Case 1:11-mc-00678-RLW Document 40 Filed 08/22/12 Page 1 of 14

IN THE UNITED STATES DISTRICT COURT FOR THE DISTRICT OF COLUMBIA ) ) ) ) ) ) ) ) ) ) )

Securities and Exchange Commission, Applicant, v. Securities Investor Protection Corporation, Respondent.

MISC. NO. 11-MC-678-RLW

SECURITIES INVESTOR PROTECTION CORPORATIONS OPPOSITION TO MOTION TO INTERVENE

Eugene F. Assaf, P.C. (D.C. Bar #449778) Edwin John U (D.C. Bar #464526) John OQuinn (D.C. Bar # 485936) Elizabeth M. Locke (D.C. Bar # 976552) Michael W. McConnell (admitted pro hac vice) Susan Marie Davies (admitted pro hac vice) KIRKLAND & ELLIS LLP 655 Fifteenth Street, N.W., Suite 1200 Washington, DC 20005 Tel: (202) 879-5000 Fax: (202) 879-5200 eugene.assaf@kirkland.com edwin.u@kirkland.com john.oquinn@kirkland.com

Josephine Wang (D.C. Bar #279299) General Counsel Securities Investor Protection Corporation 805 Fifteenth Street, N.W. Washington, D.C. 20005 Tel: (202) 371-8300 jwang@sipc.org

August 22, 2012

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INTRODUCTION On July 24, 2012, Richard Cheatham filed a motion to intervene and to suspend the Courts July 3 Opinionthree weeks after the fact. Although he provides no documentary evidence in support of his assertions, Cheatham contends that brokers from the Stanford Group Company (SGC) purchased Stanford International Bank, Ltd. (SIBL) CDs for him without his knowledge, and that the SEC failed to consider the atypical nature of these CD purchases in pursuing its case. The Court should reject Cheathams thirteenth-hour motion for three separate and independent reasons. First, intervention must be timely, Fed. R. Civ. P. 24, and Cheathams request is anything but. Cheatham provides no reason whatsoever why his request should be considered at this stage of the case, especially when there is a presumption that post-judgment motions to intervene will be denied. Associated Builders & Contractors, Inc. v. Herman, 166 F.3d 1248, 1257 (D.C. Cir. 1999). The purpose of Rule 24 intervention is to preserve judicial economy by encouraging similar claims to be joined and pursued together, see Wash. Elec. Coop., Inc. v. Mass. Mun. Wholesale Elec. Co., 922 F.2d 92, 97 (2d Cir. 1990)whereas allowing intervention at this point would create inefficiencies and thus contravene what the rule was designed to promote. Second, a proposed intervenor must have a legally recognized interest relating to the property or transaction that is the subject of the action, Fed. R. Civ. P. 24(a)(2)and Cheatham does not. After all, this litigation is about whether the SEC may compel SIPC to liquidate the various Stanford entities. Nothing in 15 U.S.C. 78ggg(b) permits participation by individual investors, and allowing intervention would undercut the careful delineation between the SEC, SIPC and private plaintiffs that the Supreme Court articulated in SIPC v. Barbour, 421 U.S. 412,

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425 (1975). Indeed, a ruling allowing the investing public to intervene as of right once the SEC elects to proceed under Section 78ggg(b) would take control over such litigation out of the SECs and SIPCs handsin direct contravention of Barbour itself. Finally, Cheathams motion must be rejected because the SEC adequately represents his interests. See Fed. R. Civ. P. 24(a)(2) (intervention not allowed if existing parties adequately represent [the putative intervenors] interest). The SEC brought this case on behalf of investors like Cheatham, and its incentives in doing so were squarely aligned with his own. The only reason that Cheatham provides to justify intervention is that the SEC purportedly ignored his atypical facts. The problem for Cheatham, however, is that he admits that he gave his brokers discretionary authority to invest on his behalf, and that the CDs they purchased are being held for him by the Stanford Trust Company and not the broker-dealerall of which is entirely consistent with the SECs stipulated facts. None of this provides grounds for Cheatham to intervene, much less to demand the suspension of the Courts July 3 Opinion. ARGUMENT I. CHEATHAM DOES NOT MEET THE REQUIREMENTS FOR INTERVENTION AS A MATTER OF RIGHT UNDER RULE 24. Federal Rule of Civil Procedure 24(a) states that, [o]n timely motion, a party may intervene as a matter of right where he claims an interest relating to the property or transaction that is the subject of the action, and is so situated that disposing of the action may as a practical matter impair or impede [his] ability to protect [his] interest, unless existing parties adequately represent that interest. Thus, [a]s paraphrased by the D.C. Circuit, the rule indicates that an applicants right to intervene depends on (1) the timeliness of the motion; (2) whether the applicant claims an interest relating to the property or transaction which is the subject of the action; (3) whether the applicant is so situated that the disposition of the action may as a practical 2

