Motion To Quash

Case 4:09-cr-00342 Document 708
Filed in TXSD on 02/10/12 Page 1 of 19
IN THE UNITED STATES DISTRICT COURT FOR THE SOUTHERN DISTRICT OF TEXAS HOUSTON DIVISION UNITED STATES OF AMERICA v. CR. NO. 4:09-342-01 ROBERT ALLEN STANFORD __________________________________________________________________________ RECEIVERS AND MALCOLM LOVETTS MOTION FOR PROTECTIVE ORDER AND TO QUASH OR MODIFY STANFORDS SUBPOENA ISSUED TO MALCOLM LOVETT __________________________________________________________________________ INTRODUCTION The Receiver, Ralph S. Janvey, and Malcolm Lovett respectfully move the Court for entry of a protective order and an order quashing or modifying the subpoena issued by R. Allen Stanford to Malcolm Lovett (the Subpoena). Mr. Lovett is one of the Receivers retained professional advisors who has worked closely with the Receiver and his attorneys to assist the Receiver in carrying out his duties. Mr. Lovett, however, did not create any valuation reports concerning any Stanford businesses or assets. The Subpoena seeks to require Mr. Lovett to appear and testify at Mr. Stanfords trial, and also seeks production of [a]ll reports, papers, notes, documents and other material relating to your evaluation and recommendations regarding sale of assets once held by Robert Allen Stanford, and/or any company owned or operated by Robert Allen Stanford. Mr. Lovett is available to testify at Mr. Stanfords trial. However, the Receiver and Mr. Lovett respectfully request that, before Mr. Lovett is called to testify, the Court enter an
RECEIVERS AND LOVETTS MOTION FOR PROTECTIVE ORDER AND TO QUASH OR MODIFY STANFORDS SUBPOENA ISSUED TO MALCOLM LOVETT PAGE 1
order directing Mr. Stanford and his attorneys not to question Mr. Lovett before the jury regarding matters protected from disclosure by the attorney-client privilege, the work-product exemption and the consulting expert privilege, specifically including: Mr. Lovetts communications with the Receiver or the Receivers legal counsel and other retained professionals, Mr. Lovetts opinions formed during the course of advising the Receiver and his legal counsel and other professionals, and any documents or other work product created by Mr. Lovett during the course of advising the Receiver and his legal counsel and other professionals.
In addition, the Receiver and Mr. Lovett ask the Court to quash the Subpoenas document request, which is invalid under Rule 17 for multiple reasons, and also represents an improper end-run around the Receivership Order entered by the Northern District of Texas, which enjoins all persons from issuing process against any agent of the Receiver, except in the Northern District of Texas. The Subpoena requests production of privileged categories of
documents that, in the context of Mr. Stanfords prior subpoena to Ernst & Young, this Court has already held that Mr. Stanford is not entitled to receive. Mr. Lovett cannot produce such privileged documentswhich in any event are property of the Receivership Estate pursuant to the Receivership Order. Moreover, Mr. Stanfords criminal defense attorneys have had access to substantially all of the Receiverships non-privileged materials and evidence for half a year now, including access to the more than 15,000 boxes of hard-copy records collected from Stanford entity offices and now located in a Receivership storage warehouse in Houston. Only after Mr. Stanfords trial began, however, did his counsel begin a limited review of these boxes. In addition, the Receiver produced to Mr. Stanford last summer multiple indices and over 140,000
pages of declarations prepared by the Receivers expert, Karyl Van Tassel, and supporting Stanford entity records.1 BACKGROUND A. The SEC enforcement action and the Receivership Order. On February 16, 2009, the Securities and Exchange Commission (SEC) commenced a lawsuit in the Northern District of Texas against R. Allen Stanford, two associates, James M. Davis and Laura Pendergest-Holt, and three of Mr. Stanfords companies, Stanford International Bank, Ltd., Stanford Group Company, and Stanford Capital Management, LLC (collectively, the SEC Defendants). On February 17, 2009, the Northern District Court entered an order appointing Ralph S. Janvey as Receiver over all the assets of the SEC Defendants and all the entities they own or control (the Receivership Order).2 [See No. 09-CV-0298-N, Doc. 10.] B. Retention of Mr. Lovetts company, Strategic Capital Corporation. Malcolm Lovett is the CEO of Strategic Capital Corporation, which was retained to perform services in connection with Baker Botts and other counsels providing legal advice to the Receiver, including by advising the Receiver and his counsel concerning various operational issues and on planning and coordinating the winding down of the affairs of the businesses owned by the Receivership Estate, such as: staffing levels; operational management; release of customer
The materials included financial statements, bank data, tax returns, loan documents, real estate documents, accounting files and analysis, investment summaries, internal and external SIBL reports, and Stanford employee emails. These records include declarations stating (a) that the substantial majority of funds received or utilized by [SGC] was proceeds from the sale of SIB CDs, (b) that [w]ithout income related to SIB CDs, SGC would have been insolvent from at least 2004 forward (and likely before), and (c) that the only reason SGCs financial statements did not reflect negative cash flows between 2004 and 2008 is because SGC received millions of dollars in capital contributions from other Stanford Entities [which] consisted primarily of SIB CD sale proceeds. On March 12, 2009, the Court entered an Amended Order Appointing Receiver. [No. 09-CV-0298-N, Doc. 157.] And on July 19, 2010, the Court entered a Second Amended Order Appointing Receiver. [Id., Doc. 1130; also attached to Exhibit 1, Declaration of Ralph Janvey.] These subsequent amendments to the Receivership Order contained changes not material to this motion. RECEIVERS AND LOVETTS MOTION FOR PROTECTIVE ORDER AND TO QUASH OR MODIFY STANFORDS SUBPOENA ISSUED TO MALCOLM LOVETT PAGE 3
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accounts; evaluation of proprietary accounts; termination of employee benefit plans; office closings and record retention; negotiation of lease and executory contract termination; and other such matters as requested by the Receiver and his counsel. In addition, although Mr. Lovett helped to establish procedures for the sale of private equity investments and real estate that was part of the Receivership Estate, he did not perform valuations of those assets. Mr. Lovett is not a fact witness. His only connection to the Stanford Ponzi scheme is that his firm was retained to assist the Receiver and his attorneys in carrying out the Receivers court-ordered duties and in related litigation. All Stanford-related documents in Mr. Lovetts possession are Receivership Assets under the exclusive jurisdiction and possession of the Receiver and the District Court for the Northern District of Texas pursuant to the Receivership Order. [Doc. 485, Ex. 9, Second Amended Order Appointing Receiver, at 2-3.] C. The Receivers prior productions and efforts to cooperate with Mr. Stanfords counsel. Mr. Stanfords subpoena to Mr. Lovett is simply the latest in a long series of attempts by Mr. Stanfords lawyers to seek access to all documents in the Receivers possession, including privileged communications and work product. However, as a result of the Receivers voluntary cooperation with Mr. Stanfords defense team, Mr. Stanfords attorneys have had access to substantially all of the Receiverships non-privileged materials and evidence for half a year. [See Doc. 565 at 5 n.9 (this Courts order noting that thousands of boxes of documents in the possession of the Receiver in the SEC litigation . . . for several months . . . have been available for Stanfords defense team to peruse at their leisure).] In June 2011, Mr. Stanfords counsel wrote a letter to the Receiver requesting access to virtually everything in the possession of the Receiver concerning Mr. Stanford and his collapsed financial empire which consisted of over 140 entities chartered and operating in
