it outside the United States. Some of the funds were put in untraceable digital accounts, the SEC alleged.

The SEC complaint which is a civil case, not a criminal case indicated that the brothers had investors from Pennsylvania, California and Florida.

Sean Hvizdzaks attorney, David Berardinelli of Pittsburgh, asked for an extension to Oct. 5. In his motion, the attorney said Sean Hvizdzak and the SEC have engaged in preliminary discussions about a possible non-litigated, amicable resolution to this action as to him. Due to the complexity of the issues, the discussions will not be completed this week, the attorney explained. The SEC was in agreement with the motion, he noted.

The motion was granted Wednesday by Judge Susan Paradise Baxter.

Contacted by The Era Wednesday, Berardinelli declined further comment.

As for Shane Hvizdzak, Hvizdzak Capital Management LLC, High Street Capital LLC and High Street Capital Partners LLC all represented by The Grail Law Firm of Pittsburgh attorney Efrem Grail is asking to move deadlines as well.

Grails motion noted that the court ordered a preliminary accounting on or before July 1, and for Hvizdzak to provide a final sworn accounting and asset repatriation by July 26.

He asked for the deadline on accounting and repatriation to be moved to Sept. 14, explaining in order to provide the information, Hvizdzak would need access to his business records, which are on a cellphone and laptop that have been seized by the SEC.

In the SECs response, the agencys attorney, Matthew Scarlato, stated Grail informed him that when able, they intended to invoke the Fifth Amendment in response to the preliminary accounting.

The Fifth Amendment is the right against self incrimination.

The response also noted that Grail was in discussions with the Department of Justice to establish parameters by which they could repatriate additional investor assets and provide at least some aspects of the sworn accounting despite Shanes intention to assert the Fifth Amendment.

Scarlato noted this would accomplish the critical goal of securing additional existing investor assets while this case is pending. He noted, too, that the SEC would not agree to an additional extension of time for Hvizdzak to comply with court orders, or to assert his Fifth Amendment rights.

This motion had not been ruled upon by Wednesday afternoon, according to the online docket.

Excerpt from:
Brothers ask for more time in SEC case - Olean Times Herald

The Northern District of Illinois recently denied a brokers motion for a temporary restraining order and a preliminary injunction against the Financial Industry Regulatory Authority (FINRA) seeking to stop a scheduled remote arbitration hearing.

A copy of the opinion in Legaspy v. Fin. Indus. Regulatory Auth., Inc. is available at: Link to Opinion.

In February 2019, the plaintiffs former clients filed a statement of claim against the plaintiff and his firm seeking damages of $2.765 million, loan interest, dividends, and lost appreciation related to alleged losses in their brokerage account. The parties signed a FINRA uniform submission agreement stating that in the event a hearing is necessary, such hearing shall be held at a time and place as may be designated by the Director of FINRA and that the arbitration will be conducted in accordance with the FINRA Code of Arbitration Procedure.

The arbitration hearing was originally scheduled to begin Aug. 17, 2020 in Boca Raton, Florida, but due to the COVID-19 pandemic, FINRA notified the parties that the in-person hearing was canceled and would either be rescheduled or held via ZOOM or telephone conference by joint agreement or panel order. Two days later the panel ordered the hearing to be conducted via FINRAs virtual hearing services on its original date of Aug. 17, 2020. The plaintiff noted his objection at a pre-trial hearing and in a letter in late July.

The plaintiff claimed that FINRA breached its Code of Arbitration Procedure and the uniform submission agreement, denied him due process, and sought injunctive relief to stop the remote hearing. In support, the plaintiff argued that remote proceedings would be cumbersome and procedurally irregular because the claimants are from Argentina and would require an interpreter, and there are dozens of witnesses and hundreds of documents that would have to be shared remotely. The plaintiff also argued that by the time the hearing is over, he would have spent so much on attorneys fees that he will have exhausted his insurance coverage and, if he loses the arbitration, FINRA will deduct any award against his net capital, immediately making his firm undercapitalized under FINRA rules, essentially forcing him out of business before he could file a motion to vacate any award against him.

