Thursday, May 17, 2018

SEC Opposes Delbert's Opposition

Not so fast, my friend, said the SEC to the Mississippi Secretary of State yesterday.   The SEC and Secretary of State Eggbert Hosemann are fighting over the right to appoint a receiver in the Lamar Adams Ponzi scheme case. The SEC accused Adams of operating a Ponzi scheme that defrauded 150 investors out of more than $85 million since 2005, in a lawsuit filed in U.S. District Court on April 20.   The SEC said Adams sold bogus timber rights and deeds guaranteeing 13% interest rates.  Mr. Adams pleaded guilty in U.S. District Court last week to one count of wire fraud.  The Justice Department said in that case Adams defrauded 250 investors of more than $100 million.

The SEC asked U.S. District Judge Carlton Reeves to appoint a temporary receiver for Lamar Adams and his company Madison Timber Properties. in an emergency motion submitted on April 10.  The SEC argued a receiver was needed so the defendants' assets could be "preserved" for distribution to the victims.  The request states that a receiver will submit a report within 60 days stating how the assets will be distributed to the victims. The Commission also argued the assets gained through the fraud should be protected from a "race to the courthouse" since some victims are filing lawsuits.

However, Secretary of State Gilbert Hosemann filed a motion to intervene Friday opposing the SEC's motion to appoint a receiver.  Mr. Hosemann said the defendants are Mississippi citizens, as well as a large number of the victims.  The alleged violations are also violations of the Mississippi Securities Act.    His motion asks the court to appoint Derek Henderson as receiver.  Mr. Henderson is a bankruptcy trustee in Jackson.   The Secretary of State claimed:

9.  The Secretary has a significant interest in the appointment of receiver in this action,  given the number of Mississippi investors involved, significant assets being located in the State, the  Secretary’s own interest in the assets with respect to fines, penalties, and restitution to  Mississippi investors, and the receiver’s obligations and abilities to administer the recovery and  restitution of investors’ funds.  The Secretary does not believe the SEC’s recommended appointment  can protect those interests adequately and effectively.

U.S. Magistrate Keith Ball approved the motion to intervene.  However, the SEC fired back at the Secretary of State Tuesday.  The Commission asked the Court to appoint Kenneth Murena of Miami, Florida, as a temporary receiver.  It said he was very experienced in handling such cases, while the Secretary of State's recommendation, Derek Henderson, was a trustee in state cases.   Mr. Murena will only charge $275 per hour and will not charge for travel expenses.  He also proposes to hire two Jackson lawyers, Kristina Johnson and Chad Hammons of Jones Walker, at a rate of $275 per hour as well as accountants from Horne, LLP.

The Commission took great issue with the argument that a Mississippi receiver should be appointed since most of the victims are in Mississippi:
Specifically, the Secretary argues that a Mississippi-based receiver is needed to better represent Mississippi investors. Yet the Commission understands that the scheme perpetrated by Defendants ensnared investors from 18 other states as well, including California, Texas and Florida. Indeed, the two largest investors currently known to the Commission reside in California and Texas. In selecting a receiver, the Court should evaluate which candidate is best positioned to represent all victims of the fraud, not just those located in Mississippi. Mr. Murena and the professionals he proposes to hire are well situated to represent all investors, as Mr. Murena has extensive experience with federal receiverships involving investors from multiple states and his professionals have offices in multiple states. The Commission has some concern that, if appointed under these circumstances, the Secretary’s candidate might tend to favor Mississippi investors over investors from other states.
This is getting interesting.  Stay tuned.

Earlier Posts
 SEC wants receiver in Ponzi scheme case, Delbert opposes.
Victim sues Timber Trolls 
Lamar Adams pleads guilty.  
SEC: Ponzi scheme began in 2004. 
Flashback Friday
Clearcutting the timber. 
Wicker wobbed in Ponzi scheme.
Pinnacle Trust issues statement on Ponzi scheme
Lamar Adams waives indictment.
Feds: Lamar Adams took over $100 million in Ponzi scheme.


Anonymous said...

I have been in the same room with Delbert. There was no doubt in my mine who the smartest person in the room was, and it certainly wasn't me. I also have no doubt about his honesty and competency. It is awfully generous of those fed. appointed lawyers to only charge $500,000.00 per year for their help. Do you think this might be a payback deal? Let Mississippi clean up a Mississippi mess.

Anonymous said...

But, it's all about Delbert!

Anonymous said...

Delbert is just embarrassed he didn't get in on this on the front end, with it going on under his nose.

Anonymous said...

Horne CPAs is a bad idea. They are likely involved.

Anonymous said...

Mighty courteous to not charge travel expenses while charging $275/hr. No wonder Dilbert wanted his buddy in on being the receiver.

Anonymous said...

Dilbert is embarrassed at dropping the ball. He is too well connected with the good ole boy network which includes those Mississippians who promoted and foolishly invested in this obvious-on-the-front-end Ponzi scheme, for me to feel comfortable with his belated, political grandstanding. Dilbert is a shallow Johnny-come-lately to the opportunity to garner press from this debacle as evidenced by the weakness of his motion. The Judge will not be fooled.

