SECURITIES AND EXCHANGE COMMISSION v. MCDERMOTT

District Court, E.D. Pennsylvania·Decided June 24, 2022·No. 5:19-cv-04229·Unknown

Opinion

IN THE UNITED STATES DISTRICT COURT FOR THE EASTERN DISTRICT OF PENNSYLVANIA

SECURITIES AND EXCHANGE CIVIL ACTION COMMISSION,

Plaintiff, NO. 19-4229-KSM

v.

DEAN PATRICK MCDERMOTT, et al.,

Defendants.

ORDER

AND NOW, this 24th day of June, 2022, it is hereby ORDERED as follows: 1. Upon consideration of Defendants’ Motion to Preclude Evidence on the Timing of Prospectus Delivery (Doc. No. 82) and Plaintiff’s Opposition to Defendants’ Motion to Preclude Evidence on the Timing of Prospectus Delivery (Doc. No. 99), it is hereby ordered that Defendants’ Motion to Preclude Evidence on the Timing of Prospectus Delivery (Doc. No. 82) is DENIED. 2. Upon consideration of Defendants’ Motion in Limine to Preclude Plaintiff from Introducing Irrelevant Brokerage Account Documents (Doc. No. 83) and Plaintiff’s Opposition to Defendants’ Motion in Limine to Preclude Plaintiff from Introducing Irrelevant Brokerage Account Documents (Doc. No. 100), it is hereby ordered that Defendants’ Motion in Limine to Preclude Plaintiff from Introducing Irrelevant Brokerage Account Documents (Doc. No. 83) is GRANTED. 3. Upon consideration of Defendants’ Motion in Limine to Preclude Evidence Referencing Commission and Judicial Opinions (Doc. No. 84) and Plaintiff’s Opposition to Defendants’ Motion in Limine to Preclude Evidence Referencing Commission and Judicial Opinions (Doc. No. 102), it is hereby ordered that Defendants’ Motion in Limine to Preclude Evidence Referencing Commission and Judicial Opinions (Doc. No. 84) is GRANTED. 4. Upon consideration of Defendants’ Motion in Limine to Preclude Plaintiff from Introducing Certain Evidence or Testimony Related to Dean McDermott’s Ph.D. from LaSalle University (Doc. No. 85), Plaintiff’s Opposition to Defendants’ Motion in Limine to Preclude

Plaintiff from Introducing Certain Evidence or Testimony Related to Dean McDermott’s Ph.D. from LaSalle University (Doc. No. 101), and Plaintiff’s Supplemental Submission in Further Support of Its Opposition to Defendants’ Motion in Limine to Preclude Plaintiff from Introducing Certain Evidence or Testimony Related to Dean McDermott’s Ph.D. from LaSalle University (Doc. No. 107), it is hereby ordered that Defendants’ Motion in Limine to Preclude Plaintiff from Introducing Certain Evidence or Testimony Related to Dean McDermott’s Ph.D. from LaSalle University (Doc. No. 85) is GRANTED. 5. Upon consideration of Defendants’ Motion to Preclude Evidence and References Related to Settlement Orders (Doc. No. 86) and Plaintiff’s Opposition to Defendants’ Motion to

Preclude Evidence and References Related to Settlement Orders (Doc. No. 102), it is hereby ordered that Defendants’ Motion to Preclude Evidence and References Related to Settlement Orders (Doc. No. 86) is GRANTED. 6. Upon consideration of Plaintiff’s Motion in Limine to Preclude Testimony Containing Legal Conclusions and Misstating the Law Concerning an Investment Adviser’s Duty to Act in Clients’ Best Interests and to Seek Best Execution (Doc. No. 87) and Defendants’ Response to Plaintiff’s Motion in Limine to Preclude Testimony Containing Legal Conclusions and Misstating the Law Concerning an Investment Adviser’s Duty to Act in Clients’ Best Interests and to Seek Best Execution (Doc. No. 96), it is hereby ordered that Plaintiff’s Motion in Limine to Preclude Testimony Containing Legal Conclusions and Misstating the Law Concerning an Investment Adviser’s Duty to Act in Clients’ Best Interests and to Seek Best Execution (Doc. No. 87) is GRANTED IN PART and DENIED IN PART. 7. Upon consideration of Plaintiff’s Motion in Limine to Preclude Evidence and Argument About Examinations Conducted by Other Entities (Doc. No. 88) and Defendants’

