Securities and Exchange Commission v. Beasley

Opinion

1 Jarrod L. Rickard, Bar No. 10203 Kara B. Hendricks, Bar No. 07743 jlr@skrlawyers.com hendricksk@gtlaw.com 2 Katie L. Cannata, Bar No. 14848 Jason K. Hicks, Bar No. 13149 klc@skrlawyers.com hicksja@gtlaw.com 3 SEMENZA KIRCHER RICKARD Kyle A. Ewing, Bar No. 014051 10161 Park Run Drive, Suite 150 ewingk@gtlaw.com 4 Las Vegas, Nevada 89145 GREENBERG TRAURIG, LLP Telephone: (702) 835-6803 10845 Griffith Peak Drive, Suite 600 5 Facsimile: (702) 920-8669 Las Vegas, Nevada 89135 Telephone: (702) 792-3773 6 David R. Zaro (admitted pro hac vice) Facsimile: (702) 792-9002 dzaro@allenmatkins.com 7 Joshua A. del Castillo (admitted pro hac vice) jdelcastillo@allenmatkins.com 8 Matthew D. Pham (admitted pro hac vice) mpham@allenmatkins.com 9 ALLEN MATKINS LECK GAMBLE MALLORY & NATSIS LLP 10 865 South Figueroa Street, Suite 2800 Los Angeles, California 90017-2543 11 Telephone: (213) 622-5555 Facsimile: (213) 620-8816 12 Attorneys for Receiver Geoff Winkler 13

14 UNITED STATES DISTRICT COURT 15 DISTRICT OF NEVADA 16 17 SECURITIES AND EXCHANGE Case No. 2:22-cv-00612-CDS-EJY COMMISSION, 18 [PROPOSED] STIPULATED PROTECTIVE Plaintiff, ORDER (REGARDING PRODUCTION OF 19 DOCUMENTS, INFORMATION, AND vs. THINGS BY ECO CAPITAL, INC.) 20 MATTHEW WADE BEASLEY, et al., 21 Defendants, 22 THE JUDD IRREVOCABLE TRUST, et al., 23 Relief Defendants. 24 25 26 / / / 27 / / / 28 1 I. REQUEST FOR STIPULATED PROTECTIVE ORDER 2 A. Purposes and Limitations. 3 Discovery activity in this action is likely to involve the disclosure or production of 4 confidential, proprietary, or private information for which special protection from public 5 disclosure and from use for any purpose other than in connection with this action (or any related or 6 ancillary proceedings) may be warranted. Accordingly, Geoff Winkler (the "Receiver"), the 7 Court-appointed receiver, on the one hand, and Eco Capital, Inc. ("Eco Capital"), a nonparty in 8 this action, on the other hand, hereby stipulate to and petition the Court to enter the following 9 stipulated protective order (the "Order"). 10 B. Acknowledgement of Procedure for Filing Under Seal. 11 The Receiver and Eco Capital acknowledge, as set forth in Section X.C, below, that this 12 Order does not entitle them to file protected material under seal; LR IA 10-5 and the directives in 13 Kamakana v. City and County of Honolulu, 447 F.3d 1172 (9th Cir. 2006), set forth the procedures 14 that must be followed and the standards that will be applied when a party seeks permission from 15 the Court to file protected material under seal. 16 II. DEFINITIONS 17 1. "Action": The civil action captioned as SEC v. Beasley, et al. and bearing Case 18 No. 2:22-cv-00612-CDS-EJY, pending before this Court. 19 2. "Challenging Party": A Receiving Party that challenges a Designating Party's 20 designation of Discovery Material as Protected Material under this Order. 21 3. "CONFIDENTIAL" (with respect to Discovery Material): Material qualifying for 22 protection under Rule 26(c) of the Federal Rules of Civil Procedure or material that contains or 23 reflects confidential, non-public, proprietary, commercially sensitive, and/or private information 24 of an individual or entity. 25 4. "Counsel" (without qualifier): House Counsel or Outside Counsel. 26 5. "Designating Party": A Producing Party that designates Discovery Material as 27 Protected Material. 28 1 6. "Discovery Material": Information or items, regardless of the medium or manner 2 in which they are generated, stored, or maintained (including, among other things, testimony, 3 transcripts, and tangible things), that are disclosed or produced by a Producing Party in response to 4 discovery in this Action. 5 7. "Expert": A person with specialized knowledge or experience in a matter pertinent 6 to the litigation who has been retained by a Party or its counsel to serve as an expert witness or 7 consultant in this Action (or any related or ancillary proceedings). 8 8. "House Counsel": Any attorney who is an employee of a Party. House Counsel 9 does not include Outside Counsel or any other outside counsel of a Party. 10 9. "Outside Counsel": Any attorney who is not an employee of a Party but is retained 11 to represent or advise that Party and has appeared in this Action (or any related or ancillary 12 proceedings) on behalf of that Party or is affiliated with a law firm which has appeared on behalf 13 of that Party. 