{"cached_at":"2026-10-23T10:49:38.282977+00:00","cl_docket_id":"67830293","docket":{"resource_uri":"https://www.courtlistener.com/api/rest/v4/dockets/67830293/","id":67830293,"court":"https://www.courtlistener.com/api/rest/v4/courts/txnd/","court_id":"txnd","original_court_info":null,"idb_data":null,"clusters":["https://www.courtlistener.com/api/rest/v4/clusters/10205016/"],"audio_files":[],"assigned_to":"https://www.courtlistener.com/api/rest/v4/people/1073/","referred_to":null,"bankruptcy_information":null,"absolute_url":"/docket/67830293/securities-and-exchange-commission-v-verges/","date_created":"2023-09-26T13:23:23.931002-07:00","date_modified":"2025-10-01T11:51:21.342625-07:00","source":1,"appeal_from_str":"","assigned_to_str":"Sidney a. Fitzwater","referred_to_str":"","panel_str":"","date_last_index":"2024-07-08T00:56:00.518240-07:00","date_cert_granted":null,"date_cert_denied":null,"date_argued":null,"date_reargued":null,"date_reargument_denied":null,"date_filed":"2023-09-26","date_terminated":"2025-01-14","date_last_filing":"2025-08-11","case_name_short":"Verges","case_name":"Securities and Exchange Commission v. Verges","case_name_full":"","slug":"securities-and-exchange-commission-v-verges","docket_number":"3:23-cv-02146","docket_number_core":"2302146","docket_number_raw":"3:23-cv-02146","docket_number_source":0,"federal_dn_office_code":"3","federal_dn_case_type":"cv","federal_dn_judge_initials_assigned":"D","federal_dn_judge_initials_referred":"","federal_defendant_number":null,"pacer_case_id":"381575","cause":"15:77 Securities","nature_of_suit":"850 Other Statutes: Securities/Commodities/Exchange","jury_demand":"Defendant","jurisdiction_type":"U.S. Government Plaintiff","appellate_fee_status":"","appellate_case_type_information":"","mdl_status":"","filepath_ia":"","filepath_ia_json":"","ia_upload_failure_count":null,"ia_needs_upload":true,"ia_date_first_change":"2023-09-26T13:23:23.927770-07:00","date_blocked":null,"blocked":false,"appeal_from":null,"parent_docket":null,"tags":[],"panel":[]},"parties":[{"resource_uri":"https://www.courtlistener.com/api/rest/v4/parties/13342642/","id":13342642,"attorneys":[{"attorney":"https://www.courtlistener.com/api/rest/v4/attorneys/8966808/","attorney_id":8966808,"date_action":null,"docket":"https://www.courtlistener.com/api/rest/v4/dockets/67830293/","docket_id":67830293,"role":1},{"attorney":"https://www.courtlistener.com/api/rest/v4/attorneys/8966808/","attorney_id":8966808,"date_action":null,"docket":"https://www.courtlistener.com/api/rest/v4/dockets/67830293/","docket_id":67830293,"role":2},{"attorney":"https://www.courtlistener.com/api/rest/v4/attorneys/8966809/","attorney_id":8966809,"date_action":null,"docket":"https://www.courtlistener.com/api/rest/v4/dockets/67830293/","docket_id":67830293,"role":1},{"attorney":"https://www.courtlistener.com/api/rest/v4/attorneys/8966809/","attorney_id":8966809,"date_action":null,"docket":"https://www.courtlistener.com/api/rest/v4/dockets/67830293/","docket_id":67830293,"role":4},{"attorney":"https://www.courtlistener.com/api/rest/v4/attorneys/8966810/","attorney_id":8966810,"date_action":null,"docket":"https://www.courtlistener.com/api/rest/v4/dockets/67830293/","docket_id":67830293,"role":1},{"attorney":"https://www.courtlistener.com/api/rest/v4/attorneys/8966810/","attorney_id":8966810,"date_action":null,"docket":"https://www.courtlistener.com/api/rest/v4/dockets/67830293/","docket_id":67830293,"role":4},{"attorney":"https://www.courtlistener.com/api/rest/v4/attorneys/8966811/","attorney_id":8966811,"date_action":null,"docket":"https://www.courtlistener.com/api/rest/v4/dockets/67830293/","docket_id":67830293,"role":1}],"party_types":[{"docket":"https://www.courtlistener.com/api/rest/v4/dockets/67830293/","docket_id":67830293,"name":"Defendant","date_terminated":null,"extra_info":"","highest_offense_level_opening":"","highest_offense_level_terminated":"","criminal_counts":[],"criminal_complaints":[]}],"date_created":"2024-02-06T00:29:25.055043-08:00","date_modified":"2024-02-06T00:29:25.055051-08:00","name":"JDT Trading LLC","extra_info":""},{"resource_uri":"https://www.courtlistener.com/api/rest/v4/parties/13342641/","id":13342641,"attorneys":[{"attorney":"https://www.courtlistener.com/api/rest/v4/attorneys/8966806/","attorney_id":8966806,"date_action":null,"docket":"https://www.courtlistener.com/api/rest/v4/dockets/67830293/","docket_id":67830293,"role":1},{"attorney":"https://www.courtlistener.com/api/rest/v4/attorneys/8966806/","attorney_id":8966806,"date_action":null,"docket":"https://www.courtlistener.com/api/rest/v4/dockets/67830293/","docket_id":67830293,"role":2},{"attorney":"https://www.courtlistener.com/api/rest/v4/attorneys/8966807/","attorney_id":8966807,"date_action":null,"docket":"https://www.courtlistener.com/api/rest/v4/dockets/67830293/","docket_id":67830293,"role":1}],"party_types":[{"docket":"https://www.courtlistener.com/api/rest/v4/dockets/67830293/","docket_id":67830293,"name":"Defendant","date_terminated":null,"extra_info":"","highest_offense_level_opening":"","highest_offense_level_terminated":"","criminal_counts":[],"criminal_complaints":[]}],"date_created":"2024-02-06T00:29:25.019577-08:00","date_modified":"2024-02-06T00:29:25.019585-08:00","name":"West Cucharras LLC","extra_info":""},{"resource_uri":"https://www.courtlistener.com/api/rest/v4/parties/13342640/","id":13342640,"attorneys":[{"attorney":"https://www.courtlistener.com/api/rest/v4/attorneys/8966806/","attorney_id":8966806,"date_action":null,"docket":"https://www.courtlistener.com/api/rest/v4/dockets/67830293/","docket_id":67830293,"role":1},{"attorney":"https://www.courtlistener.com/api/rest/v4/attorneys/8966806/","attorney_id":8966806,"date_action":null,"docket":"https://www.courtlistener.com/api/rest/v4/dockets/67830293/","docket_id":67830293,"role":2},{"attorney":"https://www.courtlistener.com/api/rest/v4/attorneys/8966807/","attorney_id":8966807,"date_action":null,"docket":"https://www.courtlistener.com/api/rest/v4/dockets/67830293/","docket_id":67830293,"role":1}],"party_types":[{"docket":"https://www.courtlistener.com/api/rest/v4/dockets/67830293/","docket_id":67830293,"name":"Defendant","date_terminated":null,"extra_info":"","highest_offense_level_opening":"","highest_offense_level_terminated":"","criminal_counts":[],"criminal_complaints":[]}],"date_created":"2024-02-06T00:29:24.980678-08:00","date_modified":"2024-02-06T00:29:24.980687-08:00","name":"143 Partners LLC","extra_info":""},{"resource_uri":"https://www.courtlistener.com/api/rest/v4/parties/13342639/","id":13342639,"attorneys":[{"attorney":"https://www.courtlistener.com/api/rest/v4/attorneys/8966806/","attorney_id":8966806,"date_action":null,"docket":"https://www.courtlistener.com/api/rest/v4/dockets/67830293/","docket_id":67830293,"role":1},{"attorney":"https://www.courtlistener.com/api/rest/v4/attorneys/8966806/","attorney_id":8966806,"date_action":null,"docket":"https://www.courtlistener.com/api/rest/v4/dockets/67830293/","docket_id":67830293,"role":2},{"attorney":"https://www.courtlistener.com/api/rest/v4/attorneys/8966807/","attorney_id":8966807,"date_action":null,"docket":"https://www.courtlistener.com/api/rest/v4/dockets/67830293/","docket_id":67830293,"role":1}],"party_types":[{"docket":"https://www.courtlistener.com/api/rest/v4/dockets/67830293/","docket_id":67830293,"name":"Defendant","date_terminated":null,"extra_info":"","highest_offense_level_opening":"","highest_offense_level_terminated":"","criminal_counts":[],"criminal_complaints":[]}],"date_created":"2024-02-06T00:29:24.944827-08:00","date_modified":"2024-02-06T00:29:24.944836-08:00","name":"SMEA2Z LLC","extra_info":""},{"resource_uri":"https://www.courtlistener.com/api/rest/v4/parties/13342638/","id":13342638,"attorneys":[{"attorney":"https://www.courtlistener.com/api/rest/v4/attorneys/8966812/","attorney_id":8966812,"date_action":null,"docket":"https://www.courtlistener.com/api/rest/v4/dockets/67830293/","docket_id":67830293,"role":1},{"attorney":"https://www.courtlistener.com/api/rest/v4/attorneys/8966812/","attorney_id":8966812,"date_action":null,"docket":"https://www.courtlistener.com/api/rest/v4/dockets/67830293/","docket_id":67830293,"role":2}],"party_types":[{"docket":"https://www.courtlistener.com/api/rest/v4/dockets/67830293/","docket_id":67830293,"name":"Defendant","date_terminated":null,"extra_info":"","highest_offense_level_opening":"","highest_offense_level_terminated":"","criminal_counts":[],"criminal_complaints":[]}],"date_created":"2024-02-06T00:29:24.921968-08:00","date_modified":"2024-02-06T00:29:24.921980-08:00","name":"Blue Citi LLC","extra_info":""},{"resource_uri":"https://www.courtlistener.com/api/rest/v4/parties/13342637/","id":13342637,"attorneys":[{"attorney":"https://www.courtlistener.com/api/rest/v4/attorneys/8966812/","attorney_id":8966812,"date_action":null,"docket":"https://www.courtlistener.com/api/rest/v4/dockets/67830293/","docket_id":67830293,"role":1},{"attorney":"https://www.courtlistener.com/api/rest/v4/attorneys/8966812/","attorney_id":8966812,"date_action":null,"docket":"https://www.courtlistener.com/api/rest/v4/dockets/67830293/","docket_id":67830293,"role":2}],"party_types":[{"docket":"https://www.courtlistener.com/api/rest/v4/dockets/67830293/","docket_id":67830293,"name":"Defendant","date_terminated":null,"extra_info":"","highest_offense_level_opening":"","highest_offense_level_terminated":"","criminal_counts":[],"criminal_complaints":[]}],"date_created":"2024-02-06T00:29:24.897466-08:00","date_modified":"2024-02-06T00:29:24.897474-08:00","name":"Linda Malin","extra_info":""},{"resource_uri":"https://www.courtlistener.com/api/rest/v4/parties/13342636/","id":13342636,"attorneys":[{"attorney":"https://www.courtlistener.com/api/rest/v4/attorneys/8966812/","attorney_id":8966812,"date_action":null,"docket":"https://www.courtlistener.com/api/rest/v4/dockets/67830293/","docket_id":67830293,"role":1},{"attorney":"https://www.courtlistener.com/api/rest/v4/attorneys/8966812/","attorney_id":8966812,"date_action":null,"docket":"https://www.courtlistener.com/api/rest/v4/dockets/67830293/","docket_id":67830293,"role":2}],"party_types":[{"docket":"https://www.courtlistener.com/api/rest/v4/dockets/67830293/","docket_id":67830293,"name":"Defendant","date_terminated":null,"extra_info":"","highest_offense_level_opening":"","highest_offense_level_terminated":"","criminal_counts":[],"criminal_complaints":[]}],"date_created":"2024-02-06T00:29:24.871627-08:00","date_modified":"2024-02-06T00:29:24.871635-08:00","name":"Robert F Malin","extra_info":""},{"resource_uri":"https://www.courtlistener.com/api/rest/v4/parties/13342635/","id":13342635,"attorneys":[{"attorney":"https://www.courtlistener.com/api/rest/v4/attorneys/8966808/","attorney_id":8966808,"date_action":null,"docket":"https://www.courtlistener.com/api/rest/v4/dockets/67830293/","docket_id":67830293,"role":1},{"attorney":"https://www.courtlistener.com/api/rest/v4/attorneys/8966808/","attorney_id":8966808,"date_action":null,"docket":"https://www.courtlistener.com/api/rest/v4/dockets/67830293/","docket_id":67830293,"role":2},{"attorney":"https://www.courtlistener.com/api/rest/v4/attorneys/8966809/","attorney_id":8966809,"date_action":null,"docket":"https://www.courtlistener.com/api/rest/v4/dockets/67830293/","docket_id":67830293,"role":1},{"attorney":"https://www.courtlistener.com/api/rest/v4/attorneys/8966809/","attorney_id":8966809,"date_action":null,"docket":"https://www.courtlistener.com/api/rest/v4/dockets/67830293/","docket_id":67830293,"role":4},{"attorney":"https://www.courtlistener.com/api/rest/v4/attorneys/8966810/","attorney_id":8966810,"date_action":null,"docket":"https://www.courtlistener.com/api/rest/v4/dockets/67830293/","docket_id":67830293,"role":1},{"attorney":"https://www.courtlistener.com/api/rest/v4/attorneys/8966810/","attorney_id":8966810,"date_action":null,"docket":"https://www.courtlistener.com/api/rest/v4/dockets/67830293/","docket_id":67830293,"role":4},{"attorney":"https://www.courtlistener.com/api/rest/v4/attorneys/8966811/","attorney_id":8966811,"date_action":null,"docket":"https://www.courtlistener.com/api/rest/v4/dockets/67830293/","docket_id":67830293,"role":1}],"party_types":[{"docket":"https://www.courtlistener.com/api/rest/v4/dockets/67830293/","docket_id":67830293,"name":"Defendant","date_terminated":null,"extra_info":"","highest_offense_level_opening":"","highest_offense_level_terminated":"","criminal_counts":[],"criminal_complaints":[]}],"date_created":"2024-02-06T00:29:24.797392-08:00","date_modified":"2024-02-06T00:29:24.797422-08:00","name":"James D Tilton, Jr.","extra_info":""},{"resource_uri":"https://www.courtlistener.com/api/rest/v4/parties/13342634/","id":13342634,"attorneys":[{"attorney":"https://www.courtlistener.com/api/rest/v4/attorneys/8966806/","attorney_id":8966806,"date_action":null,"docket":"https://www.courtlistener.com/api/rest/v4/dockets/67830293/","docket_id":67830293,"role":1},{"attorney":"https://www.courtlistener.com/api/rest/v4/attorneys/8966806/","attorney_id":8966806,"date_action":null,"docket":"https://www.courtlistener.com/api/rest/v4/dockets/67830293/","docket_id":67830293,"role":2},{"attorney":"https://www.courtlistener.com/api/rest/v4/attorneys/8966807/","attorney_id":8966807,"date_action":null,"docket":"https://www.courtlistener.com/api/rest/v4/dockets/67830293/","docket_id":67830293,"role":1}],"party_types":[{"docket":"https://www.courtlistener.com/api/rest/v4/dockets/67830293/","docket_id":67830293,"name":"Defendant","date_terminated":null,"extra_info":"","highest_offense_level_opening":"","highest_offense_level_terminated":"","criminal_counts":[],"criminal_complaints":[]}],"date_created":"2024-02-06T00:29:24.712636-08:00","date_modified":"2024-02-06T00:29:24.712645-08:00","name":"Philip Verges","extra_info":""},{"resource_uri":"https://www.courtlistener.com/api/rest/v4/parties/13342633/","id":13342633,"attorneys":[{"attorney":"https://www.courtlistener.com/api/rest/v4/attorneys/8966804/","attorney_id":8966804,"date_action":null,"docket":"https://www.courtlistener.com/api/rest/v4/dockets/67830293/","docket_id":67830293,"role":1},{"attorney":"https://www.courtlistener.com/api/rest/v4/attorneys/8966804/","attorney_id":8966804,"date_action":null,"docket":"https://www.courtlistener.com/api/rest/v4/dockets/67830293/","docket_id":67830293,"role":2},{"attorney":"https://www.courtlistener.com/api/rest/v4/attorneys/8966805/","attorney_id":8966805,"date_action":null,"docket":"https://www.courtlistener.com/api/rest/v4/dockets/67830293/","docket_id":67830293,"role":1}],"party_types":[{"docket":"https://www.courtlistener.com/api/rest/v4/dockets/67830293/","docket_id":67830293,"name":"Plaintiff","date_terminated":null,"extra_info":"","highest_offense_level_opening":"","highest_offense_level_terminated":"","criminal_counts":[],"criminal_complaints":[]}],"date_created":"2024-02-06T00:29:24.627606-08:00","date_modified":"2024-02-06T00:29:24.627622-08:00","name":"Securities and Exchange Commission","extra_info":""}],"entries":[{"resource_uri":"https://www.courtlistener.com/api/rest/v4/docket-entries/436460554/","id":436460554,"docket":"https://www.courtlistener.com/api/rest/v4/dockets/67830293/","recap_documents":[{"resource_uri":"https://www.courtlistener.com/api/rest/v4/recap-documents/450906985/","id":450906985,"tags":[],"absolute_url":"/docket/67830293/59/securities-and-exchange-commission-v-verges/","date_created":"2025-09-01T22:50:57.552131-07:00","date_modified":"2025-10-01T11:51:23.779650-07:00","sha1":"","page_count":null,"file_size":null,"filepath_local":null,"filepath_ia":"","ia_upload_failure_count":null,"thumbnail":null,"thumbnail_status":0,"plain_text":"","ocr_status":null,"date_upload":null,"document_number":"59","attachment_number":null,"pacer_doc_id":"177017905229","is_available":false,"is_free_on_pacer":null,"is_sealed":null,"document_type":1,"description":"","acms_document_guid":""}],"date_created":"2025-09-01T22:50:57.528090-07:00","date_modified":"2025-10-01T11:51:23.761329-07:00","date_filed":"2025-08-08","time_filed":null,"entry_number":59,"recap_sequence_number":"2025-08-08.001","pacer_sequence_number":156,"description":"Unopposed MOTION to Withdraw as Attorney Jason P. Reinsch filed by United States Securities and Exchange Commission (Attachments: # 1 Proposed Order) (Reinsch, Jason) (Entered: 08/08/2025)","tags":[]},{"resource_uri":"https://www.courtlistener.com/api/rest/v4/docket-entries/434333043/","id":434333043,"docket":"https://www.courtlistener.com/api/rest/v4/dockets/67830293/","recap_documents":[{"resource_uri":"https://www.courtlistener.com/api/rest/v4/recap-documents/448712653/","id":448712653,"tags":[],"absolute_url":"/docket/67830293/60/securities-and-exchange-commission-v-verges/","date_created":"2025-08-11T12:05:46.766279-07:00","date_modified":"2025-10-01T11:51:23.819480-07:00","sha1":"","page_count":null,"file_size":null,"filepath_local":null,"filepath_ia":"","ia_upload_failure_count":null,"thumbnail":null,"thumbnail_status":0,"plain_text":"","ocr_status":null,"date_upload":null,"document_number":"60","attachment_number":null,"pacer_doc_id":"177017907158","is_available":false,"is_free_on_pacer":null,"is_sealed":null,"document_type":1,"description":"Order on Motion to Withdraw as Attorney","acms_document_guid":""}],"date_created":"2025-08-11T12:05:46.748445-07:00","date_modified":"2025-10-01T11:51:23.798268-07:00","date_filed":"2025-08-11","time_filed":"13:37:46","entry_number":60,"recap_sequence_number":"2025-08-11.001","pacer_sequence_number":158,"description":"ORDER granting 59 Motion to Withdraw as Attorney. Attorney Jason P Reinsch terminated. (Ordered by Senior Judge Sidney A Fitzwater on 8/11/2025) (knb) (Entered: 08/11/2025)","tags":[]},{"resource_uri":"https://www.courtlistener.com/api/rest/v4/docket-entries/430505382/","id":430505382,"docket":"https://www.courtlistener.com/api/rest/v4/dockets/67830293/","recap_documents":[{"resource_uri":"https://www.courtlistener.com/api/rest/v4/recap-documents/444786899/","id":444786899,"tags":[],"absolute_url":"/docket/67830293/57/securities-and-exchange-commission-v-verges/","date_created":"2025-07-04T20:25:39.638203-07:00","date_modified":"2025-10-01T11:51:23.698778-07:00","sha1":"","page_count":null,"file_size":null,"filepath_local":null,"filepath_ia":"","ia_upload_failure_count":null,"thumbnail":null,"thumbnail_status":0,"plain_text":"","ocr_status":null,"date_upload":null,"document_number":"57","attachment_number":null,"pacer_doc_id":"177017617787","is_available":false,"is_free_on_pacer":null,"is_sealed":null,"document_type":1,"description":"","acms_document_guid":""}],"date_created":"2025-07-04T20:25:39.623195-07:00","date_modified":"2025-10-01T11:51:23.681392-07:00","date_filed":"2025-04-15","time_filed":null,"entry_number":57,"recap_sequence_number":"2025-04-15.001","pacer_sequence_number":152,"description":"MOTION to Withdraw as Attorney Kate M. Novak, Esq. filed by JDT Trading LLC, James D Tilton, Jr (Attachments: # 1 Proposed Order) (Novak, Kate) (Entered: 04/15/2025)","tags":[]},{"resource_uri":"https://www.courtlistener.com/api/rest/v4/docket-entries/430505381/","id":430505381,"docket":"https://www.courtlistener.com/api/rest/v4/dockets/67830293/","recap_documents":[{"resource_uri":"https://www.courtlistener.com/api/rest/v4/recap-documents/444786898/","id":444786898,"tags":[],"absolute_url":"/docket/67830293/55/securities-and-exchange-commission-v-verges/","date_created":"2025-07-04T20:25:39.569314-07:00","date_modified":"2025-10-01T11:51:23.615891-07:00","sha1":"52e3168f665950bc2b8368b415d55c6e2c9c24b7","page_count":3,"file_size":118444,"filepath_local":"recap/gov.uscourts.txnd.381575/gov.uscourts.txnd.381575.55.0.pdf","filepath_ia":"https://archive.org/download/gov.uscourts.txnd.381575/gov.uscourts.txnd.381575.55.0.pdf","ia_upload_failure_count":null,"thumbnail":null,"thumbnail_status":0,"plain_text":"Case 3:23-cv-02146-D        Document 55        Filed 01/13/25     Page 1 of 3     PageID 403\n\n\n\n                      IN THE UNITED STATES DISTRICT COURT\n                      FOR THE NORTHERN DISTRICT OF TEXAS\n                                DALLAS DIVISION\n\n\n                                                           \u00a7\nSECURITIES AND EXCHANGE COMMISSION,                        \u00a7\n                                                           \u00a7\n              Plaintiff,                                   \u00a7\n                                                           \u00a7\nv.                                                         \u00a7      Case No.: 3:23:cv-02146-D\n                                                           \u00a7\nPHILIP VERGES, JAMES D. TILTON, JR.,                       \u00a7\nROBERT F. MALIN, LINDA MALIN, and                          \u00a7\nBLUE CITI, LLC,                                            \u00a7\n                                                           \u00a7\n              Defendants,                                  \u00a7\n                                                           \u00a7\nSMEA2Z, LLC, 143 PARTNERS LLC, WEST                        \u00a7\nCUCHARRAS, LLC, and JDT TRADING, LLC,                      \u00a7\n                                                           \u00a7\n              Relief Defendants.                           \u00a7\n                                                           \u00a7\n\n          PLAINTIFF\u2019S NOTICE OF NON-OPPOSITION TO THE RELIEF\n        REQUESTED IN DEFENDANT PHILIP VERGES\u2019S MOTION TO STAY\n            AND DEFENDANTS BLUE CITI LLC, ROBERT F. MALIN,\n                  AND LINDA MALIN\u2019S MOTION TO STAY\n\n       Plaintiff Securities and Exchange Commission (the \u201cCommission\u201d) files this notice of non-\n\nopposition to the relief requested in Defendant Philip Verges\u2019s (\u201cVerges\u201d) Motion to Stay [Dkt.\n\nNo. 51] (\u201cVerges Motion\u201d) and Defendants Blue Citi, LLC, Robert F. Malin, and Linda Malin\u2019s\n\n(collectively, \u201cBlue Citi Defendants\u201d) Motion to Stay [Dkt. No. 52] (\u201cBlue Citi Motion\u201d).\n\n       The Commission respectfully suggests that, if granted, any order concerning the Verges\n\nMotion or the Blue Citi Motion require Verges and the Blue Citi Defendants to notify the Court\n\nand counsel of record in writing within five (5) days of any order or judgment concluding United\n\nStates v. Verges, No. 3:24-cr-00551-E (N.D. Tex.).\n\n\n\n\n                                               1\n\fCase 3:23-cv-02146-D      Document 55     Filed 01/13/25     Page 2 of 3   PageID 404\n\n\n\nDated: January 13, 2025                 Respectfully submitted,\n\n                                         /s/ Jason P. Reinsch\n                                        Jason P. Reinsch\n                                        Texas Bar No. 24040120\n                                        Patrick Disbennett\n                                        Texas Bar No. 24094629\n                                        United States Securities and Exchange Commission\n                                        Fort Worth Regional Office\n                                        801 Cherry Street, Suite 1900\n                                        Fort Worth, Texas 76102\n                                        (817) 900-2601 (phone)\n                                        (817) 978-4927 (facsimile)\n                                        reinschj@sec.gov\n                                        disbennettpa@sec.gov\n\n                                        ATTORNEYS FOR PLAINTIFF SECURITIES\n                                        AND EXCHANGE COMMISSION\n\n\n\n\n                                           2\n\fCase 3:23-cv-02146-D          Document 55         Filed 01/13/25       Page 3 of 3      PageID 405\n\n\n\n                                  CERTIFICATE OF SERVICE\n\n        I hereby certify that on January 13, 2025, I electronically filed the foregoing via the Court's\nCM/ECF filing system, which will send a notice of electronic filing to all CM/ECF participants. I\nfurther certify that I served a true and correct copy of the foregoing document and the notice of\nelectronic filing via electronic mail on all non-CM/ECF parties and/or their counsel as detailed\nbelow:\n\n Paul Coggins                                         Mark David Hunter\n Locke Lord LLP                                       2 Alhambra Plaza, Suite 650\n 2200 Ross Ave, Suite 2800                            Coral Gables, Florida 33134\n Dallas, TX 75201                                     mhunter@htflawyers.com\n pccoggings@lockelord.com                             Counsel for Defendants Blue Citi, LLC, Linda\n Counsel for Defendants 143 Partner, LLC,             Malin and Robert Malin\n SMEA2Z, LLC, Philip Verges, and West\n Cucharras\n\n Russell D. Duncan\n Clark Hill\n 1001 Pennsylvania Ave. N.W., Suite 1300\n South, Washington, DC 20004\n rduncan@clarkhill.com\n Counsel for Defendants JDT Trading, LLC\n and James D. Tilton, Jr.\n\n\n                                               /s/Jason P. Reinsch\n                                               JASON P. REINSCH\n\n\n\n\n                                                  3\n\f","ocr_status":2,"date_upload":"2025-07-28T13:49:29.040966-07:00","document_number":"55","attachment_number":null,"pacer_doc_id":"177017386182","is_available":true,"is_free_on_pacer":null,"is_sealed":null,"document_type":1,"description":"","acms_document_guid":""}],"date_created":"2025-07-04T20:25:39.554956-07:00","date_modified":"2025-10-01T11:51:23.597880-07:00","date_filed":"2025-01-13","time_filed":null,"entry_number":55,"recap_sequence_number":"2025-01-13.001","pacer_sequence_number":146,"description":"NOTICE of Non-Opposition to the Relief Requested in Defendant Philip Verges's Motion to Stay and Defendants Blue Citi LLC, Robert F Malin, and Linda Malin's Motion to Stay re: 51 MOTION to Stay, 52 MOTION to Stay filed by United States Securities and Exchange Commission (Reinsch, Jason) (Entered: 01/13/2025)","tags":[]},{"resource_uri":"https://www.courtlistener.com/api/rest/v4/docket-entries/430505380/","id":430505380,"docket":"https://www.courtlistener.com/api/rest/v4/dockets/67830293/","recap_documents":[{"resource_uri":"https://www.courtlistener.com/api/rest/v4/recap-documents/444786897/","id":444786897,"tags":[],"absolute_url":"/docket/67830293/53/securities-and-exchange-commission-v-verges/","date_created":"2025-07-04T20:25:39.505134-07:00","date_modified":"2025-10-01T11:51:23.532288-07:00","sha1":"","page_count":null,"file_size":null,"filepath_local":null,"filepath_ia":"","ia_upload_failure_count":null,"thumbnail":null,"thumbnail_status":0,"plain_text":"","ocr_status":null,"date_upload":null,"document_number":"53","attachment_number":null,"pacer_doc_id":"177017374079","is_available":false,"is_free_on_pacer":null,"is_sealed":null,"document_type":1,"description":"","acms_document_guid":""}],"date_created":"2025-07-04T20:25:39.489854-07:00","date_modified":"2025-10-01T11:51:23.513722-07:00","date_filed":"2025-01-07","time_filed":null,"entry_number":53,"recap_sequence_number":"2025-01-07.001","pacer_sequence_number":142,"description":"Joint MOTION to Extend Time to Amend Scheduling Order filed by United States Securities and Exchange Commission (Attachments: # 1 Proposed Order) (Reinsch, Jason) (Entered: 01/07/2025)","tags":[]},{"resource_uri":"https://www.courtlistener.com/api/rest/v4/docket-entries/430505379/","id":430505379,"docket":"https://www.courtlistener.com/api/rest/v4/dockets/67830293/","recap_documents":[{"resource_uri":"https://www.courtlistener.com/api/rest/v4/recap-documents/444786896/","id":444786896,"tags":[],"absolute_url":"/docket/67830293/52/securities-and-exchange-commission-v-verges/","date_created":"2025-07-04T20:25:39.475746-07:00","date_modified":"2025-10-01T11:51:23.492098-07:00","sha1":"","page_count":null,"file_size":null,"filepath_local":null,"filepath_ia":"","ia_upload_failure_count":null,"thumbnail":null,"thumbnail_status":0,"plain_text":"","ocr_status":null,"date_upload":null,"document_number":"52","attachment_number":null,"pacer_doc_id":"177017356945","is_available":false,"is_free_on_pacer":null,"is_sealed":null,"document_type":1,"description":"","acms_document_guid":""}],"date_created":"2025-07-04T20:25:39.460195-07:00","date_modified":"2025-10-01T11:51:23.473611-07:00","date_filed":"2024-12-27","time_filed":null,"entry_number":52,"recap_sequence_number":"2024-12-27.001","pacer_sequence_number":140,"description":"MOTION to Stay filed by Robert F Malin, Linda Malin, Blue Citi LLC with Brief/Memorandum in Support. (Attachments: # 1 Exhibit(s) Ex A - Verges Indictment, # 2 Proposed Order) (Hunter, Mark) (Entered: 12/27/2024)","tags":[]},{"resource_uri":"https://www.courtlistener.com/api/rest/v4/docket-entries/430505378/","id":430505378,"docket":"https://www.courtlistener.com/api/rest/v4/dockets/67830293/","recap_documents":[{"resource_uri":"https://www.courtlistener.com/api/rest/v4/recap-documents/444786895/","id":444786895,"tags":[],"absolute_url":"/docket/67830293/51/securities-and-exchange-commission-v-verges/","date_created":"2025-07-04T20:25:39.443316-07:00","date_modified":"2025-10-01T11:51:23.451526-07:00","sha1":"","page_count":null,"file_size":null,"filepath_local":null,"filepath_ia":"","ia_upload_failure_count":null,"thumbnail":null,"thumbnail_status":0,"plain_text":"","ocr_status":null,"date_upload":null,"document_number":"51","attachment_number":null,"pacer_doc_id":"177017351644","is_available":false,"is_free_on_pacer":null,"is_sealed":null,"document_type":1,"description":"","acms_document_guid":""}],"date_created":"2025-07-04T20:25:39.429066-07:00","date_modified":"2025-10-01T11:51:23.432905-07:00","date_filed":"2024-12-23","time_filed":null,"entry_number":51,"recap_sequence_number":"2024-12-23.001","pacer_sequence_number":138,"description":"MOTION to Stay filed by Philip Verges with Brief/Memorandum in Support. (Attachments: # 1 Exhibit(s) A, # 2 Proposed Order) (Coggins, Paul) (Entered: 12/23/2024)","tags":[]},{"resource_uri":"https://www.courtlistener.com/api/rest/v4/docket-entries/430505377/","id":430505377,"docket":"https://www.courtlistener.com/api/rest/v4/dockets/67830293/","recap_documents":[{"resource_uri":"https://www.courtlistener.com/api/rest/v4/recap-documents/444786894/","id":444786894,"tags":[],"absolute_url":"/docket/67830293/49/securities-and-exchange-commission-v-verges/","date_created":"2025-07-04T20:25:39.375640-07:00","date_modified":"2025-10-01T11:51:23.362800-07:00","sha1":"","page_count":null,"file_size":null,"filepath_local":null,"filepath_ia":"","ia_upload_failure_count":null,"thumbnail":null,"thumbnail_status":0,"plain_text":"","ocr_status":null,"date_upload":null,"document_number":"49","attachment_number":null,"pacer_doc_id":"177017169558","is_available":false,"is_free_on_pacer":null,"is_sealed":null,"document_type":1,"description":"","acms_document_guid":""}],"date_created":"2025-07-04T20:25:39.362189-07:00","date_modified":"2025-10-01T11:51:23.344692-07:00","date_filed":"2024-10-02","time_filed":null,"entry_number":49,"recap_sequence_number":"2024-10-02.001","pacer_sequence_number":133,"description":"Joint MOTION to Amend/Correct 39 Scheduling Order, filed by United States Securities and Exchange Commission (Attachments: # 1 Proposed Order) (Reinsch, Jason) (Entered: 10/02/2024)","tags":[]},{"resource_uri":"https://www.courtlistener.com/api/rest/v4/docket-entries/422475762/","id":422475762,"docket":"https://www.courtlistener.com/api/rest/v4/dockets/67830293/","recap_documents":[{"resource_uri":"https://www.courtlistener.com/api/rest/v4/recap-documents/436506433/","id":436506433,"tags":[],"absolute_url":"/docket/67830293/58/securities-and-exchange-commission-v-verges/","date_created":"2025-04-15T14:21:41.887491-07:00","date_modified":"2025-10-01T11:51:23.737915-07:00","sha1":"","page_count":null,"file_size":null,"filepath_local":null,"filepath_ia":"","ia_upload_failure_count":null,"thumbnail":null,"thumbnail_status":0,"plain_text":"","ocr_status":null,"date_upload":null,"document_number":"58","attachment_number":null,"pacer_doc_id":"177017618809","is_available":false,"is_free_on_pacer":null,"is_sealed":null,"document_type":1,"description":"Order on Motion to Withdraw as Attorney","acms_document_guid":""}],"date_created":"2025-04-15T14:21:41.858264-07:00","date_modified":"2025-10-01T11:51:23.717814-07:00","date_filed":"2025-04-15","time_filed":"15:49:16","entry_number":58,"recap_sequence_number":"2025-04-15.002","pacer_sequence_number":154,"description":"ORDER granting 57 Motion to Withdraw as Attorney. Attorney Kate Mallory Novak terminated. (Ordered by Senior Judge Sidney A Fitzwater on 4/15/2025) (cfk) (Entered: 04/15/2025)","tags":[]},{"resource_uri":"https://www.courtlistener.com/api/rest/v4/docket-entries/413435753/","id":413435753,"docket":"https://www.courtlistener.com/api/rest/v4/dockets/67830293/","recap_documents":[{"resource_uri":"https://www.courtlistener.com/api/rest/v4/recap-documents/427032861/","id":427032861,"tags":[],"absolute_url":"/docket/67830293/56/securities-and-exchange-commission-v-verges/","date_created":"2025-01-14T06:11:05.277430-08:00","date_modified":"2025-10-01T11:51:23.658554-07:00","sha1":"","page_count":null,"file_size":null,"filepath_local":null,"filepath_ia":"","ia_upload_failure_count":null,"thumbnail":null,"thumbnail_status":0,"plain_text":"","ocr_status":null,"date_upload":null,"document_number":"56","attachment_number":null,"pacer_doc_id":"177017386608","is_available":false,"is_free_on_pacer":null,"is_sealed":null,"document_type":1,"description":"Order of Dismissal or Administrative Closure","acms_document_guid":""}],"date_created":"2025-01-14T06:11:05.265626-08:00","date_modified":"2025-10-01T11:51:23.636356-07:00","date_filed":"2025-01-14","time_filed":"07:56:43","entry_number":56,"recap_sequence_number":"2025-01-14.001","pacer_sequence_number":150,"description":"Order Administratively Closing Case. This civil action is stayed, and the August 18, 2025 trial setting and all unexpired deadlines are vacated. To reduce the burdens on the parties and the court of maintaining this action as a pending case while the stay is in effect, the court directs the clerk of court to close this case statistically pending further court order. (Ordered by Senior Judge Sidney A Fitzwater on 1/14/2025) (Senior Judge Sidney A Fitzwater) (Entered: 01/14/2025)","tags":[]},{"resource_uri":"https://www.courtlistener.com/api/rest/v4/docket-entries/412904380/","id":412904380,"docket":"https://www.courtlistener.com/api/rest/v4/dockets/67830293/","recap_documents":[{"resource_uri":"https://www.courtlistener.com/api/rest/v4/recap-documents/426453107/","id":426453107,"tags":[],"absolute_url":"/docket/67830293/54/securities-and-exchange-commission-v-verges/","date_created":"2025-01-08T07:20:56.768234-08:00","date_modified":"2025-10-01T11:51:23.573748-07:00","sha1":"","page_count":null,"file_size":null,"filepath_local":null,"filepath_ia":"","ia_upload_failure_count":null,"thumbnail":null,"thumbnail_status":0,"plain_text":"","ocr_status":null,"date_upload":null,"document_number":"54","attachment_number":null,"pacer_doc_id":"177017375154","is_available":false,"is_free_on_pacer":null,"is_sealed":null,"document_type":1,"description":"Scheduling Order","acms_document_guid":""}],"date_created":"2025-01-08T07:20:56.751405-08:00","date_modified":"2025-10-01T11:51:23.551674-07:00","date_filed":"2025-01-07","time_filed":null,"entry_number":54,"recap_sequence_number":"2025-01-07.002","pacer_sequence_number":144,"description":"ORDER granting the Parties' 53 Second Joint Motion to Amend: Discovery due by 4/11/2025. Status Report due by 4/11/2025. Motions due by 5/12/2025. (Ordered by Senior Judge Sidney A Fitzwater on 1/7/2025) (twd) (Entered: 01/08/2025)","tags":[]},{"resource_uri":"https://www.courtlistener.com/api/rest/v4/docket-entries/404074655/","id":404074655,"docket":"https://www.courtlistener.com/api/rest/v4/dockets/67830293/","recap_documents":[{"resource_uri":"https://www.courtlistener.com/api/rest/v4/recap-documents/414495608/","id":414495608,"tags":[],"absolute_url":"/docket/67830293/50/securities-and-exchange-commission-v-verges/","date_created":"2024-10-02T15:22:58.705935-07:00","date_modified":"2025-10-01T11:51:23.406109-07:00","sha1":"","page_count":null,"file_size":null,"filepath_local":null,"filepath_ia":"","ia_upload_failure_count":null,"thumbnail":null,"thumbnail_status":0,"plain_text":"","ocr_status":null,"date_upload":null,"document_number":"50","attachment_number":null,"pacer_doc_id":"177017171491","is_available":false,"is_free_on_pacer":null,"is_sealed":null,"document_type":1,"description":"Order on Motion to Amend/Correct","acms_document_guid":""}],"date_created":"2024-10-02T15:22:58.689105-07:00","date_modified":"2025-10-01T11:51:23.385267-07:00","date_filed":"2024-10-02","time_filed":"16:21:32","entry_number":50,"recap_sequence_number":"2024-10-02.002","pacer_sequence_number":136,"description":"ORDER granting 49 Motion to Amend Scheduling Order. (Ordered by Senior Judge Sidney A Fitzwater on 10/2/2024) (ndt) (Entered: 10/02/2024)","tags":[]},{"resource_uri":"https://www.courtlistener.com/api/rest/v4/docket-entries/400329817/","id":400329817,"docket":"https://www.courtlistener.com/api/rest/v4/dockets/67830293/","recap_documents":[{"resource_uri":"https://www.courtlistener.com/api/rest/v4/recap-documents/409559765/","id":409559765,"tags":[],"absolute_url":"/docket/67830293/48/securities-and-exchange-commission-v-verges/","date_created":"2024-08-23T15:02:15.994598-07:00","date_modified":"2025-10-01T11:51:23.321540-07:00","sha1":"7549a908c642b3a11b826c14ec12ddc4e8eb9fb5","page_count":14,"file_size":775708,"filepath_local":"recap/gov.uscourts.txnd.381575/gov.uscourts.txnd.381575.48.0.pdf","filepath_ia":"https://archive.org/download/gov.uscourts.txnd.381575/gov.uscourts.txnd.381575.48.0.pdf","ia_upload_failure_count":null,"thumbnail":null,"thumbnail_status":0,"plain_text":"Case 3:22-cv-01529-N Document 28 Filed 08/23/24 Page 1 of 14. PagelD: 215\" \u00a2 ees\n| TIED\n|\n\nIN THE UNITED STATES DISTRICT COURT | ,,\nFOR THE NORTHERN DISTRICT OF TEXAS | <>\nDALLAS DIVISION |\n\nAUG 23 2024\n\nSPECIAL ORDER NO. 3-354\n\nEffective August 23, 2024, the cases listed on Exhibit A to this order are transferred to\nMagistrate Judge Brian McKay and shall henceforth carry the suffix letters \u201cBW.