01 Civ. 9879 (LAK)
March 25, 2002
Based on a concession by the government that it cannot establish venue in this District in the criminal case against him, defendant Joseph F. Doody, IV, moves to dismiss this action on the ground of improper venue.
The complaint in this action alleges that "[c]ertain of the defendants' transactions, acts, practices, and courses of business occurred within this District . . ." (Cpt ¶ 5) This clearly is sufficient for purposes of Section 27 of the Securities Exchange Act of 1934, 15 U.S.C. § 78aa, which permits the laying of venue in a civil case under the act in any "district wherein any act or transaction constituting a violation occurred" as well as in any district in which the defendant "transacts business," in view of the well established proposition that an action may not be dismissed on a Rule 12 motion unless it is clear that the plaintiff can prove no facts that would entitle it to relief. E.g., Conley v. Gibson, 355 U.S. 41 (1957).
Doody urges the Court to go farther. He points out that the Commission seeks to sustain venue only on the ground that the allegedly improper trades were settled in New York and argues both that this is insufficient as a matter of law and, in any case, that the Commission has not established even that the trades were settled here. In substance, then, he asks the Court to convert the motion into one for summary judgment or, alternatively, to hold an evidentiary hearing in order to decide the issue.
The Court declines these invitations. If one thing is clear from the parties' submissions, it is that the Court is not persuaded that either fully understands the precise manner in which the trades at issue in this action were settled. Were they settled, as Doody would have it, entirely outside New York, the Commission's argument presumably would fall of its own weight. Only if they were settled here — whatever precisely that means — would it become necessary to address the legal question that Doody tenders. There is little doubt that the Court would benefit from the factual development that would attend the discovery process. Nor is there any reason to decide the issue of venue before trial — even if this is not a proper district, the Court merely would transfer it to a proper one, and all of the discovery and pretrial proceedings would be required in any case.
Motion denied without prejudice to renewal on summary judgment after the conclusion of discovery.