evident from a reading of the local rule, which exempts

UNITED STATES DISTRICT COURT

SOUTHERN DISTRICT OF FLORIDA

Case N o. (B-80612-Civ-M ARR A

. t .* f . ' !' . j û z.. ,...; t . .akz'.w,.- q-e

SECURITIES AND EXCHANGE COM M ISSION,

Plaintiff,

)

M ICHAEL LAUER,

Defendant.

DEFENDANT M ICHAEL LAUER'S REPLY TO SEC'S RESPONSE TO LAUER'S

M OTION FOR LEAVE TO SUPPLEM ENT M ICHAEL LAUER'S THIRD M OTION TO

VACATE THE JUDGM ENT AND/OR DISM ISS THE COM PLAINT

Defendant M ichael Lauer files this reply to the SEC'S response to Lauer's m otion to

supplement his third motion to vacate the final judgment and/or dismiss the SEC'S complaint.

The SEC has no basis for opposing the filing of Lauer's motion.

First, no authority requires Lauer to consult with the SEC on a dispositive motion, as is

evident from a reading of the local rule, which exempts both motions for summary judgment and

certain motions to dismiss. A supplement to a motion to dismiss is a motion to dismiss. Until

17E2764, moreover, everything the SEC did in this case, starting with DE207, demonstrates that

it agrees whh the only possible reading of the rules. Thus, when Lauer filed his motion to

dismiss or, in the altem ative, to move venue to a more convenient location, the SEC accepted

Lauer's reading of the local rule. The SEC made no objection based on failure to consult when

Lauer filed three motions to vacate the judgment and dismiss the complaint earlier this year. DE

2676, DE 2677, DE 2740. lt made no objection when Lauer filed a motion for recusal. DE

2745. Even more significantly, it made no objection when Lauer previously filed a motion to

1

Case 9:03-cv-80612-KAM Document 2774 Entered on FLSD Docket 12/17/2013 Page 1 of 25

supplement a motion to dismiss. DE 2717. The SEC'S newly formed position should be

rejected.

Second, there was no ûçtransparent attempt to evade page limitations imposed by Local

Rule 7.1.C.'' That is why out of an abundance of caution Lauer filed a motion for leave to

supplement his third motion to vacate and/or dismiss. The subjed third motion to vacate the

judgment and dismiss the complaint, DE 2740, is based on a redacted Request for Commission

Adion and was filed on October 28, 2013. Lauer did not acquire the unredaded Request for

Comm ission Action that is the basis for the supplem entary motion until November 14, 2013, DE

2740, p.1, weeks after he tsled his third motion. Lauer obviously had no advanee notice of when

or how his FOIA request would be deeided.Finally, Lauer could just as easily have filed a

fourth motion to vacate and/or dism iss. The SEC'S position is frivolous and dilatory.

l

Third, the SEC'S response on the merits is risible. After consistently and successfully

resisting all discovery and produdion of documents relating to the events surrotmding the

institution of this case - as has the Receiver both in this Court, DE 2699, and in the Eleventh

Circuit by his motion to intervene in SEC v. Lauer, No. 13-1 31 10, 1 1th Cir., filed August 9, 20l 3

- the SEC attacks as incomplete Lauer's reliance on a dispositive document he obtained from the

SEC itself through FOIA. Of course, the SEC does not produce or even describe the balance of

the documents that it says are required to understand the Request for Com m ission Action. That

would be too easy, except for the obvious fad that the document that Lauer duly acquired from

the SEC is dispositive and there is no suggestion on its face that it must be read and construed in

the light of other docum ents, assum ing such a suggestion might m atter. In the covering letter

' If Lauer had filed a fourth motion to vacate/dismiss, the one-page Request for Com mission

Action would have been the subject of three separate motions and possibly three appeals,obviously inefficient.

