hamdan answer to sec.pdf

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UNITED STATES DISTRICT COURT EASTERN DISTRICT OF MICHIGAN SOUTHERN DIVISION UNITED STATES SECURITIES AND EXCHANGE COMMISSION, Plaintiff, v. RANDY A. HAMDAN and ORACLE CONSULTANTS, LLC, Defendants. Civil Action No. 13-15006-NGE-MKM ANSWER AND AFFIRMATIVE DEFENSES OF DEFENDANTS RANDY A. HAMDAN AND ORACLE CONSULTANTS LLC Defendants, Randy A. Hamdan (“Mr. Hamdan”) and Oracle Consultants, LLC (“Oracle Consultants”) (collectively, “Defendants”), submit their Answer and Affirmative Defenses to the Complaint filed by the United States Securities and Exchange Commission (the “SEC”) and state as follows: SUMMARY 1. Defendants admit only that Oracle Consultants, LLC is an entity wholly owned by Mr. Hamdan. As to the remaining allegations in this 2:13-cv-15006-NGE-MKM Doc # 9 Filed 02/03/14 Pg 1 of 11 Pg ID 29

description

Randy Hamdan's response to SEC legal complaint

Transcript of hamdan answer to sec.pdf

Page 1: hamdan answer to sec.pdf

UNITED STATES DISTRICT COURT EASTERN DISTRICT OF MICHIGAN

SOUTHERN DIVISION

UNITED STATES SECURITIES AND EXCHANGE COMMISSION, Plaintiff, v. RANDY A. HAMDAN and ORACLE CONSULTANTS, LLC, Defendants.

Civil Action No. 13-15006-NGE-MKM

ANSWER AND AFFIRMATIVE DEFENSES OF DEFENDANTS RANDY A.

HAMDAN AND ORACLE CONSULTANTS LLC

Defendants, Randy A. Hamdan (“Mr. Hamdan”) and Oracle

Consultants, LLC (“Oracle Consultants”) (collectively, “Defendants”), submit their

Answer and Affirmative Defenses to the Complaint filed by the United States

Securities and Exchange Commission (the “SEC”) and state as follows:

SUMMARY

1. Defendants admit only that Oracle Consultants, LLC is an

entity wholly owned by Mr. Hamdan. As to the remaining allegations in this

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paragraph, Defendants respectfully assert their rights to decline to answer based on

the Fifth Amendment to the United States Constitution.1

JURISDICTION AND VENUE

2. This paragraph states a legal conclusion to which no response is

required.

3. This paragraph states a legal conclusion to which no response is

required.

4. The first sentence of this paragraph states a legal conclusion to

which no response is required. Defendants admit that at all relevant times, he was a

resident of this District, and that Oracle Consultants is registered in Michigan to

Mr. Hamdan’s address. As to the remaining allegations in this paragraph, based on

the Fifth Amendment of the United States Constitution, Defendants respectfully

assert their rights to decline to answer.

DEFENDANTS

1The SEC has alleged that Mr. Hamdan’s allegedly improper trading

activities were the actions of Mr. Hamdan, conducted “through” or “in the name of” Oracle Consultants. Mr. Hamdan is the sole member and employee of Oracle Consultants. Under such circumstances, Oracle Consultants is not a collective entity, and a factfinder would inevitably conclude that Oracle Consultant’s answers are in fact the answers of Mr. Hamdan. Accordingly, Oracle is entitled to assert the rights afforded by the Fifth Amendment to the United States Constitution. Braswell v. United States, 487 U.S. 99, 118 n.11 (1988).

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5. Defendants admit the allegations in the first sentence of this

paragraph. As to the remaining allegations in this paragraph, based on the Fifth

Amendment of the United States Constitution, Defendants respectfully assert their

rights to decline to answer.

6. Defendants admit that at all times relevant herein, Defendant

Oracle Consultants was a Michigan-registered limited liability company.

Defendants further admit that Mr. Hamdan is the sole member of the company,

which he formed in April 2009. As to the remaining allegations in this paragraph,

based on the Fifth Amendment of the United States Constitution, Defendants

respectfully assert their rights to decline to answer.