The Court held that the plaintiff was not likely to succeed on his claim that FINRA breached the uniform submission agreement because FINRA is not a party to the agreement. Instead, the agreement is between the plaintiff and the claimants. Even if FINRA were a party to the agreement, the Court noted that the plaintiff still would not be likely to succeed on his breach of contract claim because, under the Federal Arbitration Act (FAA), the Court does not oversee arbitrators procedural rules. Instead, under the FAA, procedural questions which grow out of the dispute and bear on its final disposition are presumptively not for the judge, but for an arbitrator, to decide. Thus, whether FINRA can or should conduct a hearing remotely is a question of procedure that FINRA, not the Court, must decide.

The Court also rejected the plaintiffs due process argument, noting that FINRA is a private corporation, not a state actor, and thus cannot be sued for violating the Fifth Amendment.

The plaintiff also failed to demonstrate that he would be irreparably harmed absent injunctive relief because the harms of losing the arbitration would occur no matter when the arbitration starts and how it is conducted. Moreover, the Court saw no reason why the claimants would fare any better than the plaintiff in a remote hearing considering they have the burden of proof in the arbitration. The Court believed that, if anything, the logistical challenges of a remote hearing would be more likely to harm the claimants than the plaintiff.

Finally, the Court noted that, even if the plaintiff could prove that he met the threshold requirements for a temporary restraining order, the equities were not in his favor because the claimants argue they suffered losses in excess of $2.6 million and delaying the hearing delays their chance to be made whole. The Court also believed that waiting until the eleventh hour to seek injunctive relief weighed against the plaintiff, noting that claimants and FINRA arbitrators had invested substantial resources to prepare, and enjoining the hearing would upend their preparation.

Accordingly, the Court denied the plaintiffs motion for temporary restraining order and preliminary injunction.

More here:
ND Illinois Denies Broker's Attempt to Block Zoom Arbitration Hearing - Lexology

By U.S. Sen. Mike CrapoR-Idaho

Requiring Americans to prove their property should not have been taken by the government, rather than the government proving guilt, undermines our system of justice. Commonsense restraints must be instituted to protect against civil asset forfeiture abuses. I am again backing legislation to address problems with civil asset forfeiture.

According to a March 2017 U.S. Department of Justice (DOJ) Inspector General report, the Department seized more than $28 billion over the past ten years via asset forfeiture. Despite the staggering sum collected during that period, the report found that the DOJ does not collect data to measure how often seizures and forfeitures advance or relate to criminal investigations.

I joined in reintroducing S. 4074 the Fifth Amendment Integrity Restoration (FAIR) Act, led by Senator Rand Paul (R-Kentucky).

This legislation would better protect property owners from wrongful property seizures and decrease potential monetary incentives for agencies to seize assets. I have co-sponsored this legislation in multiple congresses because it would put the burden of proof where it should be on the government, not innocent Americans. The government would have to prove the assets were used to facilitate criminal activity. Importantly, to address unjust incentives, the legislation would require proceeds from the disposition of seized property to be deposited in the General Fund of the U.S. Treasury, instead of going to the agencies seizing property.

Reintroduction of this legislation builds on ongoing efforts to end forfeiture abuses. This includes urging the DOJ to reform its asset forfeiture practices. For example, in a 2017 letter to the DOJ, fellow senators and I requested the retraction of the Departments expansion of its use of civil asset forfeiture writing, Civil forfeiture does not reflect the fundamental principle of innocent until proven guilty that is vital to our nations criminal justice system.

Law enforcement can confiscate property from individuals without ever giving them a day in court, and it does so with increasing regularity. . . . In 2014 alone, the federal government took more cash and property from Americans than burglars did. I also joined fellow senators in urging our colleagues in the Senate to deny the use of federal funding for expanding DOJs civil asset forfeiture program.