2


dated M arch 13, 2013, in the FOIA case, while releasing the redacted Request for Commission

Action, the SEC represented that it was producing çûthose records reflecting the çcollective vote

of the Commissioners' to authorize an investigation and civil adion.'' Exhibit 1. The SEC'S

current statem ent that the Request for Commission Action is irrelevant is nothing less than

2astonishing.

But since the SEC insists that other documents are relevant, Lauer will discuss the only

other document that the SEC produced to date. In the initial FOIA proceeding, after Lauer was

required to file a civil action in the United States District Court for the District of Columbia,

along with the redacted Request for Commission Action, the SEC produced its Order Directing

Private Investigation and Designating Officeis to Take Testimony,'' dated July 7, 2003, the snme

date as the Request for Commission Action. Exhibit 2. That Order stated the Commission's

position that the M iami staff was not prepared to file an action against Lauer. Thus, page 1 of

Exhibit 2 says that identified individuals and entities Qkmay have, directly or indirectly, employed

devices, schemes or artifices to defraud; . . . .'' Page 2 of Exhibit 2 ordered çlthat a private

investigation be made to determine whether the aforesaid persons, entities, or others have

engaged or are about to engage in any of the reported acts, or practices or in any acts or practices

of similar purport or object'' (emphasis added). Lauer does not see how that additional document

advances the SEC'S position on this issue. For obvious reasons the SEC concealed this

document from Judge Zloch and this Court and resisted all discovery.

Since the attomey-client privilege is a nonconstitutional privilege, the Court should draw

adverse inferences from the SEC'S and Receiver's passionate refusal to produce anything

2 The SEC'S argum ent is hard to follow. It states in footnote 3 that it w ill address the m erits

of Lauer's motion later, yet proceeds to argue the merits in the body of its opposition. To

avoid any suggestion that Lauer is pennitting the SEC'S argument to go unanswered, he

includes a brief refutation of the SEC'S argument in this reply


relating to what they did shortly before and shortly after the filing of the complaint and the

appointment of Receiver Steinberg. M oreover, by representing that the withheld documents are

helpful to the SEC'S position, the SEC has once against waived any privilege that it may have

had not to produce additional SEC documents that bear on the subject matter of the Request for

Commission Action. One cannot simultaneously rely on the privilege as both a shield and a

sword. Lauer specifcally renews his request for discovery based on the recent actions of the

SEC and Commission, which include The Receiver's statement in this Court that he and the SEC

were engaged in ajoint operation along with the SEC'S failure to contradict that position. Lauer

discusses this aspect of the waiver in his third motion to vacate the judgment and dismiss the

complaint.

In the Court of Appeals, the Receiver filed a motion to intervene in order to argue his

position that communications between the SEC and him were protected by the joint-entemrise or

common-interest exception to waiver of the attorney-client privilege. Exhibit 3 (Certiticate of

Interested Persons and Corporate Disclosure Statement deleted). The SEC did not respond.

Later, Lauer filed a motion to strike or deny that motion. Both the SEC and Receiver opposed

the motion. Signitk antly, the SEC agreed with the Receiver's position on waiver of the

attorney-client privilege. The SEC opposition is attached hereto as Exhibit 4 (Certificate of

lnterested Persons and Comorate Disclosure Statement deleted). The Court granted the

Receiver's motion to intervene and denied Lauer's motion to strike or deny.

The SEC has taken the position in DE 2764 that the Request for Commission Action was

only 1ta sm all portion of the docum ents between the Comm ission's staff and the Com missioners''

and that Sçltlhe Commission's staff brought this case as the Commissions intended . . . .'l'he last-

cited argument was designed to convince the Court that there are additional records that have not

4


been produced that support the staff's position that it was following Com mission directions. The

Court granted the Receiver's motion to intervene. That constitutes a waiver of the attorney-

client privilege. As noted, it constitutes a prohibited effort to use the privilege as a sword and a

shield.