\u201d Magistrate\nJudge McKay shall seek consent of the parties in these cases to conduct all further proceedings\nand order the entry of final judgment in accordance with 28 U.S.C. \u00a7 636(c). Ifall parties do not\nconsent, Magistrate Judge McKay shall, unless the assigned district judge otherwise orders,\n\nexercise all powers permitted by 28 U.S.C. \u00a7 636(b).\n\nSO ORDERED.\n\nAugust 23, 2024\n\nDect (_ wes\n\nDAVID C. GODBEY\nCHIEF JUDGE\n\n\fCase 3:22-cv-01529-N Document 28 Filed 08/23/24 Page 2of14 PagelD 216\nExhibit A\n\nCASES TO BE TRANSFERRED FROM THE DOCKET OF JUDGE RENEE H. TOLIVER TO JUDGE MCKAY\n\n1 2:24-CV-0142-BK Hasan v. Commissioner, Social Security Administration\n\n2 3:18-CV-1933-N Lexor Manufacturing LLC v. Luraco Ine, et al.\n\n3 3:19-CV-2204-X Retail Ready Career Center inc v. United States of America, et al.\n\n4 3:19-CV-2218-E Southwest Airlines Co v. Liberty Insurance Underwriters Inc\n\n5 3:19-CV-2281-K FTC v. Match Group\n\n6 3:20-CV-0656-K-BK Buzz Photo, et al. v. People's Republic of China, et al.\n\n7 3:20-CV-2935-N Carswell v. Hunt County Texas, et al.\n\n8 3:20-CV-3718-D Samurai Global LLC v. Landmark American Insurance Company\n3:21-CV-0116-B Rainier Arms LLC, et al. v. Bureau of Alcohol Tobacco Firearms and\n\n9 Explosives, et al.\n\n10 3:21-CV-0840-E TNT Quadrangle Partner, LP, et al. v. SRPF B/Quadrangle Property, LLC, et al.\n\n11 3:21-CV-1764-D Vess v. City of Dallas, et al.\n\n412 3:21-CV-2429-L Raskin, et al. v. Dallas Independent Schoo! District, et al.\n\n13 3:22-CV-0654-N Salt and Light Energy Equipment LLC v. Crigin Bancorp\n\n14 3:22-CV-0663-E United States of America v. All Funds in 199 Bank Accounts Located in India\n\n15 3:22-CV-0780-M State of Texas, et al. v. Biden, et al.\n\n16 3:22-CV-0907-5 Hilltop Holdings Inc v. AlG Specialty Insurance Company\n\n17 3:22-CV-1185-X Sentry Insurance A Mutual Company v. Morgan\n\n18 3:22-CV-1869-E Walsh v. Peterson\n\n19 3:22-CV-2118-X Securities and Exchange Commission v. Barton, et al.\n\n20 3:22-CV-2272-S Thomas v. McDonough, et al.\n\n21 3:22-CV-2597-K Pearson, et al. v. Gage\n\n22 3:22-CV-2624-B Iske v. Precision Dynamics International LLC\n\n23 3:22-CV-2763-E Boy Scouts of America v. Touch A Life Foundation Inc\n\n24 3:22-MC-0079-X-BK NiRB v. LM Carpet\n\n25 3:23-CV-0037-5 Young v. Baylor Scott & White Health\n\n26 3:23-CV-0133-B Endurance American Insurance Company v. Lloyd's Syndicate 3624\n\n27 3:23-CV-0313-S G Thomas Air LLC v. Pratt & Whitney Engine Services Inc\n\n28 3:23-CV-0342-M Ariat International Inc v. Khemchand Handicrafts Limited, et ai.\n\n29 3:23-CV-0464-D Alford v. Wonderland Montessori Academy LLC\n\n30 3:23-CV-0584-G Lee Ir v. United States\n3:23-CV-0640-D M Central Residences Condominium Association Inc v. Technology\n\n31 Insurance Company Inc\n\n32 3:23-CV-0641-L Securities and Exchange Commission v. McKnight\n\n33 3:23-CV-0811-E Alawei v. United States Citizenship and Immigration Service\n\n34 3:23-CV-0881-X GS Holistic LCC v. Sri Manakamana Inc\n\n35 3:23-CV-0910-B Brandon Architects Inc v. Olerio Home LLC\n\n36 3:23-CV-0954-X Lopez v. US Immigration and Customs Enforcement, et al.\n\n37 3:23-CV-0965-X Wilcox v. Equifax Information Services LLC\n\n38 3:23-CV-1171-K Modern Vascular of Southaven LLC, et al. v. Qlarant Integrity Solutions LLC\n\n39 3:23-CV-1198-G White v. American Economy Insurance Company\n\n40 3:23-CV-1351-X $2 Brothers LLC v. AmGuard Insurance Company\n\n41 3:23-CV-1399-G Dill v. Experian Information Solutions Inc\n\n1\n\n\fCase 3:22-cv-01529-N Document 28 Filed 08/23/24 Page 3o0f14 PagelD 217\nExhibit A\n\nCASES TO BE TRANSFERRED FROM THE DOCKET OF JUDGE RENEE H. TOLIVER TO JUDGE MCKAY\n\n42 3:23-CV-1457-5 Denison Glass & Mirror Ine v. EFCO LLC\n\n43 3:23-CV-1559-B Fitton v. Pinnacle Propane LLC\n\n44 3:23-CV-1574-E Johnson, et al. v. Dallas County Hospital District, et al.\n\n45 3:23-CV-1583-E Hernandez v. Brown\n\n46 3:23-CV-1663-D-BK Hill v. Norman, et ai.\n\n47 3:23-CV-1698-L-BK Jaffari v. Garland, et al.\n\n48 3:23-CV-1772-B Uliman v. OBM Miami\n\n49 3:23-CV-1915-B-BK Pinson v. Dallas Cnty. Sherriff\u2019s Office, et al.\n\n50 3:23-CV-1918-N Martinez v. Kroger\n3:23-CV-1945-D-BK Thornton v. Dallas County d/b/a Dallas County District Attorney's Office, et\n\n51 al.\n\n52 3:23-CV-2088-L-BK Gordon v. Kellam\n\n53 3:23-CV-2090-N-BK Tyson v. Commissioner of Social Security\n\n54 3:23-CV-2094-N-BK Humble v. Enge, et al.\n\n55 3:23-CV-2112-D King v. SeaHarbor Insurance Agency LLC\n\n56 3:23-CV-2162-5 Sealed v. Sealed\n\n57 3:23-CV-2195-X-BK Ashley v. DOL\n\n58 3:23-CV-2212-B Hunter v. Procollect Inc\n\n59 3:23-CV-2231-5 82 Glenwood Avenue LLC v. Schutze, et al.\n\n60 3:23-CV-2385-BK Fernandez v. Social Security Administration\n\n61 3:23-CV-2412-D Beasley v. Castle Credit Co Holdings LLC\n\n62 3:23-CV-2438-N-BK Blanks v, Federal Correctional Institution Seagoville, et al.\n\n63 3:23-CV-2493-K-BK Dickerson v. Conduent Commercial! Solutions LLC\n\n64 3:23-CV-2656-K-BK United States of America v. Rehab 4 Work Services LLC, et al.\n\n65 3:23-CV-2728-B Factor Mutual Insurance Company v. Southwest Pumps LLC, et al.\n\n66 3:24-CV-0013-B SW Marine v. Valentine\n\n67 3:24-CV-0072-E Katz v. Gruenberg, et al.\n\n68 3:24-CV-0104-E Tupac v. Asbury Automotive Group Inc, et al.\n\n69 3:24-CV-0112-E-BK Keys v. Connors et al.\n\n70 3:24-CV-0113-K-BK Smith v. Federai Bureau of Prisons, et al.\n\n71 3:24-CV-0148-B Samiappan v. Su\n\n72 3:24-CV-0244-N Sukin v. Experian Information Soiutions Inc, et al.\n\n73 3:24-CV-0298-G Liu v. U.S. Department of State, et ai.\n\n74 3:24-CV-0376-X Colonna, et al. v. LoanDepot.com LLC\n\n75 3:24-CV-0626-S-BK Alfano v. Allred Unit Mailroom\n\n76 3:24-CV-1060-L-BK Butler v. Lee at al\n\n77 3:24-CV-1063-D Rodriguez v. ALDI Inc\n\n78 3:24-CV-1083-K G&G Closed Circuit Events LLC v. Frida's Tacos LLC, et al.\n\n79 3:24-CV-1089-X Feit Electric Company Inc v. Elong international USA Inc, et al.\n\n80 3:24-CV-1117-K Umoru v. Walmart Stores Texas LLC\n\n81 3:24-CV-1149-X-BK Central States Health and Welfare Fund v. Contreras\n3:24-CV-1151-X Dallas Food & Beverage LLC, et al. v. United States Smail Business\n\n82 Administration, et al.\n\n83 3:24-CV-1245-B Sealed v. Sealed\n\n84 3:24-CV-1367-S Jain, et al. v. Jaddou\n\n85 3:24-CV-1416-G-BK Henderson v. Trump\n\n\fCase 3:22-cv-01529-N Document 28 Filed 08/23/24 Page 4of14 PagelD 218\n\nExhibit A\n\nCASES TO BE TRANSFERRED FROM THE DOCKET OF JUDGE RENEE H. TOLIVER TO JUDGE MCKAY\n\n86 3:24-CV-1422-5 Kearney v. Equifax Information Services LLC\n\n87 3:24-CV-1551-B Zachary v. Environmental Protection Agency\n\n88 3:24-CV-1587-S-BK Henderson v. Trump\n\n89 3:24-CV-1621-G Hamilton v. Walmart Inc\n\n90 3:24-CV-1677-X EYM Pizza of Georgia LLC, et al. v. Pizza Hut LLC, et al.\n\n91 3:24-CV-1705-D Ogboru v. Allstate Vehicle and Property Insurance Company\n92 3:24-MC-0017-E NFinity IP v. Varsity Spirit\n\n93 4:24-CV-0592-BK Johnson v. Commissioner, Social Security Administration\n\n94 5:23-CV-0259-BK Arguello v. Social Security Administration\n\n95 5:23-CV-0281-BK Murphy v. Social Security Administration\n\n\fCase 3:22-cv-01529-N Document 28 Filed 08/23/24 Page5of14 PagelD 219\n\nExhibit A\n\nCASES TO BE TRANSFERRED FROM THE DOCKET OF JUDGE DAVID L. HORAN TO JUDGE MCKAY\n\n# Case No. Case Name\n1 3:16-cv-00764-N VidStream LLC v. Twitter Inc\nCapio Funding LLC v. Rural/Metro Operating\n2 3:17-cv-02713-X Company LLC et al\n3 3:19-cv-01067-K Von Colditz v. Woods et af\n4 3:20-cv-00045-D Rodriguez v. Southern Health Partners Inc et al\n5 3:20-cv-00313-N Hamilton et al v. Dallas County\n6 3:20-cv-01358-E Coleman et al v. Brozen et al\n7 3:20-cv-03636-K Blue Yonder Group inc v. Kinaxis inc et al\n8 3:21-cv-01498-B Halperin et al v. Wills et al\n9 3:22-cv-00034-X McClung et al v. Wal-Mart Stores Texas LLC et al\n10 3:22-cv-00141-N-BN Bell v. Moore\nit 3:22-cv-00525-X Fiberco, Inc. v. Acadia Insurance Company\nHighland Capital Management LP et al v. Highland Capital Management Fund\n12 3:22-cv-00789-X Advisors LP\n13 3:22-cv-00794-$ Legacy Exploration LLC v. Optimum Energy Partners LLC et al\n14 3:22-cv-01498-G-BN Timmons v. Director\n45 3:22-cy-01581-G-BN Sharper v. Director, TDCJ-CID\n416 3:22-cv-01600-G-BN Matthews v. Director, TDCJ-CID\n17 3:22-cv-01871-G-BN Turner v. O'Daniel\n18 3:22-cv-02062-X Shuler Drilling Company Inc v. Disiere Partners LLC, et al\n19 3:22-cv-02312-G-BN Mornes v, Director, TDCJ-CID\n20 3:22-cv-02403-N-BN Carey v. Director, TDCJ-CID\n21 3:22-cv-02410-G Castillo v. Walmart Inc et ai\n22 3:22-cv-02589-S-BN Minze v. Director, TOCJ-CID\n23 3:22-cv-02600-X Venzant v. Bigelow Arizona TX-282 LP et al\n24 3:22-cv-02891-N-BN Carcamo v. Director, FDCJ-CID\n25 3:23-cv-00057-K-BN Turner v. Wellpath Med Co\n26 3:23-cv-00066-B-BN Hernandez v. Director, TDCJ-CID\nTrustees of the IBEW-NECA Southwestern Health and Benefit Fund et al v. Rockey\n27 3:23-cv-00224-B Electric Inc\n28 3:23-cv-00280-K Mercury Associates Inc v. Primoris Services Corporation\n29 3:23-cv-00303-N Paige v. State Farm Lloyds\n30 3:23-cv-00337-X-BN Roccaforte v. Transunion\n31 3:23-cv-00338-N-BN Roccaforte v. Experian information Solutions Inc\n32 3:23-cv-00339-E-BN Roccaforte v. Equifax Inc\n33 3:23-cv-00355-X EDN Global Inc et al v. AT&T Mobility Services LUC et al\n34 3:23-cv-G0391-D Walker v. Hoffman et al\n35 3:23-cv-00410-E-BN Lewis v. Equifax\n36 3:23-cv-00435-B-BN Lewis v. Experian\n37 3:23-cv-00508-N Doe v. Backpage.com LLC et al\n38 3:23-cv-00547-K Bilbo v. Central Transport LLC\n39 3:23-cv-00568-B Cunningham v. State Farm Lloyds\n40 3:23-cv-00574-B Martin v. Penske Logistics LLC\n41 3:23-cv-80603-E Bridging Biosciences LLC v, Esch et al\n42 3:23-cv-00668-E-BN Spillman Jr v. Director, TDCI-CID\n43 3:23-cv-00706-E Arka Mesquite Investments LLC et al v. Philadelphia Indemnity Insurance Company\n44 3:23-cv-00736-M Powell v. Safeco Insurance Company of Indiana\n45 3:23-cv-00755-M-BN Toliver v. Director, TDCJ-CID\n46 3:23-cv-00772-E-BN Cloninger v. Director, TDC)-CID\n47 3:23-cv-00819-G White v. Wal-Mart Stores Texas LLC\n\n\fCase 3:22-cv-01529-N Document 28 Filed 08/23/24 Page 6\u00e9of14 PagelD 220\n\nExhibit A\n\nCASES TO BE TRANSFERRED FROM THE DOCKET OF JUDGE DAVID L. HORAN TO JUDGE MCKAY\n# Case No. Case Name\n4g 3:23-cv-00844-M Bellinger v. CureWave Lasers LLC et al\n49 3:23-cv-00852-G New York inn Inc et al v, Associated Industries Insurance Company Inc\n50 3:23-cv-00882-L GS Holistic LLC v. B Over 21 Inc et al\n51 3:23-cv-00915-B SMA v. Salesforce et al\n52 3:23-cv-00948-K Eder v. City of Burleson\n53 3:23-cv-00977-5 Brown v. Sarn\u2019s East Inc\n54 3:23-cv-01016-D Johnson v. Epsilon Data Management LLC\n55 3:23-cv-01018-X Licht v. Ling et al\n56 3:23-cv-01024-L GS Holistic LLC v. OMS Investment LLC et al\n57 3:23-cv-01039-B Jone Doe AS v. Salesforce Inc et a!\n58 3:23-cv-01089-N-BN Rountree v, FedEx Ground Package System Inc\n59 3:23-cv-01228-G Garcia v. Fiesta Mart LLC et al\n60 3:23-cv-01230-B Horton et al v. Heppner et al\n61 3:23-cv-01286-E Warner v. Equifax information Services LLC et ai\n62 3:23-cv-01301-X Dheera Limited Company v. Johnson Controls Inc et ai\n63 3:23-cv-01320-N-BN Silvers v. Director, TOCJ-CIB\n64 3:23-cv-01339-E Terri E Newkirk IRA v. Kelly e\u00a2 al\n65 3:23-cv-01345-L Russell v. Kroger Texas, LP\n66 3:23-cv-01356-L-BN Perez v. Specialized Loan Servicing LLC et al\n6&7 3:23-cv-01366-N Husinger v. Smart Start Real estate Corporation\n68 3:23-cv-01376-X Harris v. Papa Texas LLC\n69 3:23-cv-01468-D Nieves v. Uber Technologies Inc et al\n70 3:23-cv-01484-L Red Barn Candle Company ELC v. Bath & Body Works Brand Management Inc\n7t 3:23-cv-01497-L Rittman v. Amguard Insurance Company\n72 3:23-cv-01502-G-BN Cook v. Costco Wholesale Corporation\n73 3:23-cv-01503-B Charitable DAF Fund LP et al v. Highland Capital Management LP\n74 3:23-cv-01517-N Bahamas Laguna Azure LLC v. City of Royse City, Texas\n75 3:23-cv-01525-X Biovant LLC v. BTEAG LLC et al\n76 3:23-cv-01548-5 Cobbs v. Baylor Scott & White\n77 3:23-cv-01557-D Clark v. Wyndham Worldwide, Inc\n78 3:23-cv-01561-K Erwin et al v. Metalcraft of Mayville Inc\n79 3:23-cv-01565-S-BN Fields v. Kelley\n80 3:23-cv-01617-X Holmes v. Equifax information Services LLC et al\n81 3:23-cv-01621-5 Niter et al v. Brown et al\n82 3:23-cv-01669-B Strike 3 Holdings LLC v. Doe\n83 3:23-cv-01674-B Brookfield Property Retail Holdings LLC et ai v. Dillard Texas Central LLC\n84 3:23-cv-01675-L Van-Zandt Reiss et al v. The Bank of New York Melon\n&5 3:23-cv-01679-E Harris v. HireRight LLC\n86 3:23-cv-01775-X Palmer v. Wal-Mart Stores Inc\n87 3:23-cv-01791-L SPBL-1119 LLC v. Arciterra Strategic Retail Advisor LLC et al\n8&8 3:23-cv-01793-L LSM Blue Sky LLC v. AT Olathe Outlot 5 LLC et al\n89 3:23-cv-01802-E Megehee v. Pallida LLC\n90 3:23-cv-01805-E McConnell v. Applied Digital Corporation et al\n91 3:23-cv-01832-8 Doe v. Dallas Area Rapid Transit et al\n92 3:23-cv-01870-K GS Holistic LLC v. GNS Sons Inc\n93 3:23-cv-01889-S Velis v. Bangert et al\n94 3:23-cv-01910-E Hagans v. Child Care Group\n95 3:23-cv-01912-S Lessig v. Fiesta Mart LLC\n96 3:23-cv-01937-N Kustom Signals Inc v. Applied Concepts Inc\n97 3:23-cv-01972-L Owens v. Dallas Country Club\n98 3:23-cv-01973-K-BN Bohemond v. City of Dallas TX\n99 3:23-cv-01998-B Harland v. Workforce outsource Services Inc\n\n5\n\fCase 3:22-cv-01529-N Document 28 Filed 08/23/24 Page 7of14 PagelD 221\n\nExhibit A\nCASES TO BE TRANSFERRED FROM THE DOCKET OF JUDGE DAVID L. HORAN TO JUDGE MCKAY\n\n# Case No. Case Name\n\n100 3:23-cv-02009-G-BN Hunsinger v. Atmos Energy Corporation\n\n101 3:23-cv-02010-B Johnson et al v. Crosby Elementary School et al\n3:23-cv-02011-B\n\n102 Sample v. SLI Enterprises Inc et al\n3:23-cv-02023-B\n\n103 Promed LLC v, Quintairos Prieto Wood & Boyer PA\n3:23-cv-02050-X\n\n104 Taste of Chengdu LLC v. Feng\n3:23-cv-G2070-G6\n\n105 Summers v. Longbrake et al\n3:23-cv-02071-E\n\n106 Hunter Mountain Investment Trust et al v. Highland Capital Management LP et al\n3:23-cv-02097-X\n\n107 Holcamb v. Monitronics International\n3:23-cv-02110-B\n\n108 Consumer Data Partners, LP et al v. Agentra LLC et al\n3:23-cv-02126-5\n\n109 Mosure et al. v. Southwest Airlines, Co.