more than 100 discrete locations spanning fifteen states in the U.S. and thirteen countries in Europe, the Caribbean, Canada, and Latin America. (Doc. 485, Ex. 2.) As part of the request, Mr. Stanfords counsel sought all Work Papers from Ernst & Young and FTI Consulting, two of the professional firms Baker Botts retained to help unwind the Stanford scheme and prepare for related litigation. (Id.) The letter also sought Work Papers from Mr. Lovetts firm, Strategic Capital Corporation. (Id.) Following an exchange of emails in which Receivers counsel expressed concern over the breadth of Mr. Stanfords requests, counsel spoke by phone on June 17 to discuss the requests. During the call, Mr. Stanfords counsel refused to even discuss narrowing their
requests, claiming they could not do so because they did not know what information the Receiver possessed. To meet that purported concern, the Receivers counsel offered to produce a number of indices of non-privileged items in possession of the Receiver that would assist Mr. Stanfords counsel in narrowing their requests. (Doc. 485, Ex. 3.) Following the call, Receivers counsel sent the following materials to Mr. Stanfords counsel: June 23 an inventory of the more than 15,000 boxes of hard-copy records collected from Stanford entity offices and now located in a Receivership storage warehouse in Houston. (Doc. 485, Ex. 4.) June 27 an inventory of the over 2,000 IT assets collected from Stanford entity offices and available at the same Houston warehouse. (Doc. 485, Ex. 5.) July 5 a log of documents and data produced by the Receiver to the SEC, DOJ and FBI. (Doc. 485, Ex. 6.) July 22 an index of Stanford entity Compliance Licensing and Registration files, which are located in filing cabinets at the Receivership warehouse in Houston. (Doc. 485, Ex. 7.) July 22 an index of over 165 Stanford entity IT assets in the possession of the Receivers retained consultant, FTI Consulting. (Id.)
July 22 the declarations of Karyl Van Tassel, the Receivers retained expert, concerning the existence and scope of the Stanford Ponzi scheme, including the documentation she relied upon in preparing those declarations (e.g., financial statements, bank data, tax returns, loan documents, real estate documents, accounting files and analysis, investment summaries, internal and external SIBL reports, and Stanford employee emails). (Id.) October 27 copies of all declarations submitted by Karyl Van Tassel relating to the Stanford matter along with their exhibits. October 28 transcripts of the depositions of Karyl Van Tassel relating to the Stanford matter along with the deposition exhibits.
Rather than identify even one box, file or other item of evidence they wanted to review, Mr. Stanfords counsel began issuing subpoenas, including one directed at another of the Receivers retained professionals, Ernst & Young (EY). Consistent with their earlier refusals to limit their requests, the EY subpoena demanded immediate production of [a]ny and all documents, papers, memorandum, electronic or otherwise, including all copies of work product related to Robert Allen Stanford or any of the Stanford entities from the inception of your working relationship until the present or end of your professional relationship. The Receiver moved to quash Mr. Stanfords subpoena to EY, and the Court heard arguments from counsel for the Receiver and counsel for Mr. Stanford on August 25, 2011.3 At the hearing, counsel for the Receiver advised the Court that the Receiver was willing to produce records the receiver gathered when he took over that are financial records, accounting records, tax records that were in EYs possession. (Doc. 485, Ex. 10, Tr. at 50.) The Receivers counsel asserted, however, that EYs work product is privileged and protected from discovery. (Id. at 51.)
Before the hearing, on August 4, four members of Mr. Stanfords criminal defense team were allowed to visit the Receiverships document warehouse in Houston, but they did not identify any specific boxes or items at the warehouse that they wanted to review. RECEIVERS AND LOVETTS MOTION FOR PROTECTIVE ORDER AND TO QUASH OR MODIFY STANFORDS SUBPOENA ISSUED TO MALCOLM LOVETT PAGE 6
Mr. Stanfords counsel argued that he wanted the Receivers privileged work product because it would cut[] about months and months and a ton of CJA funds out of what we need to go through as far as conducting investigations in connection with Allen Stanfords defense costs. (Id. at 40; see also id. at 48-49 (Mr. Stanfords counsel argued that requiring EY to produce its work product will save the CJA fund a lot of money and the CJA fund is a tax fund, and it would be nice for the taxpayers of this country to save some money).) Yet Mr. Stanford did not (and has not) cited any legal authority that would entitle him to production of the Receivers privileged work product or offered any equitable basis for adopting that position, which would amount to requiring Mr. Stanfords victims to pay to fund his legal defense. On September 2, the Court issued an order stating that Mr. Stanford was entitled to the records that the Receivers counsel represented that the Receiver was willing to produce,4 but that Stanford is not entitled to the . . . documents Ernst & Young created after the receivership . . . which [the Receivers counsel] indicated the Receiver is not willing to turn over to Stanford due to privilege. [Doc. 497 at 7.] The same rationale applies to Mr. Stanfords subpoena to Mr. Lovett. ARGUMENT AND AUTHORITIES A. Mr. Lovetts communications with the Receiver and the Receivers counsel and other retained professionals are protected from disclosure by the attorney-client privilege. 1. The attorney-client privilege. The attorney-client privilege protects from disclosure confidential
communications made to obtain a lawyers professional advice and assistance. SEC v. Brady,
At the August 25 hearing regarding the EY subpoena, the Receivers counsel also represented that the Receiver would produce (a) documents related to pre-Receivership work that EY had done for a Stanford entity, and (b) Stanford-related tax return documents prepared by EY for filing with taxing authorities. Neither of these categories is applicable to Mr. Lovett or his firm. RECEIVERS AND LOVETTS MOTION FOR PROTECTIVE ORDER AND TO QUASH OR MODIFY STANFORDS SUBPOENA ISSUED TO MALCOLM LOVETT PAGE 7