It is clear that the SEC Commissioners did not authorize the unconstitutional actions that

the M iami SEC decided to take against Lauer, Lancer M anagement Group and Lancer

M anagem ent Group II, and the Lancer-m anaged hedge funds. In particular, the Commission did

not authorize the SEC to engage in the flagrantly unlawful and unconstitutional action of shutting

down the innocent hedge funds on the basis of an expatp order. The SEC resorts with

inapplicable authority that uses language that speaks of the Slconsequence for noncompliance

with statutory timingprovisions,'' United States v. James Daniel Good Real Property, 510 U.S.

43, 63-64 (1993) (emphasis added), or compliance with 11al'l internal agency deadline,'t Barnhart

v. Peabody Coal Co., 537 U.S. 149, 157-50 (2003) (emphasis added). The SEC engages in no

more than wishful thinking.Lauer is talking about agency authority' He is not talking about

timing deadlines! To equate fundamental rights protected by the Constitution and by statute with

minor timing requirements flagrantly distorts the obligation of administrative agencies and their

obligation to adhere to the law.

The SEC states at DE 2765, page 3: C;A statutory provision stating that the Govenlment

shall do something, without more, does not create ajurisdictional limit precluding action.'' Why

does the SEC think Congress required the Commission to approve filing a complaint against a

citizen, with all the horrible ensuing consequences, rather than let an inexperience local staff file

one willy nilly? Such a fundamental violation of the Constitution and laws on the part of the

United States govelmment has consequences. See, e.g., United States v. Giordano, 416 U.S. 505


(1974) (reversing convictions for government's failure to follow specific requirements of wiretap

statute); Stern v. Marshall, 131 S.Ct. 2594, 2605 (201 1) (Roberts, C.J.) Cçç-fhe structural

principles secured by the separation of powers protect the individual . . . ,''' quoting Bond v.

United States, 131 S.Ct. 2355, 2365 (201 1)); Bivens v. Six Unknown Agents ofthe Federal

Bureau ofNarcotics, 403 U.S. 388 (1971) (individual can bring suit against government agents

f iolating the Fourth Amendment); Burke v. Smith 252 F.3d 1260 1263 1265-66 (1 1th CirOr V , , , .

2001) (setting aside as void an earlier judgment because the district court failed to conduct a

fairness hearing on the settlem ent of a minor's claim , holding that the hearing requirement was

binding); Carter v. Fenner, 136 F.3d 1000 (5th Cir. 1998) (affirming district court's decision

declaring a consent judgment void when the child's representative failed to secure court approval

before the settlement, which the court held was essential to protect the interests of minors).

Fundnmental protections protect individuals.

W HEREFORE, the Court must accept Lauer's supplement to his third motion to vacate

the judgment and dismiss the complaint.

Res ectfully subm it'te ,

David M . DorsenSuite 500

2900 K Street, N.W .

W ashington, DC 20007

Telephone: 202 204-3706

E-Mail: [email protected] for M ichael Lauer

Dated: December 13, 2013

6


E X H IB IT 1

7


# +.# %s> tl;ï u 1*

.%uk o. - p o

+ n *wC

OFFICE OF THEGENEM L COIJMSEL

U N ITED STATES

SECURIMIES AND EXGHANGE COMMISSIONW ASHINGTON, D.C. 20549

Stop 9612 March 13, 2013

David M . Dorsen

2900 K Sleeta N.W ., Suite 500

W ashington, D.C. 20007

Re: Appeal, Freedom of lafonnation Act (F0IA) Requeqt No. 2012-10548

Dear Mr. borsen:

of Inform aion Act appeal of thedecision of the FolN privacy Act Oo cer

, Securities and Excbnnge Commissiow to withbolddocllments submitted by Commission staffto the Commissioners related to a civil

complaintagainst M ichael Lauer ms well as records reflecting mly vote to authotize an investi

gation andfiling of the civil comple t against M r. Lauer. On Novem ber 5, 2012, the FOIA Offker asserted

