Securities and Exchange Commission v. Cornerstone Acquisition and Management Company LLC, Derren L. Geiger, and She Hwea Ngo

• Court: District Court, S.D. California
• Decided: May 19, 2026
• Docket: 3:22-cv-00765
• Status: Unknown

Opinion

1 2 3 4 5 6 7 8 UNITED STATES DISTRICT COURT 9 SOUTHERN DISTRICT OF CALIFORNIA 10 11 SECURITIES AND EXCHANGE Case No.: 22-CV-765 JLS (VET) COMMISSION, 12 ORDER REGARDING MOTIONS IN Plaintiff, 13 LIMINE v. 14 (ECF Nos. 90, 94) CORNERSTONE ACQUISITION AND 15 MANAGEMENT COMPANY LLC, 16 DERREN L. GEIGER, and SHE HWEA NGO, 17 Defendants. 18 19 Presently before the Court are Plaintiff Securities and Exchange Commission’s 20 (“Plaintiff” or “SEC”) Motions in Limine (ECF Nos. 90, 94). The Court heard oral 21 argument on April 30, 2026, and thereafter took the Motions under submission. Having 22 considered the Parties’ arguments and the law, the Court rules as follows. 23 I. SEC’s Motion in Limine No. 1 (Exclude Evidence Concerning the Wealth or 24 Financial Sophistication of Defendants’ Investors) 25 The SEC first seeks to preclude Defendants from introducing evidence concerning 26 the wealth or financial sophistication of actual or prospective investors in the Bermuda 27 Fund. ECF No. 90 (“MIL”) at 3. The SEC argues that its claims concern Defendants’ 28 conduct, and thus, the characteristics of individual investors are not relevant. Id. at 4. 1 Plaintiff further contends that insofar as Defendants argue that this evidence is relevant to 2 the materiality of the alleged fraud, jurors must apply an objective reasonable investor 3 standard, which does not depend on the characteristics of actual investors. Id. Further, 4 even if the Court found that it was relevant, such evidence would be far more prejudicial 5 than probative. Id. at 3. Defendants respond that contrary to what the SEC claims, the 6 reasonable investor standard must be based on characteristics of the investors in the market 7 at issue. ECF No. 98 (“MIL Opp’n”) at 2. 8 The Court RESERVES RULING on the Motion, as evidence of investor 9 sophistication may be relevant to materiality. Materiality requires showing “a substantial 10 likelihood that a reasonable investor would have acted differently if the misrepresentation 11 had not been made.” Livid Holdings Ltd. v. Salomon Smith Barney, Inc., 416 F.3d 940, 12 946 (9th Cir. 2005). To evaluate materiality, courts apply the “objective standard of a 13 ‘reasonable investor.’” In re Alphabet, Inc. Sec. Litig., 1 F.4th 687, 699 (9th Cir. 2021); 14 United States v. Reyes, 577 F.3d 1069, 1075 (9th Cir. 2009) (“[T]he standard of materiality 15 is judged from the perspective of a ‘reasonable investor,’ and is therefore an objective 16 one.”). After reviewing the cases relied on by Defendants in support of their position that 17 evidence of investor sophistication is relevant to this standard, the Court must consider the 18 evidence in the context in which it is offered before ruling on the Motion. See MIL Opp’n 19 at 2 (first citing United States v. Litvak, 889 F.3d 56, 64–65 (2d Cir. 2018) (“The standard 20 of a ‘reasonable investor,’ like the negligence standard of a ‘reasonable man,’ is an 21 objective one. The standard may vary, therefore, with the nature of the traders involved in 22 the particular market.” (citations omitted)); then citing McCormick v. Fund Am. Cos., Inc., 23 26 F.3d 869, 879 (9th Cir. 1994); and then citing SEC v. Am. Growth Funding II, LLC, No. 24 16-CV-828 (KMW), 2019 WL 1748186, at *4–5 (S.D.N.Y. Apr. 19, 2019) (rejecting 25 identical argument made by the SEC and concluding that “investor sophistication is 26 relevant to materiality” and that “any prejudice can be addressed through a jury 27 instruction”)). 