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matter impair or impede the applicants ability to protect that interest; and (4) whether the applicants interest is adequately represented by existing parties. Envtl. Def. v. Leavitt, 329 F. Supp. 2d 55, 65-66 (D.D.C. 2004) (quoting Fund for Animals, Inc. v. Norton, 322 F.3d 728, 731 (D.C. Cir. 2003)). Cheatham does not and cannot satisfy any of these requirements. His motion is not timely, having been brought after this Court entered judgment ending the case. Nor does Cheatham have a legally recognized interest that the law protects, because SIPAs structure and purposes demonstrate that only the SEC (not private plaintiffs) may sue under 15 U.S.C. 78ggg(b). Finally, intervention as of right is neither necessary nor appropriate where, as here, one of the parties adequately represents the proposed intervenors interests. A. Cheathams Motion Is Untimely.

As a threshold matter, Cheathams motion fails because Rule 24(a) requires requests to intervene to be timely. [T]imeliness is to be judged in consideration of all the circumstances, especially weighing the factors of time elapsed since the inception of the suit, the purpose for which intervention is sought, the need for intervention as a means of preserving the applicants rights, and the probability of prejudice to those already parties in the case. United States v. Am. Tel. & Tel. Co., 642 F.2d 1285, 1295 (D.C. Cir. 1980) (citing Moten v. Bricklayers Intl Union, 543 F.2d 224, 228 (D.C. Cir. 1976)). All of this weighs squarely against Cheathams position. Over six months have passed since the SEC began these expedited proceedings, and Cheathams motion offers nothing to explain why he could not have sought to intervene earlier. Cheatham does not claim that he lacked knowledge of the parties dispute, nor could he, given the widespread media coverage about it (even before the SEC filed suit). Courts have not hesitated to deny intervention after the

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passage of similar lengths of time.1 See, e.g., Famous Joes Pizza, Inc. v. Vitale, 2011 WL 2693276, at *2 (S.D.N.Y. June 29, 2011) (denying intervention [b]ecause Thomas waited nearly five months to file); Weyend v. Hubman Foundation, 2007 WL 3377162, at *1 (E.D. Tex. June 28, 2007) (denying intervention because [t]his case has been pending for over six months). More importantly, however, Cheatham waited to intervene until after this Court had already dismissed the case with prejudice. Under these circumstances, the D.C. Circuit has concluded that intervention is presumptively untimely and should be denied. See Associated Builders & Contractors, Inc., 166 F.3d at 1257 (A motion for intervention after judgment will usually be denied where a clear opportunity for pre-judgment intervention was not taken.) (quoting Dimond v. D.C., 792 F.2d 179, 193 (D.C. Cir. 1986)); see also id. (noting the presumption that post-judgment motions to intervene will be denied); Moten v. Bricklayers, Masons & Plasterers Intl Union of Am., 543 F.2d 224, 227-28 (D.C. Cir. 1976) (denying motion to intervene and holding that cases in this Circuit permitting post-judgment intervention should not be controlling where clear opportunity for pre-judgment intervention was not taken); Rubin v. Islamic Republic of Iran, 270 F.R.D. 7, 11 (D.D.C. 2010) (noting that [t]his Circuit has made clear that [a] motion for intervention after judgment will usually be denied) (internal quotation marks and citation omitted); Democratic Senatorial Campaign Comm. v. Fed. Election Commn, 918 F. Supp. 1, 4-5 (D.D.C. 1994) (The Court finds that the NRSCs motion to intervene as a party, filed four days after the final judgment in this action, is untimely.). This makes sense. After all, the purpose of intervention is to permit the intervenors perspective to be considered while the litigation is pending, in order to promote judicial efficiency and avoid multiple bites at the apple. See Mass. Sch. of Law v. United States, 118
1

Cheathams motion to intervene is untimely even if compared to the date of the parties stipulations rather than the SECs initial filings. Cheatham waited over four months from the date of the stipulations and until well after the ultimate adjudication of the case before seeking to intervene.