238 F.R.D. 429, 438 (N.D. Tex. 2006).
Moreover, the attorney-client privilege covers
communications not only with lawyers but also with representatives of lawyers or persons whom lawyers employ to assist in providing legal services. Pasadena Ref. Sys. Inc. v. United States, No. 3:10CV0785K, 2011 WL 1938133, at *1 (N.D. Tex. Apr. 26, 2011) (citing United States v. Pipkins, 528 F.2d 559, 562 (5th Cir. 1976)). The privilege may also reach outside experts employed to help the lawyer provide legal services, such as an accountant. 2011 WL 1938133, at *1 (citing United States v. Kovel, 296 F.2d 918, 921 (2d Cir. 1961) (presence of accountant is necessary, or at least highly useful, for the effective consultation between the client and the lawyer which the privilege is designed to permit)). 2. Mr. Lovetts communications with the Receiver and with the Receivers counsel and retained professionals are protected by the attorney-client privilege. In the initial days of the Receivership, Mr. Lovetts firm, Strategic Capital Corporation, was retained to perform services related to Baker Botts and other counsels rendition of legal advice to the Receiver. Substantially all of Mr. Lovetts communications with the Receiver, and all of Mr. Lovetts communications with Baker Botts and other lawyers and professionals retained by the Receiver, were made in confidence for the purpose of facilitating the rendition of legal advice to the Receiver. (Ex. 1, Janvey Decl.) The Receiver has maintained the confidence of such communications and has not disclosed them to any third parties. (Id.) Therefore, such communications are protected from disclosure by the attorney-client privilege.5 Moreover, only the Receiver and not Mr. Lovett has authority to assert or waive the privilege with respect to attorney-client communications that involved Mr. Lovett. See, e.g.,
Stanford has previously argued that the so-called fiduciary exception to the attorney-client privilege applies in this case, but Stanford has not cited a single case where a receivership court has applied a fiduciary exception, and the Receiver has found none. For all the reasons set forth in the Receivers reply brief regarding the EY subpoena, no fiduciary exception applies in this case. [See Doc. 485 at 11-14.] RECEIVERS AND LOVETTS MOTION FOR PROTECTIVE ORDER AND TO QUASH OR MODIFY STANFORDS SUBPOENA ISSUED TO MALCOLM LOVETT PAGE 8
United States v. Juarez, 573 F.2d 267, 276 (5th Cir. 1978) (attorney-client privilege is the clients and his alone).6 B. Work product created by Mr. Lovett is not discoverable. 1. Documents and analysis prepared by Mr. Lovett in anticipation of litigation are also exempt from disclosure by the work-product doctrine and consulting expert privilege. The work product and communications created by Mr. Lovett during the course of his work for the Receivership and its counsel were prepared in anticipation of litigation involving the Receiver. (Ex. 1, Janvey Decl.) Indeed, because the Receivers duties, and therefore the duties of the professionals retained by the Receiver, all originate from the orders of the Receivership Court, all of the materials prepared by Mr. Lovett were prepared in connection with the litigation pending in the Receivership Court. (Id.) Additionally, Mr. Lovetts work for the Receiver includes consulting with the Receiver and his counsel concerning matters within Mr. Lovetts expertise and that relate to pending or reasonably anticipated litigation. (Id.) For
Although Mr. Lovett performed no work for Stanford prior to the Receivership, this same rationale would apply to pre-receivership privileged communications. When a court places a corporation in receivership, any right to assert the attorney-client privilege on behalf of the corporation passe[s] [to] the receiver. United States v. Plache, 913 F.2d 1375, 1381 (9th Cir. 1990); see also SEC v. Bravata, No. 09-12950, 2011 WL 606745, at *2 (E.D. Mich. Feb. 11, 2011) (holding that only the receiver, as new management, had authority to assert or waive attorneyclient privilege) (citing CFTC v. Weintraub, 471 U.S. 343, 349 (1985)). In Weintraub, the Supreme Court analyzed whether the trustee of a corporation in bankruptcy had the power to waive a debtor corporations attorney-client privilege with respect to communications that took place before the filing of the bankruptcy petition. The Court held that [b]ecause the attorney-client privilege is controlled, outside of bankruptcy, by a corporations management, the actor whose duties most resemble those of management [i.e., the trustee] should control the privilege in bankruptcy. 471 U.S. at 351-52. Receivership courts have consistently applied the Weintraub rationale in holding that receivers control the receivership entities attorney-client privilege. See SEC v. Elfindepan, 169 F. Supp. 2d 420, 430 (M.D.N.C. 2001) (relying on Weintraub in holding that the receiver was the actor most analogous to management in the companies at issue and therefore succeeded to the companies attorney-client privilege); Odmark v. Westside Bancorporation, Inc., 636 F. Supp. 552, 554 (W.D. Wash. 1986) (holding that because receiver succeeded to the rights and powers of the company and its management, he also succeeded to the attorney-client privilege which existed between the corporation and its former counsel); SEC v. Marker, No. 1:02CV01109, 2006 WL 288426, at *4 (M.D.N.C. Feb. 6, 2006) (holding that receiver succeeded to the attorney-client privilege of the receivership entities); CFTC v. Standard Forex, Inc., 882 F. Supp. 40, 41, 45 (E.D.N.Y. 1995) (holding that equity receiver controlled corporations attorney-client privilege); Wing v. Woodbury & Kesler, P.C., No. 2:09cv402, 2011 WL 1428076, at *1 (D. Utah Apr. 13, 2011) (noting in Ponzi scheme receivership that it was undisputed that the receiver owned the attorneyclient privilege with respect to pre-receivership communications between receivership entity and its counsel). RECEIVERS AND LOVETTS MOTION FOR PROTECTIVE ORDER AND TO QUASH OR MODIFY STANFORDS SUBPOENA ISSUED TO MALCOLM LOVETT PAGE 9
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example, Mr. Lovett has consulted with and advised the Receiver and his counsel concerning the commissions and loans paid to Stanford financial advisors as compensation for selling SIB CDs, and concerning the account release process for Stanford brokerage accounts frozen by the orders of the Receivership Court.7 (Id.) Such work has been in connection with the Receivers ongoing litigation, including asset-recovery litigation. (Id.) Such materials and communications are protected from disclosure by the workproduct doctrine, which under the Federal Rules, protects documents and tangible things that are prepared in anticipation of litigation or for trial by or for another party or its representative (including the other partys attorney, consultant, surety, indemnitor, insurer, or agent). FED. R. CIV. P. 26(b)(3)(A). These materials and communications are also protected by the consulting expert privilege, which exempts from discovery facts known or opinions held by an expert who has been retained or specially employed by another party in anticipation of litigation or to prepare for trial and who is not expected to be called as a witness at trial. FED. R. CIV. P. 26(b)(4)(D). C. The Subpoena violates the Receivership Order. The Subpoena also violates the Receivership Orders injunction against subpoenaing the Receivers agents outside of the Northern District of Texas. The Receivership Order states, without exception, that attempts to subpoena Receivership records, or to subpoena the Receivers agents, must go through the Receivership Court. [See Doc. 485, Ex. 9, Second Amended Order Appointing Receiver, 9(a).] The Receivership Order also enjoins any act to obtain possession of the Receivership Estate Assets without leave of this Court. [See id., 10(a).] In a previous discovery dispute involving the Receiver and Mr. Stanford, this Court