Exemption 5, 5 U.S.C. 552(19(5), to withhold responsive records. In your November 13 appeal,as further clarified on November 16, you limited the scope of the request to solely those records

reflecting the llcollective vote of the Commissioners'' to authorize an hwestigation and civil

action. As nalw wed on appeal, your request excludes any commlmicaéons 9om Commissionattomeys and slnffto the Commission. 1 have reviewed your appeal and have determined t

oexercise my discretion and to relemse the seriatim vote authorizing the ftling of a civil a

céon anda copy of tile Formal Order of hwestigation

, both of which are enclosed. This discretionaryrelemse should not be interpreted as a waiver of any applicable exemption should you mak

e arequest for similar information in the future.

'

Imnresponding to your November 13, 2012, Freedom

For the Commission

by delegated authority,

Richard M . Humes

Associate General Cotmsel

Enclosure


E X H IB IT 2

8


qYFtJSLICU S ATES OF AMERICAbefore theS

ECURI'I'IES AND EW HANGE COMY SSION

July 7, 2803

. '*

1In the M atter of :

. '

LANCER oe sHoltEyo c. ORDYRDIRECTINGPRIVA.

Im sn cAn ox wxsm 02939 DXSTGNATW G om cEas

: m ya m m osy. .

'

. i .

I

n e staFhai reported information to the Comndssion tbat tends to showthat:

'

A. Three hedge fmtds started in 1994, 1995 and 1999

, timt are notre/stered with the Commissiow - - Lancer Parters LP, Lancer UFshöre, hc.; andThe Omnl'Fu< Ltd. (collmévely referred to

as the RLDCC F=ds'l - - oseredinvestzpts to the public, in the form of limited parte

rKhib, intœests or shares, tke. ' .œ ' ..X .proceeds of which were te d b#Qw T Jmcer Fund

s to'pdmnrily invœt in small an'dmid-cap companies. At ieirpeak the Ixqncœ Funds rep

ortedlymanaged over $1.2billioa

B. At all relevut times, Michael Lauer Cuuer''). through hismanagvment companies

, Lmwer Management Group LLC and Lancer ManagementGroup 11 LLC (W-qncer Me geme

nf 3. operated the Ixncer Flmdq and SeI'VH asits invese ent msnlger. Iiuer is the.fotmder

, sole m anagçr and prindpal owner ofLancer M anagement.

C-. While engaged in theDmhase and sale of securï es

,

in the form Oj'%SYY' Od in Connection * t11 tlleP. jtea parusvsup jmom s orshares

, Iwauer and yomcer Managenput and ceua oj.tjja proxt auoor youwom cezsa direcjors

, employees, agrnts, aëljatqs and ozerpersoss or eatz

es mayhave, directly or indirectly, employed deuces

, schemas or arc ces to dew udi .obe ed money or property by meam

s oji or ole- se may have made untruestatemena of matedal facu or omitted jo

sute material j'acts necessaryu ortw t;make the statements made iu jjgu oj'gp cjxumsta

nces uutsr wuu tjsy wyx>.y,

made. not misleading; or engaged fn acts traasacuons pmctices

, or courso oçbusiness wliich would and did operate as a fraud or deceit upon purcha

ers antjothers concenzingy among otà. thups, maipujauve trading practues

, se yajua ogthe Lancer Funds poztfolios, the manner of theïr opemgons

, specu c pousuoholdinps, and management's backpotmd

.

offer and


le%t 2000 to July 2003, Iaauery TmncerM anagement

y andother persbns or entities associ

ated w1t11 them, in çonnection w1t11 them or tkeirbusiness as an invesc ent add

ser, may have, directly or indirectly. employeddevices. sohemes or artifces to d

egaud any client or prosnv fve olienji or engagedin tonsacuons

, praçûces or couoes of btlsiness which have operatH or wouldopemte R a âaud or d

eceit upon any client or prospecuve clienty concenu'ng,among pther tbings

y me pulative tading practices, the value of àè lzmcer Flmdsortfolios, the mlmner of their op

erations, specifio poztfoliû holdiugs. and

P

manag= ent's backpound-

From atD.