Additionally, the U.S. Supreme Court applied constitutional restrictions to state civil asset forfeiture actions in a 2019 decision determining the Eighth Amendment, our Constitutions protection against excessive fines, applies to the states. The Court found that excessive fines undermine other liberties. This is a step in the right direction as it pertains to protecting property rights, but civil asset forfeitures may still be subject to abuse.

The Fifth Amendment to our Constitution clearly states that no person shall be deprived of life liberty, or property, without due process of law; nor shall private property be taken for public use without just compensation.

As civil forfeiture and other reforms are discussed in the overall context of rebuilding the lost confidence in many institutions designed for the purposes of keeping communities safe, I continue to maintain that the vast majority of law enforcement officers are hard-working Americans who put their lives on the line every day to keep our communities safe.

Unfortunately, we have seen several instances of horrific and inexcusable conduct by some very bad actors under the guise of law enforcement. Reforms are needed. I will continue to work with my colleagues in Congress and the Administration to end civil forfeiture abuses and continue to support legislation to improve and reform policing practices, accountability and transparency.

Read the rest here:
Fifth Amendment Integrity Restoration - The Highland County Press

Jaime McMillan just overcame a six-week battle with COVID-19, but hes worried health restrictions are now more of a menace to individual liberties and commerce than the virus is to public health.

The only instrument we have to protect individuals liberties is the Constitution. And you cant protect the health and safety of people by doing a shortcut around the Constitution, and this is coming from someone whos survived COVID-19, McMillan said in a phone interview.

The Fifth Amendment, he said, protects people from being deprived of property without due process of the law or without just compensation.

Health restrictions in place by the state, the citys mask ordinances and even guidance from local public health agencies, McMillan says, are now skirting with legal jeopardy as essentially governmental takings from private businesses without compensation and eventually are likely to be challenged in court.

McMillan, a former constitutional law professor, said governmental takings arent confined to eminent domain. The law also protects people and businesses from regulatory takings stemming from enforcement of laws.

I think that the federal government can defend itself because you know, whatever you think about the relief packages, weve printed something like $5 trillion for relief, he said, but when you look at the health restrictions on restaurants from the state, when you look at the mask ordinance by the city, no ones considered compensation.

While McMillan, 53, who battled COVID-19 for six weeks in March and April, said the discussions might seem academic, the problem is festering and getting more serious with each business, like The Palace Restaurant, which has announced it will close its doors.

Theres a click economy and a brick economy, and were in danger of losing our brick economy, he said.

The problems with COVID-19 health restrictions are particularly severe in small towns dependent on small businesses, said McMillan, a Durango investment adviser and former candidate for City Council.

The problem in a rural community like Durango, is theres a big difference in the ability of small businesses to withstand this versus a national chain. Walmart can withstand a diminution of sales that a small business cant. And it seems our governments in the name of public health dont recognize that disparity.

The chance of any lawsuit emerging from a Durango small business or even a Colorado small businesses might be remote, but McMillan believes some small businesses across the nation are likely to challenge COVID-19 health restrictions as takings under the Fifth Amendment.

I think peoples patience will run out at some point. Is anybody going to file a lawsuit? Well, most people dont have the legal knowledge, the time or the budget, but there will be a lawsuit somewhere.

parmijo@durangoherald.com

Visit link:
Durango man battled COVID-19. Now hes fighting health restrictions - The Journal

Editors Note: Its possible there is some litigation missing from this roundup. Please email the editors or the author at [emailprotected] with any relevant litigation missing from this summary. This page was last updated on July 28, 2020.

On June 26, President Trump announced an Executive Order instructing the Attorney General to prioritize investigations and prosecutions for the desecration of monuments, memorials and statues and for several other departments, including Homeland Security, to provide personnel to assist with protecting such monuments. Acting Secretary of Homeland Security Chad Wolf responded by preparing 2,000 federal agentsincluding Border Patrol agents, Immigration and Customs Enforcement officers and Coast Guard personnelto assist the Federal Protective Service, the agency charged with protecting federal property.