The freeze over these accounts was also at issue in asset recovery litigation brought by the Receiver. See generally Janvey v. Adams, 588 F.3d 831 (5th Cir. 2009). RECEIVERS AND LOVETTS MOTION FOR PROTECTIVE ORDER AND TO QUASH OR MODIFY STANFORDS SUBPOENA ISSUED TO MALCOLM LOVETT PAGE 10
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recognized that motions seeking relief from the Receivership Order issued by the Northern District of Texas are more appropriately initially raised before that court. [Doc. 159 at 2.] In addition, the Receivership Order provides that all Receivership records are under the exclusive jurisdiction of the District Court for the Northern District of Texas and that Ralph Janvey is ordered to maintain custody and control of such records. [See Doc. 485, Ex. 9, Second Amended Order Appointing Receiver, 1, 2, 5.] Thus, Mr. Lovett cannot produce any Receivership Records in his possession without consent from either the Receiver or the Northern District Court. D. The Subpoena is improper under Rule 17(c) and binding case law. Rule 17 provides that the court may quash or modify a subpoena if compliance would be unreasonable or oppressive. FED. R. CRIM. PROC. 17(c)(2). Courts have interpreted Rule 17 to require a criminal defendant seeking production of documents through a Rule 17 criminal subpoena to establish that (1) the subpoenaed document is relevant, (2) it is admissible, and (3) that it has been requested with adequate specificity. United States v. Butler, 429 F.3d 140, 149 (5th Cir. 2005) (quoting United States v. Loe, 248 F.3d 449, 466 (5th Cir. 2001)); United States v. Nixon, 418 U.S. 683, 699 (1974); see also Doc. 497 at 5 (this Courts order applying Butler).8 1. The Subpoena must be quashed for lack of specificity. The Subpoena seeks from Mr. Lovett [a]ll reports, papers, notes, documents and other material relating to your evaluation and recommendations regarding sale of assets once
Stanford has previously argued that the Rule 17 standard is relaxed when applied to subpoenas to third parties rather than subpoenas to the government. [See Doc. 342 at 18 (At least one court has held that a lower evidentiary standard is required by the Constitution when a defendant issues a subpoena duces tecum to a third party.).] However, Stanford has not cited any opinion from any court in the Fifth Circuit with such a holding, and the Receiver has found none. To the contrary, this Court applied the standard analysis under Nixon and Rule 17 to a subpoena directed at Arthur Anderson, LLP (a third party) in United States v. Skilling, Crim. No. H04025, 2006 WL 1006622, at *3 (S.D. Tex. Apr. 13, 2006). RECEIVERS AND LOVETTS MOTION FOR PROTECTIVE ORDER AND TO QUASH OR MODIFY STANFORDS SUBPOENA ISSUED TO MALCOLM LOVETT PAGE 11
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held by Robert Allen Stanford, and/or any company owned or operated by Robert Allen Stanford. The vague and ambiguous nature of this request makes it impossible to ascertain exactly what documents Stanford seeks. Based on Stanfords prior requests and the positions his counsel has taken before this Court, however, the Receiver anticipates that Stanford intends to seek virtually all documents that Mr. Lovett created or possesses concerning Mr. Stanford and the Stanford entities. But Rule 17 subpoenas seeking all documents . . . are improper and have been routinely rejected by courts: Defendants proposed subpoena duces tecum repeatedly asks for all of whatever it is that follows, and what follows are listings of documents and other things on broad, sweeping subjects, sometimes over periods of months and sometimes over periods of years. This comprehensive request for all documents, records, minutes, or whatever else, is made without any showing that they or any of them are relevant, or that they or any of them would be admissible in evidence. It is simply a broad discovery request such as may be used, or at least attempted, in civil case discovery. Accordingly, because the motion does not meet the exacting requirements of Criminal Procedure Rule 17(c) and is an attempt to use the subpoena duces tecum as a discovery device, which it is not, [the defendants motion for issuance of a Rule 17 subpoena duces tecum must be denied]. United States v. Bermingham, C.R. No. H-02-597, 2007 WL 1052600, at *7 (S.D. Tex. Apr. 5, 2007) (denying request to issue Rule 17(c) subpoena directed at the United Kingdom Central Authority and the Serious Fraud Office) (quoting United States v. Arditti, 955 F.2d 331, 345 (5th Cir. 1992)); see also United States v. Hoeffner, 254 F.R.D. 302, 306 (S.D. Tex. 2008) (Specificity serves to prevent a subpoena from being converted into a license for a fishing expedition to see what may turn up.) (quoting United States v. Skilling, Crim. No. H04025, 2006 WL 1006622, at *3 (S.D. Tex. Apr. 13, 2006)); United States v. Carriles, 263 F.R.D. 400, 402 (W.D. Tex. 2009) (Requesting entire files instead of specific documents [in a Rule 17 subpoena] is indicative of a fishing expedition.); United States v. Morris, 287 F.3d 985, 991
(10th Cir. 2002) (affirming order quashing Rule 17(c) subpoena that requested all records, documents, reports, telephone logs, etc., surrounding the investigation into the FBI undercover agents shooting of [defendant] and the agents entire personnel file because it failed to meet the specificity requirement set forth in Nixon).9 In his prior briefing relating to the EY subpoena, Mr. Stanford relied on but mischaracterized the MacKey case, which he cited for the proposition that (in Stanfords words) courts have reduced the specificity required by the request when the proponent of a subpoena could not be expected to identify the materials he seeks in exacting detail because he does not have access to them. [Doc. 474 at 10 (citing United States v. MacKey, 647 F.2d 898, 901 (9th Cir. 1981)).] But the MacKey case did not involve a dispute over specificity at all, because the subpoena at issue was extremely specific. It sought production of MacKeys diaries, calendars, and appointment books used in the roofing business he operated. 647 F.2d at 899. The MacKey holding actually related to relevancy not specificity. In rejecting the defendants claim that the government failed to sufficiently establish the relevance to the indictment of the documents they requested the government said it sought the calendars and diaries to establish that the defendant met with competitors and engaged in discussions that violated the Sherman Act the court stated that [b]ecause the government has not yet seen the documents, it would be unreasonable to expect a more detailed connection be provided between
Even the cases Mr. Stanford cited to the Court in his briefing regarding the EY subpoena do not support Stanfords position. For example, the Jackson case illustrates exactly why the Subpoena to Mr. Lovett is improper: Specificity is the hurdle on which many subpoena requests stumble. This requirement ensures that the subpoenas are used only to secure for trial certain documents or sharply defined groups of documents. . . . In describing the documents, the subpoena must refer to specific documents or, at least, to specific kinds of documents. . . . The specificity hurdle, however, cannot be cleared by simply naming the title of the document. The moving party must specify why the materials are wanted, what information is contained in the documents, and why those documents would be relevant and admissible at trial. 647 F. 2d at 899 (citations omitted). RECEIVERS AND LOVETTS MOTION FOR PROTECTIVE ORDER AND TO QUASH OR MODIFY STANFORDS SUBPOENA ISSUED TO MALCOLM LOVETT PAGE 13