28 / / / 1 II. SEC’s Motion in Limine No. 2 (Exclude Evidence Concerning the Investment 2 Returns of Defendants’ Investors) 3 The SEC’s second Motion seeks to exclude evidence of investors’ financial returns, 4 arguing that such evidence is not relevant to the SEC’s claims and Defendants’ defenses. 5 MIL at 5. The SEC argues that since it is not required to show that Defendants’ fraud 6 resulted in harm or damages, the fact that some investors made profits is not a defense. Id. 7 5–6. Further, even if the Court finds evidence of investors’ financial returns relevant, it 8 will confuse the jury to believe that Defendants are not liable simply because investors 9 profited and that Defendants’ conduct was excusable. Id. at 6. 10 Defendants respond that they are not asserting a “no harm, no foul” defense. MIL 11 Opp’n at 6. Rather, they argue that evidence showing the historical returns to Defendants’ 12 investors, including the disclosure that investors lost money in certain months, is relevant 13 to both the materiality and scienter elements of the SEC’s claims. Id. at 4. Further, 14 Cornerstone’s past performance was part of the “total mix” of information available to 15 investors for the purposes of materiality. Id. Defendants’ truthful disclosure to prospective 16 investors of historical returns, including past investor losses, is also relevant to scienter. 17 Id. at 6. 18 The Court DENIES the Motion and finds that evidence of investment returns is 19 relevant to materiality and scienter.1 Materiality requires consideration of the “total mix 20 of information” available to investors. TSC Indus., Inc. v. Northway, Inc., 426 U.S. 438, 21 449 (1976). The Court agrees with Defendants that investment returns were part of the 22 “total mix of information” available to investors, and thus, are relevant to materiality. 23 Likewise, the Court agrees with Defendants that evidence of the disclosure of losses is 24 relevant, as “[r]obust disclosure of risks and problems further ‘negates an inference’” of 25 scienter. City of Roseville Employees’ Ret. Sys. v. Sterling Fin. Corp., 963 F. Supp. 2d 26

27 1 As the Court noted at the hearing, and the SEC acknowledged, there is likely a “middle ground” on 28 admitting evidence of investor returns, and the Court’s ruling does not mean that Defendants will have 1 1092, 1142 (E.D. Wash. 2013), aff’d, 691 F. App’x 393 (9th Cir. 2017) (internal quotation 2 marks and citation omitted); see also In re Dot Hill Sys. Corp. Sec. Litig., 594 F. Supp. 2d 3 1150, 1160 (S.D. Cal. 2008) (“Disclosing the precise risks at issue negates an inference of 4 scienter.” (internal quotation marks and citation omitted) (cleaned up)). That the SEC need 5 not show that the alleged fraud resulted in harm or damages does not negate the relevance 6 of the evidence. The probative value of the evidence outweighs any potential prejudice, 7 which may be addressed through a limiting instruction if necessary. 8 III. SEC’s Motion in Limine No. 3 (Exclude Evidence and Argument That 9 Defendants Did Not Intend to Harm Investors) 10 The SEC’s third Motion seeks to exclude evidence and argument that Defendants 11 did not intend to harm investors because whether Defendants meant to harm or even help 12 their investors is irrelevant to the claims and defenses in this case. MIL at 6. The SEC 13 argues that it is not required to show “intent to injure and actual injury to the client” to 14 prove fraud, and to require so would “defeat the manifest purpose” of the federal securities 15 law. Id. The SEC further argues that evidence Defendants did not intend to harm investors 16 is not relevant to scienter because the SEC can satisfy the scienter requirement by showing 17 “knowing or reckless conduct” without a showing of “willful intent to defraud.” Id. at 7. 