sec opposition glisson''s motion preclude post 2007 activities show_temp

8/3/2019 SEC Opposition Glisson''s Motion Preclude Post 2007 Activities Show_temp

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JOHN B. BULGOZDY, Cal Bar No. 219897E-mail: [email protected] J. VAN HAVERMAAT, Cal. Bar No. 175761E-mail: [email protected]

Attorney for PlaintiffSecurities and Exchange CommissionRosalind R. Tyson, Regional DirectorMichele Wein Layne, Associate Regional DirectorJohn W. Berry, Regional Trial Counsel5670 Wilshire Boulevard, 11th FloorLos Angeles, California 90036Telephone: (323) 965-3998Facsimile: (323) 965-3908

UNITED STATES DISTRICT COURT

DISTRICT OF NEVADA

SECURITIES AND EXCHANGECOMMISSION,

Plaintiff,

vs.

MARCO GLISSON,

Defendant

Case No. 2:09-cv-00104-LDG-GWF

PLAINTIFFSECURITIESANDEXCHANGECOMMISSIONSOPPOSITIONTODEFENDANTGLISSONSMOTIONTO

PRECLUDETHEINTRODUCTION,BYTHEPLAINTIFF,OFALLEVIDENCEPERTAININGTOGLISSONSPOST2007ACTIVITIES

Case 2:09-cv-00104-LDG-GWF Document 92 Filed 11/30/11 Page 1 of 13


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I. INTRODUCTIONPlaintiff Securities and Exchange Commission (Commission) opposes the

motion of defendant Marco Glisson (Glisson) to preclude the introduction of

relevant evidence concerning his transactions in CMKM securities in 2010, from

which he realized over $1.6 million during the period between May and October

2010. Glisson engaged in transactions in CMKM stock in 2010 in direct

contradiction of his sworn assurances to the Court in 2009 that he had no

intention to purchase or sell any shares of any public company including without

limitation CMKKM at any time in the future. (Declaration of Marco Glisson in

Support of his Opposition to SECs Motion for Summary Judgment, filed

November 16, 2009 (Docket No. 28), at p. 13, 74.) Glissons 2010 transactions

in CMKM stock are highly relevant to the issues of the need for injunctive relief

and the credibility of his recent assurances that he will not engage in such conduct

in the future. The $1.6 million in proceeds, and the location of those funds, are

also relevant to Glissons argument that the Court should not impose any

disgorgement order, prejudgment interest, or civil penalty, because Glisson

purportedly lacks any financial resources and has an inability to satisfy any

judgment.

Alternatively, Glisson requests that the Court preclude any inquiry of why

Glisson used accounts held in the names of his former wife, and current wife, for

his CMKM transactions, on the grounds that where he deposited the proceeds, and

why, and the ultimate disposition, are not relevant to the Commissions claim.

However, that information is highly relevant to, among other things, Glissons

claim that he did not believe he was doing anything wrong, as well as to the

calculation of damages. It is highly relevant to Glissons claim of innocence that

he sought to hide his involvement and the proceeds by using accounts of his



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various spouses. On the one hand Glisson admits that he used these accounts, but

Glisson then objects to admission of the account statements, and alternativelyclaims that the transactions were actually for the benefit of either his ex-wife or his

current wife. Glisson has taken so many contradictory positions about his use of

various bank accounts that the Court needs to hear the evidence and assess

Glissons credibility concerning his various competing and inconsistent stories.

Finally, Glisson requests an in limine determination that he has not waived

his Fifth Amendment privilege against self-incrimination with respect to his

motivation for depositing proceeds of his CMKM transactions into accounts of

his different wives, and that if he should assert his privilege, then no negative

inference should follow. As Glisson points out, he must assert the privilege to

each question, so that the in limine motion essentially seeks an advisory opinion

about questions that have not yet been posed, and for that reason the motion should

be denied. It is well established that a Court may draw a negative inference in a

civil proceeding when a defendant asserts his Fifth Amendment privilege, and

Glisson offers no persuasive rationale for why he should be treated differently than

every other litigant, and his request on this point should also be denied.

II. FACTSThe Commission filed this action against defendant Marco Glisson on

January 15, 2009, alleging that Glisson violated the federal securities laws by: (1)

acting as an unregistered broker-dealer in violation of Section 15(a) of the

Securities Exchange Act of 1934 (Exchange Act), 15 U.S.C. 78o(b), and (2)

selling deregistered securities in violation of Sections 5(a) and 5(c) of the

Securities Act of 1933 (Securities Act), 15 U.S.C. 77e(a) and 77e(c).

