DD Support Board and Research Team

[Michael-Goode]

John Babikian (aka Babs) makes The National Law Review - brief article.

The US District Court for the Southern District of New York recently held that it was within the court’s equitable power to sustain a writ of garnishment and a writ of attachment in a securities case. On March 13, 2014, the Securities and Exchange Commission filed suit against Defendant John Babikian. The SEC accused Babikian of securities fraud relating to an alleged “pump and dump” scheme in which Babikian bought shares in a penny stock, sent an email to 700,000 people touting the pick, and then sold off his entire position. The District Court signed a Temporary Restraining Order and two prejudgment writs: one garnishing proceeds from the sale of securities and another attaching properties owned by Babikian. The SEC later moved for a preliminary injunction to preserve all relief granted by the District Court. Babikian claimed that the garnishment and attachment were inappropriate because the Federal Debt Collection Procedure Act (FDCPA) did not authorize the relief. In contrast, the SEC argued that the FDCPA authorizes garnishment and attachment as prejudgment remedies for cases that assert claims for a debt, and contended that the relief sought – penalties and disgorgement – was a claim for a debt in which the FDCPA would apply.

www.natlawreview.com/article/district-court-sustains-attachment-and-garnishment-writs-under-equitable-powers