18 Admitting such evidence would mislead the jury about the standard for scienter. Id. 19 Defendants respond that the SEC improperly attempts “to use the scienter standard 20 as a basis for excluding evidence on a motion in limine.” MIL Opp’n at 8. The jury must 21 weigh the evidence and determine whether Defendants acted with scienter; thus, evidence 22 relevant to scienter should not be excluded on a motion in limine. Id. The SEC’s request 23 to exclude “any evidence that Defendants did not intend to harm investors” is overbroad 24 and “could conceivably cover Defendants’ entire defense.” Id. 25 The Court DENIES the Motion, as it is not persuaded by the SEC’s argument that 26 simply because it is not required to show a “willful intent to defraud,” that evidence to the 27 contrary is not relevant or would mislead the jury about the standard for scienter. True, in 28 the Ninth Circuit, “a violation of Exchange Act § 10(b) and Rule 10b–5 may be supported 1 by ‘knowing or reckless conduct,’ without a showing of ‘willful intent to defraud.’” 2 Vernazza v. S.E.C., 327 F.3d 851, 860 (9th Cir. 2003), amended, 335 F.3d 1096 (9th Cir. 3 2003) (quoting Nelson v. Serwold, 576 F.2d 1332, 1337 (9th Cir.1978)). However, it is not 4 clear to the Court why Defendants should be precluded from offering evidence that they 5 did not intend to harm investors, as it may also negate “knowing or reckless conduct.” 6 Permitting Defendants to put forth such evidence does not somehow require the SEC to 7 prove additional elements. 8 IV. SEC’s Motion in Limine No. 4 (Preclude Evidence or Argument Concerning 9 Investor Reliance) 10 The SEC’s fourth Motion seeks to preclude evidence or argument at trial concerning 11 whether any investor relied on the alleged fraudulent conduct or otherwise was aware that 12 the loans at issue were not secured. MIL at 8. The SEC argues that it does not need to 13 prove investor reliance on alleged fraudulent conduct; therefore, “such evidence is simply 14 irrelevant.” Id. Even if Defendants can demonstrate such evidence is relevant, it would be 15 unfairly prejudicial and confuse and mislead the jury. Id. at 8–9. 16 Defendants respond that evidence of reliance and investor awareness of the truth is 17 relevant to materiality and scienter. MIL Opp’n at 9. Defendants assert they will show 18 that they “fully informed investors that the loan was unsecured,” and thus “investors could 19 not have been misled into believing that the opposite was true.” Id. at 10. Defendants 20 further contend that the SEC’s request is overbroad; excluding such evidence would 21 “mislead the jury into thinking that Defendants had concealed information that, in fact, 22 they had fully disclosed.” Id. 23 The Court DENIES the Motion to the extent it seeks to exclude evidence of investor 24 reliance or awareness. Although the SEC need not prove investor reliance, as Defendants 25 point out, “if investors knew the truth, then they cannot have been defrauded.” MIL Opp’n 26 at 9. As such, evidence of investor awareness that the loans at issue were not secured is 27 relevant to materiality and scienter. The Court further DENIES the Motion to the extent 28 it seeks to exclude Defendants’ disclosures to investors that the loans were not secured. As 1 discussed, this evidence is relevant to materiality and scienter. 2 V. SEC’s Motion in Limine No. 5 (Preclude Defendants from Asserting a Defense 3 That They Acted in “Good Faith” by Relying on the Advice of Counsel or Other 4 Professionals) 5 The SEC’s fifth Motion seeks to preclude Defendants from arguing that their 6 discussions with counsel or auditors support a good faith defense. MIL at 9. The SEC 7 argues that Defendants cannot meet the requirements for admitting evidence as to good 8 faith reliance on counsel or other professionals; Defendants have presented evidence only 9 that they received tax advice relating to the structure of the promissory notes, not legal 10 advice as to whether the alleged fraudulent conduct violated securities laws. Id. at 9–10. 