Securities and Exchange Commission v. Bronson et al
Plaintiff: Securities and Exchange Commission
Defendant: Edward Bronson and E-Lionheart Associates, LLC
Relief_defendant: Fairhills Capital, Inc.
Case Number: 7:2012cv06421
Filed: August 22, 2012
Court: US District Court for the Southern District of New York
Office: White Plains Office
County: New York
Presiding Judge: Kenneth M. Karas
Nature of Suit: Securities/Commodities/Exchanges
Cause of Action: 15 U.S.C. ยง 77
Jury Demanded By: None

Available Case Documents

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Date Filed Document Text
November 24, 2021 Opinion or Order Filing 302 ORDER granting 282 Letter Motion to Compel; terminating 300 Motion re: 282 LETTER MOTION to Compel Edward Bronson to Describe fund sources; submit payments via wire and request for appropriate sanctions addressed to Judge K enneth M. Karas from Maureen Peyton King dated September 15, 2021., 300 MOTION for Relief from the Final Judgment Filed June 8, 2017 re: 178 Memorandum & Opinion, 186 Judgment, . IT IS HEREBY ORDERED that Bronson pay $500 ,000 by December 23, 2021 and resume the Court-ordered payment schedule by paying $1.1 million per month on January 13 and on the 13th of each month thereafter until Bronson has paid the Judgment in full. The final payment shall include the ba lance of prejudgment interest, disgorgement and all post-judgment interest (which shall continue to accrue until payment is made in full). Prior to the due date of this payment, counsel for Bronson shall contact the Commission to obtain the proper payoff amount due. FURTHER ORDERED that, on or before each payment is due Bronson must file proof of each payment along with proof of funds available to make the payment on ECF. FURTHER ORDERED that if Bronson fails to pay and/or fails to file proo f of payment on ECF by the due date of the payment along with proof of funds available to make the payment the U.S. Marshals Service for the Southern District of New York shall take Bronson into custody for his civil contempt. To effectuate Bronson 's arrest, the U.S. Marshals Service may enter his residence at 1275 Fairhills Drive, Ossining, New York 10562 or any other residence or place of business where Bronson is located. The U.S. Marshals Service may use such force as reasonably ne cessary to arrest Bronson and take him into custody. FURTHER ORDERED that Mr. Bronson shall remain incarcerated until he complies with the Orders of this Court. FURTHER ORDERED that Bronson will make each payment to the Securities and Exchange Commi ssion using Pay.gov: https://pay.gov/public/form/start/39621196 or wire transfer. FURTHER ORDERED that Bronson shall surrender his passport to his counsel, Ryan O'Quinn, forthwith. Mr. O'Quinn shall file proof that he has custody of Bronson's passport on ECF by November 26, 2021. (Signed by Judge Kenneth M. Karas on 11/24/2021) (ate)
November 18, 2021 Opinion or Order Filing 294 ORDER granting 293 Letter Motion for Discovery. All requests are granted: Mr. Bronson is to provide substantial details about his and Top Knot's offshore income, assets and cashflow, a current mortgage statement for the residence where the B ronsons reside. Also, Mr. Bronson is to bring multiple copies of each document produced in response to the November 22 hearing. Failure to comply with these directives could result in a contempt finding. Mr. Rachmuth is to appear and be prepared to testify at the November 22 hearing, which will not be adjourned. (Signed by Judge Kenneth M. Karas on 11/18/2021) (ate)
October 27, 2021 Opinion or Order Filing 292 ORDER granting 291 Letter Motion for Discovery. The discovery requests in this letter are entirely reasonable. Mr. Bronson is to produce all the materials and information listed herein by 11/17/21. No extensions will be granted. Failure to prod uce these materials could 1esult in Mr. Bronson being found in contempt. The Court will conduct a hearing on 11/22, at 10:00. At a minimum, the witnesses listed herein must be prepared to testify. SO ORDERED. (Signed by Judge Kenneth M. Karas on 10/27/2021) (jca)
August 17, 2021 Opinion or Order Filing 278 ORDER: IT IS ORDERED that Ryan Stumphauzer shall serve as Liquidating Trustee for the purpose of causing the sale of the Designated Securities in amounts and quantities sufficient to generate the proceeds necessary to timely satisfy the periodic payments ordered by this Court and the fees and costs associated with his appointment. IT IS ORDERED that the Liquidating Trustee shall be authorized to and is hereby directed to liquidate the Designated Securities, subject to a daily trading limit for each issuer equal to 10% of the trading volume for the security on the last day on which OTCmarkets.com reported trading volume. IT IS ORDERED that Top Knot and Bronson are hereby ordered and directed to take all reasonable efforts to cooperate with the Liquidating Trustee to facilitate his performance of all duties and obligations under this Order. IT IS ORDERED that the Liquidating Trustee satisfy the amounts Bronson and ELionheart owe in the following order: (i) penalties and postjudgment interest thereon that Bronson owes; (ii) penalties and postjudgment interest