SECURITIES AND EXCHANGE COMMISSION v. CHOUDHURY et al
| SECURITIES AND EXCHANGE COMMISSION |
| NAYEEM CHOUDHURY and DREAM VENTURE CAPITAL GROUP, LLC |
| 1:2023cv00573 |
| July 12, 2023 |
| US District Court for the Middle District of North Carolina |
| L PATRICK AULD |
| CATHERINE C EAGLES |
| Securities/Commodities |
| 12 U.S.C. § 22 Securities Fraud |
| None |
Docket Report
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This docket was last retrieved on August 9, 2023. A more recent docket listing may be available from PACER.
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| NOTICE of Change of Address as received from defendant NAYEEM CHOUDHURY on 8/3/2023 via email 1098 Othello Lane, Branson West, MO 65737. Address updated. (Winchester, Robin) |
| Filing 30 Envelope Containing #12 Notice addressed to Nayeem Choudhury, 58 Pocono Drive, Durham, NC 27705 returned to court by postal service, marked undeliverable because Return to Sender, No Mail Receptacle, Unable to Forward. (Bowers, Alexis) |
| Filing 29 Envelope Containing #10 Notice addressed to Nayeem Choudhury, 58 Pocono Drive, Durham, NC 27705 returned to court by postal service, marked undeliverable because Return to Sender, No Mail Receptacle, Unable to Forward. (Bowers, Alexis) |
| Filing 28 NOTICE by WELLS FARGO BANK, N.A. Notice of Filing Certified Statement of Non-Party Wells Fargo Bank, N.A. (Attachments: #1 Exhibit A - Certified Statement of Non-Party Wells Fargo Bank, N.A.)(HUTCHINSON, WILLIAM) |
| Filing 27 NOTICE of Attorney Appearance by attorney WILLIAM OWEN LEWIS HUTCHINSON on behalf of Notice Only WELLS FARGO BANK, N.A. (HUTCHINSON, WILLIAM) |
| Filing 26 SEALED CERTIFICATION re: Notice of Assest Freeze from FIDELITY INVESTMENTS received via UPS 7/27/23. (Winchester, Robin) |
| Filing 25 CERTIFICATION re: Notice of Asset Freeze from USBank received via UPS 7/27/2023. (Winchester, Robin) |
Filing 24
ORDER OF PRELIMINARY AND PERMANENT INJUNCTION AND OTHER RELIEF AS TO DEFENDANTS NAYEEM CHOUDHURY AND DREAM VENTURE CAPITAL GROUP, LLC signed by JUDGE CATHERINE C. EAGLES on 07/27/2023, that Choudhury and Dream Venture and their agents, servants, employees, attorneys and those persons in active concert or participation with them, be, and they hereby are, preliminarily and permanently, restrained directly or indirectly from violating Section 5 of the Securities Act of 1933 ("Securities Act") 1115 U.S.C. 77e] by, in the absence of any applicable exemption, as set out herein; IT IS HEREBY FURTHER ORDERED, ADJUDGED, AND DECREED that Defendants and Defendants' agents, servants, employees, attorneys, and all persons in active concert or participation with them who receive actual notice of this Order by personal service or otherwise are preliminarily and permanently restrained and enjoined from violating Section 17(a) of the Securities Act [15 U.S.C. 77q(a)] in the offer or sale of any security by the use of any means or instruments of transportation or communication in interstate commerce or by use of the mails, directly or indirectly, as set out herein, by, directly or indirectly, (i) creating a false appearance or otherwise deceiving any person, or (ii) disseminating false or misleading documents, materials, or information or making, either orally or in writing, any false or misleading statement in any communication with any investor or prospective investor, as set out herein; IT IS HEREBY FURTHER ORDERED, ADJUDGED, AND DECREED that Defendants and Defendants' agents, servants, employees, attorneys, and all persons in active concert or participation with them who receive actual notice of this Order of Preliminary and Permanent Injunction by personal service or otherwise are preliminarily and permanently restrained and enjoined from violating, directly or indirectly, Section 10(b) of the Securities Exchange Act of 1934 (the "Exchange Act") [15 U.S.C. 78j(b)] and Exchange Act Rule 10b-5 [17 C.F.R. 240.10b-5], by using any means or instrumentality of interstate commerce, or