That said, if Dilbert wins his motion (which I doubt), then Derek Henderson is an excellent bankruptcy trustee to handle the case.

Anonymous said...

You could very, very easily find a MS lawyer to do this for $150 an hour, versus the $275 an hour they propose paying. At $275 an hour, at least $500,000 of what little that may be recovered will go just to the lawyers alone. I know this because I too am a lawyer, and I know many others who would do this work for $150 an hour.

Anonymous said...

To 1:08 PM:

The issue is competency and experience, not cheapness. I'd rather have a good federal appointee who can efficiently and properly wrap up the case within a year, minimizing interlocutory appeals, than some greenhorn local attorney who will bill $150 an hour for the next 5 years and still screw up the case. You get what you pay for.

Anonymous said...

"Let Mississippi clean up a Mississippi mess."

Let that one sink in for a second.

The feds coming in is usually the result of Mississippi falling asleep at the wheel. The next time Mississippi cleans up their own mess will be the first time.

Anonymous said...

This mess with Adams will take time to sort through all the documents to find out exactly who was taken for a ride and for how much. On the other hand, Delbert and the Feds have access to a note and deed of trust for $26,400,000 that is at the Canton Courthouse that was executed by non other than H.C. "Buster" Bailey to his First Investors clients. I believe there is around 150 investors involved. In my opinion, Bailey gave the investors the note and deed of trust to keep from going to jail. He thought the Ponzi scheme would never end, but it did. Like I said the other day---you are still going to jail if you rob a bank and years later you want to pay the bank back---A CRIME WAS COMMITTED !

Anonymous said...

12:22 - $275/hr. is a good rate. Not many locals with the experience to handle this matter charge that rate. They charge higher.

1:08 - Do you have experience in this field? As to you doing it for $150/hr, do tell. Must be a standalone which would limit your support in what is likely going to be a big web to un-weave.

Anonymous said...

Agree with 5/17 @ 2.43PM

$275/hr is a good rate for a solid attorney - especially bankruptcy/workout types.

I haven't used corporate attorneys in MS in a long time, but I have to believe that the going rate for partners is $500+/hour these days. The $275 is a bargain.

Anonymous said...

The local attorneys mentioned in the SEC filing have experience with these types of cases and will ensure that assets are retained. A case of this magnitude requires a level of expertise that you won’t get for $150/hour. Sorry. Pay that for your closing attorney on your refinanced mortgage, not a federal $100 million Ponzi scheme.

Five Star Duck Camp said...

Yaaawn! What's the latest on sports betting at the casinos!?!?!?!?

Anonymous said...

All three attorneys here in the state mentioned are very good. Derek is one of the best bankruptcy attorneys I have ever met and is also very experienced in looking for and pursuing any professional negligence claims should they be part of this matter. (I have a feeling that is where most of the money may come from anyway)

Anonymous said...

If we want fairness, transparency, honesty and arms length relationships, we should just turn this over to our State Attorney General and let him appoint a couple of disinterested lawyers to do what's in the state's best interest. If we can't trust the Attorney General, who CAN we trust?

Anonymous said...

Haha, bunch of nerds with no money complaining about something that didn’t affect them

Anonymous said...

I want to know more about the others involved with Adams--the lawyers,the runners, the presenters,etc. Those making commissions. We are just seeing the tip of the iceberg.

Anonymous said...

Bad week for Delbert. SEC slaps him down & accused of being a racist in the clarion ledger. He’s wishing now he wouldve took the senate appointment by Bryant.

Anonymous said...

Dilbert is most certainly NOT the smartest man in the room.

Wow said...

Don't know enough about Delbert's suggested local resource to have a strong opinion but I sadly worry that 1:46 has a valid point.

Anonymous said...

I'm not worried in the least about the Clarion Ledger calling Delbert (or anybody else) a racist. It's their goal to label every non-liberal a racist. We all know that if you support voter ID, in the first place, you have to have racist motives. Right?

Anonymous said...

@10:42am Uh, wrong - Dipbert Hoseman is about to be lawfully JUDGED by his peers as a racist after the EEOC and a judge/jury get through with him:

Anonymous said...

2:22...Uh....Don't know what level of experience you have with the EEOC, but they routinely issue 'right to sue' documents when there is nothing to contradict a complainant's assertion that he/she got the shaft because he was black. It's also routine to claim that you were fired because you were black.

Like most of these baseless cases, this one won't go to trial but will be handled by handing the plaintiff an envelope of cash to go away.

Telling an employee he is 'not the right fit' is not racism. Not awarding an employee a particular promotion is not necessarily racism. People do not deserve to be promoted based merely on tenure. I have no idea why the they guy was fired but neither to you. I'm not mentally challenged enough, though, to make the knee-jerk assumption that it was because he was black. He was also black when he was hired.

Anonymous said...

