24-235-cv SEC v. Ahmed
UNITED STATES COURT OF APPEALS FOR THE SECOND CIRCUIT
SUMMARY ORDER RULINGS BY SUMMARY ORDER DO NOT HAVE PRECEDENTIAL EFFECT. CITATION TO A SUMMARY ORDER FILED ON OR AFTER JANUARY 1, 2007, IS PERMITTED AND IS GOVERNED BY FEDERAL RULE OF APPELLATE PROCEDURE 32.1 AND THIS COURT’S LOCAL RULE 32.1.1. WHEN CITING A SUMMARY ORDER IN A DOCUMENT FILED WITH THIS COURT, A PARTY MUST CITE EITHER THE FEDERAL APPENDIX OR AN ELECTRONIC DATABASE (WITH THE NOTATION SUMMARY ORDER). A PARTY CITING TO A SUMMARY ORDER MUST SERVE A COPY OF IT ON ANY PARTY NOT REPRESENTED BY COUNSEL.
At a stated term of the United States Court of Appeals for the Second Circuit, held at the Thurgood Marshall United States Courthouse, 40 Foley Square, in the City of New York, on the 17th day of November, two thousand twenty-five.
PRESENT: JOHN M. WALKER, JR., DENNIS JACOBS, JOSEPH F. BIANCO, Circuit Judges. _____________________________________
United States Securities & Exchange Commission,
Plaintiff-Appellee,
Stephen M. Kindseth,
Receiver-Appellee,
v. 24-235-cv
Shalini Ahmed,
Defendant-Appellant,
Iftikar Ahmed, Iftikar Ali Ahmed Sole Prop, I- Cubed Domains, LLC, Shalini Ahmed 2014 Grantor Retained Annuity Trust, DIYA Holdings LLC, DIYA Real Holdings, LLC, A minor child, by and through his next friends Iftikar and Shalini Ahmed, his parents I. I. 1, A minor child, by and through his next friends Iftikar and Shalini Ahmed, his parents I. I. 2, A minor child, by and through his next friends Iftikar and Shalini Ahmed, his parents I. I. 3,
Defendants,
NMR e−tailing, LLC,
Intervenor. 1 _____________________________________
FOR DEFENDANT-APPELLANT: Shalini Ahmed, pro se, Greenwich, Connecticut.
FOR PLAINTIFF-APPELLEE: Stephen G. Yoder, Senior Appellate Counsel (Megan Barbero, General Counsel, Michael A. Conley, Solicitor, on the brief), for Securities and Exchange Commission, Washington, D.C.
FOR RECEIVER-APPELLEE: Daniel A. Byrd (John L. Cesaroni, on the brief), Zeisler & Zeisler, P.C., for Stephen M. Kindseth, Receiver, Bridgeport, Connecticut.
Appeal from orders of the United States District Court for the District of Connecticut
(Jeffrey A. Meyer, Judge).
UPON DUE CONSIDERATION, IT IS HEREBY ORDERED, ADJUDGED, AND
DECREED that the appeal is DISMISSED in part. Three orders of the district court (the “Living
Expense Order,” “Divorce Order,” “Withdrawal Order,” defined infra) are AFFIRMED. The
1 The Clerk of the Court is respectfully directed to amend the caption on this Court’s docket to be consistent with the caption on this summary order. 2 “Certiorari Order” is DISMISSED for lack of jurisdiction. The “State Tax Order” is VACATED
and REMANDED to the district court to dismiss for lack of subject matter jurisdiction.
Shalini Ahmed (“Ahmed”), proceeding pro se, appeals five orders of the district court
denying various motions for relief concerning an asset freeze. In 2015, the Securities and
Exchange Commission (“SEC”) commenced this enforcement action against Ahmed’s then-
husband, Iftikar Ahmed (“Iftikar”), alleging violations of various securities and financial laws.