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F.3d 776, 783 n.5 (D.C. Cir. 1997) (describing efforts to enter proceedings after judgment as inexcusabl[e] neglect given that intervention before judgment would have permitted consideration of the intervenors position in the first instance). And Cheathams delay is made even more unreasonable by the fact that he offers no explanation for it whatsoever. See

Associated Builders & Contractors, 166 F.3d at 1257 (denying intervention where movant had offered no reason why [he] could not have sought intervention prior to judgment); E. Ky. Welfare Rights Org. v. Schultz, 1974 WL 506, at *1 (D.D.C. Jan. 28, 1974) (The untimeliness of the AHAs request as well as its failure to give adequate justification for any delay is most apparent. The reasoning presented by the Association for resting until after an opinion had been rendered before seeking an appearance is wholly unacceptable.). If anything, Cheathams request to suspend the Courts July 3 Order would delay the ultimate resolution of this litigation and require a wasteful and unnecessary expenditure of party and judicial resources. See Perles v. Kagy, 394 F. Supp. 2d 68, 75 (D.D.C. 2005) (Had Fay intervened at any point in the five years prior to judgment being entered, this issue could have been litigated. To raise the issue now, after the parties in the case and the Court have relied on the understanding that the funds were being held in trust for Kagy would unduly prejudice the parties and delay the case.). This is why courts strictly enforce Rule 24s timeliness

requirement rather than allowing putative intervenors to lie in wait and see if they like the outcome of the case. B. Cheatham Does Not Have A Legally Protected Interest That Will Impaired By This Courts July 3, 2012 Order. Be

In addition to being untimely, Cheathams motion fails for the straightforward reason that he lacks an interest relating to the property or transaction that is the subject of the action here. Fed. R. Civ. P. 24(a)(2). Intervention requires a legally protectable interest, not just any interest 5

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the applicant can put forward. S. Christian Leadership Conference v. Kelley, 747 F.2d 777, 779 (D.C. Cir. 1984) (emphasis in original). Cheatham does not and cannot demonstrate a legally recognized interest that the law protects. In particular, this case is not about whether Cheatham has been defrauded or whether he has claims against his SGC brokers. Instead, this case concerns whether the SEC can compel SIPC to initiate a liquidation and what standards should apply to such disputes. There is no question that only the SEC, not private plaintiffs, can even bring a proceeding under 15 U.S.C. 78ggg(b). As that provision explains: In the event of the refusal of SIPC to commit its funds or otherwise to act for the protection of customers of any member of SIPC, the Commission may apply to the district court of the United States in which the principal office of SIPC is located for an order requiring SIPC to discharge its obligations under this chapter and for such other relief as the court may deem appropriate to carry out the purposes of this chapter. 15 U.S.C. 78ggg(b) (emphasis added). As the Supreme Court held in SIPC v. Barbour, nothing in that provision allows participation by private plaintiffs, and the overall structure and purpose of the SIPC scheme would be incompatible with such an implied right. 421 U.S. at 421; see also id. at 425 ([W]e are unable to agree with the proposition that the customers of a member broker may sue to compel the SIPC to perform its statutory functions.); In re Adler, Coleman Clearing Corp., 1998 WL 551972, at *31 (Bankr. S.D.N.Y. Aug. 24, 1998) ([T]here is no private right of action available to a SIPA customer to compel SIPC to exercise its statutory rights and obligations. Private actions would defeat SIPAs statutory scheme .) (citations omitted). As the Court therefore observed in its July 3, 2012 Opinion, persons claiming to be customers of a broker dealer do not have an implied right of action under the [SIPA] to compel [SIPC] to exercise its statutory authority for their benefit. (July 3, 2012 Mem. Op. and Order 6