The Complaint alleged that between December 2005 and May 2006, and

then again between September 2006 and April 2007, Glisson regularly engaged in



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transactions in the deregistered securities of a company named CMKM Diamonds,

Inc. (CMKM). At the time, Glisson knew that the registration of CMKMssecurities had been revoked by the Commission in October 2005. At the time,

Glisson was not registered with the Commission as a broker or a dealer in

securities, and was not associated with a registered broker or dealer. A reasonable

approximation of Glissons net ill-gotten gains from his transactions in

deregistered CMKM securities in 2005-2007 is approximately $2.8 million.

After the case was filed in 2009, the parties moved for summary judgment.

In opposition to summary judgment and particularly with regard to the likelihood

of future violations, Glisson executed a sworn declaration, under penalty of

perjury, in which he stated:

Since the filing of this action by the SEC and continuing to

date, I have not purchased or sold any CMKM stock (or any

other shares of any publicly traded company); andI have no

intention to purchase or sell any shares of any public company

including without limitation CMKM at any time in the future;

and I will so testify in person at the trial of this case where I can

demonstrate to the satisfaction of the Court that I mean what I

say about such future conduct.

Declaration of Marco Glisson in Support of his Opposition to SECs Motion for

Summary Judgment, filed November 16, 2009, at p. 13, 74 (emphasis added).

The declaration remained on file and the Court ultimately denied the

Commissions motion for summary judgment in an order issued on September 24,

2010.

Around the time that the Court issued its summary judgment ruling, the

Commissions staff learned from sources in the community that Deli Dog, the



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Internet moniker that Glisson used, was active again, and petitioned to re-open

discovery for the purpose of obtaining evidence if that were the case. Theevidence obtained showed that starting around May 2010, Glisson actively

resumed his business in CMKM shares. In the period between May and October

2010, Glisson deposited (or caused to be deposited) at least $1,626,399.05 in

proceeds from sales of deregistered CMKM securities into an account at Sun Trust

Bank in Florida. Glisson did not inform the Court, while the summary judgment

motion was pending, that his declaration was no longer true and that he had broken

the sworn representation he had made to the Court that he would never sell CMKM

securities again.

Glisson used different bank accounts at different times for his transactions in

CMKM securities, which accounts were held in the names of his ex-wife, Alma

Padilla, and his then-girlfriend and now wife, Thidarat Tungwongsathong. In his

motion, Glisson takes contradictory positions regarding his use of these bank

accounts held in the names of his family members. At one point, Glisson claims

that he does not contest that he sold CMKM shares, realized proceeds from the

sales, or where the proceeds were deposited. (Motion at page 18, lines 15-18.)

However, in contrast to that assertion, Glisson argues that his CMKM stock

transactions involved stock sold by his family members and that the proceeds

deposited into the accounts of his different wives are the sole, separate property of

such sellers (none of who were named as defendants in this action and/or are

alleged themselves to have been unregistered broker/dealers). (Id. at page 15,

lines 2-7.)

In late 2005 and early 2006, Glisson simultaneously used two accounts at

Blackhawk Community Credit Union for his purchases: (1) an account in the

name of his then wife, Alma Padilla, with the last four digits 3788; and (2) an



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account jointly held by Glisson and Padilla, with the last four digits 8307.

Between December 2005 and May 2006, approximately $953,000 was depositedinto these two accounts in connection with CMKM transactions by Glisson. In or

around May 2006, Glisson decided to divorce Ms. Padilla, and he opened a new

account at Blackhawk in his own name, the 7650 Account. Between May 2006

and January 2007, approximately $1.056 million was deposited into that account

relating to CMKM transactions.

At some point in 2007, after he retired and separated from Ms. Padilla,

Glisson decided to move to Las Vegas. Shortly after moving to Las Vegas,

Glisson met Thidarat Tungwongsathong at a Starbucks. Around November 2006,

Glisson was added to Tungwongsathongs bank account at Bank of America as a

POD, or payable on death, and on November 17, 2006, Glisson transferred

$105,000 from his Blackhawk 7650 Account in Janesville, Wisconsin, to the

Tungwongsathong/Glisson account at Bank of America in Las Vegas which we

refer to as the 9145 Account. Between November 2006 and June 2007,

approximately $2.332 million in proceeds from CMKM transactions were

deposited into the 9145 Account.

In 2010, when Glisson resumed his transactions in CMKM securities, he

directed all proceeds into an account held at Sun Trust Bank in the name of

Tungwongsathong, also POD Glisson. During the period between May and

October 2010, over $1.6 million in proceeds from sales of CMKM stock by

Glisson were deposited into that account, and then removed. The current

whereabouts of those proceeds is unknown.