Ahmed, the couple’s three minor children, and several affiliated business entities were later named
in the action as additional “Relief Defendants.” In 2018, the district court granted summary
judgment in favor of the SEC and appointed a receiver to oversee the frozen assets of Iftikar and
the Relief Defendants. On appeal from that judgment, this Court affirmed in part, but vacated
and remanded for consideration of matters not relevant here. SEC v. Ahmed, 72 F.4th 379, 389–
90, 410 (2d Cir. 2023). We assume the parties’ familiarity with the remaining facts, the
procedural history of the case, and the issues on appeal, to which we refer only as necessary to
explain our decision.
BACKGROUND
On remand, Ahmed, now acting pro se, filed four motions seeking to increase funds for
living expenses, relief related to divorce proceedings, funds to pursue a writ of certiorari, and to
vacate a state tax levy. The SEC cross-moved, requesting that the district court terminate future
monthly payments for living expenses. In addition, Murtha Cullina LLP (“Murtha”), counsel for
the Relief Defendants other than Ahmed, filed a fifth motion seeking a release of funds for payment
of counsel or alternatively to withdraw as counsel.
3 After a hearing, the district court issued a series of text orders denying Ahmed’s motions
for increased funds for living expenses (the “Living Expense Order”), relief related to divorce
proceedings (the “Divorce Order”), and funds to pursue a writ of certiorari (the “Certiorari Order”),
and to vacate the state tax levy (the “State Tax Order”). The district court also granted the SEC’s
cross-motion to terminate future expense payments. With respect to the fifth motion, the district
court granted Murtha’s request to withdraw but denied its request for funds (the “Withdrawal
Order”). Ahmed appeals from the five motion orders.
DISCUSSION
I. Appellate Jurisdiction
At the outset, we only have jurisdiction to review four of the five district court orders: the
Living Expense Order, Divorce Order, the Withdrawal Order, and the State Tax Order. 2 See 28
U.S.C. § 1292(a)(1) (granting appellate jurisdiction over “[i]nterlocutory orders of the district
courts . . . refusing to dissolve or modify injunctions”). 3
We lack jurisdiction to review the Certiorari Order because Ahmed’s petition for Supreme
Court review is moot. “The hallmark of a moot case or controversy is that the relief sought can
2 We retain jurisdiction over the State Tax Order, for which “the lower court was without jurisdiction,” “merely for the purpose of correcting the error of the lower court in entertaining the suit.” Hapag-Lloyd Aktiengesellschaft v. U.S. Oil Trading LLC, 814 F.3d 146, 150 n.10 (2d Cir. 2016) (internal quotation marks and citation omitted). 3 With respect to the motion to withdraw, the Receiver argues that Ahmed lacks standing to challenge the district court’s order, because Ahmed has not been represented by Murtha since 2022 and is therefore not “aggrieved.” Receiver-Appellee’s Br. at 41–42. However, because Ahmed is now responsible for paying for counsel with separate funds if she wants her children to have representation, Ahmed can assert that she too is personally aggrieved by the order, and thus, has standing. See TransUnion LLC v. Ramirez, 594 U.S. 413, 425 (2021) (stating that “monetary harms” are among “[t]he most obvious” concrete injuries under Article III). 4 no longer be given or is no longer needed.” Martin-Trigona v. Shiff, 702 F.2d 380, 386 (2d Cir.
1983). Because we have “no jurisdiction over moot controversies,” we must dismiss a moot
appeal. Video Tutorial Servs., Inc. v. MCI Telecomms. Corp., 79 F.3d 3, 6 (2d Cir. 1996) (per
curiam). Here, Ahmed sought the release of funds to pursue a writ of certiorari from our decision
in SEC v. Ahmed, 72 F.4th 379 (2d Cir. 2023). However, Ahmed has already filed a petition for
a writ of certiorari, which the Supreme Court denied. Ahmed v. SEC, 144 S. Ct. 2658 (2024)
(denying writ of certiorari). Moreover, the 25-day deadline for rehearing of the denial of certiorari
has passed. See S. Ct. R. 44.2. Therefore, we dismiss as moot Ahmed’s appeal from the denial
of this motion.
