I’m not certain of the details, but there has been a procedural change regarding Mining Capital Coin’s preliminary injunction. The case docket indicated on May 10th that a preliminary injunction hearing was scheduled for May 19th.
On May 18th, a Magistrate Judge filed a “report and recommendation” (R & R).
The good news is that the filing suggests granting a preliminary injunction.
According to the R & R, the SEC has made a sufficient showing for a preliminary injunction against all defendants. As a result, the undersigned respectfully recommends that the motion’s preliminary injunction request be granted.
We previously discussed the SEC’s request for a preliminary injunction.
Defendant Luiz Carlos Capuci (right) argued in his motion defense that, despite running away to Brazil in the middle of an investigation, the SEC was required to secure service of process against him (in relation to the requested preliminary injunction); and because “the securities scheme described in the Complaint centered on foreign investors and involved, at most, an incidental number of United States investors,” the SEC lacked jurisdiction.
Both defenses were rejected by the Magistrate Judge.
The SEC’s case against Emerson Sousa Pires (right), a co-defendant, has made no filings.
When the SEC contacted the attorney who had represented Pires during the investigation, they were informed that he no longer represented him. During the SEC investigation, Pires also fled to Brazil. Reading between the lines, Pires, who has Brazilian citizenship, appears to believe he is out of reach in Brazil. And he could very well be.
Brazilian citizens are not extradited.
Certainly, Capuci and Pires’ flights to Brazil influenced the magistrate’s decision.
Defendants clearly recognize the illegality of their actions, and at least one, Capuci, allegedly liquidated a number of assets and fled to Brazil after the SEC issued subpoenas in its investigation. The Court also notes that Capuci and Pires were both subpoenaed during the SEC’s investigation of this case, and both claimed Fifth Amendment immunity. Furthermore, both Capuci and Pires are thought to be present in Brazil, according to the SEC.
Due to the defendants’ apparent lack of remorse and the ease with which they could revive a similar scheme via the internet, the Court believes that a preliminary injunction is required to prevent them from engaging in future violations of the securities laws.
Any objections to the R & R filings must be submitted by June 1st. Following that, a preliminary injunction is expected to be granted against Mining Capital Coin, Capuci, and Pires.
On June 1st, Capuci’s attorneys filed an objection to the R & R filings. The TRO has been extended by the court until June 13th.
I’m not sure whether the SEC’s responses to Capuci’s objections will be considered by the court at the yet-to-be-scheduled preliminary injunction hearing.
I’ll return early next week for an update on the docket.