United States Securities and Exchange Commission v. Ruiz

Opinion

USDC SDNY DOCUMENT SOUTHERN DISTRICT OF NEW YORK DOC #: ccna a a naan IK DATE FILED: 9/25/2021 UNITED STATES SECURITIES AND EXCHANGE : COMMISSION, : Plaintiff, : 21-cv-6622 (LJL) -V- : ORDER MARTIN ADRIAN RUIZ, RAM FUND, LP, and : CARTER BAIN WEALTH MANAGEMENT, LLC, : Defendants, and : ROTHSCHILD MAGNUS FUND, LP, ISG CAPITAL : LLC, and MISTER FARMS, LLC, : Relief Defendants :

LEWIS J. LIMAN, United States District Judge: Defendants move for a stay of this case in favor of parallel criminal proceedings that have not ripened into an indictment. Dkt. No. 57. The request originally was made by defendant Ruiz through his criminal counsel who has not yet appeared in this action. Dkt. No. 56. The United States Securities and Exchange Commission (“SEC”) opposes the request but consents to an adjournment of “all past and future deadlines for 45 days to allow Ruiz to pursue pre- indictment plea negotiations.” Dkt. No. 55 at 2. “A total stay of civil discovery pending the outcome of related criminal proceedings . . . is an extraordinary remedy.” In re Par Pharmaceutical, Inc. Sec. Litig., 133 F.R.D. 12, 13-14 (S.D.N.Y. 1990). Indeed, it has been held that “discovery in a civil action brought by the Securities and Exchange Commission ought to proceed in the normal course, notwithstanding the happenstance that some of the discovery also relates to a parallel criminal matter.” S.E.C. v. Saad, 384 F. Supp. 2d 692, 693 (S.D.N.Y. 2005). To the extent that issues arise that might compromise (1) the government’s criminal case or (2) the defendant’s Fifth Amendment rights, those issues often can be addressed through more narrowly tailored remedies than the blunderbluss approach of a stay of an entire case against persons who are not named as defendants in the criminal case. See generally id. That said, there is some wisdom to the notion of delaying further proceedings for a limited period for Ruiz to continue his plea negotiations. At the end of the 45 day stay, the Court and the parties will have a better sense of the status of the criminal case and its potential impact on discovery on this case. The case and all proceedings are stayed for 45 days without prejudice to the right of any party to move the Court

to lift the stay at an earlier time. The initial pretrial conference in this case is adjourned to November 22, 2021 at 3:00 p.m. SO ORDERED. - eS weit Slr Dated: September 25, 2021 □□ New York, New York LEWIS J. LIMAN United States District Judge