II. Merits
Turning to the merits, we review the modification of a preliminary injunction, including an
asset freeze, for abuse of discretion. See CFTC v. Walsh, 618 F.3d 218, 225 (2d Cir. 2010) (asset
freeze); Weight Watchers Int’l, Inc. v. Luigino’s, Inc., 423 F.3d 137, 141 (2d Cir. 2005)
(modification). We generally review decisions on receivership matters also for abuse of
discretion. SEC v. Credit Bancorp, Ltd., 290 F.3d 80, 87 (2d Cir. 2002). “A district court
necessarily abuses its discretion if it applies legal standards incorrectly or relies upon clearly
erroneous findings of fact, or proceeds on the basis of an erroneous view of the applicable law.”
Walsh, 618 F.3d at 225 (internal quotation marks and citation omitted).
We address each of the remaining four orders in turn.
a. Living Expenses Order
The district court did not abuse its discretion by denying Ahmed’s motion for an increase
5 of funds for living expenses and granting the SEC’s cross-motion to terminate future payments.
To the contrary, the district court offered substantial justification for its decision.
First, the district court was “no longer convinced that Mrs. Ahmed and her children [were]
in genuine need of more payments.” Special App’x at 2. Indeed, Ahmed, who was previously a
banker with Goldman Sachs, had “fail[ed] to engage in genuine efforts to seek and obtain
employment,” and instead had acquired unexplained wealth, as evidenced by “the expenditures
from unidentified sources for travel to India and private school tuition for [her] children.” Id. at
1. Although Ahmed alleged that she suffered migraines, the district court was “not convinced
that this condition or her childcare responsibilities prevent[ed] her altogether from returning to
work and earning substantial income in light of her educational and professional background.”
Id. at 2. The district court’s credibility findings are subject to deference, and Ahmed has not
shown they were clearly erroneous. See Phoenix Glob. Ventures, LLC v Phoenix Hotel Assocs.,
Ltd., 422 F.3d 72, 76 (2d Cir. 2005) (per curiam) (“[C]lear error review mandates that we defer to
the district court’s factual findings, particularly those involving credibility determinations.”)
On appeal, Ahmed now claims that her travels and children’s schooling are covered by
“loans” that she must pay back. Appellant’s Br. at 42–43. However, she fails to identify the
source of the purported loans and instead references “the limited generosity of other individuals”
and “third-parties who are concerned about the minor children’s emotional and mental stability.”
Id. at 45. As in the district court, Ahmed refuses to provide any further details on the source of
the large sums of money spent on her and her children.
Second, the district court emphasized that, since first issuing the temporary payments in
6 2016, circumstances had changed. The district court explained that this Court had largely
affirmed the judgment, and it was concerned that further payments to the Ahmeds would
“jeopardize recovery for victims.” Special App’x at 1–2. On appeal, Ahmed suggests that the
judgment is oversecured, comparing the “$94.9 million” judgment, including the “disgorgement,
prejudgment interest, and civil penalty,” Appellant’s Br. at 41, against the frozen assets “worth
over $120 million,” Id. at 46. However, even assuming that Ahmed’s estimated value of the
frozen assets is correct, her comparison ignores, among other things, prejudgment interest,
additional relief sought on remand, tax payments, and receivership expenses.
b. Withdrawal Order
The district court did not abuse its discretion when it denied Murtha’s motion for release
of funds to pay counsel’s fees and thereafter granted Murtha’s request to withdraw as counsel.
With respect to Murtha’s request for payment of fees, the district court explained that this request
had been previously denied and expressed concern that the motion was filed “simply because of
the transfer of the case” to a new district court judge. Special App’x at 4. The district court ruled
that Murtha could renew its motion after liquidation was complete and after submitting proper
billing documentation. Id. at 4–5.