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III. LEGAL ARGUMENTA.

Evidence of Glissons 2010 Transactions in CMKM Stock isRelevant Evidence on Several Issues and Should Not Be Excluded

The substance of Glissons argument is that since his 2010 transactions in

CMKM stock were not alleged in the Complaint which was filed in 2009,

evidence of those transactions is irrelevant and inadmissible. Glisson also argues

that the Commission was required to seek leave to amend its Complaint in 2011

after summary judgment had been decided and the case was being set for trial, in

order for the Court to hear evidence about the 2010 conduct. Glissons arguments

lack merit and should be denied, because his 2010 activities are relevant to several

issues in this case, including the appropriateness and need for injunctive relief, his

ability to satisfy any money judgment, and Glissons credibility because his 2010

activities establish that Glisson provided false assurances to this Court in a sworn

declaration filed in 2009. Credibility is always relevant, and for this last reason

alone, Glissons motion should be denied.

Relevant evidence is defined by Federal Rule of Evidence 401 as evidence

having any tendency to make the existence of any fact that is of consequence to the

determination of the action more probable or less probable than it would be

without the evidence. Federal Rule of Evidence 402 provides that [a]ll relevant

evidence is admissible, except as otherwise provided. Relevant evidence need

not relate directly to an element of a claim or defense asserted in the case to be

relevant. If it would tend to assist the trier of fact in determining facts necessary to

its decision resolving the claim or defense, it is relevant. Thus, evidence relating to

the credibility of witnesses is relevant because it will assist the trier of fact in

determining the weight to give to the witnesss testimony. See, e.g., United States

v. Abel, 469 U.S. 45, 48-49 (1984) (admitting evidence that defendant and witness



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were members of secret prison organization because relevant to witnesss

credibility); United States v. Taylor, 239 F.3d 994, 997 (9th Cir. 2001) (admittingexpert testimony concerning relationship between pimp and prostitute to explain

inconsistent testimony relevant to witnesss credibility). See generally Cotchett, J.,

Federal Courtroom Evidence, Fifth Edition, 401.2 (2003).

Glissons 2010 conduct is directly related to his credibility, since it flies in

the face of his sworn assurances to this Court in 2009 that he has no intention to

purchase or sell any shares of any public company including without limitation

CMKM at any time in the future, and I will so testify in person at the trial of this

case where I can demonstrate to the satisfaction of the Court that I mean what I say

about future conduct. Declaration of Marco Glisson in Support of his Opposition

to SECs Motion for Summary Judgment, filed November 16, 2009, at p. 13, 74.

Glissons 2010 transactions in CMKM stock directly impeach that statement, and

are therefore highly relevant to Glissons credibility. For that reason alone,

Glissons motion should be denied.

Moreover, Glissons 2010 conduct is put into issue by his claim that he has

not bought or sold a single share of CMKM stock since 2007. In his motion,

Glisson states:

[T]he factual predicate for the Plaintiffs unregistered dealer

(market maker) does not exist after April 2007 period because,

after an intervening period of three years when Glisson did not

buy or sell a single share of CMKM stock, he never again (in

2010 or thereafter) both bought and sold any CMKM stock and

never engaged in any activity that the Plaintiff could possibly

allege constitute broker activity.



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(Motion at page 17 lines 18-21 (emphasis added).) In fact, this statement is

contradicted by Glissons 2010 transactions in CMKM securities. Factualassertions by Glisson like this -- which ignore Glissons 2010 transactions and the

over $1.6 million in proceeds he realized -- make Glissons 2010 transactions in

CMKM relevant.

The sincerity of Glissons assurances that he will not engage in future

CMKM transactions is directly at issue concerning injunctive relief. Among the

factors to be considered in awarding injunctive relief is the sincerity of [a

defendants] assurances against future violations. See, e.g., SEC v. Fehn, 97 F.3d

1276, 1295 (9th Cir. 1996). Here, defendant Glisson proposes to prove, as stated

in the Joint Pretrial Order, that: Glisson has no intention of buying or selling

CMKM stock in the future. (Joint Pretrial Order at page 42, 131.) Glisson

made that same promise to the Court in 2009, and his 2010 conduct shows that

such assurances have no value.

Glisson realized over $1.6 million from his 2010 transactions in CMKM

stock, yet Glisson proposes to prove, as stated in the Joint Pretrial Order: Glisson

does not have the financial wherewithal to pay the substantial money damages the

Plaintiff is seeking in this case. (Joint Pretrial Order at page 42, 130.) The fact

that Glisson realized proceeds of $1.6 million from CMKM transactions in 2010 is

relevant to Glissons claim that he does not have the wherewithal to pay

disgorgement.