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(Dkt. 34) (citation omitted)). And as Cheatham himself has conceded, individual customers of SGC have no private right of action to enforce their SIPC insurance claims unless SIPC voluntarily acknowledges those claims by instituting a receivership proceeding involving its member broker dealer or unless the SEC forces it to do so in a proceeding such as this one. (July 24, 2012 Mem. in Support of Mot. To Intervene (Dkt. 36-1) at 5-6 (emphasis added)).2 At bottom, Cheatham cannot use Rule 24 intervention to circumvent what Barbour commands. See Barbour, 421 U.S. at 425 (Instead of enlisting the aid of investors in achieving that purpose, Congress imposed upon the SEC, the exchanges, and the self-regulatory organizations the obligation to report to the SIPC any situation that might call for its intervention.). The Supreme Court itself has held that disputes over compelling a liquidation are to be litigated between the SEC and SIPC. Because Cheatham lacks the right to sue on those matters, he cannot claim to have a legally protected interest in the litigation before the Court. Cf. SEC v. Prudential Secs. Inc., 136 F.3d 153, 160 (D.C. Cir. 1998) ([A]ppellants have no legally protected interest in enforcing the terms of the consent decree. Hence, they have no right to intervene in the proceedings between the Commission and Prudential to enforce the decree.). C. Cheathams Interests Are Adequately Represented By The Parties.

Finally, Cheatham cannot intervene because his interests are adequately represented by the parties to this litigation. As the movant, Cheatham bear[s] the burden of demonstrating that the plaintiffs will inadequately represent [his] interests, and, to do so, must produce something more than speculation as to the purported inadequacy. Aref v. Holder, 774 F. Supp. 2d 147,

Cheatham also mischaracterizes SIPA as insurance (see Mem. in Support of Mot. to Intervene at 1 (As noted in the Order, beneficiaries of SIPC insurance are precluded from individually enforcing SIPCs obligation to them.) (emphasis added))when SIPC in fact administers a program limited by law pursuant to a particularized statutory regime. See In re Bernard L. Madoff Inv. Secs. LLC, 654 F.3d 229, 239 (2d Cir. 2011); SEC v. Albert & Maguire Sec. Co., 560 F.2d 569, 572 n. 2 (3d Cir. 1977); In re Stratton Oakmont, Inc., 2003 WL 22698876, at *5 (S.D.N.Y. Nov. 14, 2003).

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172 (D.D.C. 2011) (quoting Moosehead Sanitary Dist. v. S.G. Phillips Corp., 610 F.2d 49, 54 (1st Cir. 1979)). [T]he courts have been quite ready to presume that a government defendant will adequately represent the interests of all private defenders of the statute or regulation unless there is a showing to the contrary. And while there are various ways to show that state representation is not adequate, the burden of overcoming the presumption is on the would-be intervenor. Mass. Food Assn v. Mass. Alcoholic Beverages Control Commn, 197 F.3d 560, 567 (1st Cir. 1999)); see also Envtl. Def. Fund, Inc. v. Higginson, 631 F.2d 738, 740 (D.C. Cir. 1979) ([A] state that is a party to a suit involving a matter of sovereign interest is presumed to represent the interests of all its citizens.). Cheatham, however, makes no allegations that his interests diverge from the SECs, because they plainly do not. The SEC purports to have brought this case for putative

customers, including Cheatham himself. See Barbour, 421 U.S. at 425; In re Adler, 1998 WL 551972, at *31. Indeed, the SEC sought precisely the same relief as Cheatham ultimately seeks in his motion to intervene: an order compelling SIPC to initiate a liquidation proceeding. Cf. SEC v. Qualified Pensions, Inc., 1998 WL 29496, at *4 (D.D.C. Jan. 16, 1998) (denying intervention in light of adequate representation because [the SEC] is statutorily commissioned to represent the interests of individual investors in the public at large, such as applicants). Nor can Cheatham support his position by claiming that the SEC overlooked the atypical facts of his purchase of SIBL CDs, becauseeven on its own termsthe position he describes is squarely consistent with the stipulated facts that the parties presented for the benefit of the Court. While Cheatham contends that he was unaware that his brokers purchased SIBL CDs using his funds and that he did not authorize those transactions, he admits that he had already grant[ed] discretionary investment authority to [his brokers] in their capacity as