14 10. "Party": A Producing Party or Receiving Party. 15 11. "Producing Party": Eco Capital. 16 12. "Professional Vendor": Any person or entity that provides litigation support 17 services (e.g., photocopying, videotaping, translating, preparing exhibits or demonstrations, and 18 organizing, storing, or retrieving data in any form or medium) to a Party, including such person or 19 entity's employees and subcontractors. 20 13. "Protected Material": Any Discovery Material that has been designated as 21 "CONFIDENTIAL" under this Order; provided, however, that notwithstanding the foregoing, 22 Protected Material does not include the following information relating to a money transaction 23 reflected on a bank statement or other financial record produced by a Producing Party: (a) the 24 identities of the parties to the transaction (i.e., the payor and payee), (b) the names and addresses 25 of the financial institutions involved in the transaction, along with the last four digits of the 26 applicable account numbers, (c) the date of the transaction, (d) the amount of the transaction, and 27 (e) any identifying number for the transaction (i.e. a wire transfer identifier). 28 1 14. "Receiving Party": The Receiver. 2 III. SCOPE 3 The protections conferred by this Order cover not only Protected Material, but also (a) any 4 information copied or extracted from Protected Material; (b) all copies, excerpts, summaries, or 5 compilations of Protected Material; and (c) any testimony, conversations, or presentations by the 6 Parties or their counsel that might reveal Protected Material. However, the protections conferred 7 by this Order do not cover the following information: (y) any information that is in the public 8 domain at the time of disclosure to the Receiving Party or becomes part of the public domain after 9 its disclosure to the Receiving Party as a result of publication not involving a violation of this 10 Order, including becoming part of the public record through trial or otherwise; and (z) any 11 information known to the Receiving Party prior to the disclosure, or obtained by the Receiving 12 Party after the disclosure, from a source who obtained the information lawfully and under no 13 obligation of confidentiality to the Designating Party. Notwithstanding the foregoing, any 14 materials produced by the Producing Party to the plaintiff Securities and Exchange Commission in 15 connection with the above-entitled action, and subsequently shared with or obtained by the 16 Receiving Party, shall be deemed to be Protected Material. 17 Nothing in this Order shall be construed as preventing or restricting a Producing Party's 18 ability to disclose or use its Discovery Material for any purpose or precluding a Producing Party 19 from showing its Discovery Material to the person who prepared such material. 20 IV. DURATION 21 Even after the final discharge of the Receiver as the receiver or the termination of this 22 Action, the confidentiality obligations imposed on the Receiving Party by this Order for the benefit 23 of a Designating Party shall remain in effect unless otherwise waived in writing by the Designating 24 Party or ordered by the Court. 25 26 27 28 1 V. DESIGNATING PROTECTED MATERIAL 2 A. Manner and Timing of Designations. 3 Except as otherwise provided in this Order (see, e.g., the last paragraph of this subsection), 4 stipulated in writing by the Parties, or ordered by the Court, any Discovery Material that qualifies 5 for protection under this Order must be clearly so designated by the Designating Party before the 6 material is disclosed or produced. 7 Designation in conformity with this Order requires the following: 8 1. For information in documentary form (e.g., paper or electronic documents), that the 9 Designating Party affix the legend "CONFIDENTIAL" to each page of a document designated for 10 protection. 11 B. Failure to Designate. 12 The failure by a Producing Party to designate Discovery Material with the correct 13 confidentiality designation, shall not waive any such designation. If the Producing Party notifies all 14 Receiving Parties of a failure to designate materials as "CONFIDENTIAL," the Producing Party 15 shall reproduce the Protected Material with the correct confidentiality designation within ten (10) 16 days upon its notification to the Receiving Party. Upon receiving the Protected Material with the 17 correct confidentiality designation, the Receiving Parties shall destroy all Discovery Material that 18 was not designated properly. 