Securities and Exchange Commission v. Kokesh

MOTION for Summary Judgment as to All Claims Against Defendant Charles R. Kokesh

D.N.M.January 25, 2013

IN THE UNITED STATES DISTRICT COURT FOR THE DISTRICT OF NEW MEXICO ________________________________________________ § SECURITIES AND EXCHANGE COMMISSION, § § Plaintiff, § § v. §Civil No.1:09-cv-1021-SMV-WDS § CHARLES R. KOKESH § § Defendant. § ________________________________________________§ PLAINTIFF’S MOTION FOR SUMMARY JUDGMENT AS TO ALL CLAIMS AGAINST DEFENDANT CHARLES R. KOKESH Pursuant to Rule 56 of the Federal Rules of Civil Procedure, Plaintiff Securities and Exchange Commission (“Commission”) moves for summary judgment as to all claims against Defendant Charles R. Kokesh. Fed. R. Civ. P. 56(c). The evidence supporting the Statement of Material Facts in the accompanying Memorandum of Law establishes that there is no genuine dispute as to any material fact whether Defendant Charles R. Kokesh violated federal securities laws as alleged in the Commission’s Complaint. Therefore, the Commission is entitled to prevail as a matter of law. Fed. R. Civ. P. 56(c); Celotex Corp. v. Catrett, 477 U.S. 317, 322 (1986). The evidence shows that, from 1995 through 2005, Kokesh misappropriated $41,064,736 from four Commission-registered business-development companies (“BDCs”)—Technology Funding Medical Partners I (“TFMP”) ; Technology Funding Partners III, L.P. (“TFP III”); Technology Funding Partners IV, L.P. (“TFP IV”); and Technology Funding Partners V, L.P. (“TFP V”). Kokesh owned and controlled two now-defunct Commission-registered investment- adviser firms, Technology Funding Ltd. (“TFL”) and Technology Funding, Inc. (“TFI”) (collectively, the “Kokesh Advisers”), which, in turn, controlled and provided investment advice Case 1:09-cv-01021-SMV-WDS Document 51 Filed 01/25/13 Page 1 of 3 2 to the BDCs pursuant to advisory agreements. Acting by and through the Kokesh Advisers, Kokesh misappropriated the funds by causing the BDCs to pay illegal distributions, performance fees, and rent, salary, and bonus reimbursements to the Kokesh Advisers. To conceal the scheme, Kokesh caused the Kokesh Advisers to distribute misleading proxy statements to BDC investors and to file false Commission reports on behalf of the BDCs. By reason of the foregoing, Kokesh violated Section 37 of the Investment Company Act of 1940 [15 U.S.C. § 80a-36] or, in the alternative, Section 57 of the Investment Company Act [15 U.S.C. § 80a-56], and aided and abetted violations of Sections 13(a) and 14(a) of the Securities Exchange Act of 1934 [15 U.S.C. §§ 78m and 78n] and Rules12b-20, 13a-1, 13a-13, and 14a-9 [17 C.F.R. §§ 240.12b-20, 13a-1, 13a-13, and 14a-9] thereunder and Sections 205, 206(1), and 206(2) of the Investment Advisers Act of 1940 [15 U.S.C. §§ 80b-5, 80b-6(1), and 80b-6(2)]. For the reasons set forth in the accompanying Memorandum of Law and evidentiary Appendix, the Commission respectfully requests this Court to grant its Motion for Summary Judgment on all claims it asserts against Kokesh. DATED: January 25, 2013 s/Timothy S. McCole_______ TIMOTHY S. McCOLE Mississippi Bar No. 10628 United States Securities and Exchange Commission Burnett Plaza, Suite 1900 801 Cherry Street, Unit 18 Fort Worth, Texas 76102 Telephone: (817) 978-6453 FAX: (817) 978-4927 E-mail: McColeT@SEC.gov For Plaintiff Case 1:09-cv-01021-SMV-WDS Document 51 Filed 01/25/13 Page 2 of 3 3 CERTIFICATE OF SERVICE I hereby certify that on January 25, 2013, I electronically filed the foregoing document with the Clerk of the Court for the District of New Mexico by using the CM/ECF system which will send a notice of electronic filing to the following CM/ECF participants, Clinton W. Marrs: cmarrs@smidtlaw.com, melissa@smidtlaw.com Counsel for Defendant Charles R. Kokesh January 25, 2013 s/Timothy S. McCole_ Timothy S. McCole CERTIFICATE OF CONFERENCE I certify that, on January 23, 2013, I conferred with counsel for Defendant Kokesh as to the page-limit restriction for exhibits in Local Rule 10.5. Counsel agreed to allow the exhibits to the accompanying Memorandum of Law to exceed 50 pages. January 25, 2013 s/Timothy S. McCole_ Timothy S. McCole Case 1:09-cv-01021-SMV-WDS Document 51 Filed 01/25/13 Page 3 of 3