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Securities and Exchange Commission v. Cope

United States District Court, S.D. New York

February 8, 2017

SECURITIES AND EXCHANGE COMMISSION, Plaintiff,
v.
JASON COPE, IZAK ZIRK DE MAISON F/K/A IZAK ZIRK ENGELBRECHT, GREGORY GOLDSTEIN, STEPHEN WILSHINSKY, TALMAN HARRIS, WILLIAM SCHOLANDER, JACK TAGLIAFERRO, VICTOR ALFAYA, JUSTIN ESPOSITO, KONA JONES BARBERA, LOUIS MASTROMATTEO, ANGELIQUE DE MAISON, TRISH MALONE, KIERNAN T. KUHN, PETER VOUTSAS, RONALD LOSHIN, GEPCO, LTD., SUNATCO LTD., SUPRAFIN LTD., WORLDBRIDGE PARTNERS, TRAVERSE INTERNATIONAL, and SMALL CAP RESOURCE CORP., Defendants, And ANGELIQUE DE MAISON, Relief Defendant.

          For Angelique de Maison: Jeffrey B. Coopersmith Lauren Rainwater Davis Wright Tremaine LLP

          For the Securities and Exchange Commission Howard A. Fischer John O. Enright Securities & Exchange Commission - New York Regional Office

          MEMORANDUM OPINION AND ORDER

          DENISE COTE, District Judge

         Angelique de Maison (“de Maison”) brings this motion for reconsideration of the Court's December 23, 2016 Memorandum Opinion and Order awarding de Maison $25, 000 as compensation for facilitating the sale of four of her properties (“the December 23 Opinion”). Specifically, the motion seeks the award of an additional $75, 000. For the reasons set forth below, de Maison's motion for reconsideration is denied.

         BACKGROUND

         General familiarity with the facts of this case is presumed, and are therefore summarized here only briefly. In September 2014, the SEC filed a complaint against de Maison and others for violating various provisions of the Securities Act of 1933 and the Securities Exchange Act of 1934.[1] On October 22, 2014, the Court entered a preliminary injunction order freezing de Maison's assets (the “Freeze Order”). While the Freeze Order was in place, de Maison entered into two stipulations with the SEC allowing her to complete the contracted sale of several of her properties. At the time the Court issued its December 23 Opinion, the proceeds from the sale of de Maison's properties amounted to $612, 551.64.

         On December 23, 2015, the Court so ordered a Consent between de Maison and the SEC (the “Consent”). Pursuant to the terms of the Consent, de Maison agreed to eventually pay disgorgement of her ill-gotten gains, in addition to a civil penalty. The SEC has not yet moved for disgorgement and penalties, but has previously submitted -- and de Maison has not contested -- that it is “more likely than not that either disgorgement or penalties -- not to mention a combination of disgorgement and penalties -- would be greater than the amount of liquid assets subject to the freeze.” Ms. de Maison filed a motion for relief from the Freeze Order on November 1, 2016 (the “November 1 motion for relief”). The motion sought: (1) $93, 478.65 to cover incurred, as well as future, attorneys' fees; and (2) $100, 000 to cover de Maison's living expenses. The December 23 Opinion granted the request for attorneys' fees in its entirety and granted de Maison $25, 000 as compensation for her real estate efforts.

         Ms. de Maison filed the present motion for reconsideration on January 6. The motion for reconsideration became fully submitted on January 30.

         DISCUSSION

         The standard for granting a motion for reconsideration is “strict.” Analytical Surveys, Inc. v. Tonga Partners, L.P., 684 F.3d 36, 52 (2d Cir. 2012) (citation omitted) (discussing a motion under Rule 59(e), Fed. R. Civ. P.).[2] “[R]econsideration will generally be denied unless the moving party can point to controlling decisions or data that the court overlooked.” Id. (citation omitted). “A motion for reconsideration should be granted only when the defendant identifies an intervening change of controlling law, the availability of new evidence, or the need to correct a clear error or prevent manifest injustice.” Kolel Beth Yechiel Mechil of Tartikov, Inc. v. YLL Irrevocable Tr., 729 F.3d 99, 104 (2d Cir. 2013) (citation omitted). It is “not a vehicle for relitigating old issues, presenting the case under new theories, securing a rehearing on the merits, or otherwise taking a second bite at the apple.” Analytical Surveys, 684 F.3d at 52 (citation omitted).

         Ms. de Maison's motion for reconsideration does not identify an intervening change of controlling law, nor does it present previously unavailable evidence. Rather, the motion is a thinly veiled attempt to relitigate the Court's entirely discretionary award of compensation to de Maison for her real estate work.

         At base, de Maison believes that the Court's December 23 Opinion underestimated the value of her real estate efforts. But for her cleanup and outreach work, de Maison maintains, her properties “could not have been sold because there was no one else who would or could have Dated this work.” Ms. de Maison also believes that she was not given adequate opportunity to respond to the SEC's compensation proposal. Finally, de Maison repeats her argument that it was inappropriate for the SEC to propose a specific compensation figure in light of its prior representations that it would take no position as to the amount that should be released to de Maison.

         Ms. de Maison's arguments are unavailing. First, de Maison had an adequate opportunity to -- and, in fact, did -- respond to the SEC's compensation proposal. In its opposition to de Maison's November 1 motion for relief, the SEC suggested that de Maison be compensated $25, 000 for her real estate efforts, reasoning that “a reasonable proxy for compensation might be the commissions that real estate brokers typically earn, ” and that “general practice in the real estate industry is that compensation for real estate brokers ranges between 4-6%, with a buying and selling agent splitting the commission.” In her reply, de Maison challenged the SEC's $25, 000 compensation figure, arguing that brokers' fees are calculated from the total sales price of the property; accordingly, a four percent commission rate applied to the total combined purchase price of $2, 067, 500 would be $82, 700 -- not $25, 000. Her reply also highlighted the work she had done to facilitate the property sales, suggesting that a real estate commission may not be the most appropriate proxy for compensation since her work went “well above and beyond the normal responsibilities of a real estate agent.”

         Ms. de Maison's reply failed to address the SEC's observation that buying and selling agents generally tend to split a commission. This omission was raised by the SEC in a December 20 letter to the Court.[3] In the December 20 letter, the SEC noted that “the record does not reflect whether any other real estate professional received some compensation in connection with these sales, which would have bearing on the reasonableness of Ms. de Maison's request for compensation.” Ms. de Maison now argues that the SEC “raised the issue of compensation to other real estate professionals late and inappropriately in response to the Court's order of December 16.” But as the record shows, the SEC first raised this issue in its ...


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