\n3:23-cv-02143-N\n\n110 Dillard v. Gaines Investment Trust et al\n3:23-cv-02148-K-BN\n\n411 Booth v. US Bank Trust NA\n3:23-ev-02155-L\n\n412 cici Enterprises LP v. HSB Specialty Insurance Company\n3:23-cv-02158-D\n\n113 Wilson v. Korth Direct Mortgage et al\n3:23-cv-02203-E\n\n114 Warehouse Solutions Inc v. Plus Veterans, LLC\n3:23-cv-02214-$\n\n115 Big Games Management LLC v. Bespoke Piush LLC et al\n3:23-cv-02232-B\n\n116 Campbell v. Methodist Hospitais of Dallas et al\n3:23-cv-02238-E\n\n117 Cameron v. QT South LLC et al\n3:23-cv-02243-E\n\n118 Paez v. Childrens Health System of Texas\n3:23-cv-02284-G\n\n119 Stanley v. Wal-Mart Stores Texas LLC\n3:23-cv-02286-X\n\n120 Brandon Wade Photography LLC v. Killian Design LLC\n3:23-cv-02292-L\n\n121 Lloyd v. Athena Condominiums Co-Owners Association\n3:23-cv-02294-B-BN\n\n422 Andrews v. York et af\n3:23-cv-02307-G\n\n123 Lee v. Equifax Information Services LLC et al\n3:23-cv-02367-K\n\n124 City of Dallas v. Triple D Gear, LLC\n3:23-cv-02387-L\n\n125 Nasrallah v. Scottsdale Insurance Company\n\n\fCase 3:22-cv-01529-N Document 28 Filed 08/23/24 Page 8of14 PagelD 222\n\nExhibit A\nCASES TO BE TRANSFERRED FROM THE DOCKET OF JUDGE DAVID L. HORAN TO JUDGE MCKAY\n# Case No. Case Name\n3:23-cv-02404-L\n126 Lilium GVP LLC v. Transportation Insurance Company et al\n3:23-cv-02421-X\n127 Principal Life Insurance Company v. Roque et al\n3:23-cv-02457-B-BN\n428 Young v. United Parcel Service Inc (Ohio)\n3:23-cv-02494-\u00a7\n4129 Hossain v. The Boeing Company\n3:23-cv-02504-K\n130 DAV Sub Inc v. QligSOFT Inc\n3:23-cv-02531-E\n131 Dawson v. Union Pacific Railroad\n3:23-cv-02532-E-BN\n132 Randle v. Brown et al\n3:23-cv-02539-X\n133 Bowers v. Uplift Education\n3:23-cv-02547-E\n134 Session v. Sanofi US Services Inc. et al\n3:23-cv-02594-E\n135 Verna IP Holdings LLC v. Dais Inc\n\n3:23-cv-02624-N\n\n136 Doe v. International Association of Eating Disorder Professionals Foundation Inc et al\n3:23-cv-02633-S\n137 Motton v. Wal-Mart Stores Texas, LLC\n3:23-cv-02670-E\n138 Samadian v. Allstate Vehicle and Property Insurance Company\n3:23-cv-02671-X\n139 APOD Group ELC v. Glen Lakes Homeowners Association Inc et al\n3:23-cv-02673-G\n140 Elliott v. Gonzalez et al\n3:23-cv-02708-B\n144 Dishmon v. Newkirk Logistics Inc\n3:23-cv-02725-D\n142 Pradia v. The City of Rhome et al\n3:23-cv-02737-N\n143 Rollins-Booker v. Senture LLC\n3:23-cv-02770-S\n144 Camacho v. Sajeda Inc et al\n3:23-cv-02795-E\n145 Coil v. Experian Information Solutions Inc et al\n3:23-cv-02807-K\n146 Wells Fargo Bank NA v. Williams et al\n3:23-cv-02827-G-BN\n447 Moka v. Huntex Properties LLC et al\n3:23-cv-02830-X\n148 Mesa Digital LLC v. One Plus USA Corp\n3:23-cv-02834-E\n149 Canada, Jr. et al v. Sherman\n3:23-cv-02839-E\n150 Accurate Metal Stamping LLC v. Chubb Indemnity Insurance Company et al\n\n\fCase 3:22-cv-01529-N Document 28 Filed 08/23/24 Page9of14 PagelD 223\n\nExhibit A\nCASES TO BE TRANSFERRED FROM THE DOCKET OF JUDGE DAVID L. HORAN TO JUDGE MCKAY\n\n# Case No. Case Name\n3:24-cv-00002-L\n\n151 McLaughlin et al v. Family Assets Management LLC\n3:24-cv-00004-N\n\n152 Hill v. Garcia et af\n3:24-cv-00631-L\n\n153 Great American Insurance v, Truckmax Inc\n3:24-cv-00098-L\n\nLeon Capital Group LEC et al v. Princeton Excess & Surplus Lines Insurance Company\n\n154 et al\n3:24-cv-00122-B\n\n455 Slate/Sefect Inc v. Martin Marietta Materials Inc et al\n3:24-cv-00191-E\n\n156 Crum & Forster Insurance Company v. Shreno Limited\n3:24-cv-00255-E\n\n157 Blacknall v. Allata LLC et al\n3:24-cv-00285-G-BN\n\n158 Davis et al v. Wells Fargo Bank NA et ai\n3:24-cv-00331-5\n\n159 Tafolla v. Wacker et al\n3:24-cv-00341-S\n\n160 Forsythe et al v. Equifax Information Services LLC et ai\n3:24-cv-00347-K\n\n161 Homesteaders Life Company v. Williams\n3:24-cv-00361-E\n\n162 Kendrick v. QuickTrip Corporation\n3:24-cv-00382-B\n\n463 US Bank National Association v. Malloy\n3:24-cv-00388-E\n\n164 Elioznde v. Randalls Food and Drug LP\n3:24-cv-00417-X\n\n165 Strike 3 Holdings, LLC v. Doe\n3:24-cv-00434-L\n\n166 G&G Closed Circuit Events LLC v. Aguifar\n3:24-cv-00498-K\n\n167 Highland Employee Retention Assets LLC v. Dondero et al\n3:24-cv-00528-B\n\n168 Texas State Board of Dental Examiners v. Doe\n3:24-cv-00544-D-BN\n\n169 Rector v. Director, TDC)-CID\n3:24-cv-00568-N\n\n170 Strong v. Bank of America Corporation et al\n3:24-cv-00569-5\n\ni71 Haag Engineering Co v. Ellis et al\n3:24-cv-00647-L\n\n172 Languasco et al v. Blair Logistics LLC\n3:24-cv-00658-5\n\n173 Gardner v. The Lincoin National Life Insurance Company\n3:24-cv-00691-D\n\n174 Miller v. Wal-Mart Stores East LP\n3:24-ev-00702-L\n\n175 Birrueta v. State Farm Lloyds\n\n\fCase 3:22-cv-01529-N Document 28 Filed 08/23/24 Page 10o0f14 PagelD 224\n\nExhibit A\n\nCASES TO BE TRANSFERRED FROM THE DOCKET OF JUDGE DAVID L. HORAN TO JUDGE MCKAY\n\n# Case No. Case Name\n3:24-cv-00728-X-BN\n\n176 Said v. EAN Holdings LLC et al\n3:24-cv-00791-E\n\n177 Wilson v. British Airways PLC\n3:24-cv-00796-L\n\n178 Sanchez v. Caliber Holdings LLC\n\n179 3:24-cv-00798-E King v. Wal-Mart Stores Texas, LLC\n3:24-cv-00809-S\n\n180 Kenney et al v. Dallas County Texas\n3:24-cv-00817-B\n\n181 Children's Health System of Texas v. UnitedHeaithcare Insurance Company\n3:24-cv-00892-B\n\n182 Toombs et al v. Kaufman County, Texas et al\n3:24-cv-00905-E-BN\n\n183 Rass v. Texas Instruments\n3:24-cv-00909-K-BN\n\n184 Bryant v. EverBank NA\n3:24-cv-00971-X\n\n185 Morgan v. Fundamental Clinical And Operational Services LLC\n3:24-cv-01020-X\n\n186 The Shore Firm LLP v. Videoshare LLC\n\n187 3:24-cv-01051-5 Gilliard v. Southwest Airlines Federal Credit Union\n3:24-ev-01075-N\n\n188 Ayangbile et al v. Children's Health Services of Texas\n3:24-cyv-011329-X\n\n189 Ray v. Experian Information Solutions Inc et al\n3:24-cv-01175-S-BN\n\n190 Romero et al v. US Bank National Association\n3:24-cv-01198-L\n\n191 Nautilus Hyosung America Inc v. BMO Bank NA et al\n3:24-cv-01209-D\n\n192 American Alliance for Equal Rights v. Southwest Airlines Co\n3:24-cv-01233-5\n\n193 Smith v. Montez et al\n3:24-cv-01262-D\n\n194 Brandon Wade Photography, LLC v. OTC Bar LLC\n3:24-cv-01288-D-BN\n\n195 Williams v. Richardson Independent School District\n3:24-cv-01319-G\n\n196 Daniels-Mock v. Taxir Logistics Inc et al\n3:24-cv-01326-K-BN\n\n197 Wickman v. Navarro County Jail\n3:24-cv-01339-B\n\n198 Travers v. Allstate Vehicle and Property insurance Company\n3:24-cv-01358-E\n\n199 Joe Hand Promotions inc v. Carbajal et at\n3:24-cv-01370-D-BN\n\n200 Council v. Draftkings et al\n3:24-cv-01397-K\n\n201 PacSec3 LLC v. RSA Federal LLC\n3:24-cv-01413-X\n\n202 Guillen et al v. U-Haul Company of Texas et al\n\n\fCase 3:22-cv-01529-N Document 28 Filed 08/23/24 Page 11of14 PagelD 225\n\nExhibit A\n\nCASES TO BE TRANSFERRED FROM THE DOCKET OF JUDGE DAVID L. HORAN TO JUDGE MCKAY\n# Case No. Case Name\n203 3:24-cv-01418-L Wilson v. Frontier Communications Parent, Inc.\n3:24-cv-O1447-E\n204 Akhmedov v. TA Operating LLC\n3:24-cv-01461-K\n205 Moreno et al v. Alan Halperin, In his capacity as Trustee of the GFES Liquidation Trust\n3:24-cv-01479-$\n206 NexPoint Real Estate Partners LLC et al v. Highland Capital Management LP\n3:24-cv-01483-G\n207 Amazon.com Inc et al v. Baik et al\n3:24-cv-01519-B-BN\n208 Robinson-Durham v. Navarro County Jail\n3:24-cv-01531-X\n209 Dugaboy Investment Trust et al v. Highland Capital Management LP et al\n3:24-cv-01541-B\n210 Sanchez et al v. Schneider National Carriers Inc et al\n3:24-cv-01554-D\n211 Hernandez v. Bishop Cider Company LLC et al\n3:24-cv-01563-D\nWLands Limited Partnership LP et al v. Founders Plaza Nursing & Rehabilitation\n212 Partners LLC et al\n213 3:24-cv-01603-X Strike 3 Holdings LLC v. Doe\n214 3:24-cv-01610-E Strike 3 Holdings LLC v. Doe\n215 3:24-cv-01641-D Elizondo v. Equifax Information Services LLC et al\n2156 3:24-cv-01642-K Aurzada et af v. JPMorgan Chase Bank NA et al\n217 3:24-cv-01646-G-BN Sharman v. H&R Block et al\n218 3:24-cv-01647-N Rodriguez v. Home Depot USA inc\n219 3:24-cv-01684-L Criss v. Grocery Delivery E-Services USA Inc\n220 3:24-cv-01685-G Harris v. Equifax Information Services LLC et al\n221 3:24-cv-01692-N Ricker v. Equifax Information Services LLC et al\n222 3:24-cv-01711-D Mitchel v, Pitre et al\n223 3:24-cv-01717-K Ayala v. Chedraui USA Inc\n224 3:24-cv-01716-L Hutchinson v. Sunrun Inc\n225 3:24-cv-01720-K Miller v. Xpress Global Systems LLC\ngag \u00ab| 3:44-cv-01743-L Collier v. Carter\n227 3:24-Cv-01768-S Bosman v. Amazon.com inc et al\n3:24-cv-01786-L\n228 Hunter Mountain Investment Trust et al v. Highland Capital Management LP et al\n3:24-cv-01787-L\n229 Hunter Mountain Investment Trust et al v. Highland Capital Management LP et al\n230 3:24-cv-01796-8 Larsen v. Apt All Points Transportation LLC et al\n231 3:24-cv-01811-D McAfee v. Lear Corporation\n232 3:24-cv-01821-K Ryan LLC v, Radin\n233 3:24-cv-01839-E Forstey v. Jordan et al\n234 3:24-cv-01873-X Strike 3 Holdings LLC v. Doe\n235 3:24-cv-01882-X Strike 3 Holdings LLC v. Doe\n236 3:24-cv-01908-D Hibdon v. Atrium Hospitality LP\n3:24-cv-01912-L\n237 Hunter Mountain Investment Trust v. Highland Capital Management LP et al\n\n10\n\fCase 3:22-cv-01529-N Document 28 Filed 08/23/24 Page 12o0f14 PagelD 226\n\nExhibit A\n\nCASES TO BE TRANSFERRED FROM THE DOCKET OF JUDGE DAVID L. HORAN TO JUDGE MCKAY\n# Case No. Case Name\n238 3:24-cv-01949-X Alentisar Trading Company v. Eyondi et al\n239 3:24-cv-01967-S-BN Willtams v. Richardson ISD\n\n41\n\fCase 3:22-cv-01529-N Document 28 Filed 08/23/24 Page 130f14 PagelD 227\n\nExhibit A\n\nCASES TO BE TRANSFERRED FROM THE DOCKET OF JUDGE REBECCA RUTHERFORD\nTO JUDGE MCKAY\n\n1 3:22-cv-02887-L-BT Murphy v. Director\n\n2 3:23-cv-00316-B-BT Marcus v. Director\n\n3 3:23-cv-00978-D-BT Walton v. USA\n\n4 3:23-cv-02449-D-BT Manzo v. Federal Bureau of Prisons\n\n5 3:23-cv-2677-S-BT Jackson v. Smali Business Administration et al\n\n6 3:24-cv-00175-S-BT Gonzales v. Collier\n\n7 3:24-cv-00661-B-BT Hammons v. Tradeline Motorcars et al\n\n8 3:24-cv-00637-S-BT Humes v. McDonald's Walmart #5416-945\n\n9 3:24-cv-01708-X-BT Traeger v. Jones et al\n\n10 3:23-cv-00315-X-BT Duhon v. Metropolitan Tower Life Insurance Company et al\n\n11 3:23-cv-02194-8-BT Walters v. Garland\n\n12 3:23-cv-02157-L-BT United States of America v. Morgan et al\n3:24-cv-00277-L National Association of Blind Merchants et al v. The Army & Air Force Exchange\n\n13 Service et al\n\n14 3:24-cv-00273-N-BT De Pute v. United States of America et al\n\n15 3:24-cv-00703-B-BT Freeman v. USA et al\n\n16 3:23-cv-01994-S-BT Davis v. City of Mclendon Chisholm et al\n\n17 3:24-cv-00731-L Crenshaw v. Anderson et al\n\n18 3:24-mc-00034-B-BT Calhoun v. United States\n\n19 3:23-cv-02682-5-BT Phoenix Bulk Carriers LLC v. CAL-IXA Aggregates LLC\n\n20 3:24-cv-01590-N-BT Jackson v. United States Postal Service et al\n\n27 3:24-cv-01759-B-BT Woods v. Delta Air Lines inc\n\n22 2:23-cv-00171-BT Row v. Commissioner\n\n23 1:24-cv-00083-BT Gonzales v. Commissioner\n\n24 5:23-cv-00293-BT Mims v. Commissioner\n\n25 3:14-cv-02970-X Clapper et al v. American Realty Investors Inc et al\n\n26 3:20-cv-01276-N Kunze et al v. Baylor Scott & White Health et al\n\n27 3:20-cv-01364-E Malbrew et al v. A+ Charter Schools\n\n28 3:21-cv-02131-K Bernstein v. Maximus Federal Services Inc\n\n29 3:22-cv-00876-N Grimmett et al v. Coleman et al\n\n30 3:22-cv-02116-X Black v. UNUM Life Insurance Company of America\n\n31 3:22-cv-02182-M Range! de Oliveira v. Bierman\n\n32 3:22-cv-02184-B Mid-Continent Casualty Company v. Vibrant Builders et ai\n\n33 3:23-cv-00271-K Green v. USA\n\n34 3:23-cv-01340-L Perez v. Experian Information Solutions Inc\n\n35 3:23-cv-01412-N Aravamuthan v. US Citizenship & immigration Service et al\n\n36 3:23-cv-01416-B8 Landmark American Insurance Company v. Richland Trace Owners Association Inc\n\n37 3:23-cv-01441-N Thompson v. McGehee et al\n\n38 3:23-cv-01490-S Norwood v. Dallas County Hospital District\n\n39 3:23-cv-01494-N Mathew v. Santander Consumer USA Inc\n\n40 3:23-cv-02051-N Shrestha et al v. USCIS et al\n\n41 3:23-cv-02089-E Nationstar Mortgage LLC v. ACI Payments Inc et al\n\n42 3:22-cv-01529-N Oliver v. Wal-Mart Stores Texas LLC et al\n\n12\n\fCase 3:22-cv-01529-N Document 28 Filed 08/23/24 Page 14o0f14 PagelD 228\n\nExhibit A\n\nCASES TO BE TRANSFERRED FROM THE DOCKET OF JUDGE REBECCA RUTHERFORD\nTO JUDGE MCKAY\n\n43 3:23-cv-00045-E Mauricio et al v. US Postal Service\n\n44 3:23-cv-01168-N-BT United States of America v. $39,900 in US Currency\n45 3:23-cv-02146-D Securities and Exchange Commission v. Verges et al\n\n46 3:23-cv-02222-K Heard et al v. State Farm Lloyds\n\n47 3:23-cv-02591-D Oldham v. State Farm Lloyds\n\n48 3:23-cv-02621-8 Sealed v. Sealed\n\n49 3:23-cv-02701-\u00a3 Pertrorock Mineral Holdings, LLC et al v. Minerva Resources, LLC et al\n50 3:23-cv-02271-S Hayes v. City of Dallas et al\n\n51 3:23-cv-02338-K Smith v. USA\n\n52 3:23-cv-02462-D Botone et al v. Unitrin Safeguard Insurance Company\n\n53 3:24-cv-00014-D Hardrick v. Wells Fargo Bank National Association et al\n54 3:24-cv-00201-K Ware et al v. Meridian Security Insurance Company\n\n55 3:24-cv-00204-X United States of America v. $45,000.00 in US Currency\n56 3:24-cv-00220-B Bayazeed v. Robinson et al\n\n57 3:24-cv-00664-X VDPP, LLC v. Mercedes-Benz USA, LLC\n\n58 3:24-cv-00700-X-BT Garrison v. John Doe et al\n\n59 3:24-cv-00943-E M&H Metal Specialties Inc v. Sheet Metal Workers Nat'l Pension Fd\n60 3:24-cv-00944-5 USA v. Various Amounts of Funds Seized\n\n61 3:24-cv-01169-B Nieto v. USA\n\n62 3:24-cv-01484-S5 Antunez-Martinez v. Mayorkas\n\n63 3:24-cv-01525-K Gonzales Miranda et al v. Jaddou\n\n64 3:24-cv-01674-E-BT Turner v. Equal Employment Opportunity Comm et al\n65 3:24-cv-01676-S Bibars v. Jaddou et al\n\n66 3:24-cv-01795-S Valtrus Innovations Ltd et al v. Google LLC\n\n67 3:24-cv-01902-K-BT Allen-Straight v. Director-TBC)\n\n68 3:24-cv-02028-X-BT Lockwood v. Chilcoat et al\n\n69 3:24-cv-02114-K-BT Santana v. Cantu et al\n\n70 3:24-cv-02127-X-BT Stancu v. Equal Employment Cppertunity Commission\n71 3:24-cy-02132-S-BT Damm v. Dallas County Jail\n\n72 3:24-cv-02143-B-BT Jalloul v. USA\n\n73 3:24-cv-02144-5-BT Jeffery v. NLN\n\n74 4:24-cv-00678-B8T Bolden v. Commissioner\n\n13\n","ocr_status":1,"date_upload":"2024-08-23T15:02:16.172198-07:00","document_number":"48","attachment_number":null,"pacer_doc_id":"177017081985","is_available":true,"is_free_on_pacer":null,"is_sealed":false,"document_type":1,"description":"Order Reassigning Case AND ~Util - Set/Clear Flags","acms_document_guid":""}],"date_created":"2024-08-23T15:02:15.978292-07:00","date_modified":"2025-10-01T11:51:23.298910-07:00","date_filed":"2024-08-23","time_filed":"17:00:23","entry_number":48,"recap_sequence_number":"2024-08-23.001","pacer_sequence_number":130,"description":"Special Order No. 3-354: Effective August 23, 2024, the cases listed on Exhibit A to this order are transferred to Magistrate Judge Brian McKay and shall henceforth carry the suffix letters BW. This case has been reassigned pursuant to Special Order No. 3-354. (The clerk has mailed a copy to all non-ECF users.) (Ordered by Magistrate Judge Brian W McKay on 8/23/2024) (rekc) (Entered: 08/23/2024)","tags":[]},{"resource_uri":"https://www.courtlistener.com/api/rest/v4/docket-entries/379316713/","id":379316713,"docket":"https://www.courtlistener.com/api/rest/v4/dockets/67830293/","recap_documents":[{"resource_uri":"https://www.courtlistener.com/api/rest/v4/recap-documents/387031863/","id":387031863,"tags":[],"absolute_url":"/docket/67830293/46/securities-and-exchange-commission-v-verges/","date_created":"2024-02-23T14:26:36.666572-08:00","date_modified":"2025-10-01T11:51:23.232385-07:00","sha1":"","page_count":null,"file_size":null,"filepath_local":null,"filepath_ia":"","ia_upload_failure_count":null,"thumbnail":null,"thumbnail_status":0,"plain_text":"","ocr_status":null,"date_upload":null,"document_number":"46","attachment_number":null,"pacer_doc_id":"177016646337","is_available":false,"is_free_on_pacer":null,"is_sealed":null,"document_type":1,"description":"Answer to Complaint","acms_document_guid":""}],"date_created":"2024-02-23T14:26:36.550439-08:00","date_modified":"2025-10-01T11:51:23.211373-07:00","date_filed":"2024-02-23","time_filed":"15:30:47","entry_number":46,"recap_sequence_number":"2024-02-23.001","pacer_sequence_number":126,"description":"ANSWER to 1 Complaint,,,, with Jury Demand filed by Linda Malin. Unless exempted, attorneys who are not admitted to practice in the Northern District of Texas must seek admission promptly. Forms and Instructions found at www.txnd.uscourts.gov, or by clicking here: Attorney Information - Bar Membership. If admission requirements are not satisfied within 21 days, the clerk will notify the presiding judge. (Hunter, Mark) (Entered: 02/23/2024)","tags":[]},{"resource_uri":"https://www.courtlistener.com/api/rest/v4/docket-entries/379316669/","id":379316669,"docket":"https://www.courtlistener.com/api/rest/v4/dockets/67830293/","recap_documents":[{"resource_uri":"https://www.courtlistener.com/api/rest/v4/recap-documents/387031790/","id":387031790,"tags":[],"absolute_url":"/docket/67830293/47/securities-and-exchange-commission-v-verges/","date_created":"2024-02-23T14:26:27.397585-08:00","date_modified":"2025-10-01T11:51:23.276451-07:00","sha1":"","page_count":null,"file_size":null,"filepath_local":null,"filepath_ia":"","ia_upload_failure_count":null,"thumbnail":null,"thumbnail_status":0,"plain_text":"","ocr_status":null,"date_upload":null,"document_number":"47","attachment_number":null,"pacer_doc_id":"177016646452","is_available":false,"is_free_on_pacer":null,"is_sealed":null,"document_type":1,"description":"Answer to Complaint","acms_document_guid":""}],"date_created":"2024-02-23T14:26:27.344753-08:00","date_modified":"2025-10-01T11:51:23.256054-07:00","date_filed":"2024-02-23","time_filed":"15:44:25","entry_number":47,"recap_sequence_number":"2024-02-23.002","pacer_sequence_number":128,"description":"ANSWER to 1 Complaint,,,, with Jury Demand filed by Blue Citi LLC, Robert F Malin. Unless exempted, attorneys who are not admitted to practice in the Northern District of Texas must seek admission promptly. Forms and Instructions found at www.txnd.uscourts.gov, or by clicking here: Attorney Information - Bar Membership. If admission requirements are not satisfied within 21 days, the clerk will notify the presiding judge. (Hunter, Mark) (Entered: 02/23/2024)","tags":[]},{"resource_uri":"https://www.courtlistener.com/api/rest/v4/docket-entries/378072007/","id":378072007,"docket":"https://www.courtlistener.com/api/rest/v4/dockets/67830293/","recap_documents":[{"resource_uri":"https://www.courtlistener.com/api/rest/v4/recap-documents/385734533/","id":385734533,"tags":[],"absolute_url":"/docket/67830293/45/securities-and-exchange-commission-v-verges/","date_created":"2024-02-09T12:22:29.731198-08:00","date_modified":"2025-10-01T11:51:23.180934-07:00","sha1":"eb17fc46973862fb47199e768cab629197756aa3","page_count":34,"file_size":182026,"filepath_local":"recap/gov.uscourts.txnd.381575/gov.uscourts.txnd.381575.45.0.pdf","filepath_ia":"https://archive.org/download/gov.uscourts.txnd.381575/gov.uscourts.txnd.381575.45.0.pdf","ia_upload_failure_count":null,"thumbnail":null,"thumbnail_status":0,"plain_text":"  Case 3:23-cv-02146-D Document 45 Filed 02/09/24              Page 1 of 34 PageID 251\n\n\n\n                     IN THE UNITED STATES DISTRICT COURT\n                     FOR THE NORTHERN DISTRICT OF TEXAS\n                               DALLAS DIVISION\n\nSECURITIES AND EXCHANGE                       \u00a7\nCOMMISSION,                                   \u00a7\n                                              \u00a7\n                     Plaintiff,               \u00a7\n                                              \u00a7    Civil Action No. 3:23-CV-2146-D\nVS.                                           \u00a7\n                                              \u00a7\nPHILIP VERGES, et al.,                        \u00a7\n                                              \u00a7\n                     Defendants.              \u00a7\n\n                                  MEMORANDUM OPINION\n                                      AND ORDER\n\n       In this securities fraud civil enforcement action brought by plaintiff Securities and\n\nExchange Commission (\u201cSEC\u201d), three of the defendants\u2014Blue Citi LLC (\u201cBlue Citi\u201d),\n\nRobert Malin (\u201cRobert\u201d), and Linda Malin (\u201cLinda\u201d) (collectively, \u201cdefendants\u201d)\u2014move to\n\ndismiss under Fed. R. Civ. P. 9(b) for failure to plead fraud with particularity and under Rule\n\n12(b)(6) for failure to state a claim on which relief can be granted. For the reasons that\n\nfollow, the court denies defendants\u2019 motion.