of the mails, or of any facility of any national securities exchange, in connection with the purchase or sale of any security, as set out herein, by, directly or indirectly, (i) creating a false appearance or otherwise deceiving any person, or (ii) disseminating false or misleading documents, materials, or information or making, either orally or in writing, any false or misleading statement in any communication with any investor or prospective investor, as set out herein; IT IS HEREBY FURTHER ORDERED, ADJUDGED, AND DECREED that Defendant Choudhury and his agents, servants, employees, attorneys, and all persons in active concert or participation with them who receive actual notice of this Order by personal service or otherwise are preliminarily and permanently restrained and enjoined from violating, directly or indirectly, in connection with the purchase or sale or in the offer or sale of securities, by use of any means or instrumentalities of interstate commerce or any means or instruments of transportation or communication in interstate commerce, or by the mails or any facility of any national securities exchange, be, and they hereby are, restrained from, directly or indirectly as an investment adviser, as set out herein; IT IS HEREBY FURTHER ORDERED, ADJUDGED AND DECREED that Defendants are preliminarily and permanently enjoined directly or indirectly, including, but not limited to, through any entity owned or controlled by them, from participating in the issuance, purchase, offer, or sale of any security, provided however, that such injunction shall not prevent Choudhury from purchasing or selling securities for his own personal accounts; IT IS HEREBY FURTHER ORDERED, ADJUDGED, AND DECREED that Defendants shall pay disgorgement of ill-gotten gains (jointly and severally), prejudgment interest thereon (jointly and severally), and each shall pay a civil penalty pursuant to Section 20(d) of the Securities Act [15 U.S.C. 77t(d)] Section 21(d)(3) of the Exchange Act [15 U.S.C. 78u(d)(3)] and Sections 209(d) and 209(e) of the Advisers Act [15 U.S.C. 80b-9(d)-(e)]. The Court shall determine the amounts of the disgorgement, prejudgment interest, and civil penalty upon motion of the Commission. Prejudgment interest shall be calculated from August I, 2022, based on the rate of interest used by the Internal Revenue Service for the underpayment of federal income tax as set forth in 26 U.S.C. 6621(a)(2). In connection with the Commission's motion for disgorgement and/or civil penalties, and at any hearing held on such a motion: (a) Defendants will be precluded from arguing that they did not violate the federal securities laws as alleged in the Complaint; (b) Defendants may not challenge the validity of the Consent or this Order; (c) solely for the purposes of such motion, the allegations of the Complaint shall be accepted as and deemed true by the Court; and (d) the Court may determine the issues raised in the motion on the basis of affidavits, declarations, excerpts of sworn deposition or investigative testimony, and documentary evidence, without regard to the standards for summary judgment contained in Rule 56(c) of the Federal Rules of Civil Procedure. In connection with the Commission's motion for disgorgement and/or civil penalties, the parties who have entered an appearance may take discovery, including discovery from appropriate non-parties and from Dream Ventures, if it remains unrepresented before the Court; IT IS FURTHER ORDERED, ADJUDGED, AND DECREED that, solely for purposes of exceptions to discharge set forth in Section 523 of the Bankruptcy Code, 11 U.S.C. 523, the allegations in the complaint are true and admitted by Defendant Choudhury, and further, any debt for disgorgement, pre-judgment interest, civil penalty or other amounts due by Defendant Choudhury under this Order or any other judgment, order, consent order, decree or settlement agreement entered in connection with this proceeding, is a debt for the violation by Defendant Choudhury of the federal securities laws or any regulation or order issued under such laws, as set forth in Section 523(a)(19) of the Bankruptcy Code, 11 U.S.C. 523(a)(19); IT IS FURTHER ORDERED, ADJUDGED, AND DECREED that the Consents of Defendants are incorporated herein with the same force and effect as if fully set forth herein; IT IS FURTHER ORDERED, ADJUDGED, AND DECREED that this Court shall retain jurisdiction of this matter for the purposes of enforcing the terms of this Order. (Bowers, Alexis)
