SEC File 3

Case 3:18-cv-00252-CWR-FKB Document 25 Filed 05/25/18 Page 1 of 3
____________________
No. 3:18-CV-252-CWR-FKB
SECURITIES & EXCHANGE COMMISSION,

et al.,
Plaintiffs,
v.
ARTHUR LAMAR ADAMS,

et al.,
Defendants.
____________________
ORDER ON RECEIVERSHIP
____________________
Before CARLTON W. REEVES, District Judge.

This case involves a multi-million dollar Ponzi scheme that
defrauded hundreds of investors. The ill-gotten gains of that
scheme now reside in Defendants’ estates. Both the Securities
and Exchange Commission and the Mississippi Secretary of
State have requested the appointment of a receiver to control

those estates and protect investor interests.1
District courts have a “well-established” power to appoint a
receiver in a case brought by the Commission when there is a
“showing of fraud and mismanagement, absent insolvency.”2
The architect of this Ponzi scheme has already pleaded guilty
to systematic fraud and mismanagement, and the relevant es-
tates likely contain millions of dollars.3 The motions to ap-
point a receiver are GRANTED.
The next question is whom this Court should appoint as re-
ceiver. A receiver is “a representative of the court” who acts
on “behalf of all parties,” rather than on behalf of a particular
party.4 The discretion to select a qualified receiver therefore
lies with the Court, not the parties.5
After considering the written and oral arguments of counsel,
the Court believes that the fairest method of selecting a re-
ceiver is as follows. On May 31, 2018, the Court will enter a
1 Emergency Motion, Docket No. 11; Emergency Motion, Docket No. 21.
2 Sec. & Exch. Comm'n v. First Fin. Grp. of Texas, 645 F.2d 429, 438 (5th Cir.
1981) (quoting Sec. & Exch. Comm'n v. Keller Corp., 323 F.2d 397, 403 (7th
Cir. 1963)).
3 See Plea Agreement, Docket No. 11 in United States v. Arthur Lamar Adams,
3:18-CR-88-CWR-LRA (S.D. Miss).

4 Booth v. Clark, 58 U.S. 322, 331 (1854).
5 See Adelman v. CGS Sci. Corp., 332 F. Supp. 137, 149 (E.D. Pa. 1971); accord
Securities & Exchange Commission Office of the Inspector General, Over-

sight of Receivers and Distribution Agents, Report. No. 432 (2007) (“While a
judge in a securities case brought by the Commission usually appoints a
receiver recommended by Enforcement staff, the judge may select any
qualified receiver.”).
2
Request For Proposals Order soliciting bids for the receiver-