Soon after, reports began to surface of federal agents in Portland, Oregon pulling protestors into unmarked vehicles, refusing to identify themselves and using indiscriminate and violent tactics against protestors and neutral observers alike. Several lawsuits have been initiated against the Department of Homeland Security (DHS) and other government agencies in response to these events. What follows is a run-through of litigation surrounding the federal governments activity in Portland. While additional litigation has been filed against state and local authorities in Portland, this roundup includes only lawsuits against the federal government. These cases raise a wide range of constitutional and statutory claims, from more standard claims of violations of the First, Fourth and Fifth Amendments, the Administrative Procedure Act and civil rights violations under 42 U.S.C. 1983 to more innovative claims under the Tenth Amendment, the Federal Vacancies Reform Act and the Appointments Clause.

Woodstock et al v. City of Portland et al (3:20-cv-01035)

On June 28, the ACLU of Oregon and Braunhagey & Borden LLP brought a class-action lawsuit in the U.S. District Court for the District of Oregon against the City of Portland on behalf of journalists and legal observers who were allegedly targeted and attacked by law enforcement. The named plaintiffs are The Portland Mercury, a newspaper and media company, as well as individual journalists and legal observers. U.S. District Judge Michael H. Simon granted a temporary restraining order (TRO) against the City of Portland and officers of the Portland Police Bureau on July 2.

On July 17, following President Trumps Executive Order and the subsequent deployment of federal officers to Portland, plaintiffs amended their complaint adding DHS and the U.S. Marshals Service as defendants and seeking to enjoin DHS, the Marshals and their agents from assaulting news reporters, photographers, legal observers, and other neutrals who are documenting Defendants violent response to protests over the murder of George Floyd. The suit sought a TRO and preliminary injunction, as well as declaratory relief and monetary damages. The amended complaint includes allegations that federal agents shot photographer Lewis-Rolland with impact munitions 10 times as he filmed and photographed them and that local police struck independent attorney and legal observer Kat Mahoney with a truncheon across the back, where the words ACLU LEGAL OBSERVER are emblazoned on her vest.

On July 23, Judge Simon granted a TRO enjoining the defendants for 14 days from arresting, threatening to arrest, seizing any photographic or recording equipment or press passes from or using physical force against any person whom they know or reasonably should know is a Journalist or Legal Observer unless the officers have probable cause. The order also exempts journalists and legal observers from an officers order to disperse.

Rosenblum v. John Does 1-10 et al (3:20-cv-01161)

On July 17, Oregon Attorney General Ellen Rosenblum brought suit in the U.S. District Court for the District of Oregon on behalf of the State of Oregon, its agencies and its citizens under the doctrine of parens patriaea type of standing that allows state attorneys general to litigate on behalf of their state citizensagainst DHS, Customs and Border Protection, the Marshals, and Federal Protective Service. The complaint alleged that federal law enforcement officers in military fatigues had been driving around downtown Portland in unmarked vehicles and detaining protestors. It also included specific allegations of the arrest of Mark Pettibone, who was allegedly confronted by armed men dressed in camouflage who took him off the street, pushed him into a van, put him into a cell and read his rights but did not tell him why he was arrested or provide him with a lawyer. He was later released with no paperwork, citation or record of the arrest. The suit consists of claims of violations of the First Amendment rights of Oregonians to protest racial inequality, violations of citizens Fourth and Fifth Amendment rights against unreasonable seizures and violations of due process, and a claim of public nuisance, as well as requested injunctive and declaratory relief.

On July 24, U.S. District Court Judge Michael Mosman denied the states motion for a broad temporary restraining order that would have required federal officers to identify themselves and placed some limitations on their ability to make arrests, finding that the state lacked standing.