\n\n                                               I\n\n       According to the SEC\u2019s complaint, Robert and Linda, through Blue Citi, played \u201ca\n\nkey active\u201d role in defendant Philip Verges\u2019 (\u201cVerges\u2019\u201d) multi-faceted pump-and-dump\n\f  Case 3:23-cv-02146-D Document 45 Filed 02/09/24                Page 2 of 34 PageID 252\n\n\n\nscheme1 carried out from January 2017 to June 2022.2\n\n       In the first phase of the scheme, Verges obtained control of five penny stock\n\ncompanies: Alternet Systems, Inc. (\u201cALYI\u201d), Priority Aviation, Inc. (\u201cPJET\u201d), Puration, Inc.\n\n(\u201cPURA\u201d), Vaycaychella, Inc. (\u201cVAYK\u201d), and WaterPure International, Inc. (\u201cWPUR\u201d).\n\nVerges installed trusted friends as the penny stock companies\u2019 CEOs to conceal his control.\n\nHe then entered into consulting agreements with the penny stock companies, often for a\n\nservice fee that exceeded the companies\u2019 annual revenue. According to the SEC\u2019s complaint,\n\nthe consulting agreements were a \u201csham\u201d; Verges had direct knowledge of the penny stock\n\ncompanies\u2019 finances via his access to their bank accounts and thus knew that the companies\n\nconducted no real business and generated little or no revenue. Verges primarily used the\n\nconsulting agreements to obtain debt instruments in the penny stock companies as purported\n\ncompensation for his services and reimbursement for expenses. A typical consulting\n\nagreement directed the penny stock companies to execute a debt settlement or issue a\n\nconvertible promissory note to Verges\u2019 companies.\n\n       In the second phase of Verges\u2019 scheme, Verges enlisted accomplices to purchase the\n\n\n\n       1\n        In a pump-and-dump scheme, a stock owner artificially \u201cpumps\u201d the stock\u2019s price\nthrough promotional or trading activity and then sells his shares at the inflated price. After\nthe stock owner \u201cdumps\u201d his shares, the price and volume of the shares plummet and\nunsuspecting investors lose money.\n       2\n       In deciding defendants\u2019 Rule 12(b)(6) motion, the court construes the SEC\u2019s\ncomplaint in the light most favorable to it, accepts as true all well-pleaded factual allegations,\nand draws all reasonable inferences in the SEC\u2019s favor. See, e.g., Lovick v. Ritemoney Ltd.,\n378 F.3d 433, 437 (5th Cir. 2004).\n\n                                              -2-\n\f  Case 3:23-cv-02146-D Document 45 Filed 02/09/24              Page 3 of 34 PageID 253\n\n\n\npenny stock companies\u2019 debt instruments that he held. The SEC alleges that Verges\n\nnominated defendant James D. Tilton, Jr. (\u201cTilton\u201d), Robert, and Linda to purchase the debt\n\ninstruments and, in turn, to convert the debt to stock at prices far below market value. Tilton\n\nconverted Verges\u2019 debt instruments into equity using his company, relief defendant JDT\n\nTrading, LLC (\u201cJDT\u201d), and Robert and Linda did the same through their company, Blue Citi.\n\nThe transactions allowed Tilton, Robert, and Linda to amass shares in the five penny stock\n\ncompanies: ALYI, PJET, PURA, VAYK, and WPUR.\n\n       The SEC provides an example of such a transaction between Verges and Blue Citi.\n\nOn February 24, 2021 Verges executed a debt settlement agreement between his company,\n\nrelief defendant SMEA2Z, LLC (\u201cSMEA2Z\u201d), and penny stock company, ALYI, to accept\n\n$400,000 worth of ALYI stock in payment for his consulting services. Later that day, Verges\n\nassigned SMEA2Z\u2019s rights in the debt settlement agreement to Blue Citi. On March 3, 2021\n\nBlue Citi then executed a notice of conversion for 20 million shares of ALYI stock, which\n\nALYI issued the same day. On March 5, 2021 Blue Citi sold its 20 million shares of ALYI\n\nstock to a third party at a substantial profit. Robert and Verges agreed that Blue Citi would\n\npay Verges a portion of the trading profits, and bank records confirm that Blue Citi paid\n\nSMEA2Z (Verges\u2019 company) the sum of $12 million, which may have included payment for\n\nthe assignment and a kickback.\n\n       In the third phase of Verges\u2019 scheme, Verges made material misrepresentations or\n\nomissions to increase the trading volume of penny stocks ALYI, PJET, PURA, VAYK, and\n\nWPUR. According to the SEC\u2019s complaint, Verges directed Tilton to prepare disclosure\n\n                                             -3-\n\f  Case 3:23-cv-02146-D Document 45 Filed 02/09/24              Page 4 of 34 PageID 254\n\n\n\nstatements that omitted information regarding certain promissory notes that the penny stock\n\ncompanies issued to Verges, Robert, Linda, and Tilton himself.3 For example, Verges\n\ndirected Tilton to omit on PURA\u2019s March 2019 disclosure statement a $350,000 promissory\n\nnote issued to SMEA2Z. Verges also prepared and published other promotional material\n\nunder aliases, including 1,400 online press releases containing false statements. On April 16,\n\n2021, for example, Verges posted an online press release that related to a transaction between\n\nBlue Citi and penny stock company ALYI. The online post read: \u201cIn April 2021, [ALYI]\n\nexecuted multiple business agreements in conjunction with a $1 million investment in\n\nZoomcar, Inc. . . . To provide the funds for [ALYI\u2019s] investment, the company issued a $1\n\nmillion convertible note with a $0.10 conversion price.\u201d P. Compl. \u00b6 46 (internal quotation\n\nmarks omitted). In reality, ALYI\u2019s convertible note discount price was $0.001, and Blue Citi\n\nreceived stock pursuant to the promissory note at a conversion price of $0.0032\u201496.8%\n\nlower than the price Verges published. The disclosure statements prepared by Tilton and\n\npress releases prepared by Verges successfully increased trading volume.\n\n       In the fourth and final phase of Verges\u2019 scheme, Verges facilitated transactions among\n\n\n       3\n         The disclosure statements were issued according to the OTC Markets Group, Inc\u2019s\n(\u201cOTC Markets Group\u2019s\u201d) Pink Basic Disclosure Guidelines. The OTC Markets Group\nissues alternative reporting standards for over-the-counter public market issuers to facilitate\ncompliance with federal securities law. See OTC Pink Basic Disclosure Guidelines, OTC\nMARKETS              GROUP            INC.       1,     1    (Jan.         1,      2023),\nhttps://www.otcmarkets.com/otcapi/company/financial-report/378099/content\n[https://perma.cc/Y7LZ-BN9P]. The SEC has not reviewed the guidelines, and the OTC\nMarkets Group does not assure that compliance with the Pink Basic Disclosure Guidelines\nwill satisfy an issuer\u2019s legal obligations under federal securities law. See id. at n.1.\n\n\n                                             -4-\n\f  Case 3:23-cv-02146-D Document 45 Filed 02/09/24              Page 5 of 34 PageID 255\n\n\n\nTilton, Robert, and Linda and third parties to \u201cdump\u201d their shares into the market. Verges\n\neither used an alias to pose as a transfer agent for the penny stock companies or directed the\n\nfigurehead CEOs\u2014his trusted friends\u2014to issue the third-party transfers. For example, in\n\nDecember 2020 Verges facilitated a transfer between Blue Citi and VAYK\u2019s transfer agent\n\nusing the alias \u201cTom Faye.\u201d Linda also facilitated third-party transfers, corresponding\n\ndirectly with one transfer agent and receiving emails between Blue Citi\u2019s attorney and other\n\ntransfer agents.\n\n       The SEC alleges that Robert, Linda, and Blue Citi participated in Verges\u2019 scheme\n\nsince May 2018. During that time, Blue Citi converted over 2.5 billion shares of stock in\n\nVerges\u2019 companies at an aggregate conversion price of roughly $6 million. The stock\u2019s\n\nmarket value at the time of issuance was roughly $47 million (Blue Citi therefore received\n\na $41 million discount\u2014or 87% discount\u2014on Verges\u2019 stock over the five-year period).\n\nBank records indicate that Blue Citi made roughly $36 million in trading proceeds from May\n\n2018 to the present; Robert directly received roughly $12 million, and Linda directly\n\nreceived at least $533,750.\n\n       The SEC asserts that Robert and Linda, through Blue Citi, engaged in a pump-and-\n\ndump scheme to obtain and sell artificially inflated penny stock company shares over a five-\n\nyear period. The SEC alleges that defendants committed a primary violation of \u00a7 10(b) of\n\nthe Anti-fraud Provisions of the Securities Exchange Act of 1934 (the \u201cExchange Act\u201d) and\n\nRule 10b-5(a) and 10b-5(c) thereunder, and of \u00a7 17(a)(1) and (3) of the Securities Act of\n\n1933 (the \u201cSecurities Act\u201d) by engaging in a scheme to defraud; that defendants committed\n\n                                            -5-\n\f  Case 3:23-cv-02146-D Document 45 Filed 02/09/24               Page 6 of 34 PageID 256\n\n\n\na secondary violation of \u00a7 10(b) of the Exchange Act and Rule 10b-5(a) and 10b-5(c)\n\nthereunder, and of \u00a7 17(a)(1) and (3) of the Securities Act, by aiding and abetting Verges\u2019\n\nsecurities fraud; and that defendants are liable under \u00a7 20(a) of the Exchange Act as Blue\n\nCiti\u2019s \u201ccontrol persons.\u201d\n\n       Defendants move to dismiss, contending that the SEC\u2019s complaint fails to state fraud\n\nwith particularity and that it fails to state a claim on which relief can be granted. They posit\n\nthat the complaint neither alleges that defendants committed a deceptive or manipulative act\n\nor acted with scienter to incur primary liability, nor alleges that defendants were generally\n\naware of Verges\u2019 securities fraud or knowingly rendered substantial assistance to incur\n\nsecondary liability. And on the basis that the complaint does not allege sufficient facts for\n\na primary violation of federal securities law, defendants maintain that the allegation that\n\nRobert and Linda are liable as Blue Citi\u2019s \u201ccontrol persons\u201d also fails.\n\n       The court is deciding defendants\u2019 motion on the briefs, without oral argument.\n\n                                               II\n\n                                               A\n\n       \u201cIn deciding a Rule 12(b)(6) motion to dismiss, the court evaluates the sufficiency of\n\n[the plaintiff\u2019s] [] complaint by \u2018accept[ing] all well-pleaded facts as true, viewing them in\n\nthe light most favorable to the plaintiff.\u2019\u201d Bramlett v. Med. Protective Co. of Fort Wayne,\n\nInd., 855 F.Supp.2d 615, 618 (N.D. Tex. 2012) (Fitzwater, C.J.) (second alteration in\n\noriginal) (internal quotation marks omitted) (quoting In re Katrina Canal Breaches Litig.,\n\n495 F.3d 191, 205 (5th Cir. 2007)). To survive a Rule 12(b)(6) motion to dismiss, the\n\n                                             -6-\n\f  Case 3:23-cv-02146-D Document 45 Filed 02/09/24                Page 7 of 34 PageID 257\n\n\n\nplaintiff must plead \u201cenough facts to state a claim to relief that is plausible on its face.\u201d Bell\n\nAtl. Corp. v. Twombly, 550 U.S. 544, 570 (2007). \u201cA claim has facial plausibility when the\n\nplaintiff pleads factual content that allows the court to draw the reasonable inference that the\n\ndefendant is liable for the misconduct alleged.\u201d Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009).\n\n\u201cThe plausibility standard is not akin to a \u2018probability requirement,\u2019 but it asks for more than\n\na sheer possibility that a defendant has acted unlawfully.\u201d Id.; see also Twombly, 550 U.S.\n\nat 555 (\u201cFactual allegations must be enough to raise a right to relief above the speculative\n\nlevel[.]\u201d). \u201c[W]here the well-pleaded facts do not permit the court to infer more than the\n\nmere possibility of misconduct, the complaint has alleged\u2014but it has not \u2018shown\u2019\u2014\u2018that the\n\npleader is entitled to relief.\u2019\u201d Iqbal, 556 U.S. at 679 (alteration omitted) (quoting Rule\n\n8(a)(2)). \u201cThreadbare recitals of the elements of a cause of action, supported by mere\n\nconclusory statements, do not suffice.\u201d Id. at 678.\n\n                                                B\n\n       Because the complaint alleges a fraud claim, plaintiffs must plead the elements of the\n\nclaim with the heightened particularity required by Rule 9(b). See, e.g., Coates v. Heartland\n\nWireless Commc\u2019ns, Inc., 26 F.Supp.2d 910, 914 (N.D. Tex. 1998) (Fitzwater, J.). \u201cRule\n\n9(b) imposes a heightened pleading standard for fraud claims and requires that a party state\n\nwith particularity facts supporting each element of fraud.\u201d Turner v. AmericaHomeKey Inc.,\n\n2011 WL 3606688, at *2 (N.D. Tex. Aug. 16, 2011) (Fitzwater, C.J.) (citing Benchmark\n\nElecs., Inc. v. J.M. Huber Corp., 343 F.3d 719, 724 (5th Cir. 2003)), aff\u2019d, 514 Fed. Appx.\n\n513 (5th Cir. 2013). \u201cAt a minimum, Rule 9(b) requires allegations of the particulars of time,\n\n                                              -7-\n\f  Case 3:23-cv-02146-D Document 45 Filed 02/09/24              Page 8 of 34 PageID 258\n\n\n\nplace, and contents of the false representations, as well as the identity of the person making\n\nthe misrepresentation and what he obtained thereby.\u201d Turner, 2011 WL 3606688, at *2\n\n(quoting Benchmark Elecs., 343 F.3d at 724). More colloquially, the plaintiff must plead the\n\n\u201cwho, what, when, where, and how\u201d of the fraud. United States ex rel. Williams v. Bell\n\nHelicopter Textron Inc. (\u201cWilliams\u201d), 417 F.3d 450, 453 (5th Cir. 2005) (quoting United\n\nStates ex rel. Thompson v. Columbia/HCA Healthcare Corp., 125 F.3d 899, 903 (5th Cir.\n\n1997)). Because Rule 9(b) must be \u201cread in conjunction with [Rule] 8 which requires only\n\na short and plain statement of the claim showing that the pleader is entitled to relief,\u201d\n\n\u201cpunctilious pleading detail\u201d is not required. Steiner v. Southmark Corp., 734 F. Supp. 269,\n\n273 (N.D. Tex. 1990) (Fitzwater, J.) (internal quotation marks omitted) (quoting Landry v.\n\nAir Line Pilots Ass\u2019n Int\u2019l AFL-CIO, 892 F.2d 1238, 1264 (5th Cir. 1990)). \u201cThe court\u2019s key\n\nconcern in assessing a complaint under Rule 9(b) is to determine whether the plaintiff seeks\n\nto redress specific wrongs or whether the plaintiff instead seeks the opportunity to search out\n\nactionable wrongs.\u201d Garcia v. Boyar & Miller, P.C., 2007 WL 2428572, at *4 (N.D. Tex.\n\nAug. 28, 2007) (Fitzwater, J.) (citation omitted).\n\n                                              III\n\n       The court turns first to the SEC\u2019s primary liability claims, which allege that\n\ndefendants violated \u00a7 10(b) of the Exchange Act, Rules 10b-5(a) and (c) thereunder, and \u00a7\n\n17(a)(1) and (3) of the Securities Act based on scheme liability. See, e.g., Lorenzo v. SEC,\n\n587 U.S. __, 139 S.Ct. 1094, 1101 (2019). Defendants contend that the SEC has not alleged\n\nsufficient facts to show that defendants committed a deceptive or manipulative act or acted\n\n                                             -8-\n\f  Case 3:23-cv-02146-D Document 45 Filed 02/09/24              Page 9 of 34 PageID 259\n\n\n\nwith scienter.4\n\n                                              A\n\n       Section 10(b) of the Exchange Act grants the SEC rulemaking authority to define and\n\nthereby prohibit deceptive or manipulative practices. See 15 U.S.C. \u00a7 78j(b)). As such, Rule\n\n10b-5 makes it unlawful for any person, directly or indirectly, \u201cin connection with the\n\npurchase or sale of any security,\u201d to (a) \u201cemploy any device, scheme, or artifice to defraud\u201d;\n\n(b) \u201cmake any untrue statement of a material fact\u201d; or (c) \u201cengage in any act, practice, or\n\ncourse of business which operates or would operate as a fraud or deceit upon any person[.]\u201d\n\n17 C.F.R. \u00a7 240.10b-5(a)-(c). Rule 10b-5(a) and (c) claims are referred to as \u201cscheme\n\nliability\u201d claims because they are based on deceptive conduct, while Rule 10b-5(b) claims\n\nare based on deceptive statements or omissions. See SEC v. Narayan, 2017 WL 4652063,\n\nat *3 (N.D. Tex. Aug. 28, 2017) (Lynn, C.J.) (citing In re DVI, Inc. Sec. Litig., 639 F.3d 623,\n\n643 n.29 (3d Cir. 2011)). Rule 10b-5(a) and (c) scheme liability claims \u201crecognize that\n\nbecause conduct itself can be deceptive, a defendant may incur primary liability for securities\n\nfraud without making or using an oral or written statement.\u201d Id. (internal quotation marks\n\nomitted) (quoting Stoneridge Inv. Partners, LLC v. Scientific-Atlanta, Inc., 552 U.S. 148, 158\n\n(2008)). The Fifth Circuit has not yet considered the pleading requirements for scheme\n\nliability. See Burback v. Brock, 2023 WL 4532803, at *7 (5th Cir. July 13, 2023) (per\n\n\n\n       4\n        Defendants maintain in their reply brief that the SEC did not adequately plead a\n\u00a7 17(a)(2) violation; however, the SEC only alleges \u00a7 17(a)(1) and (3) violations against\ndefendants.\n\n                                             -9-\n\f Case 3:23-cv-02146-D Document 45 Filed 02/09/24               Page 10 of 34 PageID 260\n\n\n\ncuriam) (unpublished opinion) (affirming dismissal despite claim that district court failed to\n\naccount for \u201cscheme liability\u201d because allegations deemed insufficient on other grounds).\n\nBut district courts in this circuit have followed the Second, Eighth, and Ninth Circuits, which\n\nhold that a plaintiff can demonstrate scheme liability under Rule 10b-5(a) and (c) when the\n\nscheme encompasses conduct distinct from the misrepresentations or omissions that give rise\n\nto Rule 10b-5(b) liability. See Yoshikawa v. Exxon Mobil Corp., 2023 WL 5489054, at *3\n\n(N.D. Tex. Aug. 24, 2023) (Godbey, C.J.); Stephens v. Uranium Energy Corp., 2016 WL\n\n3855860, at *22 (S.D. Tex. July 15, 2016) (Rosenthal, J.).