ship and the receiver’s primary counsel. By close of business
on May 29, therefore, the parties shall submit draft RFP Or-
ders containing the receivership application and schedule
they propose the Court adopt.
The parties have expressed concerns about immediate threats
to investors’ interests. The federal government retains great
power to address many of those threats through its prosecu-
tion of the parallel criminal case. If, however, the parties or
any other potential intervener believes that Defendants could
themselves mitigate immediate harm to investors’ interests
were it not for the existing Consent Order [Docket No. 5], they
may file an appropriate motion and a proposed Agreed Order
amending that Consent Order.
SO ORDERED, this the 25th day of May, 2018.
s/ CARLTON W. REEVES
United States District Judge
3
Case 3:18-cv-00252-CWR-FKB Document 26-1 Filed 06/01/18 Page 1 of 6
1. What professional experience and skills qualify you to be receiver in this case?
C. RECEIVERSHIP STAFFING
1. What steps will you take to guarantee that your hiring pracices are as inclusive as possible, and what – if
any – billable hour targets do you aim to achieve?
2. Describe the law firms or other entities you hire to assist you, their qualifications, proposed rates, and
whether those rates reflect a discount from their standard rates.
3. Describe and justify the hourly rates for yourself and whether your rates reflect any discount from your
standard rate.
2
4. How will you and your staff take steps to minimize the expenses of the receivership?
5. How will you and your staff communicate with investors and keep them informed of proceedings?
D. CONFLICTS OF INTEREST
1. What potential conflicts of interest may arise during your receivership, including those of yourself and
any accounting firms, legal firms, or other support staff that you plan to hire?
2. Before your appointment, what steps will you take to check for (and eliminate) any of the above conflicts?
3
3. After your appointment, how will you guard against (and respond to) any conflicts that arise?
E. ADDITIONAL INFORMATION
Provide any further information you believe relevant to your candidacy for receivership.
F. SIGNATURE
By signing the below, you affirm that you have truthfully answered the above questions as an officer of the
court.
Signature of Applicant
Date
4
CONFLICTS OF INTEREST AND BACKGROUND INFORMATION FORM
Please complete a document that responds to all prompts listed below. Attach that document to this form
and sign the declaration below.
Except where otherwise noted, for purposes of the information request below, “you” means you as an
individual, as well as any spouse or dependents, and separately, any firm, partnership, joint venture, or
other business in which you are an officer or director, or in which you have a substantial financial interest.
Except where otherwise noted, this information is requested for any responsive matters existing during the last five
years. Also, if during the course of your duties you become aware of responsive information concerning a
potential claimant in the matter listed above, you must promptly supplement your response to disclose that
information.
1. List all contracts, consulting engagements, employment, service as an officer or director, or other work of
any kind you have performed for any defendant/respondent in this matter, or any of its parents, subsidiaries, or
other affiliates, or any claimant in this matter. Include any responsive matters existing during the last ten years.
2. List any financial interests in or with the defendant/respondent, its parents, subsidiaries, or other affiliates,
or any claimant in this matter (e.g., stocks, bonds, options, other debt or equity interests, partnerships, retirement
plans).
3. List all other personal or professional relationships or interests in or with the defendant/respondent, its
parents, subsidiaries, or other affiliates, or with any of their officers or directors, or any claimant in this matter, not
listed above.
4. List all matters in which you have been retained as a Receiver, Distribution Fund Administrator,
Distribution Consultant, or as a subcontractor, agent or other service provider, in connection with any civil action
or administrative proceeding by the Commission.
5. List all other prior or existing cases, matters, or proceedings in which the Commission or the Mississippi
Secretary of State has an interest, in which you have been retained or served as a witness, consultant, or other
expert.
6. Identify any disciplinary proceedings, felony criminal indictment or information (or equivalent formal
charge) or a misdemeanor criminal information (or equivalent formal charge), civil proceedings or actions against
you personally by any Federal, state, local, or foreign entities and the results of those proceedings. Include any
responsive matters regardless of when they arose.
7. Identify any actual or potential conflicts of which you are aware, regardless of when they arose, that are not
identified or addressed in paragraphs 1 through 5 above, but that may affect the performance of your duties under
this appointment.
5
DECLARATION
Under penalty of perjury, I declare the following:
I am providing the United States District Court for the Southern District of Mississippi with the following conflict
of interest and background information concerning the receivership created in the civil litigation styled Securities
& Exchange Commission, et al. v. Arthur Lamar Adams, et al., Case Number 3:18-cv-00252-CWR-FKB, in the
U.S. District Court for the Southern District of Mississippi, Northern Division. I agree to supplement this
information if any of the information herein changes, within thirty days of such change. I agree to provide such
other Conflict of Interest information as requested by the Court or its staff.
I have examined the information given in this statement, and attached hereto, and, to the best of my
knowledge and belief, it is true, correct, and complete. I understand that I am submitting this
information to the Court as an officer of the Court.
By: _______________________________________
Signature
Name: _______________________________________
Date: _______________________________________
6
____________________
No. 3:18-CV-252-CWR-FKB
SECURITIES & EXCHANGE COMMISSION,

et al.,
Plaintiffs,
v.
ARTHUR LAMAR ADAMS,

et al.,
Defendants.
____________________
ORDER ON RECEIVERSHIP
____________________
Before CARLTON W. REEVES, District Judge.

This case involves a multi-million dollar Ponzi scheme that
defrauded hundreds of investors. The ill-gotten gains of that
scheme now reside in Defendants’ estates. Both the Securities
and Exchange Commission and the Mississippi Secretary of
State have requested the appointment of a receiver to control

those estates and protect investor interests.1
District courts have a “well-established” power to appoint a
receiver in a case brought by the Commission when there is a
“showing of fraud and mismanagement, absent insolvency.”2
The architect of this Ponzi scheme has already pleaded guilty
to systematic fraud and mismanagement, and the relevant es-
tates likely contain millions of dollars.3 The motions to ap-
point a receiver are GRANTED.
The next question is whom this Court should appoint as re-
ceiver. A receiver is “a representative of the court” who acts
on “behalf of all parties,” rather than on behalf of a particular
party.4 The discretion to select a qualified receiver therefore
lies with the Court, not the parties.5
After considering the written and oral arguments of counsel,
the Court believes that the fairest method of selecting a re-
ceiver is as follows. On May 31, 2018, the Court will enter a
1 Emergency Motion, Docket No. 11; Emergency Motion, Docket No. 21.
2 Sec. & Exch. Comm'n v. First Fin. Grp. of Texas, 645 F.2d 429, 438 (5th Cir.
1981) (quoting Sec. & Exch. Comm'n v. Keller Corp., 323 F.2d 397, 403 (7th
Cir. 1963)).
3 See Plea Agreement, Docket No. 11 in United States v. Arthur Lamar Adams,
3:18-CR-88-CWR-LRA (S.D. Miss).