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| Filing 23 Minute Entry for proceedings held via zoom before JUDGE CATHERINE C. EAGLES: Attorneys Joshua Cole Hess and Edward Sullivan appeared as counsel for plaintiff. Nayeem Choudhury present Pro Se. Motion Hearing held on 7/27/2023 regarding Motion for Preliminary Injunction via Zoom. Order forthcoming extending the Temporary Restraining Order pending entry of an order in connection with other pending motions. (Court Reporter Jane Allen.) (Winchester, Robin) |
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TEXT ORDER issued by JUDGE CATHERINE C. EAGLES on 7/27/23. The Temporary Restraining Order entered July 13, 2023, Doc. #8 , is EXTENDED pending entry of an order in connection with other pending motions. Defendants remain bound by its terms, as stated in open court this day.(Winchester, Robin)
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| Filing 22 NOTICE by PNC BANK, N.A. Notice of Filing Certified Statement (Attachments: #1 Exhibit A - Certified Statement of Non-Party PNC Bank)(HUTCHINSON, WILLIAM) |
| Filing 21 NOTICE of Attorney Appearance by attorney WILLIAM OWEN LEWIS HUTCHINSON on behalf of Notice Only PNC BANK, N.A. (HUTCHINSON, WILLIAM) |
| Filing 20 DECLARATION of John S. Keating of Webull Financial LLC received via email 7/21/23 re: Notice of Asset Freeze (Winchester, Robin) |
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Filing 19
ORDER signed by JUDGE CATHERINE C. EAGLES on 07/24/2023, as set out herein, The hearing scheduled for July 27, 2023, will go forward and the Court will hear from the plaintiff as to the LLC issue. If the Court determines that the general rule prohibiting an LLC from appearing in the case except through counsel applies to the consent order, then the plaintiff will need to proceed on the merits on the motion for preliminary injunction as to Dream Venture. (Bowers, Alexis)
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| Filing 18 CERTIFICATION re: Notice of Asset Freeze from Stripe, Inc. received via email 7/21/23 (Winchester, Robin) |
| Filing 17 CERTIFICATION re: Notice of Asset Freeze from APEX Clearing received via email 7/19/23 (Winchester, Robin) |
| Filing 16 NOTICE of Attorney Appearance by attorney LAURA E. DEAN on behalf of Notice Only UNIVERSITY OF NORTH CAROLINA (DEAN, LAURA) |
| Filing 15 NOTICE by Simmons Bank Notice of Filing Certified Statement (Attachments: #1 Exhibit A - Certified Statement of Simmons Bank)(MANDEVILLE, MARY) |
| Filing 14 NOTICE of Attorney Appearance by attorney MARY K MANDEVILLE on behalf of Notice Only Simmons Bank (MANDEVILLE, MARY) |
| Filing 13 CERTIFICATE of UNIVERSITY OF NORTH CAROLINA by Notice Only UNIVERSITY OF NORTH CAROLINA. (DEAN, LAURA) |
| Filing 12 Notice of Video Conference Hearing: Persons granted remote access to proceedings are reminded of the general prohibition against photographing, recording, and rebroadcasting of court proceedings. Violation of these prohibitions may result in sanctions, including removal of court issued media credentials, restricted entry to future hearings, denial of entry to future hearings, or any other sanctions deemed necessary by the court. Hearing on Motion for Preliminary Injunction set for 7/27/2023 01:30 PM in Greensboro Courtroom #3 before JUDGE CATHERINE C. EAGLES. (Winchester, Robin) |
| Filing 11 STATUS REPORT Regarding No Accounting By Defendant Dream Venture Capital Group, LLC by SECURITIES AND EXCHANGE COMMISSION. (SULLIVAN, EDWARD) |