19 Once a Receiving Party has received notice of the failure to designate pursuant to this 20 provision, the Receiving Party shall treat such Discovery Material as Protected Material. 21 VI. ACCESS TO AND USE OF PROTECTED MATERIAL 22 A. Basic Principles. 23 The Receiving Party may use Protected Material that is disclosed or produced by a 24 Producing Party in connection with this Action (or any related or ancillary proceedings) only for 25 prosecuting, defending, or attempting to settle the litigation therein, or otherwise in the 26 performance of the Receiver's duties as the receiver, including, without limitations, in connection 27 with the development and execution of a claims allowance process and the investigation and 28 1 prosecution of disgorgement actions or other litigation against third parties to recover receivership 2 assets. Such Protected Material may be disclosed only to the categories of persons and under the 3 conditions described in this Order. 4 B. Personally Identifying Information. 5 Eco Capital may be producing records that contain Personally Identifying Information of its 6 customers, which may include name, mailing address, telephone numbers, email addresses or other 7 personally identifiable information that can be used on its own or with other information to identify, 8 contact or locate an individual ("PII"). The Parties agree that any PII contained in documents 9 produced shall be treated as CONFIDENTIAL, pursuant to the terms of this Order. 10 C. Secure Storage. 11 Protected Material must be stored and maintained by a Receiving Party at a secure location 12 or in a secure database that ensures that access is limited to the persons authorized under this Order. 13 D. Disclosure of Protected Material. 14 Unless otherwise waived in writing by the Designated Party or ordered by the Court, the 15 Receiving Party may disclose Discovery Material designated as Protected Material only to the 16 following persons or entities: 17 1. The Receiving Party itself, along with its officers, directors, and employees 18 (including House Counsel) to whom disclosure is reasonably necessary for them to direct or assist 19 the Receiving Party or Outside Counsel in connection with this Action (or any related or ancillary 20 proceedings); 21 2. Any Outside Counsel for the Receiving Party, along with their paralegals and 22 support staff; 23 3. Any Experts retained by the Receiving Party or Outside Counsel to whom 24 disclosure is reasonably necessary for them to serve as an expert witness or as a consultant in this 25 Action (or any related or ancillary proceedings), provided that such Expert has executed the 26 Acknowledgement and Agreement to Be Bound that is attached hereto as Exhibit A; 27 28 1 4. The Court and its personnel, provided that any Protected Material that is filed with 2 the Court must be filed pursuant to the sealing procedures described in Section XI.C, below; 3 5. Any court reporters, stenographers, and videographers retained to record testimony 4 taken in this Action (or any related or ancillary proceedings); 5 6. Any deposition or trial witnesses, along with counsel for such witnesses, in this 6 Action (or any related or ancillary proceedings), provided that (a) the deposing Party has requested 7 that the witness execute the Acknowledgement and Agreement to Be Bound (Exhibit A), (b) the 8 witness will not be permitted to retain any Protected Material, and (c) any pages of the transcribed 9 deposition testimony or the exhibits to the deposition that reveal Protected Material must be 10 separately bound by the court reporter and may not be disclosed to any person or entity except as 11 permitted under this Order; 12 7. Any Professional Vendors to whom disclosure is reasonably necessary for them to 13 render support services to a Party for this Action (or any related or ancillary proceedings); 14 8. Any mediator who is assigned to hear a dispute in connection with this Action (or 15 any related or ancillary proceedings), as well as their staff, provided that the mediator agrees to 16 maintain confidentiality to the same degree as required by this Order; and 17 9. The author or recipient of a document containing the Protected Material or other 18 person who otherwise possessed the Protected Material, provided such person obtained the 19 Protected Material from a source who obtained the information lawfully and under no obligation 20 of confidentiality to the Designating Party. 