United States District Court, S.D. New York
Edgardo Ramos, U.S.D.J.
Securities and Exchange Commission ("SEC" or
"Plaintiff) brings this action against Jay Mac Rust
("Rust") and Christopher K. Brenner ("Brenner,
" and collectively, "Defendants"), alleging
that Defendants violated Section 10(b) of the Securities
Exchange Act of 1934 and Rule 10b-5(b) thereunder by, among
other things, fraudulently inducing approximately 29 small
business owners to deposit millions of dollars with them as
escrow clients as part of a sham commercial loan scheme.
Before the Court is Brenner's motion pursuant to Federal
Rule of Civil Procedure 12(b)(3) to dismiss the complaint due
to improper venue. For the following reasons, Brenner's
motion is DENIED.
the Exchange Act, venue is proper if the suit is brought in
the district "wherein any act or transaction
constituting the violation occurred ... or in the district
wherein the defendant is found or is an inhabitant or
transacts business." 15 U.S.C. § 78aa(a). "As
the courts interpret this provision, 'any non-trivial act
in the forum district which helps to accomplish a securities
law violation is sufficient to establish venue.'"
Greenwood Partners v. New Frontier Media Inc., No.
99 Civ. 9099 (WK), 2000 WL 278086, at *6 (S.D.N.Y. Mar. 14,
2000) (quoting Steinberg & Lyman v.
Takacs, 690 F.Supp. 263, 267 (S.D.N.Y 1988)). "The
act or transaction committed within the district need not
constitute the core of the violation, but should be an
important step in the fraudulent scheme." Id.
(quoting Como v. Commerce Oil Co., 607 F.Supp. 335,
341 (S.D.N.Y. 1985)); see also Ahrens v. CTI Biopharma
Corp., No. 16 Civ. 1044 (PAE), 2016 WL 2932170, at *3
(S.D.N.Y. May 19, 2016) (quoting Ato Ram, II,
Ltd. v. SMC Multimedia Corp., No. 03 Civ. 5569 (HB),
2004 WL 744792, at *3 (S.D.N.Y. Apr. 7, 2004)). "Hence,
acts such as a transfer agent merely mailing dividends from
New York City, press releases being sent into a
district, and making a phone call or mailing into a district
have all been held sufficient to confer venue."
Greenwood, 2000 WL 278086, at *6 (citing
Int'l Controls Corp. v. Vesco, 490 F.2d 1334,
1337 (2d Cir. 1974); Takacs, 690 F.Supp. at 267-68;
and SEC v. Thrasher, No. 92 Civ. 6987, 1993 WL
437752, at *4 (S.D.N.Y. Oct. 25, 1993)).
Plaintiff alleges that Defendants executed and cleared many
of the securities trades at issue in this proceeding through
broker-dealers located in the Southern District of New York.
Compl. (Doc. 1) ¶¶ 12, 87; Van Alstyne Decl. (Doc.
26) ¶ 7. Moreover, Plaintiff alleges that Defendants
made materially false and misleading statements to those
broker-dealers. Compl. ¶¶ 12, 83-85; Van Alstyne
Decl. ¶¶ 4-5 & Exs. A-B. These facts are
sufficient to establish venue in this district. See,
e.g., Greenwood, 2000 WL 278086, at *6 (finding venue
proper in this district where relevant mail and telephone
calls were received in Manhattan and the securities at issue
were traded in Manhattan).
argues that venue is improper in this district because the
"locus of operative events" is Colorado, from where
he claims to have issued all of the alleged representations
and trading orders. Brenner's Mem. (Doc. 22) at 4. The
"locus of operative events" is, however, simply a
factor courts consider in determining whether to grant a
motion to transfer an action to another venue. See
Ahrens, 2016 WL 2932170, at *2. It has no relevance to
the question of whether venue is proper in the district in
which the action was initially brought. See
Greenwood, 2000 WL 278086, at *6 (finding venue proper
in this district although the most significant events took
place in Colorado).
foregoing reasons, Brenner's motion to dismiss is DENIED.
The parties are directed to appear for a conference on
February 17, 2017 at 10:30 a.m. The Clerk of the
Court is respectfully directed to terminate the motion, Doc.
 Although Brenner has not moved to
transfer this action to Colorado, the Court finds that
transfer to another venue is not warranted here. In
determining whether to transfer an action, courts balance a
number of factors, including:
(1) the convenience of witnesses; (2) the convenience
of the parties; (3) the location of relevant documents and
the relative ease of access to sources of proof; (4) the
locus of operative facts; (5) the availability of process to
compel the attendance of unwilling witnesses; (6) the
relative means of the parties; (7) the forum's
familiarity with the governing law; (8) the weight accorded
the plaintiffs choice of forum; and (9) trial efficiency and
the interests of justice, based on the totality of the
Ahrens, 2016 WL 2932170, at *2 (quoting
Robertson v. Cartinhour, No. 10 Civ. 8442 (LTS)
(HBP), 2011 WL 5175597, at *3 (S.D.N.Y. Oct. 28, 2011)).
Having considered these factors, as well as the parties'
submissions, the Court finds that a transfer is not justified
here, especially considering that neither Defendant resides
in Colorado, the SEC's investigation was conducted by its
New York Regional Office, ...