| Filing 10 STRICKEN see Doc. 12 Notice of Video Conference Hearing NOTICE of Hearing: Motion Hearing set for 7/27/2023 01:30 PM in Greensboro Courtroom #3 before JUDGE CATHERINE C. EAGLES. (Winchester, Robin) Modified on 7/19/2023 (Winchester, Robin). |
| Motions Submitted: #9 MOTION to Approve Consent Judgment to JUDGE CATHERINE C. EAGLES- (Winchester, Robin) |
| Filing 9 MOTION to Approve Consent Judgment by SECURITIES AND EXCHANGE COMMISSION. (Attachments: #1 Consent of Defendant Choudhury to Orders of Preliminary and Permanent Injunction and Other Relief, #2 Consent of Defendant Dream Venture To Orders of Preliminary and Permanent Injunction And Other Relief, #3 [Proposed] Order of Preliminary and Permanent Injunction And Other Relief As to Defendants Choudhury and Dream Venture)(SULLIVAN, EDWARD) |
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Filing 8
TEMPORARY RESTRAINING ORDER AND ORDER TO SHOW CAUSE, ORDER FREEZING ASSETS, AND ORDER PROHIBITING DESTRUCTION OF DOCUMENTS signed by JUDGE CATHERINE C. EAGLES on 07/13/2023, that, pending the determination of the Commission's Motion for a Preliminary Injunction or hearing on the merits: With one exception, the assets of Defendants Nayeem Choudhury and Dream Venture Capital Group, LLC are hereby frozen, as set out; At defendant Choudhury's request made at the hearing, the personal account of Defendant Choudhury at U.S. Bank, NA, ending in 2822 shall not be frozen, subject to the following restrictions and conditions, as set out; that Defendant Dream Venture and Defendant Choudhury on behalf of Defendant Dream Venture shall cause to be created and shall submit to the Plaintiff Commission within three (3) business days following service of this Order, the following identifying information, as set out; If Defendant Dream Venture has retained counsel who has entered an appearance, counsel shall file these materials on the docket under seal. If no attorney has entered an appearance for Defendant Dream Venture, the Plaintiff Commission shall file them on the docket under seal. If Defendant Dream Venture does not file or submit materials, the Plaintiff Commission shall file a statement to that effect. Defendant Choudhury shall gather the same information on his personal behalf and be prepared to submit it to the SEC immediately if and when the Court decides that is appropriate; FURTHER ORDERED that Defendants Choudhury and Dream Venture and their agents, servants, employees, attorneys-in-fact, and those persons in active concert or participation with him who receive actual notice of this Order by personal service or otherwise, and each of them, are hereby restrained from destroying, mutilating, concealing, altering, or disposing of any document referring or relating in any manner to any transactions described in the Commission's complaint in this action, as set out; FURTHER ORDERED that, under Rule 4 of the Federal Rules of Civil Procedure, service of all pleadings and other papers, including the Summons, the Complaint, this Order and all documents filed in support thereof, and all other documents to be served in this action, may be made personally, by facsimile, by overnight courier, by email, or by mail upon each Defendant, their attorney, their U.S. agents or their foreign agents, including banks to the extent permitted by law, or by alternative provision for service permitted by Rule 4 of the Federal Rules of Civil Procedure, including all means authorized under North Carolina law; FURTHER ORDERED that each Defendant and their attorneys shall appear before this Court by video appearance at 1:30 p.m. on the 27th day of July, 2023, or as soon thereafter as the matter can be heard, and show cause why a Preliminary Injunction under Rule 65 of the Federal Rules of Civil Procedure should not be granted extending the asset freeze and other relief granted in this Order until a final adjudication on the merits may be had. Defendants Choudhury and Dream Venture shall serve any papers in opposition