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the contents of the documents and the ultimate facts at issue in the case. Id. at 901. The holding in the MacKey case does not even relate to, much less support, Mr. Stanfords failure to articulate specific discovery requests in his subpoena to Mr. Lovett. Accordingly, because the Subpoenas document request is not specific to any document or to any issue relevant to Mr. Stanfords criminal proceeding, it must be quashed. 2. Mr. Stanford has not established that any (much less all) Stanford-related documents in Mr. Lovetts possession including privileged work product are relevant and admissible. To satisfy Nixons relevancy requirement, the defendant must show that the documents sought have real relevance to the particular counts for which [the defendant] was charged. Hoeffner, 254 F.R.D. at 305-06 (quoting Butler, 429 F.3d at 149 (affirming district courts order quashing a subpoena where the breadth of subject matter that [the defendant] sought failed to evoke any real relevance to the particular counts for which he was charged)). But Mr. Stanford has not made any showing suggesting that the documents he seeks from Mr. Lovett are relevant to whether Mr. Stanford solicited investment funds under false pretenses, failed to invest those funds as promised, misappropriated those funds for personal use, and misrepresented to investors the content, performance, and auditing practices of the investment portfolio. [Doc. 565 at 4 n.7 (this Courts order enumerating the primary allegations in this case).] Moreover, Mr. Stanford has not made any showing because he cannot that materials created by Mr. Lovett after the Receivership began constitute relevant and admissible evidence concerning these issues. Thus, the Subpoenas document request fails to satisfy
Nixons relevancy requirement and must be quashed. The Subpoenas document request must also be quashed because Mr. Stanford has failed to show that the subpoenaed documents would be admissible in his criminal trial. Admissibility requires the party seeking the subpoena to make a sufficient preliminary showing
that the requested material contains evidence admissible with respect to the offenses charged in the indictment. Hoeffner, 254 F.R.D. at 306. Conclusory allegations of relevance and
admissibility are insufficient. United States v. Ruedlinger, 172 F.R.D. 453, 456 (D. Kan. 1997); see also Skilling, Crim. No. H04025, 2006 WL 1006622, at *3 (Conclusory allegations of relevance are insufficient.). Thus, when a defendant has failed to affirmatively establish that the documents sought are relevant and admissible, a subpoena is improper and must be quashed. Mr. Stanford has failed to make any showing that the broad and poorly defined set of documents he seeks is relevant or admissible. Perhaps most noteworthy, Mr. Stanford has not and cannot cite any legal basis for a claim that work product created by Mr. Lovett after the Receivership began might constitute admissible evidence in his criminal trial.10 As a result, the Subpoenas document request must be quashed. E. Production or disclosure of Mr. Lovetts work product would be an impermissible end-run around the limitations of Rule 26 in other litigation between the Receiver and Mr. Stanford. Further, though the Receiver is not a party to Stanfords criminal case, the Receiver and Stanford are adverse parties in a fraudulent-transfer case pending in the Northern District, in which the Receiver seeks to recover over $1.8 billion from Mr. Stanford. Discovery has not yet begun in the Northern District case, and allowing Mr. Stanford access in this case to the privileged work product and other privileged materials concerning Mr. Lovetts work for the Receivers attorneys would be an impermissible end-run around the limitations of Rule 26 in that case. See, e.g., Perry v. U.S., No. CA3:96-CV-2038, 1997 WL 53136, at *1 (N.D. Tex. Feb. 4, 1997) ([R]ule 26(b)(4) governs a partys access to the opposing partys experts. See FED. R.
In his brief regarding the EY subpoena, Stanford argued that the business records hearsay exception would apply to the documents sought in the subpoena. But that exception, set forth in Federal Rule of Evidence 803(6), only applies to records of events made at or near the time, and thus, none of the work product created by Mr. Lovett after the Receivership began would fall under the exception. RECEIVERS AND LOVETTS MOTION FOR PROTECTIVE ORDER AND TO QUASH OR MODIFY STANFORDS SUBPOENA ISSUED TO MALCOLM LOVETT PAGE 15
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CIV. P. 26(b)(4). A party may not circumvent the limitations of Rule 26 and gain access to opposing expert evidence via a bare subpoena duces tecum.). Moreover, Rule 26 exempts from discovery facts known or opinions held by an expert who has been retained or specially employed by another party in anticipation of litigation or to prepare for trial and who is not expected to be called as a witness at trial. FED. R. CIV. P. 26(b)(4)(D). For this additional reason, Mr. Lovetts opinions formed during the course of advising the Receiver and his attorneys are exempt from discovery. (Janvey Declaration, Ex. 1.) In addition, any work product created by Mr. Lovett as part of the Stanford engagement is a Receivership Asset under the exclusive jurisdiction and possession of the Receiver and the District Court for the Northern District of Texas pursuant to the Receivership Order. [Doc. 485, Ex. 9, Second Amended Order Appointing Receiver, at 2-3.] Thus, even if Mr. Stanford could overcome the Receivers privilege objections, Mr. Lovett cannot be compelled under the rules to testify regarding and should not be required to produce privileged work product. In Young v. U.S., 181 F.R.D. 344 (W.D. Tex. 1997), the Western District, relying on an earlier case from the Southern District of Texas, denied a similar request, holding that [i]n the absence of a statute to the contrary, a professional witness may not generally be compelled to testify as an expert at the request of a private litigant, as such testimony is a matter of contract or bargain and that just because a party wants to make a person work as an expert does not mean that, absent the consent of the person in question, the party generally can do so. Id. at 346. The circumstances here compel the same result. CONCLUSION AND PRAYER The Receiver and Mr. Lovett respectfully request that the Court (1) enter the attached proposed order directing Mr. Stanford and his attorneys not to question Mr. Lovett before the jury panel or jury regarding (a) Mr. Lovetts communications with the Receiver or the
Receivers legal counsel and other retained professionals, (b) Mr. Lovetts opinions formed during the course of advising the Receiver and his legal counsel and other professionals, or (c) any documents or other work product created by Mr. Lovett during the course of advising the Receiver and his legal counsel and other professionals; and (2) quash the Subpoenas document request. The Receiver and Mr. Lovett also request any additional relief to which they may be entitled.
Dated: February 10, 2012
Respectfully submitted, BAKER BOTTS L.L.P. By: /s/ Kevin M. Sadler Kevin M. Sadler, Lead Attorney Texas Bar No. 17512450 kevin.sadler@bakerbotts.com Robert I. Howell Texas Bar No. 10107300 robert.howell@bakerbotts.com David T. Arlington Texas Bar No. 00790238 david.arlington@bakerbotts.com 1500 San Jacinto Center 98 San Jacinto Blvd. Austin, Texas 78701-4078 Tel: 512.322.2500 Fax: 512.322.2501 Timothy S. Durst Texas Bar No. 00786924 tim.durst@bakerbotts.com 2001 Ross Avenue Suite 600 Dallas, Texas 75201-2980 Tel: 214.953.6500 Fax: 214.953.6503 ATTORNEYS FOR RECEIVER RALPH S. JANVEY AND FOR MALCOLM LOVETT
CERTIFICATE OF CONFERENCE Counsel for the Receiver has conferred with Robert Scardino, counsel for Allen Stanford, regarding the subpoena issued by Mr. Stanford to Mr. Lovett, but the parties were unable to reach an agreement regarding the disposition of the issues raised in this motion. /s/ Kevin M. Sadler Kevin M. Sadler CERTIFICATE OF SERVICE On February 10, 2012, I electronically submitted the foregoing document with the clerk of the court of the U.S. District Court, Southern District of Texas, using the electronic case filing system of the court. I hereby certify that I have served all counsel and/or pro se parties of record electronically or by another manner authorized by Federal Rule of Civil Procedure 5(b)(2).