E. While eqgaged in the activities set fo% above

, lxuer and lmncerManagemmt and certm'n of their present anior former off

cers, dtr' ectpaaemployees, agmts

, xY liltes and oler persons or enéties, directly or indirectly

,m àde use of the mails

, and the means and iustmments of transportadon andcommtmicaupn in intemtxt

t com m erce. and of tâe means and insfnxmentalities ofinterstate commerce

, or the facility of a nafonal gecurities exchange

.

n e Commissiona having considered the staff

s report and deeming suchactq atd pracéces, iftrue, to be a possible violation of Secdon 17(a) of tâeSeouddes Act of 1933 Cs

eçuriies Acf')a Sedion 101) of the Senlm'ties Excbxnglu k aAct of 1934 ( Exchsnge Aof 3 and R e 10b

-5 promulgated ierelm er and' SecGons 2û6(1) and (2) of the lnvese ent Advisers A

ct of 1940 CWdvisers Act''),

snds it neçessary and appropriate and hereby:

ORDERS, pursxlnnt to the provisions of Secuon 20(a) of the SezmritiesAct

, Sœéon 21(a) of the Exchnnge Act and Secion 209(a) of tke Advisea Act

,tbst q privat: investiation be made to detctmine whether the aforesaid persons

,entites, or others.éave engage or are about to

engage irl any of the ro orted acts,or pcactices or in any acts orpracuces

of similar pumort or object and

ORDERED, purjuant to the provisions of Sœio

n l9(c)of the SecM ties Act Section' 21*) of the Exchaage Act and

.sece n 209*) of theAdvisers Act that for the purposes of such investigaéon David Nelson

, Glenn S.Gordpn, Jolm C..Mattimore, Nicholms A

. M oùaco, Eiic R. Busto, Robbie L. M ayer.Terence M . Tennant

, Fem ando Torres, Trisha D. Sindler

, Teresa J. Verges, KenyA Zinn Robert K

. Levensow Alise Johnsow Chris M ne'n Jon Jordm and each

of

*' 7

Fiem, are hereby desir atéd oo cers of Ge Commission and empo

wered tosdminister oaths and nm rmations, subpoena wiGessœ

, compel tlzéir attenda èe,take evibence, require the production of

anybooks, pajers, correspondence,

ITIS R RTHER

2


memöranday con% cts, agreemerlts, or other records de.emed rdevaat or material to

dto perfoe a11 other dutiœ in conne où tterewitll as pre-= 'bed bythe inquhy >j 'aW.

By tlle Com mission.

3011a* G. KAtZ

SCCOW

e' . .

i. . UW + .J

By: Jill M. Petersös.-

tant Secretar-/.Assis


E X H IB IT 3

9


Case: 13-13110 Date Fîled: 08/09/2013 Page: 1 Of 51

IN TlW

UM TED STATES COURT OF APPEALS

FOR Tlv ELEVEN TH CIRCUIT

Case No. 13-13110-EE

SECURITIES M D EXCHAN GE COM M ISSION

PlaintiffAppellee,

SHCH AEL LAUER,

Defendant/Appellant.

Receiver's M otion for Leave to Intervene in M ichael Lauer's Appeal

of District Court's Omnibus Order Denying M otion for an Order

Allowing the Parties to Take Discovery Relating Solely to

D efendant's M otion to Vacate the Judgment

Juan C. EnjamioHunton & W illinm s LLP

1 1 1 1 Brickell Avenue

Suite 2500

M iami, FL 33131

(305) 810-2500

Counsel for M arty Steinberg, Receiver

C-1 of 44


Case: 13-13110 Date Filed: 08/09/2013 Page: 46 of 51

M otion

M arty Steinberg, Esq., as the court-appointed receiver of various

Receivership Entities, and a party with an interest in the outcom e of this appeal,

pursuant to Fed. R. App. P. 15, hereby files this motion for leave to intervene in