21 VII. PROTECTED MATERIAL SUBPOENAED OR ORDERED PRODUCED IN 22 OTHER LITIGATION 23 If the Receiving Party is served with a subpoena or a court order issued in other litigation 24 (including any proceeding related or ancillary to this Action) that compels disclosure of any 25 Protected Material, the Receiving Party must promptly do the following: 26 1. Notify the Designating Party in writing of the Receiving Party's receipt of the 27 subpoena or court order, with such notification to include a copy of such subpoena or court order; 28 1 2. Notify the party who caused the subpoena or court order to issue in the other 2 litigation in writing that some or all of the material covered by the subpoena or court order is 3 subject to this Order, with such notification to include a copy of this Order; and 4 3. Cooperate with respect to all reasonable procedures sought to be pursued by the 5 Designating Party whose Protected Material may be affected. 6 VIII. UNAUTHORIZED DISCLOSURE OF PROTECTED MATERIAL 7 If the Receiving Party learns that it has disclosed Protected Material to a person or under a 8 circumstance not authorized under this Order, the Receiving Party must promptly do the 9 following: 10 1. Notify the Designating Party in writing of the unauthorized disclosure; 11 2. Use its best efforts to retrieve all unauthorized copies of the disclosed Protected 12 Material; 13 3. Inform the person to whom the unauthorized disclosure was made of the terms of 14 this Order; and 15 4. Request that such person execute the Acknowledgment and Agreement to Be Bound 16 (Exhibit A). 17 Unauthorized or inadvertent disclosure does not change the status of Discovery Material or 18 waive the right to hold the disclosed document or information as Protected Material. 19 IX. PRODUCTION OF PRIVILEGED OR OTHERWISE PROTECTED MATERIAL 20 The production of documents (including both paper documents and electronically stored 21 information) subject to protection by the attorney-client privilege, or otherwise subject to protection 22 under the work-product, joint defense or other similar doctrine, or by another legal privilege 23 protecting information from discovery, shall not constitute a waiver of any privilege or other 24 protection, provided that the Producing Party notifies the Receiving Party, in writing, of the 25 production after its discovery of the same. 26 If the Producing Party notifies the Receiving Party after discovery that privileged materials 27 (hereinafter referred to as the "Identified Materials") have been produced, the Identified Materials 28 1 and all copies of those materials shall be returned to the Producing Party or destroyed or deleted, on 2 request of the Producing Party. If the Receiving Party has any notes or other work product reflecting 3 the contents of the Identified Materials, the Receiving Party will not review or use those materials 4 unless a court later designates the Identified Materials as not privileged or protected. 5 The Identified Materials shall be deleted from any systems used to house the documents, 6 including document review databases, e-rooms and any other location that stores the documents. 7 The Receiving Party may make no use of the Identified Materials during any aspect of this matter or 8 any other matter, including in depositions or at trial, unless the documents are later designated by a 9 court as not privileged or protected. 10 The contents of the Identified Materials shall not be disclosed to anyone who was not already 11 aware of the contents of them before the notice was made. 12 If any Receiving Party is in receipt of a document from a Producing Party which the 13 Receiving Party has reason to believe is privileged, the Receiving Party shall in good faith take 14 reasonable steps to promptly notify the Producing Party of the production of that document so that 15 the Producing Party may make a determination of whether it wishes to have the documents returned 16 or destroyed pursuant to this Stipulated Protective Order. 17 The Party returning the Identified Materials may move the Court for an order compelling 18 production of some or all of the material returned or destroyed, but the basis for such a motion may 19 not be the fact or circumstances of the production. 