/s/ Kevin M. Sadler Kevin M. Sadler
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IN THE UNITED STATES DISTRICT COURT NORTHERN DISTRICT OF TEXAS DALLAS DIVISION SECURITIES AND EXCHANGE COMMISSION, Plaintiff, v. STANFORD INTERNATIONAL BANK, LTD., et al., Defendant.
Civil Action No. 3:09-CV-298-N
SECOND AMENDED ORDER APPOINTING RECEIVER This Order addresses the S.E.C. and the Receivers joint motion for entry of a second amended order appointing receiver [958]. On February 17, 2009 this Court entered its order appointing receiver [10]. On March 12, 2009 this Court entered its amended order appointing receiver [157]. The Receivers stated main purpose for seeking reentry of the order is to allow him to comply with the requirements of 28 U.S.C. 754,1 which provides that a receiver shall,
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The Receiver initially also proposed several substantive changes to the receivership order. Various parties objected to the Receivers motion [986, 992, 995, 996, 1001, 1002]. In his reply, the Receiver abandoned all of his requested changes and simply asked the Court to reenter the order for Section 754 purposes. Accordingly, the Court overrules as moot all of the objections to the Receivers proposed changes. This second amended receivership order is identical to the first amended order, with several minor exceptions (removal of a provision that expired after 180 days, a clarification that the Receiver may not file for bankruptcy on behalf of individual defendants, and deletion of the term relief defendant). The Court entered the first amended order [157] more than one year ago. Accordingly, the Court finds that any objections to the substantive content of this order (other than objections to the proposed now abandoned revisions) have been
ORDER PAGE 1
within ten days after the entry of his order of appointment, file copies of the complaint and such order of appointment in the district court for each district in which property is located. The Receiver has informed the Court that after the expiration of 10 days from the dates of the original receivership orders, he identified receivership assets and receivership records in districts in which copies of the complaint and amended order appointing receiver have not been filed. So that the Court may obtain jurisdiction in these districts, the Court now enters this second amended order appointing receiver.2 IT IS THEREFORE ORDERED that: 1. This Court assumes exclusive jurisdiction and takes possession of the assets, monies, securities, properties, real and personal, tangible and intangible, of whatever kind and description, wherever located, and the legally recognized privileges (with regard to the entities), of the Defendants and all entities they own or control (Receivership Assets), and
waived. Various courts have held that a district court may reset the ten-day Section 754 clock by reentering the receivership order. See, e.g., S.E.C. v. Vision Commcns, Inc., 74 F.3d 287, 291 (D.C. Cir. 1996) (On remand, the court may reappoint the receiver and start the ten-day clock of 754 ticking once again.); S.E.C. v. Aquacell Batteries, Inc., 2008 WL 2915064, at *3 (M.D. Fla. 2008) ([N]oncompliance with the statute can be cured by subsequent filing after re-appointment of the Receiver in any event . . . .); Warfield v. Arpe, 2007 WL 549467, at *12 (N.D. Tex. 2007) (Although the Fifth Circuit has not spoken on this particular issue, other courts have held that a district court may reappoint a federal equity receiver in a securities fraud case in order to reset the 10-day clock under 754.); Terry v. June, 2003 WL 22125300, *3 (W.D. Va. 2003) ([C]ourts having addressed this issue unanimously suggest that an order of reappointment will renew the ten-day filing deadline mandated by Section 754.); SEC v. Heartland Group, Inc., 2003 WL 103015, at *5 (E.D. Ill. 2003) ([T]he court can easily correct this failure to file such a claim by merely reappointing the Receiver and thereby starting the 10-day time period under 754 ticking once more.).
2
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the books and records, client lists, account statements, financial and accounting documents, computers, computer hard drives, computer disks, internet exchange servers telephones, personal digital devices and other informational resources of or in possession of the Defendants, or issued by Defendants and in possession of any agent or employee of the Defendants (Receivership Records). 2. Ralph S. Janvey of Dallas, Texas, is hereby appointed Receiver for the Receivership Assets and Receivership Records (collectively, Receivership Estate), with the full power of an equity receiver under common law as well as such powers as are enumerated herein as of the date of this Order. The Receiver shall not be required to post a bond unless directed by the Court but is hereby ordered to well and faithfully perform the duties of his office: to timely account for all monies, securities, and other properties which may come into his hands; and to abide by and perform all duties set forth in this Order. Except for an act of willful malfeasance or gross negligence, the Receiver shall not be liable for any loss or damage incurred by the Receivership Estate, or any of Defendants, the Defendants clients or associates, or their subsidiaries or affiliates, their officers, directors, agents, and employees, or by any of Defendants creditors or equity holders because of any act performed or not performed by him or his agents or assigns in connection with the discharge of his duties and responsibilities hereunder. 3. The duties of the Receiver shall be specifically limited to matters relating to the Receivership Estate and unsettled claims thereof remaining in the possession of the Receiver as of the date of this Order. Nothing in this Order shall be construed to require
ORDER PAGE 3
further investigation of Receivership Estate assets heretofore liquidated and/or distributed or claims of the Receivership Estate settled prior to issuance of this Order. However, this paragraph shall not be construed to limit the powers of the Receiver in any regard with respect to transactions that may have occurred prior to the date of this Order. 4. Until the expiration date of this Order or further Order of this Court, Receiver is authorized to immediately take and have complete and exclusive control, possession, and custody of the Receivership Estate and to any assets traceable to assets owned by the Receivership Estate. 5. As of the date of entry of this Order, the Receiver is specifically directed and authorized to perform the following acts and duties: (a) Maintain full control of the Receivership Estate with the power to retain or remove, as the Receiver deems necessary or advisable, any officer, director, independent contractor, employee or agent of the Receivership Estate; (b) Collect, marshal, and take custody, control, and possession of all the funds, accounts, mail, and other assets of, or in the possession or under the control of, the Receivership Estate, or assets traceable to assets owned or controlled by the Receivership Estate, wherever situated, the income and profit therefrom and all sums of money now or hereafter due or owing to the Receivership Estate with full power to collect, receive, and take possession of without limitation, all goods, chattel, rights, credits, monies, effects, lands, leases, books and records, work papers, records of account, including computer
ORDER PAGE 4
maintained information, contracts, financial records, monies on hand in banks and other financial initiations, and other papers and documents of other individuals, partnerships, or corporations whose interests are now held by or under the direction, possession, custody, or control of the Receivership Estate; (c) Institute such actions or proceedings to impose a constructive trust, obtain possession, and/or recover judgment with respect to persons or entities who received assets or records traceable to the Receivership Estate. All such actions shall be filed in this Court; (d) Obtain, by presentation of this Order, documents, books, records, accounts, deposits, testimony, or other information within the custody or control of any person or entity sufficient to identify accounts, properties, liabilities, causes of action, or employees of the Receivership Estate. The attendance of a person or entity for examination and/or production of documents may be compelled in a manner provided in Rule 45, Fed. R. Civ. P., or as provided under the laws of any foreign country where such documents, books, records, accounts, deposits, or testimony maybe located; (e) Without breaching the peace and, if necessary, with the assistance of local peace officers or United States marshals to enter and secure any premises, wherever located or situated, in order to take possession, custody, or control of, or to identify the location or existence of Receivership Estate assets or records;
