CMKM Diamonds Inc (fka CMKX)

[dia duit]

**SEC Wins Motion in Marco Glisson's Case**

By goodolboy

SEC Wins Motion in Marco Glisson's Case
« Thread Started Today at 12:48pm »

courtesy of Fish&Chips board and it's member Deepthroat:

http://convert.neevia.com/docs/b8d6edb6-4f46-4e44-a860-460a48ceca1b/62.pdf

Looks like we will be seeing exactly who sold and for how much.


http://tfant53.proboards.com/index.cgi?board=general&action=display&thread=5728



UNITED STATES DISTRICT COURT DISTRICT OF NEVADA
Case 2:09-cv-00104-LDG-GWF Document 62 Filed 02/18/11 Page 1 of 4
7 SECURITIES AND EXCHANGE COMMISSION, ) ) 8 Plaintiff, ) ) 9 vs. ) ) 10 MARCO GLISSON, ) ) 11 Defendant. ) __________________________________________)
Case No.
ORDER
2:09-cv-00104-LDG-GWF

This matter is before the Court on Plaintiff’s Emergency Motion to Extend or Clarify Discovery Cut-Off (#50), filed on January 24, 2011; Defendant’s Opposition to Emergency Motion (#54), filed on January 31, 2011; and Plaintiff’s Reply in Support of Emergency Motion (#57), filed on February 4, 2011.

BACKGROUND AND DISCUSSION

On October 29, 2010, the Court granted Plaintiff’s motion to reopen discovery for a period of 90 days until January 26, 2011. The order was based on information provided by Plaintiff that contrary to Defendant Glisson’s previous representations to the Court that he had stopped selling CMKM stock, Defendant and his wife Thidarat Tungwongsathong sold billions of shares of CMKM stock during the year 2010. After discovery was reopened, Plaintiff attempted to notice the depositions of Defendant and his wife for early December 2010. According to Plaintiff, the notices of deposition/subpoena were accompanied by document requests that called for Defendant and his wife to produce financial records, which the Plaintiff argues would have reasonably included bank records relating to the proceeds of CMKM stock transactions. Defendant and his wife postponed the taking of their depositions due to Ms. Tungwongsathong’s medical condition. The depositions of Defendant Glisson and Ms. Tungwongsathong were finally taken on January 10 and 11, 2011.For purposes of this motion, it is not necessary to decide whether Defendant and his wife had legitimate reasons for postponing their depositions. The depositions were postponed at Defendant’s request. The postponement was not due to any lack of diligence on the part of the Plaintiff.

During the depositions, the Defendant and Ms. Tungwongsathong identified accounts at three banks which Plaintiff believes may contain the proceeds from the sales of CMKM stock. On January 24, 2011, the Plaintiff served subpoenas on the three banks for the account records of Defendant Glisson and Ms. Tungwongsathong. Although Plaintiff failed to notify Defendant of the subpoenas before they were served on the banks as required by Fed.R.Civ.Pro. 45(b)(1), it provided Defendant with notice of the subpoenas on January 26 and 27, 2010 and also instructed the banks not to produce records in response to the subpoenas until the Court ruled on Defendant’s objections as set forth in his opposition to the instant motion. Defendant has not formally moved to quash the subpoenas or to obtain a protective order to prevent the banks from complying with the subpoenas.

The Court agrees with Plaintiff that Defendant was not prejudiced by Plaintiff’s failure to provide prior notice of the subpoenas. The failure to provide notice was an oversight and did not deprive Defendant of his opportunity to object prior to the production of records. The subpoenas were not rendered invalid by the failure to provide notice. Because Defendant was not prejudiced and there is no evidence of bad faith by the Plaintiff, an order quashing the subpoenas or imposing other sanctions on the Plaintiff is not warranted. See Shell v. Hilliard, 2007 WL 509263, *2-4 (E.D. Tenn. 2007).

The Court also finds that Defendant’s Glisson’s and his wife’s bank records are relevant. Rule 20 26(b)(1) of the Federal Rules of Civil Procedure authorizes the parties to obtain discovery regarding any nonprivileged matter that is relevant to any party’s claim or defense. Relevant information need not be admissible at trial if the discovery appears reasonably calculated to lead to the discovery of admissible evidence. Even after the 2000 amendment which narrowed the scope of discovery to matters relevant to a claim or defense, the rule still contemplates liberal discovery and relevancy is broadly construed. U.S. E.E.O.C. v. Caesars Palace Entertainment, Inc., 237 F.R.D. 428, 431 (D. Nev. 2006). The court in Phoenix Solutions, Inc. v. Wells Fargo Bank, N.A., 254 F.R.D. 568, 575 (N.D. Cal. 2008) states that “the rule contemplates discovery into any matter that bears on or that reasonably could lead to other matters that could bear on any issue that is or may be raised on the case.” 4 Wright, Miller & Marcus, Federal Practice & Procedure, §2008 (2010), page 134, n. 31, cites numerous other cases which state that discovery under the rule is liberally construed. The bank records are relevant to Plaintiff’s requests for injunctive relief and disgorgement of income or profits.

Generally, the requesting party must serve discovery requests sufficiently before the discovery cutoff date so that the other party may respond prior to that deadline. See Bishop v. Potter, 2010 WL 2775332 (D.Nev. 2010) and Andrews v. Raphaelson, 2007 WL 160783, *6 (D.Nev. Jan.12, 2007). See also Thomas v. Pacificorp, 324 F.3d 1176, 1179 (10th Cir.2003) (stating that discovery requests served on the date of discovery cut off would be untimely); Smith v. Principal Cas. Ins. Co., 131 F.R.D. 104, 105 (S.D.Miss.1990) (holding interrogatories served six (6) days prior to the discovery cut off were untimely); Brooks v. Johnson & Johnson, 1990 11 U.S. Dist. LEXIS 8144, *3, 1990 WL 92569 (E.D.Pa. June 28, 1990) (holding requests for discovery must be made with “sufficient time to allow the answering party to respond before the termination of discovery”); Northern Indiana Public Serv. Co. v. Colorado Westmoreland, Inc., 112 F.R.D. 423, 424 (N.D.Ind.1986) (stating that it is “common sense” that requests must be made with sufficient time to respond before the deadline). In this case, Plaintiff attempted to schedule the depositions of Defendant and Ms. Tungwongsathong in early December 2010, which would have allowed Plaintiff sufficient time to engage in follow-up discovery based on information disclosed during the depositions. It is undisputed that Plaintiff was not made aware of the subject bank accounts until the January 10-11, 2011 depositions. Because Plaintiff was not at fault for the taking of these depositions late in the discovery period, it is reasonable to permit Plaintiff to subpoena the bank account records. Although the Plaintiff probably could have served the subpoenas prior to January 24, 2010, the Court also finds that this delay was not so substantial as to justify denying the Plaintiff the right to subpoena and introduce the bank records as evidence in support of its claims.1 Accordingly,

1 This order is not intended, however, to preclude Defendant from asserting other objections he may have to the introduction of the bank records at trial.

IT IS HEREBY ORDERED that Plaintiff’s Emergency Motion to Extend or Clarify Discovery Cut-Off (#50) is granted. Discovery is hereby extended for the sole purposes of permitting the Plaintiff to obtain records pursuant to the six subpoenas issued to the three banks on January 24, 2011 and to supplement its Rule 26(a) document disclosures in regard to such records. No other discovery is permitted.

DATED this 17th day of February, 2011.

______________________________________ GEORGE FOLEY, JR. U.S. MAGISTRATE JUDGE