20 The parties agree that this Order is an Order entered under Rule 502(d) of the Federal Rules 21 of Evidence and thus the disclosure of Identified Materials is not a waiver of the privilege in any 22 other federal or state proceeding. 23 This stipulated agreement set forth in Section IX does not constitute a concession by any 24 Party that any documents are subject to protection by the attorney-client privilege, the work product 25 doctrine or any other potentially applicable privilege or doctrine. This agreement also is not 26 intended to waive or limit in any way either Party's right to contest any privilege claims that may be 27 asserted with respect to any of the documents produced except to the extent stated in the agreement. 28 1 X. MISCELLANEOUS 2 A. Right to Further Relief. 3 Nothing in this Order abridges the right of any person to seek the modification of this 4 Order by the Court in the future. 5 B. Right to Assert Other Objections. 6 By stipulating to the entry of this Order, no Party waives any right it otherwise would have 7 to object to disclosing or producing any material on any ground not addressed in this Order. 8 Similarly, no Party waives any right to object on any ground to use in evidence of any of the 9 material covered by this Order. 10 C. Filing Protected Material. 11 Unless otherwise waived in writing by the Designating Party or ordered by the Court, the 12 Receiving Party may not file in the public record in this Action (or any related or ancillary 13 proceeding) any Protected Material. To the extent that the Receiving Party seeks to file any 14 Protected Material under seal, the Receiving Party must comply with LR IA 10-5. Protected 15 Material may only be and remain filed under seal pursuant to an order of this Court authorizing the 16 sealing of the specific Protected Material at issue. A sealing order will issue only upon a request 17 establishing that the Protected Material at issue is privileged, protectable as a trade secret, or 18 otherwise entitled to protection under the law. 19 If a request to file Protected Material under seal is denied by the Court, the Receiving Party 20 may file in the public record in this Action (or any related or ancillary proceeding) any Discovery 21 Material containing Protected Material, provided that such Protected Material has been sufficiently 22 redacted. 23 XI. FINAL DISPOSITION 24 Within 60 days after the final discharge of the Receiver as the receiver or the termination 25 of the Action, whichever is earlier, the Receiving Party must, upon request of a Designating 26 Party, return all Protected Material to the Designating Party or destroy all such Protected 27 Material, at the option of the Designating Party. As used in this section, "all Protected Material" 28 1 includes all copies, abstracts, compilations, summaries, and any other format reproducing or 2 capturing any of the Protected Material. Notwithstanding the foregoing, Counsel for the 3 Receiving Party is entitled to retain an archival copy of all pleadings, motion papers, trial, 4 deposition, and hearing transcripts, legal memoranda, correspondence, deposition and trial 5 exhibits, expert reports, attorney work product, and consultant and expert work product, even if 6 such materials refer to, contain, or constitute Protected Material; provided, however, that any 7 such archival copies that refer to, contain, or constitute Protected Material remain subject to this 8 Order as set forth in Section IV herein. 9 10 [SIGNATURES APPEAR ON THE FOLLOWING PAGE] 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 2 | IT IS SO STIPULATED, THROUGH COUNSEL OF RECORD. 4 | Dated: January 24, 2023 SEMENZA KIRCHER RICKARD 5 . /s/ Jarrod L. Rickard 6 Jarrod L. Rickard, Bar No. 10203 Katie L. Cannata, Bar No. 14848 7 10161 Park Run Drive, Suite 150 Las Vegas, Nevada 89145 ALLEN MATKINS LECK GAMBLE 9 MALLORY & NATSIS LLP David R. Zaro (admitted pro hac vice) 10 Joshua A. del Castillo (admitted pro hac vice) Matthew D. Pham (admitted pro hac vice) 11 865 South Figueroa Street, Suite 2800 Los Angeles, California 90017-2543 12 Attorneys for Receiver Geoff Winkler 13 14 | Dated: January 24, 2023 JACKSON WALKER LLP 15 . /s/ Jennifer S. Freel 16 Jennifer Freel 100 Congress Avenue, Suite 1100 17 Austin, TX 78701 18 Attorneys for Eco Capital, Inc. 19 IT IS SO ORDERED. 20 21 ELAYNA J. YO A UNITED STATES MAGISTRATE JUDGE 22 DATED: January 24, 2023 23 24 25 26 27 28 Leck Gamble