RELEVANT ENTITY

7. Defendants, upon information and belief, admit the allegations

contained in the first two sentences of this paragraph. Upon information and belief,

Defendants deny the allegations contained in the third sentence of this paragraph.

Defendants admit that CompuSonics traded at prices below $5.00 per share.

Defendants lack sufficient knowledge to admit or deny the remaining allegations in

this paragraph.

FACTS

8. Defendants respectfully assert their rights to decline to answer

based on the Fifth Amendment to the United States Constitution.

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9. Defendants respectfully assert their rights to decline to answer

based on the Fifth Amendment to the United States Constitution.

10. Defendants respectfully assert their rights to decline to answer

based on the Fifth Amendment to the United States Constitution.

11. Defendants respectfully assert their rights to decline to answer

based on the Fifth Amendment to the United States Constitution.

12. Defendants respectfully assert their rights to decline to answer

based on the Fifth Amendment to the United States Constitution.

13. Defendants respectfully assert their rights to decline to answer

based on the Fifth Amendment to the United States Constitution.

14. Defendants respectfully assert their rights to decline to answer

based on the Fifth Amendment to the United States Constitution.

15. Defendants respectfully assert their rights to decline to answer

based on the Fifth Amendment to the United States Constitution.

16. Defendants respectfully assert their rights to decline to answer

based on the Fifth Amendment to the United States Constitution.

17. Defendants respectfully assert their rights to decline to answer

based on the Fifth Amendment to the United States Constitution.

18. Defendants respectfully assert their rights to decline to answer

based on the Fifth Amendment to the United States Constitution.

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19. Defendants respectfully assert their rights to decline to answer

based on the Fifth Amendment to the United States Constitution.

20. Defendants respectfully assert their rights to decline to answer

based on the Fifth Amendment to the United States Constitution.

21. Defendants respectfully assert their rights to decline to answer

based on the Fifth Amendment to the United States Constitution.

22. Defendants respectfully assert their rights to decline to answer

based on the Fifth Amendment to the United States Constitution.

23. Defendants respectfully assert their rights to decline to answer

based on the Fifth Amendment to the United States Constitution.

24. Defendants lack sufficient knowledge and information to admit

or deny the allegations in the second sentence of this paragraph. As to the

remaining allegations contained in this paragraph, Defendants respectfully assert

their rights to decline to answer based on the Fifth Amendment to the United States

Constitution.

25. Defendants respectfully assert their rights to decline to answer

based on the Fifth Amendment to the United States Constitution.

26. Defendants lack sufficient knowledge and information to admit

or deny the allegations in this paragraph.

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27. Defendants respectfully assert their rights to decline to answer

based on the Fifth Amendment to the United States Constitution.

28. Defendants respectfully assert their rights to decline to answer

based on the Fifth Amendment to the United States Constitution.

29. Defendants respectfully assert their rights to decline to answer

based on the Fifth Amendment to the United States Constitution.

30. Defendants respectfully assert their rights to decline to answer

based on the Fifth Amendment to the United States Constitution.

31. Defendants respectfully assert their rights to decline to answer

based on the Fifth Amendment to the United States Constitution.

32. Defendants respectfully assert their rights to decline to answer

based on the Fifth Amendment to the United States Constitution.

33. Defendants respectfully assert their rights to decline to answer

based on the Fifth Amendment to the United States Constitution.

34. Defendants respectfully assert their rights to decline to answer

based on the Fifth Amendment to the United States Constitution.

35. Defendants respectfully assert their rights to decline to answer

based on the Fifth Amendment to the United States Constitution.

36. Defendants respectfully assert their rights to decline to answer

based on the Fifth Amendment to the United States Constitution.

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37. Defendants respectfully assert their rights to decline to answer

based on the Fifth Amendment to the United States Constitution.

38. Defendants respectfully assert their rights to decline to answer

based on the Fifth Amendment to the United States Constitution.