11 The SEC further argues that Defendants failed to make the required disclosures to their tax 12 attorneys and auditors. Id. at 10–12. 13 Defendants respond that the SEC’s motion is not a proper motion in limine because 14 it seeks to limit Defendants’ argument as to its good faith rather than evidence of 15 Defendants’ interactions with counsel and other professionals. MIL Opp’n at 11. 16 According to Defendants, the SEC could have, but did not, request that the Court resolve 17 Defendants’ good faith defense at summary judgment. Id. 18 The Court RESERVES RULING on the SEC’s Motion. The Court finds that the 19 Motion is premature, as “[a] motion in limine is not a proper vehicle for a party to ask the 20 Court to weigh the sufficiency of the evidence to support a particular claim or defense.” 21 Elliott v. Versa CIC, L.P., 349 F. Supp. 3d 1000, 1002 (S.D. Cal. 2018) (internal quotation 22 marks and citation omitted) (cleaned up). Defendants may introduce evidence of reliance 23 on the advice of counsel or other professionals if they first demonstrate that they: “(1) made 24 a complete disclosure to counsel; (2) requested counsel’s advice as to the legality of the 25 contemplated action; (3) received advice that it was legal; and (4) relied in good faith on 26 that advice.” S.E.C. v. Goldfield Deep Mines Co. of Nevada, 758 F.2d 459, 467 (9th Cir. 27 1985) (citing Sec. & Exch. Comm’n v. Savoy Indus., Inc., 665 F.2d 1310, 1328 n.28 (D.C. 28 Cir. 1981)). At trial, Defendants will have the opportunity to point to evidence of good 1 faith, and the Court will then determine if they have satisfied the requirements to present 2 such evidence to the jury.2 3 VI. SEC’s Motion in Limine No. 6 (Exclude Evidence Concerning the Impact of the 4 SEC’s Investigation and This Litigation on Defendants) 5 The SEC’s sixth Motion seeks to preclude Defendants from presenting evidence 6 concerning the impact of the SEC’s investigation and this litigation on Defendants at trial 7 because it is entirely irrelevant to the claims and defenses at issue. MIL at 12. Defendants 8 respond that the SEC’s request is moot because “the sole basis for bringing this motion is 9 deposition testimony which neither side has designated for trial.” MIL Opp’n at 15. As 10 the evidence will not be introduced by either side at trial, the Court DENIES the Motion. 11 VII. SEC Motion in Limine No. 7 (Exclude Deposition Testimony of Stephan 12 Gerwert) 13 In its final Motion, the SEC seeks to preclude Defendants from introducing the 14 deposition testimony by written questions of Stephan Gerwert (“Mr. Gerwert”), a 15 prospective Cornerstone investor, because the deposition violates German Law and the 16 Federal Rules of Civil Procedure. ECF No. 94 (“Gerwert MIL”) at 2. For the reasons 17 discussed below, the Court DENIES the Motion. 18 A. Whether the Hague Convention or Federal Rules of Civil Procedure Apply to 19 Mr. Gerwert’s Deposition 20 The SEC first argues that, under the balancing test set forth in Societe Nationale 21 Industrielle Aerospatiale v. U.S. Dist. Ct. for S. Dist. of Iowa, 482 U.S. 522 (1987), the 22

23 2 The Court agrees with Defendants that the case the SEC relies on in support of its Motion is 24 distinguishable. See MIL at 11; MIL Opp’n at 11 n.1. In Abdo v. Fitzsimmons, the defendants did not argue or intend to argue “that all four elements [of good faith were] satisfied”; therefore, admitting 25 evidence that defendants were advised by counsel, without more, ran the risk of confusing the jury and prejudicing the plaintiffs. No. 17-CV-00851-TSH, 2022 WL 2276898, at *2 (N.D. Cal. June 23, 2022). 26 The court granted the plaintiffs’ motion in limine, but qualified that its ruling “was subject to modification at trial” if defendants could “proffer that they can make a complete advice of counsel showing.” Id. *4. 