4 Booth v. Clark, 58 U.S. 322, 331 (1854).
5 See Adelman v. CGS Sci. Corp., 332 F. Supp. 137, 149 (E.D. Pa. 1971); accord
Securities & Exchange Commission Office of the Inspector General, Over-

sight of Receivers and Distribution Agents, Report. No. 432 (2007) (“While a
judge in a securities case brought by the Commission usually appoints a
receiver recommended by Enforcement staff, the judge may select any
qualified receiver.”).
2
Request For Proposals Order soliciting bids for the receiver-

ship and the receiver’s primary counsel. By close of business
on May 29, therefore, the parties shall submit draft RFP Or-
ders containing the receivership application and schedule
they propose the Court adopt.
The parties have expressed concerns about immediate threats
to investors’ interests. The federal government retains great
power to address many of those threats through its prosecu-
tion of the parallel criminal case. If, however, the parties or
any other potential intervener believes that Defendants could
themselves mitigate immediate harm to investors’ interests
were it not for the existing Consent Order [Docket No. 5], they
may file an appropriate motion and a proposed Agreed Order
amending that Consent Order.
SO ORDERED, this the 25th day of May, 2018.
s/ CARLTON W. REEVES
United States District Judge
3
UNITED STATES DISTRICT COURT

FOR THE SOUTHERN DISTRICT OF MISSISSIPPI
NORTHERN DIVISION
SECURITIES AND EXCHANGE

COMMISSION,
Plaintiff,
v. Civil Action No.

3:18 –cv-252-CWR-FKB
ARTHUR LAMAR ADAMS AND
MADISON TIMBER PROPERTIES,
LLC
Defendants,
MISSISSIPPI SECRETARY OF STATE’S UNOPPOSED

MOTION TO INTERVENE FOR THE LIMITED PURPOSE
OF OPPOSING THE SEC’S EXPEDITED MOTION
TO APPOINT TEMPORARY RECEIVER
The Mississippi Secretary of State (the “Secretary”) respectfully moves this Court, pursuant to
Fed. R. Civ. P. 24, for an order permitting the Secretary to intervene in the above-captioned action (the
“Madison Timber Action”) for the limited purpose of opposing the Securities and Exchange
Commission’s (“SEC”) Expedited Motion to Appoint Temporary Receiver and making his own
recommendation for the candidate to be chosen as the receiver in the above-styled action. In support of
this motion to intervene, the Secretary states as follows:
1. The Madison Timber Action was filed on April 20, 2018. The SEC filed its
complaint based on information and belief that Defendants committed securities fraud by operating a
Ponzi scheme, and it alleged that Defendants defrauded more than 150 investors out of at least $85
million.
2. The SEC requested injunctive relief that included freezing the assets of Defendants, relief
which requires the appointment of a receiver.
3. Defendant Adams, on April 20, 2018, entered a Consent Order, consenting to the
freezing of Defendants’ assets, to the appointment of a receiver, and to the transfer of all seized assets to
the Court-Appointed Receiver or the Registry of the Court.
4. On May 9, 2018, Defendant Adams pled guilty to a criminal charge of wire fraud.
5. On May 10, 2018, the SEC notified the Secretary of its intention to file its Expedited
Motion to Appoint Temporary Receiver with this Court, and it notified the Secretary that it was proposing
a Miami, Florida-based candidate for the position of receiver.
6. Defendants are Mississippi citizens. Upon information and believe, a large majority of
the investors in Defendants’ Ponzi scheme are Mississippi citizens.
7. Upon information and belief, most of the assets are situated in Mississippi.
8. The securities law violations alleged against Defendants, if proven, also constitute
violations of the Mississippi Security Act, under which the Secretary can assess fines, penalties, and other
sanctions such as restitution on behalf of Mississippi investors.
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.
2
10. The Secretary has an alternative receiver candidate, situated in Mississippi, to
recommend to this Court, as to avoid any undue delay or prejudice. A copy of the Secretary’s alternative
receiver is attached hereto as Exhibit “A”.
11. Because the Secretary is not a party to the Madison Timber action, the Secretary has no
avenue to oppose the SEC’s recommendation for appointment of receiver in this action, or recommend
an alternative candidate. But the Secretary is charged with enforcing the Mississippi Securities Act and
protecting Mississippi investors and has significant interests in the property that is the subject of the action
and therefore seeks to intervene.
12. The Secretary therefore respectfully submits that he is entitled to intervene as of right
pursuant to Fed. R. Civ. P. Rule 24(a)(2) because the Court’s appointment of receiver may impair the
Secretary’s ability to protect the interests of Mississippi investors harmed by this scheme and may impair
the Secretary’s ability to discharge his duties under the Mississippi Securities Act.
13. In accordance with Local Rule 7(b)(10), the Secretary has conferred with counsel for
Defendants and counsel for the SEC. The Motion is unopposed by both counsel for the Defendants and
counsel for the SEC.
THIS the 11th day of May 2018.
Respectfully Submitted,
C. DELBERT HOSEMANN, JR., in his Official
Capacity as MISSISSIPPI SECRETARY OF
STATE
BY: JIM HOOD, ATTORNEY GENERAL FOR THE

