Universal, SEC case now eyed for September
South Florida Business Journal -
July 7, 2006
by John T. Fakler
Recent delays have pushed back the Securities and Exchange Commission's federal stock fraud case against Boca Raton-based delivery firm Universal Express.
The due date to file motions for summary judgment in the case has been back to the end of July, while the start date for the trial, U.S. Securities and Exchange Commission v. Universal Express, Inc. et al, has also been extended due to personal issues of two SEC lawyers, according to court documents filed with the Southern District of New York.
"We had motions of summary judgment due, but asked the court for an extension," said Leslie J. Hughes, attorney for plaintiff SEC, who added that responses from both the government and Universal are due Sept. 1.
The enforcement action by the SEC alleges the public sale of unregistered securities by defendant Universal Express, and the dissemination of false and misleading press releases. The disgorgement of proceeds of the alleged illegal sales of unregistered Universal Express stock and civil penalties are being sought by the government.
"We optimistically await the continued and ongoing discovery in this case, which is proceeding as planned," Universal Express CEO Richard A. Altomare said in an e-mail.
He described the company as continuing to be involved in hearings and lawsuits that target naked short sellers - those who short a companies stock without having borrowed stock to do so.
A countersuit filed by Universal Express against the SEC was dismissed last year. In a March 24, 2004, press release distributed by PR Newswire, Altomare said organized crime efforts of naked short sellers are not above influencing SEC's lower-paid employees "as Al Capone infiltrated the Chicago Police Department."
In the still-pending SEC case, a default judgment was ordered on June 22 by the court against co-defendant Spiga Ltd. Such an action occurs when a party fails to respond to a complaint of challenge, Hughes said.
Upcoming court appearance
Spiga, a Bermuda-based brokerage, must appear July 24, the order states, to show cause why the court should not issue a default judgment against it. Papers in opposition to the judgment can be filed no later than July 17, ruled U.S. District Judge Gerard E. Lynch, who is presiding over the case, originally expected to begin this spring.
A document filed with the court by the SEC on July 3 included a certificate of service of order to show cause was served on Spiga on June 27. Clive Dakin, principal of the Spiga, accepted the service.
The SEC's Hughes said that under the court's case management plan, there will not be a trial date set until legal preliminaries are concluded.
"We are still in that part of the case where we wrap up motions," she said.
Hughes' letter to Judge Lynch, dated June 8, requested an extension of the date when summary judgment and depositive motions are due from June 19 to July 28. Lynch previously granted an extension on May 5 for an attorney representing co-defendant George J.Sandhu.
But the plaintiffs have had their own run of bad luck, contributing to the delay of the case.
The basis for Hughes' request was that she was caring for her mother, who died of cancer on May 23. Her co-counsel, Julie Lutz, was unable to complete the motions for summary judgment in her absence. On June 5, Lutz started a six-week absence to recover from surgery, Hughes wrote.
Robert M. Fusfeld, lead SEC attorney in the case, previously recused himself, court records show.
E-mail Senior Reporter John T. Fakler at jfalkler@bizjournals.com. |