M ichael Lauer's appeal of the District Court's Omnibus Order Denying M otion for

an Order Allowing the Parties to Take Discovery Relating Solely to Defendant's

M otion to Vacate the Judgment.

follows:

ln support of this M otion, the Receiver states as

Introduction

0n July 8, 2003, the United States Securities and Exchange Comm ission

Other Relief against Michael(the GtSEC') tiled a Complaint for Injunctive and

Lauer (:&Lauer'') and various Lauer-controlled entities

before the United States District Court for the Districtof Florida (the içDistrict

(the (CSEC Complaint'')

Court''), initiating Case No. 03-80612-CIV-M ARRA/HOPIUNS (the

GGlteceivership Case''). On July 10, 2003, the District Court entered an Order

Appointing Receiver, which nm ong other things appointed M arty Steinberg, Esq.

as Receiver of a number of Receivership Entities. Since his appointm ent, the

Receiver has worked to m arshal assets for the benefit of investors and creditors of

the Receivership Entities, which were form erly controlled by Lauer. Hunton &

W illiams LLP (1çH&W '') hms represented the Receiver since his appointment.

1



On September 24, 2008, the District Court entered its Order and Opinion on

M otion for Sum mary Judgment,wherein the Distrid Court entered summ ary

judgment in favor of the SEC and against Lauer (DE 2133). On September 22,

2009, the District Court entered a Final Judgment Granting Permanent Injunction

and Other Relief Against Lauer (DE 2321, the çiludgmenf'). After Lauer appealed

the Judgm ent, it was afûrm ed by the Eleventh Circuit, and the Supreme Court of

the United States denied certiorari.

On February 20, 2013, Lauer filed in the District Court a M otion to Vacate

the Judgment and Dismiss the Complaint (DE 2676, the ttMotion to Vacate''). On

this sam e date, Lauer Sled in the D istrict Court a M otion for an Order Allow ing

Him to Take D iscovery Related Solely to the M otion

téMotion for Discovery'').In the Motion for Discovery, Lauer stated that he was

to Vacate (DE 2679, the

seeking discovery of num erous docum ents, including, but not lim ited to the

following'.

1) dçdocuments relating to or consisting of instructions andcomm unications between the SEC and Hunton & W illiam s and its

partners between June 1, 2003, and Septem ber 30, 2003, relating to

maintaining or not m aintaining the status quo at Lancer and theLancer hedge funds or m aking changes w ith respect to the operation

of Lancer and the Lancer hedge fundslil'' and

2) tldocuments reiecting or relating to actions taken by theReceiver with respect to Lancer M anagem ent and the Lancer hedge

funds between July 8 and July 25, 2003, including the sale of any

assets, the term ination of any leases, the term ination of any contractsto supply services or otherwise, the termination of any employees

, and


Case: 13-13110 Date Filed: 08/09/2013 Page: 48 Of 51

the removal of any equipm ent or documents from the offices of

Lancer M anagem ent.''

Because the M otion for Discovery sought discovery that im properly delved

into the Receiver's litigation case strategy or the Receiver's adm inistration of the

Receivership Entities, and documents that are subject to attorney-client or work-

product protections, on M arch 21, 2013, the Receiver objected to the Motion for

Discovery (DE 2699). On June

Order (DE 2724, the çEomnibus Order'') denying the Motion for Discovery. This

13, 2013, the District Court entered its Om nibus

appeal of the Om nibus Order followed.l A s explained herein, the Receiver has a

direct interest in Lauer's appeal of the Om nibus Order. Because Lauer did not list

the Receiver as a party to his appeal of the Omnibus Order, however, the Receiver

seeks leave to intervene in this appeal.

R eceiver's Interest

As stated herein, the Receiver has a direct interest in Lauer's appeal of the

Omnibus Order with respect to Lauer's attempts to obtain information or

docum ents protected by the attorney-client and/or work-product privileges of the

Receiver. Thus, to the extent leave is required, the Receiver should be perm itted to

intervene in this appeal.

