This will be interesting. Looks like Scottrade is worried about a forced buy-in of 1,000,000,000 shares!!!
Filed: 08/13/2009
Entered: 08/13/2009
Entered By: Carrie L Abrams,
Event Name(s): Docket Text Order
Full Docket Text:
Docket Text ORDER: Re: 57 MOTION to Reopen Case by Plaintiff Scottrade, Inc. (Douglass, Thomas) filed by Scottrade, Inc. ; ORDERED GRANTED; SO ORDERED HEA. Signed by Honorable Henry E. Autrey on 8/13/09. (CLA)
UNITED STATES DISTRICT COURT
EASTERN DISTRICT OF MISSOURI
EASTERN DIVISION
Scottrade, Inc., )
)
Plaintiff, )
)
v. ) Case No. 4:07-cv-01982 CAS
)
Modern Energy Corporation; )
First Public Securities Transfer )
Corporation; Ridge Clearing & Outsourcing )
Solutions, Inc.; Penson Financial Services, Inc., )
and E*Trade Financial Corporation; )
)
Defendants. )
MOTION TO REOPEN
COMES NOW Plaintiff Scottrade, Inc. and requests the Court to reopen the
above-referenced case, and as grounds therefore states:
1. This Court on February 7, 2008 issued a Permanent Injunction, enjoining
certain transactions arising out of illegal and fraudulent activities surrounding trading in the
stock of Modern Energy Corporation.
2. Scottrade has reason to believe that one of the parties to this action, First
Public Securities Transfer Corporation, acting by and through its agents and in concert with nonparties
to this action, are engaged in continuing efforts to perpetuate the fraudulent schemes
surrounding the trading in Modern Energy stock, all in contravention of this Court’s Order.
Though served, First Public Securities Transfer Corporation failed to answer the Complaint in
this matter and remains in default.
3. In his deposition of December 14, 2007, the then President of Modern
Energy, Jim Stewart, testified to the fraudulent activities of Modern Energy and attributed those
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activities to one David Korman, who according to Stewart controlled both Modern Energy and
its transfer agent First Public Securities Transfer Corporation. Upon recognizing the fraud
perpetrated by Korman, Stewart resigned the Presidency of Modern Energy the day after his
deposition.
4. Scottrade has been named as a respondent in a FINRA arbitration by a
company which Scottrade suspects is acting in concert with David Korman. The arbitration also
appears to be an effort to effectuate the purpose of the aforementioned illegal scheme.
5. Scottrade wishes at this juncture to engage in discovery to ascertain the
extent to which activities by the above parties is an effort to perpetuate an ongoing fraud in
contravention of this Court’s Order.
6. This Court has continuing jurisdiction over any injunctions issued by it.
7. None of the broker/defendants to this action are involved in or affected by
these proceedings and it is unnecessary for them to appear.
8. Scottrade does not anticipate that First Public Securities Transfer
Corporation, Modern Energy Corporation, or a non-party will appear in opposition to this
motion, nor does it anticipate any opposition to this Court’s continuing to exercise jurisdiction
over this matter.
For the above reasons, Scottrade requests this Court to reopen this case.
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Respectfully submitted,
THOMPSON COBURN LLP
By: /s/ Thomas E. Douglass
Thomas E. Douglass, #3008
Kenton E. Knickmeyer, #3577
Mark A. Mattingly, #525559
One US Bank Plaza
St. Louis, Missouri 63101
314-552-6000
FAX 314-552-7000