to such relief by hand delivery or overnight courier service to the Commission's counsel, as set out, no later than 48 hours before the hearing. No later than 24 hours before the hearing, the Plaintiff Commission shall serve a reply brief on the Defendants or their attorneys by facsimile transmission, email, courier service, or other means as the Commission may reasonably determine will give the Defendants or their attorneys prompt delivery of these papers; FURTHER ORDERED that Defendant Dream Venture and Defendant Choudhury on behalf of Defendant Dream Venture shall prepare or direct the preparation of and present to this Court and to the Commission a sworn accounting of all funds received by Defendant Dream Venture under the scheme described in the Commission's Complaint and of the disposition and use of said proceeds, as set out. If Defendant Dream Venture has retained counsel who has entered an appearance, counsel shall file these materials on the docket under seal, no later than 7 days before the hearing. If no attorney has entered an appearance for Defendant Dream Venture, Defendant Dream Venture and Defendant Choudhury on behalf of Defendant Dream Venture shall deliver the materials to the Plaintiff Commission which shall file them on the docket under seal. If Defendant Dream Venture does not file or submit materials, the Plaintiff Commission shall file a statement to that effect; FURTHER ORDERED that, pending determination of the Motion for Preliminary Injunction, Defendants Choudhury and Dream Venture and their agents, servants, employees, attorneys and those persons in active concert or participation with him, be, and they hereby are, restrained from, directly or indirectly, from violating Section 5 of the Securities Act [15 U.S.C. 77e] by, directly or indirectly, in the absence of any applicable exemption, as set out; FURTHER ORDERED that, pending determination of the Motion for Preliminary Injunction, Defendants Choudhury and Dream Venture and their agents, servants, employees, attorneys and those persons in active concert or participation with him, be, and they hereby are, restrained from, directly or indirectly, in connection with the purchase or sale or in the offer or sale of securities, by use of any means or instrumentalities of interstate commerce or any means or instruments of transportation or communication in interstate commerce, or by the mails or any facility of any national securities exchange, as set out; FURTHER ORDERED that, pending determination of the Motion for Preliminary Injunction, Defendant Choudhury and his agents, servants, employees, attorneys and those persons in active concert or participation with him, be, and they hereby are, restrained from, directly or indirectly, in connection with the purchase or sale or in the offer or sale of securities, by use of any means or instrumentalities of interstate commerce or any means or instruments of transportation or communication in interstate commerce, or by the mails or any facility of any national securities exchange, be, and they hereby are, restrained from, directly or indirectly as an investment adviser, as set out; FURTHER ORDERED that any brokerage institution, financial institution, bank, savings and loan, mutual fund, or any other person, partnership, or corporation maintaining or having custody or control of any brokerage or deposit account or other assets of Defendants Choudhury and Dream Venture that receives actual notice of this order by personal service, facsimile transmission or otherwise shall, within five (5) business days of receipt of that notice, file with the Court and serve on counsel for the Commission a certified statement setting forth, with respect to each such account or other asset, the balance in the account or description of the assets as of the close of business on the date of receipt of the notice; FURTHER ORDERED that the Court shall retain jurisdiction of this matter for all purposes. Defendant Dream Venture Capital Group, LLC, is advised that limited liability corporations can only appear through counsel; limited liability corporations cannot appear pro se or through managers or members. The Temporary Restraining Order shall expire on July 27, 2023, at 2:00 p.m., unless extended by separate order. (Bowers, Alexis)