Opposition to Plaintiff’s Motion in Limine to Preclude Evidence and Argument About Examinations Conducted by Other Entities (Doc. No. 95), Plaintiff’s Motion in Limine to Preclude Evidence and Argument About Examinations Conducted by Other Entities (Doc. No. 88) is GRANTED IN PART and DENIED IN PART. 8. Upon consideration of Plaintiff’s Motion in Limine to Preclude Argument, Testimony, or Other Evidence Relating to Internal SEC Communications or the SEC Examination Process (Doc. No. 89) and Defendants’ Response to Plaintiff’s Motion in Limine to Preclude Argument, Testimony, or Other Evidence Relating to Internal SEC Communications or the SEC Examination Process (Doc. No. 94), it is hereby ordered that Plaintiff’s Motion in

Limine to Preclude Argument, Testimony, or Other Evidence Relating to Internal SEC Communications or the SEC Examination Process (Doc. No. 89) is DENIED. The Court reserves its ruling on the admissibility of the draft examination findings letters. The Commission SHALL produce the policies and procedures governing the examination process in effect during the Relevant Period, and such policies and procedures will be admissible at trial. 9. Upon consideration of Plaintiff’s Motion in Limine to Preclude Argument, Testimony, or Other Evidence Relating to Events Occurring After the Relevant Period (2013- 2014) (Doc. No. 90) and Defendants’ Opposition to Plaintiff’s Motion in Limine to Preclude Argument, Testimony, or Other Evidence Relating to Events Occurring After the Relevant Period (2013-2014) (Doc. No. 97), it is hereby ordered that Plaintiff’s Motion in Limine to Preclude Argument, Testimony, or Other Evidence Relating to Events Occurring After the Relevant Period (2013-2014) (Doc. No. 90) is DENIED. 10. Upon consideration of Plaintiff’s Motion in Limine to Treat Certain Witnesses as Adverse Parties (Doc. No. 91) and Defendants’ Response to Plaintiff’s Motion in Limine to

Treat Certain Witnesses as Adverse Parties (Doc. No. 98), it is hereby ordered that Plaintiff’s Motion in Limine to Treat Certain Witnesses as Adverse Parties (Doc. No. 91) is GRANTED IN PART and DENIED IN PART. It is FURTHER ORDERED that the objections to specific exhibits contained in the parties’ pretrial memoranda (Docs. No. 103 & 104), are GRANTED IN PART and DENIED IN PART, as detailed in Appendices A and B to this Order. IT IS SO ORDERED. /s/ Karen Spencer Marston ______________________________ KAREN SPENCER MARSTON, J. APPENDIX A The Court’s Rulings on Defendants’ Objections to the Commission’s Exhibits Exhibit Document Objection Ruling See Order on Deposition Investigative Testimony of Charles 25 Fed. R. Evid. 802 Designations Bowers, dated December 18, 2018

(forthcoming) See Order on Deposition Investigative Testimony of Daniel 26 Fed. R. Evid. 802 Designations Nemeth, dated December 18, 2018

(forthcoming) See Order on Deposition Deposition Testimony of Kathleen 29 Fed. R. Evid. 802 Designations McDermott, dated July 24, 2020

(forthcoming) See Order on Deposition Deposition Testimony of Ara Jabrayan, 30 Fed. R. Evid. 802 Designations dated November 5, 2020

(forthcoming) Declaration of Ara Jabrayan, 31 Fed. R. Evid. 802 SUSTAINED dated September 9, 2019 In re Arleen W. Hughes, 27 S.E.C. 629 73 Fed. R. Evid. 403 SUSTAINED (1948) Securities and Exchange Commission v. 74 Capital Gains Research Bureau, Inc., Fed. R. Evid. 403 SUSTAINED No. 84 S. Ct. 275 (1963) In re Kidder, Peabody & Co., Inc., 43 75 Fed. R. Evid.

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SECURITIES AND EXCHANGE COMMISSION v. MCDERMOTT, (E.D. Pa. 2022).

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