Thus, Glissons 2010 conduct involving CMKM stock is relevant to several

issues in this case, and therefore the motion should be denied.



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B. Glissons Motivation for Using Others Bank Accounts for His

CMKM Transactions is RelevantGlisson posits that since he is not contesting that the proceeds of his

transactions in CMKM were deposited into accounts of his former wife, Padilla,

and current wife, Tungwongsathong, then his motivation for hiding his profits in

those accounts is irrelevant. Glisson fails to rationalize this position with his other

positions, that he had nothing to do with the transactions in the bank accounts of

his former and current wife; that the money is those accounts is the sole and

separate property of other people; and that he had no authority or interest in those

accounts. If for no other reason than to resolve Glissons competing claims about

the accounts by hearing his various explanations in Court and assessing Glissons

credibility, the Court should deny Glissons motion.

Glissons motivation for using other bank accounts is relevant. Glisson

contends that his conduct was innocent, and that he was not attempting to

circumvent the broker-dealer registration requirements, or the securities

registration requirements, of the federal securities laws. However, the fact that

Glisson instructed his customers to send money to accounts not in his name may be

viewed as evidence of an effort to hide his involvement in the transactions because

of his knowledge that he was violating federal securities laws. Glisson contends

that he was, in fact, attempting to hide assets to evade taxes or to evade collection

of unpaid taxes. However, Glisson was not advised of an investigation into his tax

evasion until 20111 long after his conduct in 2005 to 2007, and in 2010, where he

1 Glissons attorney stated under oath that he learned in 2011 that the U.S.Attorneys office was conducting an investigation to determine if Glisson wasattempting to conceal assets that might otherwise be available to satisfy existingfederal tax obligations owed by Glisson. (Bretz Declaration in Support ofMotion at 7-8.)



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used accounts held in the name of family members to hide his CMKM

transactions. The Court as fact finder has the unique opportunity to assessGlissons credibility to determine whether Glisson was using bank accounts of

family members to hide his violations of the federal securities laws, or to evade his

obligations under the federal tax laws. Glisson offers no authority for the

proposition that his motivation for hiding his transactions by using the bank

accounts of others is not relevant in this case. Given the positions that Glisson

advances in the Joint Pretrial Motion, as well as in his motions in limine, Glissons

motivation for concealing his CMKM transactions using the bank accounts of

others is relevant and therefore his motion in limine should be denied.

C. Glissons Requests Regarding the Fifth Amendment Should be

Denied

Glisson requests an advisory ruling concerning his ability to assert his Fifth

Amendment privilege in response to questions that have not been posed, and

because such a ruling is premature, it should be denied. As Glisson acknowledges,

the Fifth Amendment privilege must be asserted on a question by question basis.

Moreover, the question of whether Glisson has waived, by virtue of his answers to

questions under oath, or positions taken in this litigation, must also be addressed on

a question by question basis. At this stage of the proceedings, without knowing

what questions might be asked, it would be difficult for the Court to craft an order

responsive to Glissons motion.

Glisson has put at issue his motivation for using his former wifes account,

and his girlfriends and current wifes bank account, for his CMKM transactions.

In the Joint Pretrial Order, Glisson identifies as an issue whether disgorgement is

appropriate with respect of sales by Glisson and his former girlfriend, now wife,

for their individual accounts (Joint Pretrial Order at page 47, lines 10-12), and



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where Glisson never received any of the proceeds realized from the sale of

CMKM stock his wife bought or otherwise acquired before they were married orafterward. (Id. at page 47, lines 22-23.) Yet, in the motions in limine, Glisson

states that he does not contest that he sold the shares and realized the proceeds

from the sales or where the proceeds were deposited, (Motion at page 18, lines

16-17), and Glissons motivation for commingling funds into his wifes bank

account is not germane to the SECs [case]. (Id. at page 19, lines 7-8.)

Glisson has taken wildly inconsistent positions concerning his use of the

bank accounts of his family members. Glisson should not be allowed to use the

Fifth Amendment privilege as a sword and a shield, to make arguments to the

Court about ownership of accounts, but then to preclude his own testimony about

why he was using various accounts. Glissons motion in limine seeks an advisory

opinion that is inappropriate, and the Court should require Glisson to assert his

privilege on a question by question basis, at which time the Court can determine if

Glisson has, in fact, waived his privilege.