Having denied the request for payment, the district court considered whether to permit
Murtha to withdraw, properly weighing the hardships to Murtha as well as to the remaining Relief
Defendants. The district court first explained that denying withdrawal would subject Murtha to
“continuing costs of representation and with an uncertain prospect of payment for future
representation costs.” Id. at 5. The district court next addressed the hardship of the remaining
7 Relief Defendants. “In addressing motions to withdraw as counsel, district courts have typically
considered whether the prosecution of the suit is likely to be disrupted by the withdrawal of
counsel.” Whiting v. Lacara, 187 F.3d 317, 320–21 (2d Cir. 1999) (alteration adopted) (internal
quotation marks and citation omitted). Here, the district court concluded that its “continuing
concern about lack of disclosure of assets (and their true ownership and control) . . . undermines
arguments that any of the remaining Relief Defendants are unable to afford counsel and that the
interests of justice continue to require at this time that the obligation be imposed on Murtha Cullina
to represent them.” Special App’x at 5. This reasoning was sound.
On appeal, Ahmed argues that her minor children, who were among the Relief Defendants
represented by Murtha, were entitled to counsel. Ahmed cites this Court’s decisions in Cheung
v. Youth Orchestra Found. of Buffalo, Inc., 906 F.2d 59, 61–62 (2d Cir. 1990) and Wenger v.
Canastota Cent. Sch. Dist., 146 F.3d 123, 125 (2d Cir. 1998). Ahmed is correct that these
decisions reiterate the general rule that a parent may not proceed pro se on behalf of their child,
see Cheung, 906 F.2d at 61; Wenger, 146 F.3d at 124–25; however, neither case mandates that a
court appoint counsel for a minor litigant. See Ahmed, 72 F.4th at 395 (noting that there is “no
constitutional right to counsel in [a] civil enforcement action”); Caplin & Drysdale, Chartered v.
United States, 491 U.S. 617, 626 (1989) (explaining that a defendant has no right to use tainted
assets for their legal defense). Nor do these cases require that a court prioritize paying a child’s
counsel over concerns about adequate recovery for victims of their parent’s wrongdoing.
c. Divorce Order
The district court did not abuse its discretion in denying Ahmed’s motion for divorce-
8 related relief. In particular, Ahmed sought permission to enter a dissolution agreement with her
husband, wherein her husband would agree to pay her $87.7 million in lump-sum maintenance.
The district court properly concluded “that the relief requested would contravene the Court’s
authority over frozen assets,” but stated that its order was “without prejudice to the right of the
Ahmeds to participate in divorce proceedings that do not jeopardize the funds available for
restitution to victims of Mr. Ahmed’s fraud or to present a proposed order as suggested by the
SEC.” Special App’x at 8.
Ahmed’s arguments challenging this decision lack merit. To the extent Ahmed cites Am.
Airlines, Inc. v. Block, 905 F.2d 12, 14 (2d Cir. 1990) (per curiam), and Deem v. DiMella-Deem,
941 F.3d 618, 621 (2d Cir. 2019), which address the domestic relations exception to federal subject
matter jurisdiction and the domestic relations abstention doctrine, such reliance is misplaced. She
argues that the district court lacked jurisdiction to decide the Divorce Order, because “divorce,
alimony, child support and maintenance, and child custody[] are . . . issues within the exclusive
domain of the state courts.” Appellant’s Br. at 30. Moreover, she contends that, even if the
district court had jurisdiction, it should have abstained, “in view of the greater interest and
expertise of state courts in this field.” Id. (quoting Am. Airlines, Inc., 905 F.2d at 14). However,
Ahmed is incorrect that either the domestic relations exception or the domestic relations abstention
doctrine applies in these circumstances. The domestic relations exception “divests the federal
courts of power to issue divorce, alimony, and child custody decrees.” Ankenbrandt v. Richards,
504 U.S. 689, 703 (1992). But the domestic relations exception does not apply where, as here,
the issue is before the court on federal question jurisdiction for violations of securities laws. See
9 Deem, 941 F.3d at 623 (“[T]he domestic relations exception clearly does not apply to this case
because it is before this Court on federal question jurisdiction, not diversity.” (internal quotation
marks and citation omitted)).