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(f) Make such ordinary and necessary payments, distributions, and disbursements as the Receiver deems advisable or proper for the marshaling, maintenance, or preservation of the Receivership Estate. Receiver is further authorized to contract and negotiate with any claimants against the Receivership Estate (including, without limitation, creditors) for the purpose of compromising or settling any claim. To this purpose, in those instances in which Receivership Estate assets serve as collateral to secured creditors, the Receiver has the authority to surrender such assets to secured creditors, conditional upon the waiver of any deficiency of collateral; (g) Perform all acts necessary to conserve, hold, manage, and preserve the value of the Receivership Estate, in order to prevent any irreparable loss, damage, and injury to the Estate; (h) Enter into such agreements in connection with the administration of the Receivership Estate, including, but not limited to, the employment of such managers, agents, custodians, consultants, investigators, attorneys, and accountants as Receiver judges necessary to perform the duties set forth in this Order and to compensate them from the Receivership Assets; (i) Institute, prosecute, compromise, adjust, intervene in, or become party to such actions or proceedings in state, federal, or foreign courts that the Receiver deems necessary and advisable to preserve the value of the Receivership Estate, or that the Receiver deems necessary and advisable to carry out the
ORDER PAGE 6
Receivers mandate under this Order and likewise to defend, compromise, or adjust or otherwise dispose of any or all actions or proceedings instituted against the Receivership Estate that the Receiver deems necessary and advisable to carry out the Receivers mandate under this Order; (j) Preserve the Receivership Estate and minimize expenses in furtherance of maximum and timely disbursement thereof to claimants; (k) Promptly provide the Commission and other governmental agencies with all information and documentation they may seek in connection with its regulatory or investigatory activities; (l) Prepare and submit periodic reports to this Court and to the parties as directed by this Court; (m) File with this Court requests for approval of reasonable fees to be paid to the Receiver and any person or entity retained by him and interim and final accountings for any reasonable expenses incurred and paid pursuant to order of this Court; 6. The Receiver shall have the sole and exclusive power and authority to manage and direct the business and financial affairs of the Defendants, including without limitation, the sole and exclusive power and authority to petition for relief under the United States Bankruptcy Code, 11 U.S.C. 101 et seq. (the Bankruptcy Code) for any or all of the corporate Defendants. The Receiver is not authorized, without further Court order, to petition for relief under the Bankruptcy Code for any of the Individual Defendants. Solely
ORDER PAGE 7
with respect to the authorization to file and execution of a petition for relief under the Bankruptcy Code; without limiting any powers of the Receiver under applicable law and this Order; and irrespective of provisions in any Defendants corporate organizing documents, by-laws, partnership agreements, or the like, the Receiver shall be deemed to succeed to the position of and possess the authority of any party with power to authorize and execute the filing of a petition for relief under the Bankruptcy Code, including without limitation corporate directors, general and limited partners, and members of limited liability companies. 7. Before taking action under paragraph 6 of this Order, the Receiver must provide the Commission and the Defendants with at least two business days written notice (unless shortened or lengthened by court order) that the Receiver is contemplating action under the Bankruptcy Code; provided that the Receiver may apply for an order under seal or a hearing in camera, as circumstances require. To facilitate an efficient coordination in one district of all bankruptcies of the Defendants, the Northern District of Texas shall be the Receivers principal place of business for making decisions in respect of operating and disposing of each of the Defendants and their respective assets. 8. Upon the request of the Receiver, the United States Marshals Office is hereby ordered to assist the Receiver in carrying out his duties to take possession, custody, or control of, or identify the location of, any Receivership Estate assets or records. 9. Creditors and all other persons are hereby restrained and enjoined from the following actions, except in this Court, unless this Court, consistent with general equitable principals and in accordance with its ancillary equitable jurisdiction in this matter, orders that
ORDER PAGE 8
such actions may be conducted in another forum or jurisdiction: (a) The commencement or continuation, including the issuance or employment of process, of any judicial, administrative, or other proceeding against the Receiver, any of the defendants, the Receivership Estate, or any agent, officer, or employee related to the Receivership Estate, arising from the subject matter of this civil action; or (b) The enforcement, against the Receiver, or any of the defendants, of any judgment that would attach to or encumber the Receivership Estate that was obtained before the commencement of this proceeding. 10. Creditors and all other persons are hereby restrained and enjoined, without prior approval of the Court, from: (a) Any act to obtain possession of the Receivership Estate assets; (b) Any act to create, perfect, or enforce any lien against the property of the Receiver, or the Receivership Estate; (c) Any act to collect, assess, or recover a claim against the Receiver or that would attach to or encumber the Receivership Estate; (d) The set off of any debt owed by the Receivership Estate or secured by the Receivership Estate assets based on any claim against the Receiver or the Receivership Estate; or (e) The filing of any case, complaint, petition, or motion under the Bankruptcy Code (including, without limitation, the filing of an involuntary bankruptcy
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petition under chapter 7 or chapter 11 of the Bankruptcy Code, or a petition for recognition of foreign proceeding under chapter 15 of the Bankruptcy Code) with respect to any Defendant. 11. Defendants, their respective officers, agents, and employees and all persons in active concert or participation with them who receive notice of this Order by personal service or otherwise, including, but not limited to, any financial institution, broker-dealer, investment adviser, private equity fund or investment banking fun), and each of them, are hereby ordered, restrained, and enjoined from, directly or indirectly, making any payment or expenditure of any Receivership Estate assets that are owned by Defendants or in the actual or constructive possession of any entity directly or indirectly owned or controlled or under common control with the Receivership Estate, or effecting any sale, gift, hypothecation, assignment, transfer, conveyance, encumbrance, disbursement, dissipation, or concealment of such assets. A copy of this Order may be served on any bank, savings and loan, broker-dealer, or any other financial or depository institution to restrain and enjoin any such institution from disbursing any of the Receivership Estate assets. Upon presentment of this Order, all persons, including financial institutions, shall provide account balance information, transaction histories, all account records and any other Receivership Records to the Receiver or his agents, in the same manner as they would be provided were the Receiver the signatory on the account. 12. Defendants, and their respective agents, officers, and employees and all persons in active concert or participation with them are hereby enjoined from doing any act
ORDER PAGE 10