thereon that ELionheart owes; (iii) all disgorgement, prejudgment interest and postjudgment intere st thereon. The Liquidating Trustee shall contact counsel of record for the Commission for the amount of penalties and post judgment interest due and owing. The Liquidating Trustee will pay these penalties to the Securities and Exc hange Commission ("Commission") by any of the following means: Payment may be made electronically to the Commission, which will provide detailed ACH transfer/Fedwire instructions upon request. Payment may also be made direct ly from a bank account via Pay.gov through the SEC website at htts://www.sec.gov/paymentoptions. The Liquidating Trustee may also pay by certified check, bank cashier's check, or United States postal money order, made payable to the Sec urities and Exchange Commission and setting fort the title and civil action number of this action and the name of this Court; and specifying that payment is made pursuant to this Judgment. The funds may be hand-delivered or mailed to: Enterprise Services Center Accounts Receivable Branch HQ Bldg., Room 181, AMZ-341 6500 South MacArthur Boulevard Oklahoma City, OK 73169. All other provisions as further set forth in this order. So Ordered (Signed by Judge Kenneth M. Karas on 8/17/2021) (js)
June 28, 2021 Opinion or Order Filing 259 ORDER terminating 256 Letter Motion to Compel. Mr. Bronson's letter mischaracterizes the Court's ruling with regard to the July 7 hearing. The Court has NOT ruled that Mr. Bronson may not call any witnesses at the hearing, only that th ere will not be enough time to hear from these witnesses given the witnesses who already are scheduled to testify on July 7. That is why the Court indicated that it would take up the question of what additional witnesses would be testifying in this c ase. The Court knows full well that all parties are entitled to due process and it may be the case that the hearing will last multiple days. In the meantime, the Court reminds Mr. Bronson and his counsel of the obligation to follow the Court's orders, including those governing the production of certain materials. So Ordered. (Signed by Judge Kenneth M. Karas on 6/28/21) (yv)
May 28, 2021 Opinion or Order Filing 251 ORDER granting in part and denying in part 247 Letter Motion to Adjourn Conference. The request to adjourn, (Dkt. No. 247), is granted. In view of the number of witnesses scheduled to testify, the hearing will now take place on Wednesday, July 7, 2021 at 10:00 a.m. The Court anticipates completing the hearing in one day. However, the request to excuse Dr. and Ms. Krost, (id.), is denied. The Court will allow Ms. Krost to testify remotely via phone or video. Dr. Krost must make arrangements to appear and testify in person. SO ORDERED.( Status Conference set for 7/7/2021 at 10:00 AM before Judge Kenneth M. Karas.) (Signed by Judge Kenneth M. Karas on 5/28/21) (yv)
May 25, 2021 Opinion or Order Filing 245 ORDER, Pursuant to this Court's Order dated May 14, 2021, (Dkt. No. 241), and the SEC's subsequent request to call additional witnesses, (Dkt. No. 242), the Court hereby orders the following individuals to appear before this Court on Ju ne 3, 2021 at 1:30 p.m. for a hearing in the instant matter: John Kellas, Stuart Krost, Chelsea Krost, Allen Tucci. SO ORDERED. ( Status Conference set for 6/3/2021 at 01:30 PM before Judge Kenneth M. Karas.) (Signed by Judge Kenneth M. Karas on 5/25/21) (yv)
May 14, 2021 Opinion or Order Filing 241 ORDER: The Court will hold a hearing on June 3, 2021 at 1:30 P.M. to resolve the ongoing disputes regarding Edward Bronsons production of documents and the status of his compliance with the Courts January 19, 2021 Order. (Dkt. No. 223.) At a mini mum, Mr. Bronson and his wife, Dawn Bronson, should be prepared to testify under oath and respond to questions from the Court and the SEC. By no later than May 21, 2021, the SEC should notify the Court whether there are additional witnessessuch a s John Kellaswhom it wishes to question at the hearing, in which case the Court will order these additional witnesses to appear. Separately, the Court notes that although Mr. Bronson's counsel, Paul Rachmuth, provided approximately 200 docum ents to the Court for in camera review on May 1, 2021, Mr. Rachmuth failed to specify the basis for withholding each document as ordered by the Court on April 7, 2021. (Dkt. No. 238). Mr. Rachmuth is therefore instructed to provide the Court with supplemental documentation indicating the basis for withholding each document that was provided to the Court for in camera review. He should provide this supplemental documentation no later than May 21, 2021. Finally, Mr. Rachmuth is instructed to respond to the SEC's May 11, 2021 letter, (Dkt. No. 240), no later than May 21, 2021. In particular, Mr. Rachmuth should address the troubling allegation that Mr. Bronson is using Mr. Kellas as a nominee to control the Top Knot entities, an d is now "using Top Knot to fund [his] family expenses in much the way [he] used V2IP." (Id.) Mr. Rachmuth should also address the SEC's proposed payment plan. (See id.) SO ORDERED., Status Conference set for 6/3/2021 at 01:30 PM before Judge Kenneth M. Karas. (Signed by Judge Kenneth M. Karas on 5/14/2021) (rj)