Western State Center, Inc. et al v. U.S. Department of Homeland Security et al (3:20-cv-01175)

On July 21, Western State Center (WSC), a public benefit corporation, First Unitarian Church of Portland, a religious nonprofit corporation, an individual legal observer Sara Eddie and Oregon State Representatives Karin A. Power and Janelle Bynum brought suit in the U.S. District Court for the District of Oregon against DHS, Customs and Border Protection, Federal Protective Service, and the Marshals. The complaint describes its purpose as to stop the federal government . . . from depriving Portlanders of the right to be policed solely by those the Constitution permits, and who are accountable to Portlanders and Oregonians and to vindicate the First Amendment rights of a church whose religious practice includes activism and protest in the face of injustice. The complaint alleges that unconstitutional overreach by federal law enforcement has restrained the plaintiffs from exercising their First Amendment rights, violated plaintiffs Fourth Amendment rights and encroached on powers reserved to the State of Oregon in violation of the Tenth Amendment. The plaintiffs seek injunctive and declaratory relief. The case is currently assigned to U.S. Magistrate Judge Jolie A. Russo.

Paul v. Trump et al (3:20-cv-01188)

On July 21, Jeff Paul filed a complaint in the U.S. District Court for the District of Oregon against Donald Trump, Chad Wolf, and John Does 1-100 after Paul was allegedly beaten by federal agents during a Black Lives Matter protest in downtown Portland. He stayed overnight for treatment in the emergency room. The complaint alleged violations of Pauls First Amendment right to freedom of speech, freedom of assembly and freedom to petition the government; violations of his Fourth Amendment rights by using excessive physical force and chemical agents; threatened violations of his First and Fourth Amendment rights and a conspiracy to deprive him of his civil rights in violation of 42 U.S.C. 1983. The plaintiff seeks monetary damages and declaratory and injunctive relief. The case is currently assigned to U.S. Magistrate Judge Stacie F. Beckerman.

Wise et al v. City of Portland et al (3:20-cv-01193)

On July 22, Perkins Coie and the ACLU of Oregon brought a lawsuit in the District Court of Oregon on behalf of individual protest medics against the City of Portland, DHS, the U.S. Marshals Service and individual officers. The complaint is brought by four protest medics who typically display large red crosses on their clothing and provide medical services to demonstrators, including: distributing eye wash and eye wipes to protestors in anticipation of tear gas attacks, offering personal protective equipment so that protestors can observe COVID-19 physical distancing protocols, ensuring that protestors remain adequately hydrated and fed, and rendering direct care when police injure protestors. The plaintiffs allege that officers have intentionally targeted and retaliated against protest medics and injured the individual plaintiffs, including shooting rubber bullets at a medic providing aid to a protester on a bench. The complaint includes civil rights claims under 42 U.S.C. 1983; First Amendment violations; Fourth Amendment violations due to excessive force, false arrest and unreasonable seizure and an Administrative Procedure Act claim that the federal officers conduct in implementing the Executive Order to protect federal monuments and property was arbitrary and capricious. Plaintiffs seek monetary damages and declaratory and injunctive relief. The case has been assigned to U.S. District Court Judge Karin J. Immergut.

Dont Shoot Portland et al v. Chad Wolf et al (1:20-cv-02040)

On July 27, Dont Shoot Portland, Wall of Moms and individual organizers filed suit against DHS, Customs and Border Protection, Immigration and Customs Enforcement, the Federal Protective Service, DOJ, the Marshals and their respective agency leadership in the U.S. District Court for the District of Oregon. The complaint alleges violations of the APA by violation of 40 U.S.C. 1315 and by arbitrary and capricious agency action; violation of plaintiffs First Amendment rights to speech, assembly and petition; violation of plaintiffs Fourth Amendment rights against unreasonable seizure and, in the alternative; violation of plaintiffs Fifth Amendment due process rights; violation of the APA by violation of the Constitution; violation of the Appointments Clause (U.S. Const. art. II, 2, cl. 2), unlawful appointment under 6 U.S.C. 112-113 and/or the Federal Vacancies Reform Act and violation of the APA 5 U.S.C. 706(2). The plaintiffs, a diverse group of women-founded organizations and individual women in Portland, Oregon, who are leading, participating, and standing in solidarity with historic lawful protests against police brutality and in support of Black Lives Matter, request declaratory and injunctive relief. The case has been assigned to U.S. District Court Judge Christopher R. Cooper.

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Litigating the Federal Government's Conduct in Portland Protests - Lawfare