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| Minute Entry for proceedings held before JUDGE CATHERINE C. EAGLES in GSO-1: TRO Hearing held on 7/13/2023 with all parties appearing via Zoom. Attorneys Edward Sullivan and Joshua Hess present for the SEC. Nayeem Choudhury appeared Pro se. Terms of TRO were discussed and written order forthcoming. Clerk's Office is directed to email a copy of the written order to Defendant Choudhury and Defendant Choudhury is to provide a written address to the Clerk's Office. Hearing on motion for preliminary injunction set for 7/27/2023 at 01:30 PM in Greensboro Courtroom #3 before JUDGE CATHERINE C. EAGLES. (Court Reporter Jane Allen.) (Engle, Anita) |
| Filing 7 NOTICE of Attorney Appearance by attorney MADISON GRAHAM LOOMIS on behalf of Plaintiff SECURITIES AND EXCHANGE COMMISSION (LOOMIS, MADISON) |
| Filing 6 Notice of Right to Consent. Counsel shall serve the attached form on all parties. (Attachments: #1 Consent Form) (Bowers, Alexis) |
| Filing 5 Summons Issued as to NAYEEM CHOUDHURY, DREAM VENTURE CAPITAL GROUP, LLC. (Bowers, Alexis) |
| Filing 4 NOTICE of Attorney Appearance by attorney JOSHUA COLE HESS on behalf of Plaintiff SECURITIES AND EXCHANGE COMMISSION. (Garland, Leah) |
| Filing 3 MEMORANDUM filed by Plaintiff SECURITIES AND EXCHANGE COMMISSION re #2 MOTION for Temporary Restraining Order filed by SECURITIES AND EXCHANGE COMMISSION. (Attachments: #1 Rule 65(b) Certification, #2 Sworn Declaration Matthew McNamara, #3 Sworn Declaration Donna Weeks, #4 Sworn Declaration Layton Harris, #5 Sworn Declaration Blesson John, #6 Sworn Declaration Eric Schaeffer, #7 Sworn Declaration Matthew Chacko, #8 Sworn Declaration Tiffany Kunkle, #9 Sworn Declaration Robert Nesbitt)(SULLIVAN, EDWARD) |
| Filing 2 PLAINTIFF SECs EMERGENCY MOTION FOR TEMPORARY RESTRAINING ORDER, ASSET FREEZE, AND OTHER EQUITABLE RELIEF by SECURITIES AND EXCHANGE COMMISSION. Response to Motion due by 8/2/2023 (Attachments: #1 Rule 65(b) Certification, #2 Memorandum of Law In Support of Motion for TRO, #3 Sworn Declaration Matthew McNamara, #4 Sworn Declaration Donna Weeks, #5 Sworn Declaration Layton Harris, #6 Sworn Declaration Blesson John, #7 Sworn Declaration Eric Schaeffer, #8 Sworn Declaration Matthew Chacko, #9 Sworn Declaration Tiffany Kunkle, #10 Sworn Declaration Robert Nesbitt, #11 Order (Proposed) Granting TRO)(SULLIVAN, EDWARD) Modified on 7/13/2023 to complete caption (Bowers, Alexis). |
| Filing 1 COMPLAINT For Injunctive And Other Relief against All Defendants, filed by SECURITIES AND EXCHANGE COMMISSION. (Attachments: #1 Civil Cover Sheet, #2 Summons for Nayeem Choudhury, #3 Summons for Dream Venture Capital Group, LLC)(SULLIVAN, EDWARD) |
| ELECTRONIC NOTICE of ZOOM Hearing: TRO Hearing set for 7/13/2023 08:30 AM in Greensboro Courtroom #1 before JUDGE CATHERINE C. EAGLES. Defendant Choudhury has been notified and will also be appearing as Pro Se via ZOOM. [Persons granted remote access to proceedings are reminded of the general prohibition against photographing, recording, and rebroadcasting of court proceedings. Violation of these prohibitions may result in sanctions, including removal of court issued media credentials, restricted entry to future hearings, denial of entry to future hearings, or any other sanctions deemed necessary by the court. *Participates are required to log in no later than 15 minutes prior to start of the hearing.] (Powell, Gloria) |
| Case ASSIGNED to JUDGE CATHERINE C. EAGLES and MAG/JUDGE L. PATRICK AULD. (Bowers, Alexis) |
| Motions Submitted: #2 MOTION for Temporary Restraining Order to JUDGE CATHERINE C. EAGLES- (Winchester, Robin) |
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