1 h Omnibus Order also denied various other m otions by Lauer which are alsoT e

subject to the appeal. The Receiver does not, however, seek to intervene other thanto address the discovery issues.

2



Arguraent

A. This Court Should Perm it the Receiver to lntervene.

Federal Rule of Civil Procedure 24(a)(2) provides that a court Edmust permit''

intervention by anyone who Gçclaim s an interest relating to the property or

transaction that is the subject of the action, and is so situated that disposing of the

action may as a practical m atter impair or im pede the m ovant's ability to proted its

interest, unless existing parties adequately represent that interest.'' Rule

24(b)(1)(B) allows intervention by anyone who has a claim or defense that shares

with the main action a comm on question of law or fact.

Under the facts of this case, the Receiver should be perm itted to intervene in

this appeal of the Omnibus Order in order to protect the Receiver's attorney-client

and work-product privileges. As discussed above, Lauer seeks discovery that is

directly designed to invade those privileges and improperly inquire into the

Receiver's administration of the Receivership Entities. As such, the Receiver has

an interest in the appeal and w ould be negatively impacted by any order from this

Court perm itting Lauer to obtain any privileged docum ents or information.

Accordingly, the Receiver should be permitted to intervene in this appeal.

By not listing the Receiver as a party to the appeal, Lauer is attem pting to

forestall any opposition or comm ent by the Receiver to Lauer's underlying

discovery requests which are nmong the issues addressed in the appeal. Lauer


Case: 13-13110 Date Filed: 08/09/2013 Page: 50 Of 51

should not be perm itted to do this. The Receiver's rights and interests will

potentially be affected by this Court's consideration of the appeal and the Receiver

is entitled to be heard on these issues. Accordingly, the Court should allow the

Receiver to intervene.

W H EREFORE, the Receiver respectfully requests that, to the extent leave

is required, this Court grantthis motion to intervene, and grant such other and

further relief as is just and proper.

th d f August, 2013.Dated this 9 ay o

Respectfully submitted,

Hunton & W illiams LLP

s/luan C. Eniamio -

Juan C. EnjamioFlorida Bar No. 571910

1 1 1 1 Brickell Avenue, Suite 2500M iami, Florida 33131

Te1: (305) 810-2500Fax: (305) [email protected]

Counsel for M arty Steinberg, Receiver


E X H IB IT 4

10


Case: 13-13110 Date Fi+d: 0W27/2013 Page: 1 of 10

IN TH EUNITED STATES CO URT O F APPEALS

FOR THE ELPVENTH CIRCUIT

Case N o. 13-131 IO-EE

SECURITES AND EXCHA NGE COM M ISSION

Plaintiff/Appellee,

M ICHA EL LAUER,

Defendant/Appellant,

and

LANCER M ANAGEW NT GROUP II, LLC, et al.,

Defendants.

Securities and Exchange Com m ission's

O pposition to M otion to Strike



OPPOSITION

Plaintiff-Appellee Securities and Exchange Comm ission opposes Defendant-

Appellant M ichael Lauer's Emergency M otion to Strike or Deny Receiver's

M otion to Intervene.

On February 20, 2013, as part of his effort to overturn the district court

judgment, Lauer asked the district court for leave both to depose the Receiver and

to request docum ents from the Receiver. DE2679 at 1, 2-3.The Receiver opposed

Lauer's discovery m otion because he failed to show any entitlem ent to additional

discovery and because the documents he sought were shielded by various

privileges. 17E2699 at 4-7. The district coul't denied Lauer's motion in an

Omnibus Order, DE2724 at 5-6, and Lauer appealed that order. DE2727.

On August 9, 2013, the Receiver filed a motion to intervene in this appeal.