Finally, Glisson provides no legal justification for his request that the Court

agree in advance not to put a negative inference on Glissons invocation of the

Fifth Amendment privilege. It is well-established that a Court may draw a

negative inference when a defendant in a civil action invokes the Fifth Amendment

and refuses to answer questions in a civil proceeding. See Baxter v. Palmigiano,

425 U.S. 308, 320 (1976) (permitting adverse inference to be drawn from

defendants silence in civil proceedings); Securities and Exchange Commission v.

Hughes Capital Corp., 917 F. Supp. 1080, 1087 (D.N.J. 1996) (holding that

defendants invocation of his Fifth Amendment privilege allowed finding that

defendant was not disputing evidence of receipt of fraud proceeds); SEC v. Colello,



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139 F.3d 674 (9th Cir. 1998). Glissons request to be treated as a special case, in

advance of his invocation of any privilege, lacks merit and should be denied.IV. CONCLUSION

For the foregoing reasons, the Court should deny in its entirety defendants

motion to preclude the introduction, by the plaintiff, of any and all evidence

pertaining to Glissons post 2007 activities.

Date: November 30, 2011 Respectfully submitted,

/s/ John B. BulgozdyJohn B. BulgozdyDavid J. VanHavermaatAttorneys for PlaintiffSecurities and Exchange Commission



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PROOF OF SERVICE

I am over the age of 18 years and not a party to this action. My business address is:

[X] U.S. SECURITIES AND EXCHANGE COMMISSION, 5670 WilshireBoulevard, 11th Floor, Los Angeles, California 90036-3648Telephone No. (323) 965-3998; Facsimile No. (323) 965-3908.

On November 30, 2011, I caused to be served the document entitled PLAINTIFFSECURITIESANDEXCHANGECOMMISSIONSOPPOSITIONTODEFENDANTGLISSONSMOTIONTOPRECLUDETHEINTRODUCTION,BYTHEPLAINTIFF,OFALLEVIDENCEPERTAININGTOGLISSONSPOST2007ACTIVITIESon all the parties tothis action addressed as stated on the attached service list:

[ ] OFFICE MAIL: By placing in sealed envelope(s), which I placed for

collection and mailing today following ordinary business practices. I amreadily familiar with this agencys practice for collection and processing ofcorrespondence for mailing; such correspondence would be deposited withthe U.S. Postal Service on the same day in the ordinary course of business.

[ ] PERSONAL DEPOSIT IN MAIL: By placing in sealedenvelope(s), which I personally deposited with the U.S. Postal Service.Each such envelope was deposited with the U.S. Postal Service at LosAngeles, California, with first class postage thereon fully prepaid.

[ ] EXPRESS U.S. MAIL: Each such envelope was deposited in afacility regularly maintained at the U.S. Postal Service for receipt ofExpress Mail at Los Angeles, California, with Express Mail postagepaid.

[ ] HAND DELIVERY: I caused to be hand delivered each such envelope tothe office of the addressee as stated on the attached service list.

[ ] UNITED PARCEL SERVICE: By placing in sealed envelope(s)designated by United Parcel Service (UPS) with delivery fees paid orprovided for, which I deposited in a facility regularly maintained by UPS ordelivered to a UPS courier, at Los Angeles, California.

[ ] ELECTRONIC MAIL: By transmitting the document by electronic mailto the electronic mail address as stated on the attached service list.

[X] E-FILING: By causing the document to be electronically filed via theCourts CM/ECF system, which effects electronic service on counsel whoare registered with the CM/ECF system.

[ ] FAX: By transmitting the document by facsimile transmission. Thetransmission was reported as complete and without error.

I declare under penalty of perjury that the foregoing is true and correct.

Date: November 30, 2011 /s/ John B. BulgozdyJohn B. Bulgozdy

Case 2:09-cv-00104-LDG-GWF Document 92-1 Filed 11/30/11 Page 1 of 2


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SEC v. MARCO GLISSONUnited States District Court - District of Nevada

Case No. 2:09-cv-00104-LDG-GWF(LA-3028)

SERVICE LIST

Frederick A. Santacroce, Esq.706 South Eighth StreetLas Vegas, NV 89101Email: [email protected]

Attorney for Marco Glisson

Robert H. Bretz, Esq.578 Washington Boulevard, Suite 843Marina del Rey, CA 90292Email: [email protected]

Attorney for Marco Glisson

Case 2:09-cv-00104-LDG-GWF Document 92-1 Filed 11/30/11 Page 2 of 2

sec opposition glisson''s motion preclude post 2007 activities show_temp

Documents