STATE OF MISSISSIPPI
BY: /s/ Douglas T. Miracle

DOUGLAS T. MIRACLE, MSB # 9648
SPECIAL ASSISTANT ATTORNEY GENERAL
OFFICE OF THE ATTORNEY GENERAL
CIVIL LITIGATION DIVISION
Post Office Box 220
3
Jackson, Mississippi 39205

Telephone No. (601) 359-5654
Facsimile No. (601) 359-2003
dmira@ago.state.ms.us
OF COUNSEL
Jessica Leigh Long
Assistant Secretary of State
MSB #103316
Jeffrey L. Lee
Senior Attorney
MSB # 103180
Office of the Mississippi Secretary of State

Securities Division
125 S. Congress Street
Jackson, MS 39201
Telephone No. (601) 359-1650
Facsimile No. (601) 359-9070
CERTIFICATE OF SERVICE
I, Douglas T. Miracle, Special Assistant Attorney General for the State of Mississippi, do
hereby certify that on this date I electronically filed the foregoing document with the Clerk of
this Court using the ECF system, which sent notification of this filing to all counsel of record.
THIS the 11th day of May, 2018.
/s/ Douglas T. Miracle

DOUGLAS T. MIRACLE
4

SOUTHERN DISTRICT OF MISSISSIPPI
NORTHERN DIVISION

COMMISSION,
Plaintiff,
v. Case No.
ARTHUR LAMAR ADAMS AND 3:18-cv-252-CWR-FKB

MADISON TIMBER PROPERTIES, LLC,
Defendants,
MEMORADUM OF LAW IN SUPPORT OF

EXPEDITED MOTION TO APPOINT TEMPORARY RECEIVER
In this securities fraud action, Plaintiff Securities and Exchange Commission
(“Commission”) respectfully moves the Court to appoint a temporary receiver over
Defendants’ assets to preserve them for the benefit of investors. Due to the continued
risk of dissipation of those assets, the Commission asks that the motion be heard as
expeditiously as the Court’s schedule permits.
I. Introduction and Background
In its Complaint, the Commission claims that, beginning in approximately
2004, Defendant Arthur Lamar Adams (“Adams”), through his wholly-owned

