Searching over 5,500,000 cases.


searching
Buy This Entire Record For $7.95

Download the entire decision to receive the complete text, official citation,
docket number, dissents and concurrences, and footnotes for this case.

Learn more about what you receive with purchase of this case.

Securities and Exchange Commission v. Ruderman

November 21, 2011

SECURITIES AND EXCHANGE COMMISSION, PLAINTIFF,
v.
RUDERMAN, ET AL., DEFENDANTS.



The opinion of the court was delivered by: Hon. Otis D. Wright, II United States District Judge

Order GRANTING Petitions For Approval of Settlements and Attorneys' Fees [137, 139] [Filed 08/11/11]

I. INTRODUCTION

Pending before the Court are Receiver David Ray's (the "Receiver") concurrently-filed Notices of Petition and Petitions for: (1) Instructions and an Order Approving Settlement with Prabhakar Guniganti ("Guniganti") and Approving Compensation of the Receiver's Special Litigation Counsel; and (2) Instructions and an Order Approving Settlements with (a) the Gabriel Kaplan Revocable Trust (the "Kaplan Trust") and Gabriel Kaplan ("Kaplan") as Trustee for the Gabriel Kaplan Revocable Trust; (b) Bosk Djordjevic ("Djordjevic"), and (c) Ryan Wald ("Wald"), and Approving Compensation of the Receiver's Special Litigation Counsel. (Dkt. Nos. 137, 139). Plaintiff, Securities and Exchange Commission (the "SEC"), filed a Statement of Non-Opposition to Receiver's Petitions for Approval of Specified Settlements and Compensation of Special Litigation Counsel. (Dkt. No. 142.) Having considered the papers filed in support of the instant Petition, the Court deems the matter appropriate for decision without oral argument. Fed. R. Civ. P. 78; L.R. 7-15. The Court finds the Receiver has met his burden of demonstrating the proposed settlements fall within the range of reasonableness and were negotiated in good faith. Accordingly, the Court GRANTS the Receiver's Petitions for Settlements with Prabhakar Guniganti, the Gabriel Kaplan Revocable Trust and Gabriel Kaplan as Trustee for the Gabriel Kaplan Revocable Trust; Bosko Djordjevic, and Ryan Wald. The Court also finds the Receiver has met his burden of demonstrating that the proposed attorneys' fees and costs are reasonable. Accordingly, the Court GRANTS the Receiver's Petitions for attorneys' fees and costs in the above-referenced matters.

II. BACKGROUND

On April 28, 2009, the Securities and Exchange Commission filed a Complaint against Bradley Ruderman; Ruderman Capital Management, LLC ("RCM"); Ruderman Capital Partners, LLC ("RCP"); and Ruderman Capital Partners A, LLC ("RCP-A"). (Dkt. No. 1.) The SEC alleged that Ruderman engaged in a scheme to defraud investors by offering investment materials through RCM to secure investments in the hedge funds RCM and RCP-A, which allegedly would never have been repaid. (Id.)

On May 7, 2009, the Court entered a permanent injunction and appointed David L. Ray as receiver of RCM, RCP and RCP-A, (Dkt. No. 31), based on the SEC's request and Defendants' consent, (Dkt. No. 25). Thereafter, on August 31, 2009, the Court entered default as to Defendants RCM, RCP, and RCP-A for failure to obtain counsel. (Dkt. No. 59.) Additionally, on motion of the Receiver and stipulation of bankruptcy trustee for RCP, the Court (1) terminated the duties of the Receiver as to RCP and (2) required advance approval of acts falling outside of Section IV ¶ C of the May 7, 2009 Injunction. (Dkt. No. 31.) Section IV ¶ C permitted investigation and discovery to account for all assets of Defendants. (Dkt. No. 59.) The Court also permitted the Receiver to retain attorneys for purposes of Section IV ¶ C. (Id.)

On September 9, 2009, the Court entered an Order modifying the Receiver's duties so as to be consistent with the Receiver's stipulation with the Trustee. (Dkt. No. 62.) As a result, the Receivership Estate currently consists of RCM and RCP-A only. (Id.) Subsequently, on September 2, 2010, the Court entered an Order permitting the Receiver to retain legal counsel to investigate and pursue all viable claims and avoidance actions of the Receivership Estate, but required the Receiver to obtain additional approval on the terms and conditions for which counsel was to be retained. (Dkt. No. 105 at 2.)

A. The Guniganti Action and Proposed Settlement

On November 3, 2010, the Court denied the Receiver's Motion to employ Saltzburg Ray & Weissman LLP ("SRW") as special litigation counsel on a contingency basis to pursue claims against Guniganti to avoid and recover certain disbursements from RCP-A. (Dkt. No. 118.) On November 9, 2010, the Receiver filed an action against Guniganti on behalf of RCP-A, Ray v. Guniganti, CV 10-08537(the "Guniganti Action"). On December 22, 2010, the Court approved the appointment of Levene, Neale, Bender, Yoo & Brill L.L.P. (the "Levene Firm") to pursue this action. (Dkt. No. 122.)

Guniganti was a long-time investor with Ruderman. At issue in the Guniganti Action were two wire transfers of $1,000,000, each of which Ruderman made to Guniganti during the fall of 2006 in RCP-A's name. (Mot. at 7.) At that time, Guniganti had not invested money in RCP-A. (Id.). The Receiver argued that these two wire transfers were made pursuant to a Ponzi scheme orchestrated by Ruderman. (Id.)

Guniganti answered the Receiver's complaint and filed a counterclaim against the Receiver. (Id. at 8.) Written discovery was taken by both sides, and the parties took Ruderman's deposition in a Texas federal prison. (Id.) Prior to mediation, the parties reached the settlement agreement currently before the Court. (Id.) The proposed settlement calls for Guniganti to make a payment to the Receiver that will range from $175,000 to $179,000, depending on how quickly Guniganti makes the payment. (Mot. at 4-5.) If Guniganti has not made the payment by October 15, 2011, it is proposed that the Receiver may enter a stipulated judgment in favor of the receiver in the amount of $250,000. (Mot. at 5.)

B. The Kaplan Trust Action and Proposed Settlement

The Receiver filed a Complaint against the Kaplan Trust and Kaplan on February 23, 2011, David L. Ray v. The Gabriel Kaplan Revocable Trust, Case No. CV 11-01613. The Complaint stems from allegations that Ruderman caused $142,000 to be wired from RCP-A's account to an account in Kaplan's name. (Mot. at 8.) The Receiver does not contend that Kaplan had any involvement in Ruderman's diversion of investor funds, or that he had any involvement or knowledge of Ruderman's Ponzi scheme. (Id. at 8-9.) Instead, the payment related to a series of high-stakes poker games that Ruderman, Kaplan, Djordjevic, and Wald participated in for several years pre-dating ...


Buy This Entire Record For $7.95

Download the entire decision to receive the complete text, official citation,
docket number, dissents and concurrences, and footnotes for this case.

Learn more about what you receive with purchase of this case.