27 Here, as discussed, Defendants indicate that they intend to meet the required elements of a good faith 28 defense. See MIL Opp’n at 11–15. Therefore, the Court will not preclude argument and evidence as to 1 Hague Evidence Convention, and therefore German law, should apply to Gerwert’s 2 deposition. Gerwert MIL at 5–6. The SEC argues that the evidence was not important 3 because Defendants waited until the last two weeks of discovery to take the deposition, and 4 none of the testimony Mr. Gerwert provided originated in the United States. Id. at 6. In 5 taking the deposition as they did, Defendants “undermined the clearly stated important 6 interests of the German state.” Id. Furthermore, the SEC asserts that Defendants violated 7 Germany’s requirements for obtaining testimony from witnesses in Germany, which 8 includes obtaining permission before taking testimony and possible participation by the 9 authority granting permission. Id. In proceeding with a deposition that violated German 10 law, Defendants “released the SEC from any obligation to attend and participate.” Id. at 7. 11 Defendants respond that the Parties did not have to follow the Hague Evidence 12 Convention procedures. ECF No. 97 (“Gerwert Opp’n”) at 4. Defendants argue that courts 13 typically require Hague Convention procedures only when international comity requires it, 14 and comity concerns are typically resolved during discovery—not after the fact to preclude 15 the use of the evidence. Id. at 5. Defendants argue that they regardless prevail under the 16 Aerospatiale factors: (1) Mr. Gerwert’s testimony is “extremely important” because it 17 undercuts fraudulent intent and materiality; (2) the deposition was only seventeen minutes 18 long with twenty-two specific questions; (3) the testimony concerned Mr. Gerwert’s 19 interactions with Defendant Geiger, so the information originated from both Europe and 20 the United States; (4) the SEC does not dispute the difficulty of obtaining evidence under 21 Hague procedures; and (5) the U.S.’s interest in providing a fair trial to Defendants 22 outweighs Germany’s interests. Id. at 6. Defendants also argue that Mr. Gerwert’s 23 deposition did not violate Germany’s law regulating the administration of an oath because 24 no oath was administered. Id. at 3. Instead, Mr. Gerwert provided a declaration under 25 penalty of perjury pursuant to 28 U.S.C. § 1746 following the deposition. Id. 26 The Court first notes that the SEC’s Motion is procedurally atypical. As Defendants 27 suggest, whether to pursue evidence under the Hague Convention or under the Federal 28 Rules of Civil Procedure is usually a discovery issue. The Aerospatiale factors are 1 considered before evidence is obtained to determine how to do so. The Court nevertheless 2 applies the Aerospatiale factors and finds that the Federal Rules of Civil Procedure govern 3 Mr. Gerwert’s deposition. 4 In Aerospatiale, the Supreme Court held that the Hague Convention does not provide 5 the exclusive and mandatory procedures for obtaining evidence in another country and 6 instead provides just one method to obtain evidence. 482 U.S. at 529. In determining 7 whether to permit discovery under the Federal Rules of Civil Procedure as opposed to the 8 Hague Convention, courts apply the five Aerospatiale factors: 9 10 (1) the importance to the . . . litigation of the documents or other information requested; 11 (2) the degree of specificity of the request; 12 (3) whether the information originated in the United States; (4) the availability of alternative means of securing the information; and 13 (5) the extent to which noncompliance with the request would 14 undermine important interests of the United States, or compliance with the request would undermine important interests of the state where the 15 information is located. 16 17 Id. at 544 n.28 (internal quotation marks and citation omitted). 