company, Madison Timber Properties, LLC (“MT Properties”), committed securities
fraud by operating a Ponzi scheme. [Dkt. 3, Compl., ¶ 1]. The Commission alleges
that Adams and MT Properties have raised at least $85 million from over 150
investors in multiple states. [Dkt. 3, Compl., ¶ 2].
Defendant Adams does not contest that he used MT Properties to conduct a
Ponzi scheme. At Adams’ change of plea hearing on May 9, 2018 in United States v.
Adams, No. 3:18-CR-88-CWR-LRA (S.D. Miss.), Adams pled guilty to the Bill of
Information filed against him for bank and wire fraud based on the same conduct.
Defendants and their agents still have control and possession of investor funds
as well as certain assets purchased with investor funds. Counsel for Defendant
Adams has identified interests owned by Adams in at least four real estate ventures.
See Exhibit A (May 8, 2018, Letter from John M. Colette). Upon information and
belief, Adams acquired at least some of these interests while the scheme alleged in
the Complaint was on-going. It is, thus, highly likely that such interests were
acquired, in whole or in part, with investor funds. Counsel for Adams has also
advised that several payments are coming due this month to maintain Adams’
ownership interests in these ventures. Id.
In addition, individual investors recently have filed lawsuits against Adams
and Madison Timber related to this scheme. See, e.g., Exhibit B. Absent a receiver
and the associated stay of third party litigation that would accompany his or her
2
appointment, there will be a “race to the courthouse” and the attendant possibility for
certain investors to obtain preferential treatment with respect to Defendants’ assets.
The Commission’s ability to seek receivership serves as a critical tool in
enforcing the federal securities laws. In light of the estimated size of the fraud –
nearly $100 million – and the number of investors, a receiver is necessary in this case
to preserve and analyze Defendants’ and third parties’ documents and financial
records to determine the full extent of investor losses, to discover if there are viable
claims against third parties, and to establish a claims process to facilitate a fair and
orderly distribution of remaining assets to investors. Moreover, in order to marshal
and preserve Defendants’ assets and identify other possible assets for the benefit of
the defrauded investors, the Commission asks the Court to use its equitable powers to
appoint a receiver to take control of those assets.
The Commission therefore seeks the appointment of a temporary receiver who
will, within 60 days, file a report that includes a preliminary plan for the
administration of the receivership estate, including recommendations as to the most
efficient means for marshalling, liquidating and distributing assets within that estate.
The Court, with input from the Commission, can then better determine whether the
receivership should be continued.
3
II. Equitable Power of District Courts to Order a Receivership
The Fifth Circuit and other courts have repeatedly emphasized the broad
equitable powers of district courts to shape remedies necessary to effectuate the
purposes of the federal securities laws, to preserve a defendant’s assets, and to ensure
that wrongdoers do not profit from their unlawful conduct. SEC v. Wencke, 622 F.2d
1393, 1371 (9th Cir. 1980); SEC v. Safety Fin. Serv., Inc., 674 F.2d 368, 372-73 (5th
Cir.1982) (“the district court has broad powers and wide discretion to determine . . .
relief in an equity receivership”); SEC v. Blatt, 583 F.2d 1325, 1335-1336 (5th Cir.
1978).
Based on long-standing principles of equity, a receiver serves as a disinterested
court officer who collects and possesses all property subject to the receivership,
known as the receivership “estate.” See, e.g., Atlantic Trust Co. v. Chapman, 208
U.S. 360, 370-71 (1908). The court holds custody of the receivership estate and
administers it through the receiver. Id.; see also Chicago Deposit Vault Co. v.
McNulta, 153 U.S. 554 (1894). The receiver’s possession, therefore, is the court’s
possession. Id. When a district court creates a receivership, the receiver’s focus is
“to safeguard the assets, administer the property as suitable, and to assist the district
court in achieving a final, equitable distribution of the assets if necessary.” Liberte
Capital Group, LLC v. Capwill, 462 F.3d 543, 551 (6th Cir. 2006).
4
The decision to create a receivership rests in the Court’s discretion. Bookout v.
First Nat. Mortg. & Discount Co., Inc., 514 F.2d 757, 758 (5th Cir. 1975).
III. Appointment of an SEC Receiver is Well-Established in the Fifth Circuit
The Fifth Circuit has recognized that “[t]he appointment of a receiver is a
well-established equitable remedy available to the SEC in its civil enforcement
proceedings for injunctive relief.” SEC v. First Fin. Group of Texas, 645 F.2d 429,
