Replies to post #109920 on Hemp Inc (HEMP)

[worldisfullofDerps]

CLERK'S NOTICE that this case is randomly reassigned to Magistrate Judge Brenda Weksler for all further proceedings. All further documents must bear the correct case number 2:16-cv-01413-JAD-BNW. (no image attached) (MMM) (Entered: 05/02/2019)

[tutankhamuns]

Here’s the detailed version...

Terminating sanctions are sought against Epling, Ferris, and Hobbes for failing to timely produce loan documents, and misleading counsel for the SEC about the personal and business tax returns sought by the SEC in discovery. The SEC maintains that terminating sanctions are warranted against Epling, Ferris, and Hobbes “for repeated incidents of fabrication of evidence.” The SEC also seeks sanctions against Epling and Perlowin for providing false deposition testimony about whether there were any documents memorializing the $1.8 million in loans made by Epling/Ferris to Perlowin/Hemp. Defendants concede terminating sanctions may be imposed for abusive litigation practices if the court finds a pattern of deception.

At the February 1, 2018 hearing on oral arguments on the SEC’s two motions for sanctions, the court granted the SEC’s request for sanctions, but reserved decision on the severity of the sanctions until taking testimony from Messrs. Epling, Perlowin, and Moore. It was clear from the moving and responsive papers that all of the defendants failed to comply with their discovery obligations. However, it was less clear from a review of the papers and arguments of counsel, what sanctions were appropriate and proportional to the violations.

Having conducted a lengthy evidentiary hearing, and thoroughly reviewed the moving and responsive papers with supporting exhibits and declarations, the court will deny the SEC’s request for terminating sanctions in favor of severe, but lesser available sanctions. The court finds defendants should be precluded from offering any evidence at hearing, in motion practice, or at trial related to the loan documents produced after Messrs. Epling and Perlowin were initially deposed in this case. The court also finds that the jury should be instructed that the defendants failed to comply with their discovery obligations. Additionally, the jury should be instructed that Epling deceived counsel for the SEC and defense counsel by falsely representing that his personal tax returns for tax years 2012, 2013, and 2014 that he produced in response to the SEC’s discovery requests were “as filed” copies. The jury should be instructed that they may consider evidence of the defendants’ discovery violations and Epling’s deception about his personal tax returns along with all other evidence in the case in reaching their verdict.

$HEMP