18 First, Mr. Gerwert’s testimony is relevant to considering scienter and materiality. 19 See, e.g., Gerwert MIL, Ex. K (“Gerwert Tr.”) at 11:19-12:21 (answering “no” to the 20 question, “Did you consider a potential investment in the Cornerstone funds to be an 21 investment in secured debt?”); see also St. Jude Med. S.C., Inc. v. Janssen-Counotte, 104 22 F. Supp. 3d 1150, 1166 (D. Or. 2015) (Evidence “‘directly relevant’ to the outcome of the 23 litigation . . . weighs in favor of disclosure.”) (“[T]he more important the evidence sought, 24 the greater a party’s claim to using the straightforward and efficient procedures of the 25 Federal Rules.”). The Court is not persuaded by the SEC’s argument that the timing of Mr. 26 Gerwert’s deposition inherently suggests his testimony is not important. See Gerwert MIL 27 at 6. 28 Second, the Court agrees with Defendants, and the SEC does not dispute, that the 1 evidence sought is highly specific and imposed no significant burdens to produce, 2 particularly given the deposition has already been conducted via video. See BrightEdge 3 Techs., Inc. v. Searchmetrics, GmbH., No. 14-CV-1009-WHO (MEJ), 2014 WL 3965062, 4 at *3 (N.D. Cal. Aug. 13, 2014) (“Under this factor, the Court examines the extent to which 5 the discovery requests will burden the party from whom production is sought as generalized 6 searches for information, disclosure of which is prohibited under foreign law, are 7 discouraged.” (internal quotation marks and citation omitted) (cleaned up)). 8 Third, because the information disclosed in this case was possessed by Mr. Gerwert, 9 who resided in Germany at the time of the deposition, this factor weighs in favor of the 10 Hague Convention. Richmark Corp. v. Timber Falling Consultants, 959 F.2d 1468, 1475 11 (9th Cir. 1992) (“The fact that all the information to be disclosed (and the people who will 12 be deposed or who will produce the documents) are located in a foreign country weighs 13 against disclosure, since those people and documents are subject to the law of that country 14 in the ordinary course of business.” (citation omitted)). 15 Fourth, the Court agrees that obtaining Mr. Gerwert’s deposition testimony prior to 16 the end of discovery through Hague Convention procedures would have been “difficult, if 17 not impossible.”3 See Gerwert Opp’n at 6 (citing In re Cathode Ray Tube (CRT) Antitrust 18 Litig., No. C-07-5944-SC, 2014 WL 5462496, at *6 (N.D. Cal. Oct. 23, 2014)). 19 Additionally, because Defendants sought Mr. Gerwert’s testimony in light of the SEC’s 20 reliance on the email exchange between Defendant Geiger and Mr. Gerwert, the 21 information sought “likely could not have been easily . . . obtained elsewhere.” Richmark, 22 959 F.2d at 1475. 23 Finally, the Court is not convinced that obtaining Mr. Gerwert’s testimony by written 24 deposition questions, followed by a written declaration, undermines the “important 25 interests of the German state.” Gerwert MIL at 6. Balancing the factors, the Court finds 26

27 3 Though, either the SEC or Defendants could have sought an extension for discovery deadlines and court 28 intervention to determine whether German law or the Federal Rules of Civil Procedure applied to the 1 that the Federal Rules of Civil Procedure apply to Mr. Gerwert’s deposition. The Court 2 therefore need not determine whether Mr. Gerwert’s deposition violated German law and 3 instead considers whether it violated the Federal Rules. 