\n\n       Scheme liability requires proof of participation in an illegitimate, sham, or inherently\n\ndeceptive transaction where the defendant\u2019s conduct or role has the purpose and effect of\n\ncreating a false appearance. See SEC v. Daifotis, 2011 WL 2183314, at *9 (N.D. Cal. June\n\n6, 2011); SEC v. Lee, 720 F.Supp.2d 305, 334 (S.D.N.Y. 2010) (holding that liability is\n\nappropriate if the defendant has substantially participated in scheme to mislead investors\n\n\u201ceven if a material misstatement by another person creates the nexus between the scheme and\n\nthe securities market\u201d). \u201cIt is not enough that a transaction in which a defendant was\n\ninvolved had a deceptive purpose and effect; the defendant\u2019s own conduct contributing to the\n\ntransaction or overall scheme must have had a deceptive purpose and effect.\u201d Simpson v.\n\nAOL Time Warner, Inc., 452 F.3d 1040, 1048 (9th Cir. 2006) (emphasis in original), vacated\n\non other grounds by Simpson v. Homestore.com, Inc., 519 F.3d 1041, 1041-42 (9th Cir.\n\n2008). Deceptive conduct that is distinct from a misrepresentation or omission may include\n\n\u201c[m]arket manipulation, employment of a manipulative device, and engaging in manipulative\n\n                                            - 10 -\n\f Case 3:23-cv-02146-D Document 45 Filed 02/09/24                Page 11 of 34 PageID 261\n\n\n\nschemes such as a scheme to artificially inflate or deflate stock prices, falsifying records to\n\nreflect non-existent profits, and creating and distributing false research reports favorably\n\nreviewing a company[.]\u201d In re Enron Corp. Secs., Deriv. & ERISA Litig., 235 F.Supp.2d\n\n549, 579 (S.D. Tex. 2002).\n\n       Section 17(a) similarly makes it unlawful to (1) \u201cemploy any device, scheme, or\n\nartifice to defraud\u201d; (2) \u201cobtain money or property by means of any [material misstatements\n\nor omissions]\u201d; or (3) \u201cengage in any transaction, practice, or course of business which\n\noperates or would operate as a fraud or deceit upon the purchaser.\u201d 15 U.S.C. \u00a7 77q(a)(1)-\n\n(3). Section 17(a) applies to the offer or sale of securities and does not require proof of\n\nscienter for subsections (a)(2) and (a)(3), but in other respects is the same as \u00a7 10(b) and Rule\n\n10b-5. See SEC v. World Tree Fin., LLC, 43 F.4th 448, 460 (5th Cir. 2022). Claims arising\n\nunder \u00a7 10(b) and \u00a7 17(a) \u201care often analyzed as one\u201d because of their similarities. SEC v.\n\nWilson, 2022 WL 18275941, at *6 (N.D. Tex. Dec. 28, 2022) (Ray, J.) (internal quotation\n\nmarks omitted) (quoting SEC v. Farmer, 2015 WL 5838897, at *12 (S.D. Tex. Oct. 7,\n\n2015)).\n\n       Therefore, to plausibly plead its scheme liability claims under these related provisions,\n\nthe SEC must allege sufficient facts for the court to draw the reasonable inference that the\n\ndefendant in question (1) committed a deceptive or manipulative act; (2) in furtherance of\n\nthe alleged scheme to defraud; (3) with scienter. See, e.g., Wilson, 2022 WL 18275941, at\n\n*6. The \u201cknowledge and actions of a corporation\u2019s employees and agents are generally\n\nimputed to the corporation where the acts are performed on behalf of the corporation and are\n\n                                             - 11 -\n\f Case 3:23-cv-02146-D Document 45 Filed 02/09/24              Page 12 of 34 PageID 262\n\n\n\nwithin the scope of their authority.\u201d SEC v. Winemaster, 529 F.Supp.3d 880, 924 (N.D. Ill.\n\n2021) (quoting UCAR Int\u2019l, Inc. v. Union Carbide Corp., 2004 WL 137073, at *13 (S.D.N.Y.\n\nJan. 26, 2004), aff\u2019d, 119 Fed. Appx. 300 (2d Cir. 2004)); see also Stephens, 2016 WL\n\n3855860, at *19 (declining to impute employee-defendants\u2019 scienter to defendant company\n\nwhen amended complaint did not give rise to strong scienter inference as to employees);\n\nSouthland Secs. Corp. v. INSpire Ins. Sols., Inc., 365 F.3d 353, 367 (5th Cir. 2004).\n\n                                               B\n\n       Defendants contend that they are entitled to dismissal because the SEC has not\n\nplausibly pleaded primary scheme liability by showing that defendants committed a\n\ndeceptive or manipulative act or acted with scienter. The court will first consider whether\n\nthe SEC has sufficiently pleaded that defendants engaged in a deceptive or manipulative act\n\nfor purposes of scheme liability, and will then turn to whether the SEC has adequately\n\npleaded that defendants acted with scienter.\n\n                                               1\n\n       Defendants maintain that the SEC\u2019s allegations merely demonstrate that defendants\n\nengaged in convertible note investing, generated substantial profits, and shared these profits\n\nwith Verges as compensation for the investment opportunities. The SEC responds that the\n\nmotion to dismiss standard requires the court to read the facts in the light most favorable to\n\nthe SEC, the nonmovant plaintiff. The court holds that, under that pleading standard, the\n\ncomplaint adequately alleges that defendants engaged in a deceptive or manipulative pump-\n\nand-dump scheme that deceived the market.\n\n                                            - 12 -\n\f Case 3:23-cv-02146-D Document 45 Filed 02/09/24              Page 13 of 34 PageID 263\n\n\n\n       The SEC alleges that Robert and Linda, through Blue Citi, executed a \u201ccomplex series\n\nof transactions,\u201d \u201cstrategically and deceptively timed,\u201d \u201cin close coordination with Verges,\u201d\n\nto capitalize on his efforts to \u201cpump\u201d the value of the penny stock companies\u2019 shares. P.\n\nResp. (ECF No. 36) at 10. Robert and Verges agreed that Blue Citi would purchase debt\n\ninstruments in the penny stock companies; that Verges would direct issuances of discounted\n\nstock to Blue Citi; and that Robert would pay Verges\u2019 companies a portion of the trading\n\nproceeds. The transactions between Verges and Blue Citi concealed Verges\u2019 involvement\n\nin the pump-and-dump scheme. Linda directly corresponded with at least one transfer agent\n\nand indirectly communicated with other transfer agents through Blue Citi\u2019s attorney to\n\nfacilitate the third-party sales. Together, Robert and Linda converted 2.5 billion shares of\n\nVerges\u2019 penny stock companies priced $41 million below market value. Bank records\n\nindicate that Blue Citi received $36 million from \u201ccoordinating with Verges\u201d to \u201cdump\u201d the\n\npenny stock company shares at strategic times over the course of five years. Blue Citi paid\n\nVerges\u2019 companies over $12.5 million in kickbacks.\n\n       The SEC cites five cases to demonstrate that these allegations enable the court to draw\n\nthe reasonable inference that defendants committed a deceptive or manipulative act. Two\n\ncases are from district courts in the Fifth Circuit. In Farmer the defendant argued that,\n\nalthough he funded false advertising efforts, the funding could not be considered an\n\ninherently deceptive act because he \u201cdid not control the content of the advertisements.\u201d\n\nFarmer, 2015 WL 5838867, at *16. The court reasoned that the defendant\u2019s assertion that\n\nhe did not control the advertising\u2019s content was not credible because he pursued a particular\n\n                                            - 13 -\n\f Case 3:23-cv-02146-D Document 45 Filed 02/09/24               Page 14 of 34 PageID 264\n\n\n\nadvertising strategy and spent over $1.3 million of his own funds to implement it: \u201call\n\nevidence indicates that it was [the defendant] who orchestrated the false advertising\n\ncampaign,\u201d even if he \u201crelied on others to write the false media content and purchase ad\n\nspace.\u201d Id. The court held that summary judgment was proper because the defendant\n\n\u201cplayed a leading role in every aspect of [the company\u2019s] affairs that were pertinent to setting\n\nup and executing a pump-and-dump scheme.\u201d Id. Likewise, in SEC v. Hopper, 2006 WL\n\n778640 (S.D. Tex. 2006), the defendant argued that his round-trip trades5 could not be\n\nconsidered a fraudulent scheme because \u201cround-trip trading is not itself illegal.\u201d Id. at *10.\n\nThe court held that the defendant had \u201cinaccurately\u201d characterized the SEC\u2019s allegations\n\nbecause the SEC did not \u201callege that round-trip trading violates the securities laws per se, nor\n\n[did] it seek to impose liability on [the defendant] merely for having engaged in round-trip\n\ntrades.\u201d Id. at *11. \u201cRather, the SEC alleges that the particular round-trip trading scheme\n\norchestrated and implemented by [the defendant] was fraudulent and/or deceptive because\n\nthe trades were massive sham bookkeeping transactions.\u201d Id. (emphasis added). The court\n\nultimately denied the defendants\u2019 motion to dismiss. Id. at *17. Defendants argue in reply\n\nthat, although the SEC fairly alleged scheme liability in these cases, it had not alleged\n\nanything \u201canalogous to \u2018obscuring the misuse of investor money,\u2019 covering up a scheme to\n\ndeceive the market, creating any appearance of [] false substance, deceiving the investing\n\n\n\n       5\n        I.e., purchasing and selling shares of the same security over and over again in an\nattempt to manipulate observers into believing that the security is in higher demand than it\nactually is.\n\n                                             - 14 -\n\f Case 3:23-cv-02146-D Document 45 Filed 02/09/24               Page 15 of 34 PageID 265\n\n\n\npublic about any company\u2019s appearance, or taking any steps to cover up any fraud\u201d in this\n\ncase. Ds. Reply (ECF No. 42) at 8.\n\n       The SEC\u2019s allegations are sufficient to enable the court to draw the reasonable\n\ninference that defendants committed a deceptive or manipulative act. Together, Robert and\n\nLinda owned and managed Blue Citi, which converted 2.5 billion shares of artificially\n\ninflated ALYI, PJET, PURA, VAYK, and WPUR stock. Blue Citi received a $41 million\n\ndiscount on its promissory note conversions with Verges\u2019 penny stock companies and\n\nprofited roughly $36 million; Robert received directly approximately $12 million; and Linda\n\nreceived directly at least $533,750. Defendants\u2019 success in convertible note investing\n\nrequired them to time strategically their sales of ALYI, PJET, PURA, VAYK, and WPUR\n\nstock in coordination with Verges\u2019 efforts to inflate the stocks\u2019 prices artificially. The court\n\nmust accept as true that defendants collaborated with Verges and acted on his advice\n\nconcerning these investment opportunities: Robert and Linda, through Blue Citi, paid\n\nVerges\u2019 companies over $12.5 million for the opportunity to participate in this particular\n\nscheme. See Farmer, 2015 WL 5838867, at *16 (granting summary judgment on SEC\u2019s\n\nscheme liability claim when defendant pursued a particular advertising strategy and spent\n\nover $1.3 million of his own funds to implement it).\n\n       The complaint alleges that Robert, individually, made agreements with Verges to\n\nfacilitate the debt-for-equity exchanges between Verges\u2019 companies and Blue Citi; that\n\nRobert\u2019s actions had the deceptive purpose and effect of concealing Verges\u2019 involvement in\n\nthe pump-and-dump scheme; that Linda directly corresponded with at least one transfer agent\n\n                                             - 15 -\n\f Case 3:23-cv-02146-D Document 45 Filed 02/09/24               Page 16 of 34 PageID 266\n\n\n\nand indirectly communicated with other transfer agents through Blue Citi\u2019s attorney to\n\nfacilitate the third-party sales; and that Linda\u2019s actions also had the deceptive purpose and\n\neffect of concealing Verges\u2019 involvement in the pump-and-dump scheme and of causing\n\nunsuspecting third parties\u2019 shares to plummet in value when Blue Citi \u201cdumped\u201d its shares.\n\nThe SEC also adequately alleges that Blue Citi committed deceptive or manipulative acts\n\nbecause Robert\u2019s and Linda\u2019s actions can be generally imputed to the corporation. See\n\nUCAR Int\u2019l, Inc., 2004 WL 137073, at *13. According to the complaint, Blue Citi, through\n\nRobert and Linda, facilitated the debt-for-equity exchanges with Verges and the transfers\n\nwith third parties and profited $36 million for participating in the scheme, which is more than\n\nany other Verges nominee combined. Robert\u2019s and Linda\u2019s actions were distinct from any\n\nmisrepresentation or omission made by Verges or Tilton. The SEC does not plead that\n\ndefendants made, or participated in producing or publishing, the disclosure statements\n\nprepared by Tilton or press releases prepared by Verges, even though Verges allegedly\n\npublished false information regarding Blue Citi\u2019s transaction with ALYI in April 2021.\n\n       Some district courts (albeit outside the Fifth Circuit) have held that participating in\n\na pump-and-dump scheme is a deceptive or manipulative act because the acts propelling the\n\nscheme entail deceptive conduct. See SEC v. DeFrancesco, 2023 WL 6965051, at *7\n\n(S.D.N.Y. Oct. 23, 2023) (denying defendants\u2019 summary judgment motion on scheme\n\nliability because SEC presented evidence that defendants signed a contract, were included\n\non emails requesting review and approval of articles, discussed the articles, and provided a\n\nstatement included in the articles); SEC v. Airborne Wireless Network, 2023 WL 5938527,\n\n                                            - 16 -\n\f  Case 3:23-cv-02146-D Document 45 Filed 02/09/24              Page 17 of 34 PageID 267\n\n\n\nat *23 (S.D.N.Y. Sept. 12, 2023) (granting SEC\u2019s summary judgment motion on scheme\n\nliability for defendants\u2019 varying degrees of participation in pump-and-dump scheme); SEC\n\nv. Curshen, 888 F.Supp.2d 1299, 1307 (S.D. Fla. 2012) (granting SEC\u2019s summary judgment\n\nmotion on scheme liability because SEC presented evidence defendants used public shell\n\ncorporation; opened brokerage account to facilitate stock manipulation; and directed\n\nmatching buy and sell order to artificially inflate stock). This court holds that, accepting the\n\nallegations of the SEC\u2019s complaint as true, defendants\u2019 actions to propel Verges\u2019 pump-and-\n\ndump scheme were deceptive and manipulative. Defendants played a \u201ckey active role\u201d in\n\nVerges pump-and-dump scheme by \u201cdumping\u201d the artificially inflated penny stock at\n\nstrategic times over a five-year period. Accordingly, the court concludes that the SEC has\n\npleaded sufficient facts to satisfy the deceptive and manipulative act element of scheme\n\nliability.\n\n                                               2\n\n        Defendants also maintain that the SEC\u2019s allegations do not demonstrate that\n\ndefendants knew of Verges\u2019 misstatements or omissions or knew that Verges was conducting\n\na pump-and-dump scheme. In particular, defendants say, the complaint does not allege that\n\ndefendants knew Verges (1) obtained de facto control over the penny stock companies\n\nthrough \u201cfigurehead CEOs\u201d; (2) entered into any sham consulting service contracts (or any\n\nfalse agreements whatsoever) with the penny stock companies; (3) directed Tilton to prepare\n\nand publish false and misleading OTC Disclosure Statements and Financial Reports; (4)\n\nauthored and posted any press releases (using aliases or otherwise); or (5) used aliases either\n\n                                             - 17 -\n\f Case 3:23-cv-02146-D Document 45 Filed 02/09/24               Page 18 of 34 PageID 268\n\n\n\nto conceal his true identity and control of the penny stock companies to deal with the\n\ncompanies\u2019 transfer agents or to issue press releases.\n\n       The SEC responds that defendants\u2019 motive to commit securities fraud is established\n\nby the fact that Blue Citi received roughly $36 million in trading proceeds from the pump-\n\nand-dump scheme and other circumstantial evidence. For example, Robert and Linda were\n\nsophisticated, experienced investors. In 2010 a final judgment was entered against Robert\n\nfor his participation in a fraudulent \u201cfront-running scheme,\u201d and he was enjoined from future\n\nsecurities law violations and serving as an officer or director of a public company. Linda\n\nobtained her law license in New York in 1987. The SEC maintains that, as sophisticated\n\ninvestors, Robert and Linda \u201cundoubtedly knew\u201d that the transactions with Verges were\n\ndesigned to conceal his involvement and offload the penny stock companies\u2019 shares at\n\ninflated values. Additionally, the SEC contends, the timing and circumstances of the\n\ntransactions establish that defendants knew of, or recklessly disregarded, the fraudulent\n\nscheme. Over a period spanning nearly a half-decade, Robert and Linda, through Blue Citi,\n\nreceived 2.5 billion shares in five penny stock companies at a collective $41 million discount.\n\nDefendants then sold the shares at \u201csignificantly higher values, resulting in tens of millions\n\nof dollars in trading profits\u2014at least $12.5 million of which they kicked back to Verges.\u201d\n\nP. Resp. (ECF No. 36) at 13. The SEC posits that defendants \u201cmust have known, or\n\nrecklessly disregarded, that these profits were not a product of their savvy investing[.]\u201d Id.\n\n       Assuming arguendo that defendants did not know about certain aspects of Verges\u2019\n\nmulti-faceted pump-and-dump scheme, the complaint alleges other deceptive conduct by\n\n                                            - 18 -\n\f Case 3:23-cv-02146-D Document 45 Filed 02/09/24             Page 19 of 34 PageID 269\n\n\n\nVerges that defendants knew or recklessly disregarded. For example, defendants knew or\n\nrecklessly disregarded the misleading statements and omissions in the OTC disclosure\n\nstatements or 1,400 press releases regarding penny stock companies that they were heavily\n\ninvested in. The disclosure statements and press releases were strategically timed to \u201cpump\u201d\n\nthe penny stock companies\u2019 share prices so that defendants could then \u201cdump\u201d those shares\n\ninto the market.