39. Upon information and belief, Defendants deny that

CompuSonics did not have operations or a transfer agent. As to the remaining

allegations in this paragraph, Defendants respectfully assert their rights to decline

to answer based on the Fifth Amendment to the United States Constitution.

40. Defendants respectfully assert their rights to decline to answer

based on the Fifth Amendment to the United States Constitution.

41. Defendants lack sufficient knowledge and information to admit

or deny the allegations contained in this paragraph.

42. Defendants respectfully assert their rights to decline to answer

based on the Fifth Amendment to the United States Constitution.

43. Defendants respectfully assert their rights to decline to answer

based on the Fifth Amendment to the United States Constitution.

44. Defendants respectfully assert their rights to decline to answer

based on the Fifth Amendment to the United States Constitution.

FIRST CLAIM FOR RELIEF

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45. Defendants incorporate by reference their answers to

paragraphs 1 through 44.

46. This paragraph states a legal conclusion to which no response is

required. To the extent the allegations are deemed factual, Defendants respectfully

assert their rights to decline to answer based on the Fifth Amendment to the United

States Constitution.

47. This paragraph states a legal conclusion to which no response is

required. To the extent the allegations are deemed factual, Defendants respectfully

assert their rights to decline to answer based on the Fifth Amendment to the United

States Constitution.

48. This paragraph states a legal conclusion to which no response is

required. To the extent the allegations are deemed factual, Defendants respectfully

assert their rights to decline to answer based on the Fifth Amendment to the United

States Constitution.

SECOND CLAIM FOR RELIEF

49. Defendants incorporate by reference their answers to

paragraphs 1 through 44.

50. This paragraph states a legal conclusion to which no response is

required. To the extent the allegations are deemed factual, Defendants respectfully

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assert their rights to decline to answer based on the Fifth Amendment to the United

States Constitution.

51. This paragraph states a legal conclusion to which no response is

required. To the extent the allegations are deemed factual, Defendants respectfully

assert their rights to decline to answer based on the Fifth Amendment to the United

States Constitution.

52. This paragraph states a legal conclusion to which no response is

required. To the extent the allegations are deemed factual, Defendants respectfully

assert their rights to decline to answer based on the Fifth Amendment to the United

States Constitution.

AFFIRMATIVE DEFENSES

1. The SEC’s claims are barred, in whole or in part, by the

doctrines of waiver, estoppel, laches, ratification, unclean hands and/or failure to

mitigate.

2. Any award of unreasonably high civil penalties or unreasonably

restrictive injunctive remedies would violate the Due Process Clauses of the Fifth

and Fourteenth Amendments to the United States Constitution, as well as

guaranties contained in the Sixth and Eighth Amendments thereto.

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3. Any award of unreasonably high civil penalties or unreasonably

restrictive injunctive remedies would be inequitable in light of mitigating facts and

circumstances.

Dated: February 3, 2014 Respectfully submitted,

/s/ Deborah Kovsky-Apap MATTHEW J. LUND (P48632) DEBORAH KOVSKY-APAP (P68258) Pepper Hamilton LLP Suite 1800 4000 Town Center Southfield, Michigan 48075 248.359.7300 248.359.7700 [email protected] [email protected]

Attorneys for Defendants Randy A. Hamdan and Oracle Consultants, LLC

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CERTIFICATE OF SERVICE

I hereby certify that on February 3, 2014, I caused the foregoing Answer and Affirmative Defenses of Defendants Randy A. Hamdan and Oracle Consultants, LLC to be electronically filed with the Clerk of the Court and notice will be sent by operation of the Court’s electronic filing service to all ECF participants registered to receive notice in this case.

Dated: February 3, 2014 /s/ Deborah Kovsky-Apap

MATTHEW J. LUND (P48632) DEBORAH KOVSKY-APAP (P68258) Pepper Hamilton LLP Suite 1800 4000 Town Center Southfield, Michigan 48075 248.359.7300 248.359.7700 [email protected] [email protected]

Attorneys for Defendants Randy A. Hamdan and Oracle Consultants, LLC

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