4 B. Whether Mr. Gerwert’s Deposition Violated the Federal Rules of Civil 5 Procedure 6 The SEC argues that Defendants violated Federal Rule of Civil Procedure 7 32(a)(1)(A) because the SEC did not have reasonable notice of the deposition. Gerwert 8 MIL at 8. The SEC further argues that it informed Defendants that it could not participate 9 because the deposition would violate German law, yet Defendants proceeded with the 10 deposition without providing further notice as to the date, time, and location of the 11 deposition.4 Id. at 5. Defendants respond that Mr. Gerwert’s deposition complied with 12 Rule 31, which governs depositions by written questions. Gerwert Opp’n at 7. Thus, the 13 SEC had reasonable notice when provided the opportunity to submit questions for cross- 14 examination. Id. 15 When a party seeks to depose a person by written questions under Rule 31, the party 16 “must serve [the questions] on every other party, with a notice stating, if known, the 17 deponent’s name and address” and “the state the name or descriptive title and the address 18 of the officer before whom the deposition will be taken.” Fed. R. Civ. P. 31(a)(3). Cross- 19

20 4 At the hearing, the SEC suggested for the first time that Federal Rule of Evidence 603 precludes the use 21 of Mr. Gerwert’s deposition at trial because his deposition was not taken under oath. The Court disagrees. Rule 603 requires that, “[b]efore testifying, a witness must give an oath or affirmation to testify truthfully.” 22 Fed. R. Evid. 603. An affirmation “is recognized by federal law” and “is simply a solemn undertaking to tell the truth; no special verbal formula is required.” Fed. R. Evid. 603 advisory committee’s notes to 23 proposed rules. “‘Oath’ includes affirmation.” Id. (citing 1 U.S.C. § 1). The Court finds that Mr. 24 Gerwert’s signing of an unsworn declaration under penalty of perjury pursuant to 29 U.S.C. § 1746 satisfies the “oath or affirmation” requirement under Federal Rule of Evidence 603. See United States v. 25 Bueno-Vargas, 383 F.3d 1104, 1109–1111, 1111 n.9 (9th Cir. 2004) (“We conclude that signing a statement under penalty of perjury satisfies the standard for an oath or affirmation, as it is a signal that the 26 declarant understands the legal significance of the declarant’s statements and the potential for punishment if the declarant lies.”); see also United States v. Ward, 989 F.2d 1015, 1019 (9th Cir. 1992) (“[T]here is 27 no constitutionally or statutorily required form of oath. Federal Rule of Evidence 603 requires only that 28 a witness ‘declare that the witness will testify truthfully, by oath or affirmation administered in a form 1 questions must be served on all parties “within 14 days after being served with the notice 2 and direct questions.” Id. (a)(5). The officer conducting the deposition must “(1) take the 3 deponent’s testimony in response to the questions; (2) prepare and certify the deposition; 4 and (3) send it to the party, attaching a copy of the questions and of the notice.” Id. (b). 5 The party who noticed the deposition “must notify all other parties when it is completed.” 6 Id. (c)(1). Separately but relatedly, under Rule 32, a deposition may be used against a party 7 at trial if “the party was present or represented at the taking of the deposition or had 8 reasonable notice of it.” Fed. R. Civ. P. 32. “What constitutes reasonable notice depends 9 on the circumstances of each case.” Tabbert v. Howmedica Osteonics, No. 2:15-CV- 10 00039-SMJ, 2017 WL 10311420, at *4 (E.D. Wash. Sept. 29, 2017). 11 Here, Defendants provided the SEC with a notice of deposition on May 16, 2024, 12 satisfying Rule 31. See Gerwert MIL, Exs. A–C. Albeit on account of legal objections to 13 the deposition, the SEC had the opportunity to but did not submit cross-questions. See id., 14 Exs. A–E. On August 13, 2024, Defendants provided a transcript of the deposition and 15 notified the SEC that the deposition was taken on July 11, 2024, and that Mr. Gerwert 16 provided a written declaration and approved the transcript on August 12, 2024. See id., 17 Ex. F. The SEC argues that Defendants failed to provide reasonable notice because they 18 did not provide a date for the deposition. Gerwert MIL at 8. However, Rule 31 does not 19 require that the party seeking