The opinion of the court was delivered by: Kimba M. Wood, U.S.D.J
Plaintiff Securities and Exchange Commission ("Plaintiff") brings this action against various defendants, who are alleged to have engaged in insider trading in violation of United States securities laws.
Plaintiff alleges that it has been unable to serve defendant Bruno Verinac ("Verinac"), and moves, pursuant to Federal Rule of Civil Procedure 4(f)(3),*fn1 for an order directing Plaintiff to serve Verinac by publication.
For the reasons stated below, the Court GRANTS Plaintiff's motion for service by publication.
The following facts are culled from the Plaintiff's Fourth Amended Complaint (D.E. 91) ("Complaint"), Plaintiff's Memorandum of Law in Support of Motion for an Order Directing Service by Publication Upon Defendant Verinac Pursuant to Rule 4(f) of the Federal Rules of Civil Procedure (D.E. 137) ("Supporting Memo"), and the Declaration of Scott L. Black in Support of Motion for an Order Directing Service by Publication Upon Defendant Verinac Pursuant to Rule 4(f) of the Federal Rules of Civil Procedure (D.E. 138) ("Black Declaration"). Because Verinac has not been served, he has neither filed an answer nor responded to Plaintiff's motion. Accordingly, the following facts are currently uncontested.
Plaintiff's Complaint charges seventeen defendants with participation in various related insider trading schemes. Verinac is alleged to have been both a tipper and a tippee involved in the trading of material non-public information acquired from Merrill Lynch and from Business Week magazine. (Supp. Mem. 2.)
In the more than two years that have passed since the filing of the operative Complaint, Plaintiff has been unable to effectuate service on Verinac. Plaintiff claims that it has twice attempted to serve Verinac, pursuant to Rule 4(f)(1) and the Hague Convention on the Service Abroad of Judicial and Extra-judicial Documents in Civil or Commercial Matters (the "Convention"), but that both of these efforts have failed.
A. Attempted Service in Germany Pursuant to the Convention
Plaintiff first obtained an address for Verinac from records for an Austrian brokerage account through which certain securities at issue in this case were allegedly traded. The account was held in the name of Verinac's uncle, defendant Antun Dilber ("Dilber"), and Verinac was a co-signatory. Verinac's application for the account listed his address as Everlingweg 10, 22119 Hamburg, Germany ("Everlingweg address"). (Supp. Mem. 2; Black Decl. Ex. A.)
In September 2006, Plaintiff attempted to serve Verinac at the Everlingweg address in accordance with the Convention. Plaintiff sent two copies of the Summons and Complaint, one in English and one translated into German, to the Central Authority, designated by Germany for the receipt of such documents. In October 2006, Plaintiff received a Certificate from German authorities, dated October 16, 2006, stating that the documents had been delivered to Verinac.*fn2 (Supp. Mem. 2; Black Decl. Ex. B.)
Soon thereafter, Plaintiff received a letter from the Chief Judge of the Hamburg District Court, dated October 30, 2006, indicating that the materials the German Central Authority sent to Verinac had been delivered to their Court in a closed envelope with a note stating "address unknown." (Supp. Mem. 3; Black Decl. Ex. C.) Plaintiff therefore believes that Verinac was not served in accordance with the Convention in Germany.
B. Verinac's Actual Knowledge of the Instant Case
In a separate set of events, Plaintiff received a letter, postmarked September 15, 2006, from defendant Dilber denying responsibility for the allegations made in the Complaint. A statement purportedly from Verinac was attached to Dilber's letter. In the statement, Verinac asserts that he alone was responsible for transactions involving the brokerage account held in Dilber's name, and that "therefore any charging of my uncle is complete nonsense." Verinac's address was listed at the ...