Ahmed’s argument for abstention fails for similar reasons. Under the domestic relations
abstention doctrine, “even if subject matter jurisdiction lies over a particular matrimonial action,
federal courts may properly abstain . . . in view of the greater interest and expertise of state courts.”
Deem, 941 F.3d at 621 (internal citation omitted). But there was no reason for the district court
to abstain here, as the Divorce Order merely prevented the execution of an agreement that would
allocate assets currently within the exclusive control of a receiver. See SEC v. Hardy, 803 F.2d
1034, 1038 (9th Cir. 1986) (“A district judge simply cannot effectively and successfully supervise
a receivership and protect the interests of its beneficiaries absent broad discretionary power.”).
Thus, as its clear language states, the Divorce Order did not “prejudice [] the right of the Ahmeds
to participate in divorce proceedings.” Special App’x at 8.
d. State Tax Order
The district court properly denied Ahmed’s motion to vacate a Connecticut tax levy and to
require the Connecticut Department of Revenue Services (“DRS”) to return funds to her bank
account. As a preliminary matter, Ahmed does not challenge the district court’s conclusion that
the “execution of the DRS tax warrants does not jeopardize the receivership estate.” Special
App’x at 11. Ahmed instead argues that the receiver owed her a fiduciary duty to pay taxes on
the income of the receivership estate. However, at least at this juncture, her claim that the
challenged taxes were for income to the receivership remains conclusory. Ahmed has yet to
10 provide further details or evidence to support this claim.
In any event, the Tax Injunction Act (“TIA”) barred the district court from granting the
relief Ahmed sought—to vacate the state tax levy and require the DRS to return funds to her bank
account. The TIA states that “[t]he district courts shall not enjoin, suspend or restrain the
assessment, levy or collection of any tax under State law where a plain, speedy and efficient
remedy may be had in the courts of such State.” 28 U.S.C. § 1341. This prohibition is
jurisdictional and bars district courts from exercising subject matter jurisdiction over claims for
either declaratory or injunctive relief. See Bernard v. Vill. of Spring Valley, 30 F.3d 294, 296–97
(2d Cir. 1994). Here, Ahmed’s injunctive claims were exactly those the TIA sought to cover,
namely, those that “seek federal-court orders enabling [state taxpayers] to avoid paying state
taxes.” Luessenhop v. Clinton Cnty., 466 F.3d 259, 267 (2d Cir. 2006) (emphasis in original)
(quoting Hibbs v. Winn, 542 U.S. 88, 107 (2004)).
Nor did Ahmed suggest that Connecticut’s state-court tax adjudications are procedurally
deficient. Instead, Ahmed argues that she was “unable to get relief from the Connecticut State
Court . . . because the [Connecticut Department of Revenue Services] has taken the position that
the underlying liability is not relevant to the issue of levy.” Appellant’s Br. at 38. However, a
“plain, speedy and efficient remedy” only requires adequate procedure; it does not guarantee the
taxpayer’s preferred outcome. Rosewell v. LaSalle Nat’l Bank, 450 U.S. 503, 522 (1981) (“The
overall purpose of the Tax Injunction Act is consistent with the view that the ‘plain, speedy and
efficient remedy’ exception to the Act’s prohibition was only designed to require that the state
remedy satisfy certain procedural criteria.”).
11 * * *
We have considered Ahmed’s remaining arguments and find them to be without merit.
Accordingly, we DISMISS as moot the appeal from the district court’s Certiorari Order, and
VACATE and REMAND the State Tax Order with instructions to dismiss for lack of jurisdiction.
We AFFIRM the three remaining orders from which Ahmed appeals.
FOR THE COURT: Catherine O’Hagan Wolfe, Clerk of Court