438 (5th Cir. 1981); see also Netsphere, Inc. v. Baron, 703 F.3d 296, 306 (5th Cir.
2012) (“Thus, in cases of non-compliance with SEC regulations, a receiver may be
appointed to prevent the corporation from dissipating corporate assets and to pay
defrauded investors.”). This discretion derives from the inherent powers of an equity
court to fashion relief. Id.
The Fifth Circuit has also recognized that an evidentiary hearing is not
required on the Commission’s request to appoint a receiver where the record
discloses sufficient facts to warrant such an appointment. Bookout v. Atlas Fin.
Corp., 395 F. Supp. 1338, 1342 (N.D. Ga. 1974), aff’d, 514 F.2d 757 (5th Cir. 1975).
The Court may appoint a receiver on a prima facie showing of fraud and
mismanagement. See First Fin. Group, 645 F.2d at 438. Factors courts have
considered that indicate the need for a receivership include the following: “a valid
claim by the party seeking the appointment; the probability that fraudulent conduct
has occurred or will occur to frustrate that claim; imminent danger that property will
5
be concealed, lost, or diminished in value; inadequacy of legal remedies; lack of a
less drastic equitable remedy; and likelihood that appointing the receiver will do
more good than harm.” Santibanez v. Wier McMahon & Co., 105 F.3d 234, 242 (5th
Cir. 1997), quoting Aviation Supply Corp. v. R.S.B.I. Aerospace, Inc., 999 F.2d 314,
316-17 (8th Cir. 1993).
IV. This Court Should Create a Receivership in this Case
Defendants do not dispute that they operated a Ponzi scheme that involved
hundreds of investors and close to a $100 million dollars. Indeed, Defendant Adams
has pled guilty to criminal charges of wire fraud and bank fraud based on the same
conduct. Thus, there is no dispute that fraudulent conduct occurred. It is in the
interest of justice, and to the benefit to the investors, to have a court-appointed
receiver to oversee the process of returning the remaining funds in as fair and
economical manner as possible. The appointment of a receiver will also prevent
investors from obtaining preferential treatment to Defendants assets by filing
individual lawsuits.
Moreover, in addition to the funds frozen in various accounts, there are a
number of illiquid assets at stake. Mr. Adams has invested in various real estate
projects. See Exhibit A (Letter from John M. Colette). These investments will likely
be included in the receivership estate because, among other things, Adams
presumably purchased or maintained some or all of those real estate projects with
6
investor funds. Indeed, Adams’ counsel has advised that almost $200,000 in
payments to various real estate investments are coming due, and that such payments
must be made to preserve Adams’ interest in those investments. Id. A receiver is
needed to determine whether maintaining those investments is in the best interest of
defrauded investors, particularly because the potential estate has minimal liquid
assets at the moment.
Accordingly, the Court should appoint a receiver over Defendants’ assets to
marshal Defendants’ assets, and preserve and maximize their value for the benefit of
the defrauded investors.
V. The SEC’s Receiver Recommendation
Generally, courts rely on the SEC to recommend a receiver to the court.
Anticipating that the Court may ask the Commission to recommend a potential
receiver here, the Commission sought three proposals from individuals who have
served as receivers in other SEC cases. If the Court prefers to rely on the
Commission’s recommendation rather than select its own receiver, the Commission
respectfully recommends that the Court appoint Kenneth D. Murena, Esq., of
Damian & Valori, LLP, in Miami, Florida, as the receiver in this matter. See Exhibit
C (Murena’s résumé and list of receivership cases). Mr. Murena has extensive
experience serving as a receiver, both in SEC matters and other civil contexts, and in
particular he is very familiar with this sort of fraud and the types of assets that the
7
Commission believes will compose the estate. While Mr. Murena is located in
Miami, he has committed that, if appointed, he will not bill the estate for expenses
incurred while traveling between Miami and Mississippi.
The Commission respectfully requests that this Court enter the proposed order
appointing Kenneth D. Murena as a temporary receiver over the Defendants’ assets.
VI. Conclusion
Based on the foregoing, the Commission respectfully requests that the Court
grant its motion and enter the proposed order appointing Kenneth D. Murena, Esq.,
of Damian & Valori LLP, as a temporary receiver over Defendants’ assets.
Dated this 10th day of May, 2018.
Respectfully submitted,
s/ W. Shawn Murnahan
W. Shawn Murnahan
Senior Trial Counsel
Georgia Bar No. 529940
Tel: (404) 842-7669
Email: murnahanw@sec.gov
M. Graham Loomis
Regional Trial Counsel
Tel: (404) 842-7622
Email: loomism@sec.gov
Justin Delfino
Senior Counsel
Tel: (404) 942-0698
8
Email: delfinoj@sec.gov
COUNSEL FOR PLAINTIFF