\n\n                                             3\n\n       Scienter is a necessary element of a primary violation of \u00a7 10(b) of the Exchange Act,\n\nRule 10b-5, and \u00a7 17(a)(1). See Aaron v. SEC, 446 U.S. 680, 695 (1980). The SEC can\n\nestablish scienter by proving that defendants acted intentionally, knowingly, or in a manner\n\nthat was severely reckless. See, e.g., SEC v. Seghers, 298 Fed. Appx. 319, 333 (5th Cir.\n\n2008) (citing Nathenson v. Zonagen Inc., 267 F.3d 400, 408 (5th Cir. 2001)). The Fifth\n\nCircuit defines severe recklessness as\n\n              those highly unreasonable omissions or misrepresentations that\n              involve not merely simple or even inexcusable negligence, but\n              an extreme departure from the standards of ordinary care, and\n              that present a danger of misleading buyers or sellers[,] which is\n              either known to the defendant or is so obvious that the defendant\n              must have been aware of it.\n\nBroad v. Rockwell Int\u2019l Corp., 642 F.2d 929, 961-62 (5th Cir. 1981) (en banc).\n\n       \u201cWhen analyzing a complaint for scienter, a court must \u2018assess all the allegations\n\nholistically,\u2019 not in isolation.\u201d SEC v. Gilman, 2019 WL 4743431, at *8 (N.D. Tex. Sept. 26,\n\n2019) (Lindsay, J.) (quoting Owens v. Jastrow, 789 F.3d 529, 536 (5th Cir. 2015)). The\n\n\n                                           - 19 -\n\f Case 3:23-cv-02146-D Document 45 Filed 02/09/24               Page 20 of 34 PageID 270\n\n\n\ncourt determines \u201c\u2018whether all of the facts alleged, taken collectively, give rise to a . . .\n\nplausible inference of scienter[.]\u2019\u201d Id. (quoting Lormand v. U.S. Unwired, Inc., 565 F.3d\n\n228, 251 (5th Cir. 2009)). Alleged facts are sufficient to support an inference of fraudulent\n\nintent if they either \u201c(1) show a defendant\u2019s motive to commit securities fraud, or (2) identify\n\ncircumstances that indicate conscious behavior on the part of the defendant.\u201d Lovelace v.\n\nSoftware Spectrum Inc., 78 F.3d 1015, 1019 (5th Cir. 1996). Thus circumstantial evidence\n\nmay be sufficient to establish scienter, but the evidence must be correspondingly greater.\n\nSee, e.g., World Tree Fin., LLC, 43 F.4th at 464 (quoting SEC v. Fox, 855 F.2d 247, 253 (5th\n\nCir. 1988)).6\n\n                                               4\n\n       The SEC\u2019s allegations are sufficient to enable the court to draw the reasonable\n\ninference that defendants acted with scienter because they had motive and opportunity.\n\n       The complaint alleges motive based on the concrete and personal benefits that\n\ndefendants received directly from their participation in the fraudulent pump-and-dump\n\nscheme. Blue Citi received roughly $36 million in profits; Robert received roughly $12\n\nmillion in trading proceeds; and Linda received roughly $533,750.00 in trading proceeds.\n\nThe SEC does not allege a general profit motive, which is insufficient in the Fifth Circuit to\n\n\n\n       6\n        The Private Securities Litigation Reform Act\u2019s stricter standards for pleading scienter\ndo not apply to the SEC. See 15 U.S.C. \u00a7 78u-4(b) (\u201cThe provisions of this subsection shall\napply in each private action arising under this chapter that is brought as a plaintiff class\naction pursuant to the Federal Rules of Civil Procedure.\u201d); accord SEC v. Kornman, 391\nF.Supp.2d 477, 494 (N.D. Tex. 2005) (Lindsay, J.).\n\n                                             - 20 -\n\f Case 3:23-cv-02146-D Document 45 Filed 02/09/24              Page 21 of 34 PageID 271\n\n\n\nestablish scienter. See Owens, 789 F.3d at 539 (citing Abrams v. Baker Hughes Inc., 292\n\nF.3d 424, 434 (5th Cir. 2002)); see also Jacobowitz v. Range Res. Corp., 596 F.Supp.3d 659,\n\n690 (N.D. Tex. 2022) (Pittman, J.) (\u201cTo properly plead motive, plaintiffs must allege facts\n\nshowing \u2018concrete benefits that could be realized\u2019\u201d by the fraudulent conduct) (quoting Mun.\n\nEmpls.\u2019 Ret. Sys. of Mich. v. Pier 1 Imps., Inc., 935 F.3d 424, 429 (5th Cir. 2019)). The SEC\n\nalleges motive on the basis that the trading proceedings were directed to Robert, Linda, and\n\nBlue Citi\u2019s accounts and that money was used to fund, inter alia, Verges and his scheme.\n\nSee Airborne Wireless Network, 2023 WL 5938527, at *26 (finding scienter satisfied when\n\nevidence demonstrated that proceeds from sales of shares were almost all directed to\n\naccounts controlled in whole or in part by defendants, and that the money was used to fund\n\nreal estate purchases and tax liabilities).\n\n       The SEC also pleads opportunity to commit securities fraud. The complaint alleges\n\nthat the Robert and Linda worked with Verges. Verges scoured the penny stock market and\n\nlocated the investment opportunities; Verges communicated his financial advice to Robert\n\nand Linda; Robert and Linda, through Blue Citi, acted on Verges\u2019 advice and profited\n\nsubstantially; and then Robert and Linda, through Blue Citi, paid Verges for providing them\n\nwith the investment opportunity. Robert specifically agreed to this business relationship with\n\nVerges. The relationship among Robert, Linda, and Verges, in addition to the other\n\ncircumstances that allegedly surround the transactions in question, enable the court to draw\n\nthe reasonable inference that Robert and Linda acted with scienter.\n\n       Robert and Linda also worked with Verges over a five-year period. During that time,\n\n                                              - 21 -\n\f Case 3:23-cv-02146-D Document 45 Filed 02/09/24             Page 22 of 34 PageID 272\n\n\n\nRobert and Linda, through Blue Citi, purchased the penny stock companies\u2019 debt from\n\nVerges at a steep discount\u2014over the five-year period, defendants paid $41 million below\n\nmarket value. Robert and Linda, through Blue Citi, then converted the debt to equity and\n\npromptly sold 2.5 billion shares from the five penny stock companies. Linda directly\n\ncorresponded with at least one transfer agent and indirectly communicated with other transfer\n\nagents through Blue Citi\u2019s attorney to facilitate the third-party sales of the shares at\n\nsignificantly higher prices.\n\n       The SEC provides an example of Robert\u2019s and Linda\u2019s coordination with Verges. In\n\nFebruary 2021 Verges assigned Blue Citi his rights in ALYI\u2019s debt. One week later, Blue\n\nCiti converted the debt into ALYI stock. And 48 hours later it sold 20 million shares of\n\nALYI stock at a steep profit. Blue Citi did not hold the shares for appreciation. The SEC\n\nalleges that these sales occurred against the backdrop of Tilton\u2019s and Verges\u2019 false or\n\nmisleading promotional materials. One of the promotional press releases even allegedly\n\nincluded false information regarding an April 2021 transaction between Blue Citi and ALYI.\n\nThe SEC\u2019s allegations regarding the nature and duration of defendants\u2019 relationship with\n\nVerges and the timing of defendants\u2019 transactions enables the court to draw the reasonable\n\ninference that they acted with scienter.\n\n       The complaint\u2019s allegations regarding Robert\u2019s and Linda\u2019s sophistication and\n\nexperience also enable the court to draw the reasonable inference that they acted with\n\nscienter. The SEC previously obtained a final judgment against Robert for his role in a\n\nfraudulent front-running scheme: a judgment that enjoined him from future violations of\n\n                                           - 22 -\n\f Case 3:23-cv-02146-D Document 45 Filed 02/09/24              Page 23 of 34 PageID 273\n\n\n\nvarious federal securities laws and imposed an officer-and-director bar against him. Linda\n\nhas also been a licensed New York state attorney since 1987. \u201cThe law is clear that a\n\ndefendant cannot escape liability\u201d by \u201c\u2018closing his eyes\u2019 to what he could see and \u2018readily\n\nunderstand.\u2019\u201d Farmer, 2015 WL 5838867, at *11 (citing SEC v. Frank, 388 F.2d 486, 489\n\n(2d Cir. 1968)). Considering their concrete financial gains, duration of involvement, prompt\n\nthird-party sales, and sophistication and experience, the allegations of the amended complaint\n\nare sufficient to counter the premise that Robert and Linda were merely \u201cunsuspecting pawns\n\nin Verges\u2019 fraudulent scheme.\u201d\n\n       The allegations of the amended complaint are similar to those in Farmer. In Farmer\n\nthe court granted summary judgment on the SEC\u2019s \u00a7 17(a) claim, concluding that there was\n\nno genuine issue of material fact as to scienter. See Farmer, 2015 WL 5838867, at *11. The\n\ncourt based its conclusion in part on two facts. The SEC established the defendant\u2019s motive\n\nto commit securities fraud because he \u201cpocketed at least $4.1 million of the proceeds\u201d from\n\nthe pump-and-dump scheme and his \u201cculpability [was] confirmed by the duration of his\n\nparticipation.\u201d Id. The court reasoned that \u201c\u2018[i]t would strain credulity to believe that the\n\ndefendant remained oblivious to all that transpired around him during that period\u2019\u201d when the\n\ndefendant \u201cwas heavily involved in the scheme from its inception . . . until the worthless\n\nstock was dumped on the public market over a year later.\u201d Id. (quoting SEC v. Softpoint,\n\nInc., 958 F.Supp. 846, 865 (S.D.N.Y. 1997) (finding defendant\u2019s culpability confirmed by\n\nthree-year duration of his participation in various financial manipulations)). In the present\n\ncase, the complaint\u2019s allegations enable the court to draw the reasonable inference that\n\n                                            - 23 -\n\f Case 3:23-cv-02146-D Document 45 Filed 02/09/24                Page 24 of 34 PageID 274\n\n\n\ndefendants pocketed greatly from their participation in a scheme that lasted over five\n\nyears\u2014a period much longer than the one-year participation period that confirmed\n\nculpability in Farmer. See id.\n\n       In another materially similar case, a district court held that the complaint\u2019s allegations\n\n\u201cmore than suffice[d] to establish a strong inference of fraudulent intent\u201d when it asserted\n\nthat the defendants sold unrestricted stocks for at least $1 million in proceeds and \u201chad the\n\nresources to scour the niche market of Penny Stock Companies for aged debt, purchase that\n\ndebt at a discount, retain attorneys to opine that the debt was a security eligible for\n\nconversion to unrestricted Penny Stock Company shares, and sell the securities promptly on\n\nthe market.\u201d SEC v. Garber, 959 F.Supp.2d 374, 379 (S.D.N.Y. 2013). Robert and Linda,\n\nthrough Blue Citi, directly profited from their participation; they had the resources to pay\n\nVerges $12.5 million to scour the niche market of penny stock companies for aged debt and\n\nadvise them; they purchased the debt for $41 million below market value; they converted the\n\nsecurity into unrestricted penny stock company shares and used an attorney to facilitate third-\n\nparty transfers; and they sold the securities promptly on the market. Robert and Linda\u2019s\n\npromptness is illustrated by the SEC\u2019s example of Blue Citi purchasing SMEA2Z\u2019s debt,\n\nconverting it to unrestricted shares of ALYI stock, and selling it to a third party at a\n\nsubstantial profit in under 10 days. Viewing the allegations in the light most favorable to the\n\nSEC, the complaint plausibly pleads that Robert and Linda acted with scienter. The\n\ncomplaint also plausibly pleads scienter as to Blue Citi because the inference of scienter as\n\nto Robert and Linda, Blue Citi\u2019s managers, can be imputed to the company. See Southland,\n\n                                             - 24 -\n\f  Case 3:23-cv-02146-D Document 45 Filed 02/09/24            Page 25 of 34 PageID 275\n\n\n\n365 F.3d at 367 (\u201cA corporation can be held to have a particular state of mind only when that\n\nstate of mind is possessed by a single individual.\u201d) (quoting First Equity Corp. v. Standard\n\n& Poor\u2019s Corp., 690 F. Supp. 256, 260 (S.D.N.Y. 1988), aff\u2019d, 869 F.2d 175 (2d Cir. 1989)).\n\n       Accordingly, the court concludes that the complaint plausibly pleads that Robert,\n\nLinda, and Blue Citi acted with scienter.7\n\n                                               5\n\n       Defendants also maintain that the complaint lacks the particularity required by Rule\n\n9(b) in pleading fraud. Scheme liability claims are subject to Rule 9(b)\u2019s heightened\n\npleading requirements because they sound in fraud. See Tuchman v. DSC Commc\u2019ns Corp.,\n\n14 F.3d 1061, 1067 (5th Cir. 1994). To satisfy Rule 9(b), the SEC must articulate the precise\n\ncontours of the alleged scheme to defraud, or the specific acts conducted in furtherance of\n\nit. See id.\n\n       The court concludes that the complaint satisfies Rule 9(b) because it contains the\n\n\u201cwho, what, where, when, and how\u201d allegations generally required in securities fraud cases.\n\nSee Williams, 417 F.3d at 453. The complaint identifies the participants in Verges\u2019\n\nfraudulent pump-and-dump scheme as Robert, Linda, Blue Citi, Tilton, and JDT. The\n\ncomplaint also specifies with precision the contours of the fraudulent scheme at issue. It\n\nidentifies the penny stock companies; identifies the number, conversion price, and market\n\nvalue of the shares Blue Citi converted from the penny stock companies; identifies Verges\u2019\n\n\n       7\n       Because the complaint plausibly pleads scienter, it also plausibly pleads that\ndefendants acted negligently, thereby satisfying Securities Act \u00a7 17(a)(3).\n\n                                             - 25 -\n\f Case 3:23-cv-02146-D Document 45 Filed 02/09/24               Page 26 of 34 PageID 276\n\n\n\nand Tilton\u2019s role to \u201cpump\u201d the stock price and Robert\u2019s, Linda\u2019s, and Blue Citi\u2019s role to\n\n\u201cdump\u201d the shares; and it even identifies a February 2021 transaction between Verges and\n\nBlue Citi to illustrate the scheme. The complaint alleges that the scheme occurred between\n\nJune 2017 and June 2022, and that Blue Citi was first issued shares of Verges\u2019 penny stock\n\ncompanies in at least May 2018. The complaint asserts that the scheme took place in the\n\nOTC market. And the complaint alleges how Robert and Linda, through Blue Citi, propelled\n\nVerges\u2019 pump-and-dump scheme in transactions like the one that occurred on February 24,\n\n2021, and profited from the scheme.\n\n       Accordingly, the court concludes that the complaint satisfies Rule 9(b), and it denies\n\ndefendant\u2019s motion to dismiss the SEC\u2019s primary scheme liability claims.\n\n                                              IV\n\n       The court turns next to the SEC\u2019s secondary liability claims: that defendants violated\n\n\u00a7 10(b) of the Exchange Act, Rule 10b-5(a) and (c) thereunder, and \u00a7 17(a)(1) and (3) of the\n\nSecurities Act by aiding and abetting securities fraud. Defendants maintain that the SEC has\n\nnot alleged sufficient facts to show that they had a general awareness of Verges\u2019 violations,\n\nor that they knowingly provided substantial assistance to Verges.\n\n                                               A\n\n       The SEC must prove three elements for an aiding and abetting claim: \u201c(1) a primary\n\nviolation of the securities laws; (2) that the aider and abettor had knowledge of this violation\n\nand of his or her role in furthering it; and (3) that the aider and abettor knowingly provided\n\nsubstantial assistance in the commission of the primary violation.\u201d SEC v. Life Partners\n\n                                             - 26 -\n\f Case 3:23-cv-02146-D Document 45 Filed 02/09/24                Page 27 of 34 PageID 277\n\n\n\nHoldings, Inc., 854 F.3d 765, 778 (5th Cir. 2017). The Fifth Circuit in Woodward stated that\n\n\u201cit would \u2018assume . . . the existence of a securities act violation\u2019 by the primary violator, and\n\nthen determine the second element, whether an alleged aider and abettor had \u2018general\n\nawareness that one\u2019s role was part of an overall activity that is improper.\u2019\u201d SEC v. Morris,\n\n2005 WL 2000665, at *8 (S.D. Tex. Aug. 18, 2005) (Rosenthal, J.) (quoting Woodward v.\n\nMetro Bank of Dall., 522 F.2d 84, 95 (5th Cir. 1975)).\n\n       \u201cGeneral awareness means knowledge which, though it may be adduced from reckless\n\nconduct, means actual awareness[.]\u201d Id. (quoting Abell v. Potomac Ins. Co., 858 F.2d 1104,\n\n1126 (5th Cir. 1988), vacated on other grounds sub nom. Fryar v. Abell, 492 U.S. 914\n\n(1989)); see also SEC v. Brady, 2006 WL 1310320, at *5 (N.D. Tex. May 12, 2006)\n\n(Fitzwater, J.). Therefore, actual awareness is required \u201cunless there is some special duty of\n\ndisclosure, or evidence that the assistance to the violator was unusual in character and\n\ndegree.\u201d Amacker v. Renaissance Asset Mgmt. LLC, 657 F.3d 252, 255 (5th Cir. 2011)\n\n(quoting Abbott v. Equity Grp., Inc., 2 F.3d 613, 621 (5th Cir. 1993)). In those instances, \u201ca\n\nreckless standard applies.\u201d Id. Assuming certain prerequisites are met, \u201crecklessness [is] the\n\nproper scienter for civil aiding and abetting liability\u201d in the context of securities fraud. Id.\n\nA plaintiff can demonstrate severe or reckless behavior through \u201c[a]llegations that an aider\n\nor abettor encountered red flags or suspicious events creating reasons for doubt that should\n\nhave alerted him to the improper conduct of the primary violators[.]\u201d SEC v. McKnight, 2023\n\nWL 8000294, at *4 (N.D. Tex. Oct. 17, 2023) (Toliver, J.) (internal quotation marks omitted)\n\n(quoting Morris, 2005 WL 2000665, at *9), rec. adopted, 2023 WL 8097078 (N.D. Tex.\n\n                                             - 27 -\n\f Case 3:23-cv-02146-D Document 45 Filed 02/09/24               Page 28 of 34 PageID 278\n\n\n\nNov. 21, 2023) (Lindsay, J.). But \u201chow \u2018knowing\u2019 an abettor must be depends upon how\n\nsubstantial the abettor\u2019s assistance is.\u201d Abell, 858 F.2d at 1126.