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registered representatives of SGC. (Mem. in Support of Mot. to Intervene at 4.) Under these circumstances, it is irrelevant that Cheatham did not personally undertake to open an account with SIBL, write a check that was deposited into SIBL accounts, or authorize that money be wired to SIBL for the purpose of purchasing CDs, (id. at 2) (internal quotation marks omitted), because he admits that he granted his brokers discretionary authority to take those very same actions on his behalf. Moreover, because Cheatham admits that the CDs he purchased are not held in custody for him by his brokers at SGC, he cannot have a customer claim against them. (See id. at 4.) Even if Cheathams circumstances were atypical, none of this would be relevant to whether the SEC adequately represents his interests. After all, the SEC was entitled to make strategic decisions about how to present its case (including whether to stipulate to certain facts, what facts to stipulate to, and how to frame the issues for the Court). Cheathams disagreement with the SEC on this score does not support a finding of inadequacy under Rule 24. If disagreement with an existing party over trial strategy qualified as inadequate representation, the requirement of Rule 24 would have no meaning. Butler, Fitzgerald & Potter v. Sequa Corp., 250 F.3d 171, 181 (2d Cir. 2001); see also Bradley v. Milliken, 828 F.2d 1186, 1192 (6th Cir. 1987) (A mere disagreement over litigation strategy or individual aspects of a remediation plan does not, in and of itself, establish inadequacy of representation.).3

Cheatham has not requested permissive intervention under Rule 24(b), nor can he. First, like motions for intervention as of right under Rule 24(a), motions to intervene under Rule 24(b) must be timely. Leavitt, 329 F. Supp. 2d at 66. Second, Cheatham does not have a claim or defense that has a question of law or fact in common with the main action. Id. As discussed above, Cheatham does not have a right to sue under Section 78ggg(b) or any other provision of SIPA at all, let alone claim[s] or defenses in common with the SECs suit here. Finally, Cheatham has no unique expertise to provide to the Court that would weigh in favor of permissive intervention. As discussed above, Cheathams situation is not atypical, and the SEC fully represents his interests. See 6 Daniel R. Coquillette et al., Moores Fed. Practice 24.10(2)(c) (3d ed. 2006) (Courts are understandably reluctant to grant permissive intervention to an applicant when interests are already fully represented by one of the existing parties.).

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II.

EVEN IF INTERVENTION WERE GRANTED, CHEATHAMS REQUEST THAT THIS COURT SUSPEND THE MEMORANDUM OPINION AND ORDER OF JULY, 3, 2012 SHOULD BE DENIED. Finally, even if intervention were warranted, this Court should deny Cheathams request

that this Court suspend the Memorandum Opinion and Order of July, 3, 2012. (Mem. In Support of Mot. to Intervene at 1 (capitalization modified)). While the basis for Cheathams demand is far from clear, he seems to imply that he would file a Rule 59 motion if his Motion to Intervene were granted. Rule 59 motions, however, are disfavored and warranted only if the movant establishes an intervening change of controlling law, the availability of new evidence, or the need to correct clear error or manifest injustice. Roane v. Gonzales, 832 F. Supp. 2d 61, 64 (D.D.C. 2011) (quoting Lightfoot v. D.C., 355 F. Supp. 2d 414, 421 (D.D.C. 2005)). None of those factors is present here, and, as a result, there is no basis for suspend[ing] this Courts Order dismissing the SECs Application with prejudice.4 As an initial matter, Cheathams allegedly atypical factseven if they were truly atypicalcannot form the basis for relief under Rule 59. Rule 59 authorizes reconsideration of a judgment only on the basis of new evidence, meaning evidence that is newly discovered or previously unavailable despite the exercise of due diligence. Niedermeier v. Office of Baucus, 153 F. Supp. 2d 23, 29 (D.D.C. 2001) (citing Alton & S. Ry. Co. v. Bhd. of Maint. of Way Emps., 899 F. Supp. 646, 648 (D.D.C. 1995)). The evidence here, however, was available to the SEC, which has had access to documents from the Texas receiver in charge of the Stanford entities for years. And it was admittedly available to Cheathamwho nevertheless waited until after

judgment to intervene. See Swedish Am. Hosp. v. Sebelius, 2012 WL 640796, at *4 (D.D.C. Feb. 29, 2012) (Rule 59 may not be used as a vehicle for presenting theories or arguments that could
4