Securities and Exchange Commission
Atlanta Regional Office
950 East Paces Ferry Road, N.E., Suite 900
Atlanta, GA 30326-1382
Tel (main): (404) 842-7600
Fax: (703) 813-9364
OF COUNSEL
D. Michael Hurst, Jr.

United States Attorney
s/Kristi H. Johnson
Kristi H. Johnson
Assistant United States Attorney
MS Bar No. 102891
Marc Perez
WA Bar No. 33907
Civil Division
United States Attorney's Office
Southern District of Mississippi
501 East Court Street, Suite 4-430
Jackson, MS 39201
Tel: (601) 973-2887
Fax: (601) 965-4409
9

NORTHERN DIVISION

COMMISSION,
Plaintiff,
v. Case No. 3:18-CV-252-

CWR-FKB

Defendants,
I hereby certify that on this day, I served a true and correct copy of the
Plaintiff’s Memorandum of Law in Support of its Expedited Motion to Appoint
Receiver on John M. Colette, Esq., as counsel for Defendants, via email and by
United Parcel Service.

s/Kristi H. Johnson
Kristi H. Johnson

NORTHERN DIVISION

COMMISSION,
Plaintiff,
v. Case No.
ARTHUR LAMAR ADAMS AND 3:18-cv-252-CWR-FKB

Defendants,
EXPEDITED MOTION TO APPOINT TEMPORARY RECEIVER
Plaintiff Securities and Exchange Commission (“Commission”) files this
Expedited Motion for the Appointment of a Temporary Receiver for Defendants in
this matter. Due to the continued risk of dissipation of those assets, the Commission
asks that the motion be heard as expeditiously as the Court’s schedule permits.
In support of its motion, the SEC contemporaneously files a memorandum
brief and the following supportive exhibits:
Exhibit A: Letter from John M. Colette
Exhibit B: Individual Investor Lawsuit

Exhibit C: Murena’s résumé and list of receivership cases
As set forth in the Complaint, the Commission alleges that Defendants
defrauded numerous investors via a Ponzi scheme. While Defendants have not yet
responded to the Complaint, Defendants’ counsel has indicated that Defendants do
not contest the core allegation that they conducted a Ponzi scheme. Indeed, during
the change of plea hearing on May 9, 2018 in United States v. Adams, No. 3:18-CR-
88-CWR-LRA (S.D.Miss.), Defendant Adams pled guilty to the Bill of Information
filed against him for bank and wire fraud based on the same conduct.
Under these circumstances, a receiver is necessary to take control of the
Defendants’ assets for the benefit of investors in order to marshal and preserve those
assets. The primary purpose of equity receiverships in an SEC action is to promote
orderly and efficient administration of the estate by the district court for the benefit of
investors. SEC v. Hardy, 803 F.2d 1034, 1038 (9th Cir. 1986). “The appointment of
a receiver is a well-established equitable remedy available to the SEC in its civil
enforcement proceedings for injunctive relief.” SEC v. First Fin. Group of Texas,
645 F.2d 429, 438 (5th Cir. 1981). Moreover, because the Commission remains
concerned about the potential for dissipation of investor funds and assets, the
Commission requests that this motion be heard on an expedited basis.
Based on common law principles of equity, a receiver serves as a disinterested
court officer who collects and possesses all property subject to the receivership,
known as the receivership “estate.” See, e.g., Atlantic Trust Co. v. Chapman, 208
2
U.S. 360, 370-71 (1908). The court holds custody of the receivership estate and
administers it through the receiver. Id.; see also Chicago Deposit Vault Co. v.
McNulta, 153 U.S. 554 (1894). The receiver’s possession, therefore, is the court’s
possession. Id. In this case, the Commission anticipates the receiver ultimately
distributing the estate assets back to defrauded investors.
The Commission’s ability to seek receivership serves as a critical tool in
enforcing the federal securities laws. In light of the estimated size of the fraud –
nearly $100 million – and the number of investors, a receiver is necessary in this case
to preserve and analyze Defendants’ and third parties’ documents and financial
records to determine the full extent of investor losses, to discover if there are viable
claims against third parties, and to establish a claims process to facilitate a fair and
orderly distribution of remaining assets to investors.
The Commission seeks the appointment of a temporary receiver who will,
within 60 days, file a report that includes a preliminary plan for the administration of
the receivership estate, including recommendations as to the most efficient means for
marshalling, liquidating and distributing assets within that estate. The Court, with
input from the Commission, can then better determine whether the receivership
should be continued.
The Commission, therefore, respectfully asks that the Court enter an order in
the form filed concurrently herewith appointing a temporary receiver in this case.
3
s/ W. Shawn Murnahan
W. Shawn Murnahan
Senior Trial Counsel
Tel: (404) 842-7669
Email: murnahanw@sec.gov
M. Graham Loomis
Regional Trial Counsel
Tel: (404) 842-7622
Email: loomism@sec.gov
Justin Delfino
Senior Counsel
Tel: (404) 942-0698
Email: delfinoj@sec.gov
COUNSEL FOR PLAINTIFF

Securities and Exchange Commission
Atlanta Regional Office
950 East Paces Ferry Road, N.E., Suite 900
Atlanta, GA 30326-1382
Tel (main): (404) 842-7600
Fax: (703) 813-9364
4
OF COUNSEL
D. Michael Hurst, Jr.