or thing whatsoever to interfere with the Receivers taking control, possession, or management of the Receivership Estate or to in any way interfere with the Receiver or to harass or interfere with the duties of the Receiver or to interfere in any manner with the. exclusive jurisdiction of this Court over the Receivership Estate, including the filing or prosecuting any actions or proceedings which involve the Receiver or which affect the Receivership Assets or Receivership Records, specifically including any proceeding initiated pursuant to the United States Bankruptcy Code, except with the permission of this Court. Any actions so authorized to determine disputes relating to Receivership Assets and Receivership Records shall be filed in this Court. 13. Defendants, their respective officers, agents, and employees and all persons in active concert or participation with them who receive actual notice of this Order by personal service or otherwise, including any financial institution, broker-dealer, investment adviser, private equity fund or investment banking firm, and each of them shall: (a) To the extent they have possession, custody, or control of same, provide immediate access to and control and possession of the Receivership Estate assets and records, including securities, monies, and property of any kind, real and personal, including all keys, passwords, entry codes, and all monies deposited in any bank deposited to the credit of the Defendants, wherever situated, and the original of all books, records, documents, accounts, computer printouts, disks, and the like of Defendants to Receiver or his duly authorized agents;
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(b) Cooperate with the Receiver and his duly authorized agents by promptly and honestly responding to all requests for information regarding Receivership Assets and Records and by promptly acknowledging to third parties the Receivers authority to act on behalf of the Receivership Estate and by providing such authorizations, signatures, releases, attestations, and access as the Receiver or his duly authorized agents may reasonably request; (c) Provide the Commission with a prompt, full accounting of all Receivership Estate assets and documents outside the territory of the United States which are held either: (1) by them, (2) for their benefit, or (3) under their control; (d) Transfer to the territory of the United States all Receivership Estate assets and records in foreign countries held either: (1) by them, (2) for their benefit, or (3) under their control; and (e) Hold and retain all such repatriated Receivership Estate assets and documents and prevent any transfer, disposition, or dissipation whatsoever of any such assets or documents, until such time as they may be transferred into the possession of the Receiver. 14. Any financial institution, broker-dealer, investment adviser; private equity fund or investment banking firm or person that holds, controls, or maintains accounts or assets of or on behalf of any Defendant, or has held, controlled, or maintained any account or asset of or on behalf of any defendant since January 1, 1990, shall:
ORDER PAGE 12
(a) Hold and retain within its control and prohibit the withdrawal, removal, assignment, transfer, pledge, hypothecation, encumbrance, disbursement, dissipation, conversion, sale, gift, or other disposal of any of the assets, funds, or other property held by or on behalf of any defendant in any account maintained in the name of or for the benefit of any defendant in whole or in part except: (i) as directed by further order of this Court, or (ii) as directed in writing by the Receiver or his agents; (b) Deny access to any safe deposit boxes that are subject to access by any Defendant; and (c) The Commission and Receiver may obtain, by presentation of this Order, documents, books, records, accounts, deposits, or other information within the custody or control of any person or entity sufficient to identify accounts, properties, liabilities, causes of action, or employees of the Receivership Estate. The attendance of a person or entity for examination and/or production of documents may be compelled in a manner provided in Rule 45, Fed. R. Civ. P, or as provided under the laws of any foreign country where such documents, books, records, accounts, deposits, or testimony may be located; 15. The Defendants, their officers, agents, and employees and all persons in active concert or participation with them and other persons who have notice of this Order by personal service or otherwise, are hereby restrained and enjoined from destroying, mutilating,
ORDER PAGE 13
concealing, altering, transferring, or otherwise disposing of, in any manner, directly or indirectly, any contracts, accounting data, correspondence, advertisements, computer tapes, disks or other computerized records, books, written or printed records, handwritten notes, telephone logs, telephone scripts, receipt books, ledgers, personal and business canceled checks and check registers, bank statements, appointment books, copies of federal, state, or local business or personal income or property tax returns, and other documents or records of any kind that relate in any way to the Receivership Estate or are relevant to this action. 16. The Receiver is hereby authorized to make appropriate notification to the United States Postal Service to forward delivery of any mail addressed to the Defendants, or any company or entity under the direction and control of the Defendants, to himself. Further, the Receiver is hereby authorized to open and inspect all such mail to determine the location or identity of assets or the existence and amount of claims. 17. Nothing in this Order shall prohibit any federal or state law enforcement or regulatory authority from commencing or prosecuting an action against the Defendants, their agents, officers, or employees.
ORDER PAGE 14
Signed July 19, 2010.
_________________________________ David C. Godbey United States District Judge
ORDER PAGE 15
IN THE UNITED STATES DISTRICT COURT FOR THE SOUTHERN DISTRICT OF TEXAS HOUSTON DIVISION UNITED STATES OF AMERICA v. CR. NO. 4:09-342-01 ROBERT ALLEN STANFORD __________________________________________________________________________ ORDER GRANTING RECEIVERS AND MALCOLM LOVETTS MOTION FOR PROTECTIVE ORDER AND TO QUASH OR MODIFY STANFORDS SUBPOENA ISSUED TO MALCOLM LOVETT __________________________________________________________________________ Pending before the Court is Receiver Ralph Janveys and Malcolm Lovetts Motion for Protective Order and to Quash or Modify Stanfords Subpoena Issued to Malcolm Lovett. Having thoroughly considered the motion, submissions, and applicable law, the Court has determined that the Motion should be granted. It is therefore ORDERED that Receiver Ralph Janveys and Malcolm Lovetts Motion for Protective Order and to Quash or Modify Stanfords Subpoena Issued to Malcolm Lovett is GRANTED in all respects. It is FURTHER ORDERED that Mr. Stanford and his attorneys are ordered not to question Mr. Lovett before the jury regarding matters protected from disclosure by the attorneyclient privilege, the work-product exemption and the consulting expert privilege, specifically including: Mr. Lovetts communications with the Receiver or the Receivers legal counsel and other retained professionals,
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Mr. Lovetts opinions formed during the course of advising the Receiver and his legal counsel and other professionals, and any documents or other work product created by Mr. Lovett during the course of advising the Receiver and his legal counsel and other professionals.
It is FURTHER ORDERED that the document request in the subpoena issued by Mr. Stanford to Malcolm Lovett is QUASHED.
SIGNED at Houston, Texas on this ___ day of February, 2012.
_____________________ DAVID HITTNER United States District Judge
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238 F.R.D. 429, 438 (N.D. Tex. 2006).

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Dated: February 10, 2012

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/s/ Kevin M. Sadler Kevin M. Sadler

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Civil Action No. 3:09-CV-298-N

Signed July 19, 2010.

_________________________________ David C. Godbey United States District Judge

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SIGNED at Houston, Texas on this ___ day of February, 2012.

_____________________ DAVID HITTNER United States District Judge

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