The D.C. Circuit has emphasized that [m]anifest injustice does not exist where ... a party could have easily avoided the outcome, but instead elected not to act until after a final order had been entered. Davis v. D.C., 413 F. Appx. 308, 311 (D.C. Cir. 2011) (internal quotation marks and citation omitted).

10

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have been advanced earlier); Kattan v. D.C., 995 F.2d 274, 276 (D.C. Cir. 1993) ([A] losing party may not use a Rule 59 motion to raise new issues that could have been raised previously.); W.C. & A.N. Miller Cos. v. United States, 173 F.R.D. 1, 3 (D.D.C. 1997) (A Rule 59(e) motion is not a second opportunity to present argument upon which the Court has already ruled, nor is it a means to bring before the Court theories or arguments that could have been advanced earlier.). In any event, Cheathams arguments also fail even on their own terms becauseas discussed abovethe facts that he alleges (with no documentary support) are entirely consistent with the SECs and thus not new at all. Although Cheatham contends that his brokers purchased SIBL CDs without asking him in advance, he admits that he had already given them discretionary investment authorityand never objected even after receiving account statements identifying the investments that were made. See In re Klein, Maus & Shire, Inc., 301 B.R. 408, 419 (Bankr. S.D.N.Y. 2003) (If trades were unauthorized, it was incumbent upon the Claimants to complain in writing and on a timely basis. The confirmation and account

statements that the clearing broker sent to them gave them ample notice of their duty to complain. A timely written complaint by the Claimants of unauthorized trading would have been proof that unauthorized trading had occurred.). Cheatham also admits that the CDs he purchased are not held in custody for him by his brokerage or any other SIPC-member firm, so he cannot have a customer claim against them. (See Mem. in Support of Mot. to Intervene at 4.) Cheathams factual allegations are consequently identical to the SECs in all material

respects and thus provide no basis for reconsideration of this Courts Opinion.

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CONCLUSION For the foregoing reasons, SIPC respectfully requests that this Court deny Cheathams motion to intervene. Dated: August 22, 2012 Respectfully submitted, /s/ Eugene F. Assaf Eugene F. Assaf, P.C. (D.C. Bar # 449778) Edwin John U (D.C. Bar #464526) John OQuinn (D.C. Bar # 485936) Elizabeth M. Locke (D.C. Bar # 976552) Michael W. McConnell (admitted pro hac vice) Susan Marie Davies (admitted pro hac vice) KIRKLAND & ELLIS LLP 655 Fifteenth Street, N.W., Suite 1200 Washington, DC 20005 Tel: (202) 879-5000 Fax: (202) 879-5200 eugene.assaf@kirkland.com edwin.u@kirkland.com john.oquinn@kirkland.com Josephine Wang (D.C. Bar #279299) General Counsel Securities Investor Protection Corporation 805 Fifteenth Street, N.W. Washington, D.C. 20005 Tel: (202) 371-8300 Fax: (202) 371-6728 jwang@sipc.org Attorneys for Securities Investor Protection Corporation

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CERTIFICATE OF SERVICE I hereby certify that on the 22nd day of August, 2012, I served the Securities Investor Protection Corporations Opposition to Richard R. Cheathams Motion To Intervene and To Suspend the Memorandum Opinion and Order of July 3, 2012 as follows: 1. By ECF to the following: Matthew T. Martens (martensm@sec.gov) David S. Mendel (mendeld@sec.gov) Securities and Exchange Commission 100 F Street NE Washington, DC 20549 202-551-4481 2. By email and by depositing in the United States mail on the following: Richard R. Cheatham 92 Blackland Court, NW Atlanta, Georgia 30342 rcheatham@kilstock.com