United States Attorney
s/Kristi H. Johnson
Kristi H. Johnson
MS Bar No. 102891
Marc Perez
WA Bar No. 33907
Civil Division
United States Attorney's Office
Southern District of Mississippi
501 East Court Street, Suite 4-430
Jackson, MS 39201
Tel: (601) 973-2887
Fax: (601) 965-4409
5

NORTHERN DIVISION

COMMISSION,
Plaintiff,
v. Case No. 3:18-CV-252-

CWR-FKB

Defendants,
I hereby certify that on this day, I served a true and correct copy of the
Plaintiff’s Expedited Motion to Appoint Temporary Receiver on John M. Colette,
Esq., as counsel for Defendants, via email and by United Parcel Service.
s/Kristi H. Johnson
Kristi H. Johnson
EXHIBIT
A

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Case 3:18-cv-00252-CWR-FKB Document 25 Filed 05/25/18 Page 1 of 3

SECURITIES & EXCHANGE COMMISSION,

ARTHUR LAMAR ADAMS,

Before CARLTON W. REEVES, District Judge.

State have requested the appointment of a receiver to control

3:18-CR-88-CWR-LRA (S.D. Miss).

Securities & Exchange Commission Office of the Inspector General, Over-

Request For Proposals Order soliciting bids for the receiver-

CONFLICTS OF INTEREST AND BACKGROUND INFORMATION FORM

Under penalty of perjury, I declare the following:

SECURITIES & EXCHANGE COMMISSION,

ARTHUR LAMAR ADAMS,

Before CARLTON W. REEVES, District Judge.

State have requested the appointment of a receiver to control

3:18-CR-88-CWR-LRA (S.D. Miss).

Securities & Exchange Commission Office of the Inspector General, Over-

Request For Proposals Order soliciting bids for the receiver-

UNITED STATES DISTRICT COURT

SECURITIES AND EXCHANGE

v. Civil Action No.

MISSISSIPPI SECRETARY OF STATE’S UNOPPOSED

this motion to intervene, the Secretary states as follows:

which requires the appointment of a receiver.

the Court-Appointed Receiver or the Registry of the Court.

a Miami, Florida-based candidate for the position of receiver.

the investors in Defendants’ Ponzi scheme are Mississippi citizens.

sanctions such as restitution on behalf of Mississippi investors.

10. The Secretary has an alternative receiver candidate, situated in Mississippi, to

receiver is attached hereto as Exhibit “A”.

and therefore seeks to intervene.

counsel for the SEC.

THIS the 11th day of May 2018.

BY: JIM HOOD, ATTORNEY GENERAL FOR THE

BY: /s/ Douglas T. Miracle

Jackson, Mississippi 39205

Office of the Mississippi Secretary of State

THIS the 11th day of May, 2018.

/s/ Douglas T. Miracle

UNITED STATES DISTRICT COURT

SECURITIES AND EXCHANGE

ARTHUR LAMAR ADAMS AND 3:18-cv-252-CWR-FKB

MEMORADUM OF LAW IN SUPPORT OF

In this securities fraud action, Plaintiff Securities and Exchange Commission

(“Commission”) respectfully moves the Court to appoint a temporary receiver over

expeditiously as the Court’s schedule permits.

I. Introduction and Background

In its Complaint, the Commission claims that, beginning in approximately

2004, Defendant Arthur Lamar Adams (“Adams”), through his wholly-owned

company, Madison Timber Properties, LLC (“MT Properties”), committed securities

investors in multiple states. [Dkt. 3, Compl., ¶ 2].

Defendant Adams does not contest that he used MT Properties to conduct a

ownership interests in these ventures. Id.

In addition, individual investors recently have filed lawsuits against Adams

certain investors to obtain preferential treatment with respect to Defendants’ assets.

The Commission’s ability to seek receivership serves as a critical tool in

orderly distribution of remaining assets to investors. Moreover, in order to marshal

appoint a receiver to take control of those assets.

The Commission therefore seeks the appointment of a temporary receiver who

administration of the receivership estate, including recommendations as to the most

receivership should be continued.

II. Equitable Power of District Courts to Order a Receivership

equitable powers of district courts to shape remedies necessary to effectuate the

Based on long-standing principles of equity, a receiver serves as a disinterested