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Securities and Exchange Commission v. Fujinaga

United States District Court, District of Nevada

April 20, 2015

SECURITIES AND EXCHANGE COMMISSION, Plaintiff(s),
v.
EDWIN YOSHIHIRO FUJINAGA and MRI INTERNATIONAL, INC., et al., Defendant(s).

ORDER

Presently before the court is defendants Edwin Fujinaga and MRI International’s (hereinafter “defendants”) motion for reconsideration. (Doc. # 196). Plaintiff Securities and Exchange Commission (hereinafter “the SEC”) filed a response, (doc. # 198), and defendants filed a reply, (doc. # 204).

Also before the court is defendants’ motion for extension of time. (Doc. # 205).

I. Background

The instant case arises from a Ponzi scheme perpetrated by defendants. Defendants collected hundreds of millions of dollars for purported investments in medical accounts receivable. Defendants used these funds to repay earlier investments as well as for their own personal expenses. By May 2013, defendants had entirely depleted the invested funds. (Doc. # 118).

On September 11, 2013, the SEC filed a civil enforcement action against defendants. (Doc. # 2). On October 7, 2013, the parties stipulated to the entry of a preliminary injunction. (Doc. # 20). On December 11, 2013, defendants filed an answer to the SEC’s complaint. (Doc. # 27). The parties completed discovery by July 8, 2014. (Doc. # 138).

On July 16, 2014, the SEC filed a motion for summary judgment on liability. (Doc. # 113). On October 3, 2014, the court granted the SEC’s motion. (Doc. # 156). On November 24, 2014, the SEC filed a motion for judgment against defendants Fujinaga and MRI International, Inc. (Doc. # 178). Defendants filed a response, (doc. # 184), and the SEC filed a reply, (doc. # 185).

On January 27, 2015, the court granted the SEC’s motion for judgment, holding defendants jointly and severally liable for the disgorgement of proceeds in the amount of $442, 229, 611.70, and prejudgment interest in the amount of $102, 129, 752.38. The court also held defendants liable for civil money penalties of $20, 000, 000.00 each. Finally, the court permanently enjoined defendants from any further securities violations. (Doc. # 188).

On the same date, the clerk entered judgment in favor of the SEC in the same amounts. (doc. # 189). On February 4, 2015, the SEC filed a motion to certify the court’s judgment as final pursuant to Federal Rule of Civil Procedure 54(b). Defendants did not file a response, and the court granted the motion on February 25, 2015. (Doc. # 195).

On March 9, 2015, defendants filed the instant motion for reconsideration. (Doc. # 196). On April 15, 2015, upon filing their reply, defendants filed the instant motion to extend time. (Doc. # 205).

II. Legal Standard

A motion for reconsideration “should not be granted, absent highly unusual circumstances.” Kona Enters., Inc. v. Estate of Bishop, 229 F.3d 877, 890 (9th Cir. 2000). “Reconsideration is appropriate if the district court (1) is presented with newly discovered evidence, (2) committed clear error or the initial decision was manifestly unjust, or (3) if there is an intervening change in controlling law.” School Dist. No. 1J v. ACandS, Inc., 5 F.3d 1255, 1263 (9th Cir. 1993); Fed.R.Civ.P. 60(b). “A motion to alter or amend a judgment must be filed no later than 28 days after the entry of the judgment.” Fed.R.Civ.P. 59(e).

III. Discussion

In the instant motion, defendants argue that the court should reconsider its January 27, 2015, order on the SEC’s motion for judgment. (Doc. # 196). Defendants contend that reconsideration is proper because “the SEC failed to meet its burden of reasonably approximating a disgorgement value, and provided improper, inadmissible, and previously unproduced expert testimony in support of its Motion.” (Doc. # 196). The SEC responds that defendants’ motion is no more than “a veiled attempt to re-argue their opposition to the SEC’s motion for final judgment.” (Doc. # 198).

Defendants argue that the court committed clear error in granting the SEC’s motion for judgment in the amounts requested. Defendants also state that there is new evidence in this case that warrants ...


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