April 7, 2021 Opinion or Order Filing 238 ORDER granting 229 Letter Motion for Discovery. Granted. For each category of documents requested in Dkt. Nos 229-1, 229-2, and 229-3, counsel for Defendant is instructed to provide a complete accounting of which documents have and have not bee n produced. For documents that have not been produced, counsel is instructed to state the basis on which the document(s) are being withheld and provide those documents to the Court under seal for in camera review. Finally, counsel is also instructe d to provide a complete accounting of all assets and income with documentary support for each calculation. All of this is to be provided to the Court no later than Friday, April 30, 2021. The Clerk of Court is respectfully directed to terminate the pending letter motion, (Dkt. No. 229). So Ordered. (Signed by Judge Kenneth M. Karas on 4/7/21) (yv)
February 5, 2021 Opinion or Order Filing 230 ORDER with respect to 229 LETTER MOTION for Discovery Sanctions for Contempt Order Violation. Mr. Bronson is to respond to this letter by 2/10/21. So Ordered. (Signed by Judge Kenneth M. Karas on 2/5/2021) (jca)
May 5, 2020 Opinion or Order Filing 215 CALENDAR NOTICE: Judge Kenneth M. Karas has directed that counsel for all parties herein shall appear on Friday, May 8, 2020 at 11:00 a.m. for a status conference to be held by telephone. All parties participating in the conference shall call the following number at the designated time: Meeting Dial-In Number (USA toll-free): (888) 363-4749 Access Code: 7702195 Please enter the conference as a guest by pressing the pound sign(#). Any requests for adjournments should be filed as soon as possible and clearly explain why the conference should be adjourned. SO ORDERED. (Telephone Conference set for 5/8/2020 at 11:00 AM before Judge Kenneth M. Karas.) (Signed by Judge Kenneth M. Karas on 5/5/2020) (jca)
April 29, 2020 Opinion or Order Filing 213 NOTICE OF TELECONFERENCE INFORMATION: For the week of May 4, 2020, the Court will hold all civil conferences, hearings, and/or oral arguments by telephone. Counsel shall call the following number at the designated time: Meeting Dial-In Number (US A toll-free): (888) 363-4749 Access Code: 7702195 Please enter the conference as a guest by pressing the pound sign (#). Given that much of the Court is operating remotely and has limited mail capability, counsel involved in any pro se cases shall m ail a copy of this Notice to or otherwise inform the pro se party of the above teleconference information. Counsel in any pro se inmate cases shall ensure that the pro se party is on the line before calling the above-referenced number. For initial conferences, counsel shall submit a proposed case management and discovery schedule via ECF by 5 p.m. on the evening before the initial conference. Any requests for adjournments should be filed as soon as possible and clearly explain why the conference should be adjourned. SO ORDERED. (Signed by Judge Kenneth M. Karas on 4/29/2020) (jca)
March 27, 2017 Opinion or Order Filing 178 OPINION & ORDER re: 146 MOTION for Summary Judgment , filed by Securities and Exchange Commission. The Court grants the SEC's Motion for Summary Judgment. Accordingly, Defendants are hereby enjoined from committing further viola tions of § 5 of the Securities Exchange Act of 1933 and are barred from trading in penny stocks. Defendants are hereby ordered to provide the SEC with a calculation of their transaction expenses for the purpose of calculating the disgorgement figure within seven days of the date of this Opinion & Order. The SEC is to submit a revised prejudgment interest calculation based on the revised disgorgement amount, and a proposed final judgment within seven days thereafter. The Clerk of Court is respectfully directed to terminate the pending Motion. (Dkt. No. 146.) SO ORDERED. (Signed by Judge Kenneth M. Karas on 3/27/17) (yv)
October 26, 2015 Opinion or Order Filing 120 MEMORANDUM AND OPINION:For the foregoing reasons, Plaintiff SECs motion for reconsideration is granted in part and denied in part. The Court modifies its Order, (Docket No. 98), and amends the protective order, issued pursuant to Rule 26, in accordance with this Opinion and Order. The Clerk is respectfully requested to terminate the pending motion (Docket No. 105). (Signed by Judge Kenneth M. Karas on 1023/2015) (rj)
March 31, 2014 Opinion or Order Filing 21 OPINION AND ORDER: Defendants' Motion To Dismiss is denied. The Clerk of Court is respectfully directed to terminate the pending motion. (Dkt. No. 17.) SO ORDERED. (Signed by Judge Kenneth M. Karas on 3/31/2014) (lnl)
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Plaintiff: Securities and Exchange Commission
Represented By: Andrew Matthew Calamari
Represented By: William Edwards
Represented By: Kevin Patrick McGrath
Represented By: Wendy Beth Tepperman
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Defendant: Edward Bronson
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Defendant: E-Lionheart Associates, LLC
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Relief_defendant: Fairhills Capital, Inc.
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