He sought to intervene primarily to defend the district court's Omnibus Order

' f discovery from the Receiver.l Thus, to theinsofar as it denied Lauer s request or

extent that Lauer appeals the district court's denial of his request for additional

1 Although Lauer appealed the Om nibus Order denying his request for discovery,

his opening brief, filed August 8, 2013, did not include a section that plainly

argued the district court's denial of discovery was error. lnstead, discovery is

mentioned only in passing in the context of other argum ents. Lauer Br. 37, 58-59.

Thus, Lauer abandoned any argum ents that the district court's denial of discovery

was error. United States v. Jernigan, 341 F.3d 1273, 1283 n.8 (1 1th Cir. 2003).N otwithstanding Lauer's abandonment, the Commission brietly addressed Lauer's

passing m entions of discovery. Comm ission Br. 49. The Receiver's intervention

motion establishes grounds for him to participate in the appeal and to separately

address the discovery issue, if he so chooses.



discovery, the Receiver has identiGed a direct intexest in this appeal, and the

Com mission therefore does not oppose allowing the Receiver to intervene.

Lauer's m otion is not a m odel of clarity. Its caption bills it as a m otion to

strike or deny the Receiver's intervention motion, but Lauer specifically requests

that, assuming this Court grants the Receiver's m otion before the October 7 due

date for his reply to the Comm ission's bridf, çtthe due date on his reply brief be

October 7, 20 13, or seven days after the Receiver tsles his brief, whichever is

later.'' Lauer assures the Court that if it does not act on the Receiver's intervention

motion, he will file his reply brief on or before October 7. Thus, Lauer asks for an

extension of tim e, contingent on the possible grant of the Receiver's m otion before

October 7. Although the Com mission believes that request is prem ature, it

nonetheless does not object to the contingent extension of time requested by Lauer.

To the extent that Lauer's m otion asks the court to deny the Receiver's

m otion, it is untimely. The proper means for Lauer to oppose the Receiver's

intervention motion was to file a response on or before August 19. See Fed. R.

App. P. 27(a)(3)(A).Instead, Lauer waited until September 24 to file an

SsEm ergency M otion''z asking to the Court to deny the Receiver's intervention. He

did not, however, ask for leave to file his opposition out of time or offer any

2 L 's motion also fails to comply with 1 1th Cir. R. 27-1(b)(1) because it doesauer

not explain why his motion w ill be moot if not acted on within seven calendar days

and fails to include the specific discussion required by 1 1th Cir. R. 27-1(b)(2).

2


Caseê 13-13110 Date Filed: 09/27/2013 Page: 9 of 10

explanation for his failure to file a timely opposition.Thus, Lauer's motion to

deny the Receiver's motion should be denied as untimely.

Finally, Lauer states no b% is for striking the Receiver's motion. His

confusion about whether to ççreserve wèrds'' to answer the Receiver's arguments in

his reply brief provides no basis to strike. Fed. R. Civ. P.12(9 (pleadings may be

stricken because of çtredundant, immaterial, impertinent, or scandalous matterlsq'').

For the foregoing reasons, the Commission does not oppose the Receiver's

intervention m otion, and that the Court should deny Lauer's motion to strike.

Respectfully Subm itted,

/s/ Beniamin VetterBENJAM IN VETTER

Ofsce of the General Counsel

Securities and Exchange Comm ission

100 F Street NE

W ashington, DC 20549

[email protected](202) 551-7945


CERTIFICATE OF SERVICE

1 HEREBY CERTIFY that on this 13th day of Decem ber, 2013, a true and correct

copy of the foregoing has been sent by first-class mail to:

Christopher M artin, Esq.

Securities & Exchange Comm ission

80l Brickell Avenue

Suite 1800

M iam i, FL 33131

r d

David Bane, Esq.

Hunton & W illiam s

1 1 1 1 Brickell Avenue

Suite 2500

M inm i, FL 33131

David M . DorsenAttorney for M ichael Lauer


Documents

evident from a reading of the local rule, which exempts