a deposition by written questions include a date for the 20 deposition—in contrast to Rule 30, which governs depositions by oral examination and 21 requires notice of “the time and place of the deposition.” Fed. R. Civ. P. 30(b)(1). And 22 here, the SEC not only received the required notice of deposition under Rule 31 but also 23 engaged in back-and-forth discussion about the deposition with Defendants. See Gerwert 24 MIL, Exs. B–F (“We have conducted meet and confer sessions regarding this deposition 25 notice, both telephonically and in-person.”). The Court is therefore unpersuaded by the 26 SEC’s argument that it did not have reasonable notice under Rule 32. The Court is equally 27 unmoved by the argument that the deposition is inadmissible because the SEC was “not 28 present or represented at the taking of Mr. Gerwert’s deposition.” Gerwert MIL at 8. As 1 Defendants point out, because it was a deposition by written questions, none of the Parties 2 were present and instead were required to submit their questions in advance of the 3 deposition. See Fed. R. Civ. P. 31(a)(5). Therefore, the Court concludes that the deposition 4 did not violate the Federal Rules of Civil Procedure. 5 C. Prejudice & Fairness Concerns 6 The SEC argues that it would be prejudiced by the use of Mr. Gerwert’s deposition 7 at trial because it did not have an opportunity for cross-examination. Gerwert MIL at 10. 8 Defendants argue that due process and fairness necessitate admitting the testimony if the 9 SEC “opens the door” to its admission. Gerwert Opp’n at 9. The SEC intends to rely on 10 a June 9, 2016, email exchange between Defendant Geiger and Mr. Gerwert to support its 11 allegations of fraud. Id. Defendants argue that the SEC now attempts to block the jury 12 from hearing from Mr. Gerwert himself because it contradicts their claims. Id. at 1. 13 The Court finds that the SEC would not be “severely prejudiced” if the deposition 14 were introduced at trial. The SEC had the opportunity to submit cross-questions or seek 15 Court intervention to address its concerns over violating German law—but did not. On the 16 other hand, the Court finds that failing to admit the deposition testimony at trial deprives 17 Defendants of the opportunity to address the June 9, 2016, email between Defendants and 18 Mr. Gerwert. See ECF No. 1 ¶ 41 (quoting email, in which Defendant Geiger states, 19 “Offshore [the Bermuda Fund] has priority over Onshore [the U.S. Fund] due to Note being 20 secured debt”). Furthermore, because Mr. Gerwert’s deposition was conducted by written 21 questions rather than in-person with the Parties present—and Defendants’ proposed 22 questions to Mr. Gerwert were provided to the SEC beforehand—the risk of prejudice is 23 diminished. 24 In sum, the Court finds that Mr. Gerwert’s deposition did not violate the Federal 25 Rules and therefore DENIES the Motion. 26 / / / 27 / / / 28 / / / 1 CONCLUSION 2 In light of the foregoing, the Court (1) RESERVES RULING on the SEC’s Motion 3 || in Limine No. 1 (ECF No. 90); (2) DENIES the SEC’s Motion in Limine No. 2 (ECF No. 4 || 90); (3) DENIES the SEC’s Motion in Limine No. 3 (ECF No. 90); (4) DENIES the SEC’s 5 || Motion in Limine No. 4 (ECF No. 90); (5) RESERVES RULING on the SEC’s Motion 6 || in Limine No. 5 (ECF No. 90); (6) DENIES the SEC’s Motion in Limine No. 6 (ECF No. 7 and (7) DENIES the SEC’s Motion in Limine No. 7 (ECF No. 94). The Court SETS 8 remote Status Conference for July 23, 2026, at_10:00 a.m. to update the Court on 9 ||settlement efforts and to schedule trial if necessary. The Parties SHALL contact the 10 || Courtroom Deputy, Adrianna Garcia, at Adrianna_Garcia@casd.uscourts.gov to obtain the 11 call-in information. 12 IT IS SO ORDERED. 13 ||Dated: May 19, 2026 . □□ f Le 14 on. Janis L. Sammartino 15 United States District Judge 16 17 18 19 20 21 22 23 24 25 26 27 28