/s/ Eugene F. Assaf Eugene F. Assaf, P.C. Edwin John U John OQuinn Elizabeth M. Locke KIRKLAND & ELLIS LLP 655 Fifteenth Street, N.W. Washington, D.C. 20005 Telephone: (202) 879-5000 Facsimile: (202) 879-5200 eugene.assaf@kirkland.com edwin.u@kirkland.com john.oquinn@kirkland.com Counsel for Defendant Securities Investor Protection Corporation

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IN THE UNITED STATES DISTRICT COURT FOR THE DISTRICT OF COLUMBIA ) ) ) ) ) ) ) ) ) ) )

Securities and Exchange Commission, Plaintiff/Applicant, v. Securities Investor Protection Corporation, Defendant/Respondent.

Misc. No. 11-MC-678-RLW

[PROPOSED] ORDER DENYING MOTION TO INTERVENE AND TO SUSPEND THE MEMORANDUM OPINION AND ORDER OF JULY 3, 2012

Upon consideration of Richard R. Cheathams Motion To Intervene and To Suspend the Memorandum Opinion and Order of July 3, 2012 (Docket No. 36), the Securities Investor Protection Corporations opposition to the same, and for other good cause shown, it is hereby ORDERED that the Motion To Intervene and To Suspend the Memorandum Opinion and Order of July 3, 2012 is DENIED. IT IS SO ORDERED.

______________________________ HON. ROBERT L. WILKINS UNITED STATES DISTRICT JUDGE Date: ___________________

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Oppositions and Replies

1:11-mc-00678-RLW SECURITIES AND EXCHANGE COMMISSION v. SECURITIES INVESTOR PROTECTION CORPORATION CASE CLOSED on 07/03/2012 CLOSED U.S. District Court District of Columbia Notice of Electronic Filing The following transaction was entered by Assaf, Eugene on 8/22/2012 at 4:34 PM and filed on 8/22/2012 SECURITIES AND EXCHANGE COMMISSION v. SECURITIES INVESTOR Case Name: PROTECTION CORPORATION 1:11-mc-00678-RLW Case Number: SECURITIES INVESTOR PROTECTION CORPORATION Filer: WARNING: CASE CLOSED on 07/03/2012 Document 40 Number: Docket Text: RESPONSE re [36] MOTION to Intervene filed by SECURITIES INVESTOR PROTECTION CORPORATION. (Attachments: # (1) Text of Proposed Order)(Assaf, Eugene) 1:11-mc-00678-RLW Notice has been electronically mailed to: David Stuart Mendel Edwin John U mendeld@sec.gov

eu@kirkland.com eassaf@kirkland.com, travis.langenkamp@kirkland.com john.oquinn@kirkland.com

Eugene Frank Assaf , Jr John Caviness O'Quinn Matthew T Martens

martensm@sec.gov

1:11-mc-00678-RLW Notice will be delivered by other means to:: Michael W. McConnell KIRKLAND & ELLIS LLP 655 15th Street, NW Suite 1200 Washington, DC 20005

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Susan Davies KIRKLAND & ELLIS LLP 655 15th Street, NW Suite 1200 Washington, DC 20005 The following document(s) are associated with this transaction: Document description:Main Document Original filename:suppressed Electronic document Stamp: [STAMP dcecfStamp_ID=973800458 [Date=8/22/2012] [FileNumber=3390039-0] [95ce336b5a6c76bcc60f857bee5ce94efd77741ade96c397353000c53dcfb03a7bf0 323a7ba0b760f8d89635663b07f28fd4823125b5e4df5bb82c1ac87d5045]] Document description:Text of Proposed Order Original filename:suppressed Electronic document Stamp: [STAMP dcecfStamp_ID=973800458 [Date=8/22/2012] [FileNumber=3390039-1] [2237471b3a833247c92b026df15ea89508a30b67b17a1b4838058a7d68e26e47dc76 b67f4dbad37e2f363d839681de1b4fbf9ce5d4fd2e2d7df61d6ae1acb40d]]

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