\n\n       Substantial assistance may be adequately alleged based on facts showing that the\n\ndefendant\u2019s conduct was \u201ca substantial causal factor in the perpetration of the primary party\u2019s\n\nfraud.\u201d SEC v. Shapiro, 2008 WL 819945, at *7 (E.D. Tex. Mar. 25, 2008) (citation\n\nomitted). In other words, \u201cthe SEC must demonstrate that the defendant \u2018in some sort\n\nassociated himself with the venture, that he participated in it as something that he wished to\n\nbring about, and that he sought by his action to make it succeed.\u2019\u201d SEC v. Felton, 2021 WL\n\n2376722, at *12 (N.D. Tex. June 10, 2021) (Fish, J.) (quoting SEC v. Apuzzo, 689 F.3d 204,\n\n206 (2d Cir. 2012), cert. denied, 570 U.S. 918 (2013)).\n\n       The court will assume that the SEC has alleged facts that enable the court to\n\nreasonably infer that Verges committed a primary violation of the Securities Act, Exchange\n\nAct, and related rules because the Woodward court adopted this approach and the parties do\n\nnot dispute this element.8 See Woodward, 522 F.2d at 94. The court therefore considers\n\nwhether the SEC has alleged sufficient facts regarding defendants\u2019 general awareness of their\n\nrole in the overall improper scheme and whether the SEC has alleged sufficient facts\n\nregarding defendants\u2019 knowing and substantial assistance. Because the parties\u2019 briefs\n\ncombine elements two and three, the court will analyze them together.\n\n\n\n\n       8\n       Based on the complaint, the court assumes that Verges committed a primary violation\nof Exchange Act \u00a7 10(b), Rule 10-b5(a)-(c), and Securities Act \u00a7 17(a)(1)-(3).\n\n                                            - 28 -\n\f Case 3:23-cv-02146-D Document 45 Filed 02/09/24             Page 29 of 34 PageID 279\n\n\n\n                                             B\n\n       Defendants posit that the SEC has failed to allege facts demonstrating that they had\n\nany general awareness of their role in Verges\u2019 securities violations or knowingly or\n\nrecklessly provided substantial assistance because \u201cthe complaint\u2019s lack of allegations that\n\nthe [defendants] had any knowledge of [Verges\u2019] misstatements/omissions and/or pump-and-\n\ndump scheme is fatal\u201d to the SEC\u2019s aiding and abetting claim.\n\n       The SEC responds that the complaint alleges that defendants executed transactions\n\nwith Verges that were designed to conceal his involvement and mislead investors. For a half-\n\ndecade, Robert and Linda, through Blue Citi, purchased Verges\u2019 debt instruments in the same\n\nfive penny stock companies; converted the debt to equity and then quickly offloaded their\n\nshares into the market at a substantial profit; and paid Verges millions of dollars for the\n\ninvestment opportunities. Moreover, Robert and Linda, as sophisticated investors, either\n\nknew or recklessly disregarded the misleading statements and omissions in the OTC\n\ndisclosures and the 1,400 press releases regarding the penny stock companies in which they\n\nheavily invested.   Robert and Linda also knew or recklessly disregarded that these\n\npromotional materials were \u201cstrategically timed and coordinated\u201d to inflate the penny stock\n\ncompanies\u2019 shares artificially before Robert and Linda, through Blue Citi, dumped the shares\n\ninto the market.\n\n       The court concludes that the SEC has sufficiently pleaded facts that demonstrate, or\n\nfrom which it can be reasonably inferred, that defendants had a general awareness that their\n\nrole was part of an overall activity that was improper. The complaint alleges that Robert and\n\n                                           - 29 -\n\f Case 3:23-cv-02146-D Document 45 Filed 02/09/24              Page 30 of 34 PageID 280\n\n\n\nLinda were sophisticated investors: the SEC previously obtained a final judgment against\n\nRobert for his role in a fraudulent front-running scheme, which enjoined him from future\n\nviolations of various federal securities laws and imposed an officer-and-director bar against\n\nhim, and Linda is a licensed attorney in New York. The complaint enables the court to draw\n\nthe reasonable inference that, because of their sophistication and experience, Robert and\n\nLinda, at a minimum, acted with extreme recklessness by assuming, without confirming, that\n\nthe transactions executed in coordination with Verges were legitimate despite the \u201cred flags.\u201d\n\nFor example, (1) the investment opportunities Verges provided Robert and Linda involved\n\nthe same five penny stock companies over a five-year period; (2) Verges provided Robert\n\nand Linda with steep discounts to purchase the debt instruments he held; (3) shortly after\n\nRobert and Linda purchased and converted Verges\u2019 debt instruments into equity, OTC\n\ndisclosure statements or press releases were published regarding the very same penny stock\n\ncompanies that Robert and Linda had recently invested in; (4) Robert and Linda then sold\n\nthe shares promptly at a significant profit margin; (5) a press release inaccurately reported\n\non the conversion rate in a transaction between Blue Citi and ALYI; and (6) by purchasing\n\nand converting Verges\u2019 debt instruments, Robert and Linda concealed Verges\u2019 involvement\n\nin the transactions. The court can draw the reasonable inference that red flags and suspicious\n\ncircumstances surrounding the transactions created reasons for doubt that sophisticated and\n\nexperienced investors, like Robert and Linda, overlooked.\n\n       The court also concludes that the SEC has sufficiently pleaded facts that demonstrate,\n\nor from which the court can reasonably infer, that defendants knowingly or recklessly\n\n                                            - 30 -\n\f Case 3:23-cv-02146-D Document 45 Filed 02/09/24               Page 31 of 34 PageID 281\n\n\n\nprovided substantial assistance. The complaint alleges that Robert and Linda, through Blue\n\nCiti, (1) agreed with Verges to buy his debt instruments in the penny stock companies and\n\ntherefore conceal his involvement in \u201cdumping\u201d the stocks; (2) converted Verges\u2019 debt\n\ninstruments and sold roughly 2.5 billion shares of stock in Verges\u2019 penny stock companies;\n\n(3) profited more than any other nominee in Verges\u2019 scheme combined; (4) and worked with\n\nVerges for a five-year period.\n\n       The court concludes that, taken as true, these allegations are sufficient under Rule 9(b)\n\nand 12(b)(6) to support the SEC\u2019s claim that defendants had a general awareness that their\n\nrole was part of an overall activity that was improper and knowingly or recklessly provided\n\nsubstantial assistance to Verges in the commission of the primary violation. Accordingly,\n\nthe court denies defendants\u2019 motion to dismiss regarding the SEC\u2019s secondary liability\n\nclaims.\n\n                                              V\n\n       The court turns last to the SEC\u2019s claim alleging that Robert and Linda are jointly and\n\nseverally liable as control persons under \u00a7 20(a) of the Exchange Act. Defendants\u2019 sole\n\ncontention regarding control person liability is that the \u00a7 20(a) claim must be dismissed\n\nbecause the SEC has failed to plausibly plead a primary scheme liability violation under\n\n\u00a7 10(b) of the Exchange Act and Rule 10-b5.\n\n                                              A\n\n       \u201cUnder [\u00a7] 20(a), a person who exerts control over a person who violates any\n\nprovision of the [Exchange Act] can be held jointly and severally liable with the primary\n\n                                            - 31 -\n\f Case 3:23-cv-02146-D Document 45 Filed 02/09/24               Page 32 of 34 PageID 282\n\n\n\nactor of the underlying securities law violation.\u201d Flaherty & Crumrine Preferred Income\n\nFund, Inc. v. TXU Corp., 565 F.3d 200, 206 n.4 (5th Cir. 2009). \u201cIn determining whether\n\na plaintiff has made a prima facie showing of \u2018control,\u2019 it is well-established that a plaintiff\n\nmust plead facts indicating that the defendant \u2018had the requisite power to directly or\n\nindirectly control or influence corporate policy.\u2019\u201d Kunzweiler v. Zero.Net, Inc., 2002 WL\n\n1461732, at *13 (N.D. Tex. July 3, 2002) (Solis, J.) (quoting G.A. Thompson & Co. v.\n\nPartridge, 636 F.2d 945, 958 (5th Cir. 1981)). District courts in the Fifth Circuit continue\n\nto \u201capply a \u2018relaxed\u2019 and \u2018lenient\u2019 pleading standard for evaluating whether a plaintiff has\n\nsufficiently alleged a claim for control person liability.\u201d In re SolarWinds Corp. Sec. Litig.,\n\n595 F.Supp.3d 573, 593 (W.D. Tex. 2022) (quoting One Longhorn Land I, L.P. v. FF\n\nArabian, LLC, 2015 WL 7432360, at *2 (E.D. Tex. Nov. 23, 2015)). A plaintiff need not\n\nallege that the controlling person actually participated in the underlying primary violation,\n\nsee G.A. Thompson & Co., 636 F.2d at 958, but the plaintiff must allege some facts beyond\n\na defendant\u2019s position or title, see Dennis v. Gen. Imaging, Inc., 918 F.2d 496, 509-10 (5th\n\nCir. 1990). Section 20(a) claims are not subject to the heightened pleading requirements of\n\nRule 9(b), so once the SEC has pleaded a primary violation with sufficient particularity, it\n\nneed only provide the defendants\u2019 fair notice of the controlling person claim and the basis\n\nof the allegations. See Abbott, 2 F.3d at 620.\n\n                                               B\n\n       The SEC has pleaded primary violations of securities law. See supra \u00a7 III(B). The\n\ncomplaint also alleges that Robert and Linda served as managing members of Blue Citi\n\n                                             - 32 -\n\f Case 3:23-cv-02146-D Document 45 Filed 02/09/24                Page 33 of 34 PageID 283\n\n\n\nduring the relevant period. In particular, the complaint asserts that, as a managing member,\n\nRobert agreed with Verges that Blue Citi would obtain interests in Verges\u2019 companies debt\n\ninstruments with the penny stock companies. Robert and Linda, together, used Blue Citi to\n\nexercise its conversion rights in the debt purchased from Verges\u2019 companies, and to enter\n\ninto stock purchase agreements to sell its shares to third parties, who, in turn, sold the shares\n\nin the OTC markets using domestic and offshore brokers. Robert and Linda also \u201cexecuted\n\nnotes, agreements, and conversion notices in their capacities as \u2018managers\u2019 of Blue Citi to\n\nobtain the penny stock companies\u2019 shares.\u201d P. Compl. (ECF No. 1) at \u00b6 31. And Linda was\n\nincluded on multiple emails that Blue Citi\u2019s attorney sent to the penny stock companies\u2019\n\ntransfer agents to receive their stock.\n\n       Accepting the allegations as true and viewing them in the SEC\u2019s favor, the complaint\n\nplausibly pleads that Robert and Linda had the ability to control Blue Citi\u2019s transactions with\n\nVerges\u2019 companies and other third parties. Defendants do not offer any argument to the\n\ncontrary. The court concludes that the SEC plausibly pleaded a primary violation and\n\ncontrolling person liability. Accordingly, the court denies defendants\u2019 motion to dismiss the\n\nSEC\u2019s \u00a7 20(a) claim.\n\n\n\n\n                                             - 33 -\n\f Case 3:23-cv-02146-D Document 45 Filed 02/09/24         Page 34 of 34 PageID 284\n\n\n\n                                      *     *      *\n\n       For the reasons explained, the court denies defendants\u2019 November 27, 2023 motion\n\nto dismiss.\n\n       SO ORDERED.\n\n       February 9, 2024.\n\n\n\n                                          _________________________________\n                                          SIDNEY A. FITZWATER\n                                          SENIOR JUDGE\n\n\n\n\n                                          - 34 -\n\f","ocr_status":2,"date_upload":"2024-02-12T00:38:22.118392-08:00","document_number":"45","attachment_number":null,"pacer_doc_id":"177016611788","is_available":true,"is_free_on_pacer":true,"is_sealed":null,"document_type":1,"description":"Memorandum Opinion and Order","acms_document_guid":""}],"date_created":"2024-02-09T12:22:29.713727-08:00","date_modified":"2025-10-01T11:51:23.156462-07:00","date_filed":"2024-02-09","time_filed":"13:53:54","entry_number":45,"recap_sequence_number":"2024-02-09.001","pacer_sequence_number":123,"description":"MEMORANDUM OPINION AND ORDER denying 19 Motion to Dismiss for Failure to State a Claim filed by Blue Citi LLC, Linda Malin, Robert F Malin. (Ordered by Senior Judge Sidney A Fitzwater on 2/9/2024) (Senior Judge Sidney A Fitzwater) (Entered: 02/09/2024)","tags":[]},{"resource_uri":"https://www.courtlistener.com/api/rest/v4/docket-entries/377638775/","id":377638775,"docket":"https://www.courtlistener.com/api/rest/v4/dockets/67830293/","recap_documents":[{"resource_uri":"https://www.courtlistener.com/api/rest/v4/recap-documents/385292845/","id":385292845,"tags":[],"absolute_url":"/docket/67830293/44/securities-and-exchange-commission-v-verges/","date_created":"2024-02-06T00:29:23.840828-08:00","date_modified":"2025-10-01T11:51:23.135910-07:00","sha1":"","page_count":null,"file_size":null,"filepath_local":null,"filepath_ia":"","ia_upload_failure_count":null,"thumbnail":null,"thumbnail_status":0,"plain_text":"","ocr_status":null,"date_upload":null,"document_number":"44","attachment_number":null,"pacer_doc_id":"","is_available":false,"is_free_on_pacer":null,"is_sealed":null,"document_type":1,"description":"","acms_document_guid":""}],"date_created":"2024-02-06T00:29:23.819548-08:00","date_modified":"2025-10-01T11:51:23.114939-07:00","date_filed":"2024-01-08","time_filed":null,"entry_number":44,"recap_sequence_number":"2024-01-08.001","pacer_sequence_number":null,"description":"ELECTRONIC ORDER granting 43 MOTION Leave to Proceed Without Local Counsel - Unopposed filed by Blue Citi LLC, Linda Malin, Robert F Malin. (Ordered by Senior Judge Sidney A Fitzwater on 1/8/2024) (Senior Judge Sidney A Fitzwater) (Entered: 01/08/2024)","tags":[]},{"resource_uri":"https://www.courtlistener.com/api/rest/v4/docket-entries/377638774/","id":377638774,"docket":"https://www.courtlistener.com/api/rest/v4/dockets/67830293/","recap_documents":[{"resource_uri":"https://www.courtlistener.com/api/rest/v4/recap-documents/385292844/","id":385292844,"tags":[],"absolute_url":"/docket/67830293/43/securities-and-exchange-commission-v-verges/","date_created":"2024-02-06T00:29:23.747274-08:00","date_modified":"2025-10-01T11:51:23.098144-07:00","sha1":"","page_count":null,"file_size":null,"filepath_local":null,"filepath_ia":"","ia_upload_failure_count":null,"thumbnail":null,"thumbnail_status":0,"plain_text":"","ocr_status":null,"date_upload":null,"document_number":"43","attachment_number":null,"pacer_doc_id":"177016520154","is_available":false,"is_free_on_pacer":null,"is_sealed":null,"document_type":1,"description":"","acms_document_guid":""}],"date_created":"2024-02-06T00:29:23.726184-08:00","date_modified":"2025-10-01T11:51:23.080324-07:00","date_filed":"2024-01-05","time_filed":null,"entry_number":43,"recap_sequence_number":"2024-01-05.002","pacer_sequence_number":119,"description":"MOTION Leave to Proceed Without Local Counsel - Unopposed filed by Blue Citi LLC, Linda Malin, Robert F Malin with Brief/Memorandum in Support. (Attachments: # 1 Proposed Order) (Hunter, Mark) (Entered: 01/05/2024)","tags":[]},{"resource_uri":"https://www.courtlistener.com/api/rest/v4/docket-entries/377638773/","id":377638773,"docket":"https://www.courtlistener.com/api/rest/v4/dockets/67830293/","recap_documents":[{"resource_uri":"https://www.courtlistener.com/api/rest/v4/recap-documents/385292843/","id":385292843,"tags":[],"absolute_url":"/docket/67830293/42/securities-and-exchange-commission-v-verges/","date_created":"2024-02-06T00:29:23.706852-08:00","date_modified":"2025-10-01T11:51:23.061905-07:00","sha1":"","page_count":null,"file_size":null,"filepath_local":null,"filepath_ia":"","ia_upload_failure_count":null,"thumbnail":null,"thumbnail_status":0,"plain_text":"","ocr_status":null,"date_upload":null,"document_number":"42","attachment_number":null,"pacer_doc_id":"177016520043","is_available":false,"is_free_on_pacer":null,"is_sealed":null,"document_type":1,"description":"","acms_document_guid":""}],"date_created":"2024-02-06T00:29:23.688473-08:00","date_modified":"2025-10-01T11:51:23.043145-07:00","date_filed":"2024-01-05","time_filed":null,"entry_number":42,"recap_sequence_number":"2024-01-05.001","pacer_sequence_number":116,"description":"REPLY filed by Blue Citi LLC, Linda Malin, Robert F Malin re: 19 Motion to Dismiss for Failure to State a Claim (Attachments: # 1 Proposed Order) (Hunter, Mark) (Entered: 01/05/2024)","tags":[]},{"resource_uri":"https://www.courtlistener.com/api/rest/v4/docket-entries/377638772/","id":377638772,"docket":"https://www.courtlistener.com/api/rest/v4/dockets/67830293/","recap_documents":[{"resource_uri":"https://www.courtlistener.com/api/rest/v4/recap-documents/385292842/","id":385292842,"tags":[],"absolute_url":"/docket/67830293/41/securities-and-exchange-commission-v-verges/","date_created":"2024-02-06T00:29:23.664061-08:00","date_modified":"2025-10-01T11:51:23.022437-07:00","sha1":"","page_count":null,"file_size":null,"filepath_local":null,"filepath_ia":"","ia_upload_failure_count":null,"thumbnail":null,"thumbnail_status":0,"plain_text":"","ocr_status":null,"date_upload":null,"document_number":"41","attachment_number":null,"pacer_doc_id":"177016514653","is_available":false,"is_free_on_pacer":null,"is_sealed":null,"document_type":1,"description":"","acms_document_guid":""}],"date_created":"2024-02-06T00:29:23.640287-08:00","date_modified":"2025-10-01T11:51:23.005243-07:00","date_filed":"2024-01-04","time_filed":null,"entry_number":41,"recap_sequence_number":"2024-01-04.001","pacer_sequence_number":114,"description":"CERTIFICATE OF INTERESTED PERSONS/DISCLOSURE STATEMENT by Blue Citi LLC, Linda Malin, Robert F Malin. (Clerk QC note: No affiliate entered in ECF). (Hunter, Mark) (Entered: 01/04/2024)","tags":[]}],"entries_total":"https://www.courtlistener.com/api/rest/v4/docket-entries/?count=on&docket=67830293&page_size=40"}