"Telling an employee he is 'not the right fit' is not racism". Hate to break it to ya, but if I'm more educated and experienced and you choose the other person that is less qualified, what exactly does "fit" supposed to mean?

Anonymous said...

I have been told this McHenry guy has an extensive and valuable collection of pistols, rifles, and shot guns. FYA, you probably will not be able to find them however.

Anonymous said...

"Telling an employee he is 'not the right fit' is not racism". Hate to break it to ya, but if I'm more educated and experienced and you choose the other person that is less qualified, what exactly does "fit" supposed to mean?

That's what the employer will be called upon to explain if this reaches the courtroom. There are lots of reasons employees are 'not a fit' for a promotional opportunity. What causes you to automatically assume it must relate to race?

For your review, here are just a few examples of notations and counseling documents that might be in a personnel file:

"On June 12, 2013, with supervisor Jones present, HR Director counseled Johnson regarding his comments in the breakroom in which he said he had no desire to work with the team and the department director could handle the project on his own."

"Performance Improvement Plan" documents, attached hereto regarding a 90-day period during with Johnson has agreed to correct deficiencies noted in accompanying documentation."

"This is the fourth occasion when employee Johnson as been asked to attend group meetings and participate in the goal-setting exercises of his department. He shrugged his shoulders when asked to explain his repetitive absences."

In cases such as this example, where Johnson's file is full of backup and documentation, he will not have a chance in hell of convincing a jury or mediator that his 'experience and education' warrant promotion.

Anonymous said...

An EEOC investigation will objectively gather and consider the relevant facts, including past PIPs, corrective actions, unbecoming comments, etc. Getting them to rule that discrimination even happened is a first major hurdle to overcome, which apparently he has. I don't know of an attorney who would take a case of claimed discrimination unless the EEOC has already ruled such. Most EEOC complaints are dismissed for lack of grounds or evidence. Doofbert is in a pickle, just in time for an election cycle.

Have NEVER Lost One.. said...

6:21 - The EEOC does not 'rule that discrimination even happened'. You have no idea what, if anything, was submitted by the employer in response to the request from the EEOC. It could range from 'nothing at all' to a complete personnel file and all files of those similarly situated. We don't have those facts. In many cases, the employer tells the EEOC to take a leap, on advice of an employment law attorney, and provides nothing at all. In some cases the employer is so intimidated that they turn over the keys to the building. They're nothing but a strong-arm, liberal federal agency whose mission is to help convict an employer who is guilty until proven innocent.

The EEOC is not an enforcement agency. They do not 'rule' discrimination, as you suggest. We don't have time (or inclination) here to go into every ramification of the EEOC, their agenda or how they operate (often with egg on their face). A 'right to sue' letter/finding is nothing more than a liberal witch-hunt based on the theory of 'Looks good to us', hoping some plaintiff's attorney will take up a case.

But you lost me at 'objectively.

Anonymous said...

@9:24 Your disdain for the process itself sounds prejudiced skippy, and has been openly echoed by your buddy Beanpole Hoseman - "Let Mississippi clean up Mississippi's messes". LOL at Dilbert Hoseman Yup, that pretty much demonstrates y'all's contempt for the union, and personal desires to find a friendly (plantation) judge that will rule in his favor down there in Dixie....old times not forgotten. "You're in Mississippi now".....The word "objectively" in Mississippi doesn't mean a thing to the corrupt inner circle.

Anonymous said...

If Pinnacle trust has no involvement, why have there been firing(s) since these disclosures? Also, who at this firm have "left" since these allegations surfaced? Curious minds want to know.

Anonymous said...

8:47 - Your last post is as confusing as your other three are inaccurate. But thanks for playing.


Anonymous said...

@3:24 You are indeed confused that's for sure. That video pretty much sums up your (and many other inside movers/shakers) and their "confused" views about the new Mississippi. You're likely part of the old guard that's being exposed and is on it's way out, and you just....can'

Anonymous said...

9:03 - No. Actually I'm just a regular guy who has four decades of experience in Human Resources and Employment Law along with at least fifty successfully defended EEOC charges under my belt. And it's YOU who can't stand THAT.

Anonymous said...

Strange that you didn't say that from the beginning....yhy didn't you say so? I concede!

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Trollfest '09

Trollfest '07 was such a success that Jackson Jambalaya will once again host Trollfest '09. Catch this great event which will leave NE Jackson & Fondren in flames. Othor Cain and his band, The Black Power Structure headline the night while Sonjay Poontang returns for an encore performance. Former Frank Melton bodyguard Marcus Wright makes his premier appearance at Trollfest singing "I'm a Sweet Transvestite" from "The Rocky Horror Picture Show." Kamikaze will sing his new hit, “How I sold out to da Man.” Robbie Bell again performs: “Mamas, don't let your babies grow up to be Bells” and “Any friend of Ed Peters is a friend of mine”. After the show, Ms. Bell will autograph copies of her mug shot photos. In a salute to “Dancing with the Stars”, Ms. Bell and Hinds County District Attorney Robert Smith will dance the Wango Tango.

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This is definitely a Beaver production.

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