cor clearing, llc v. calissio resources group, inc. et al doc 25 filed 13 oct 15.pdf

8/20/2019 COR Clearing, LLC v. Calissio Resources Group, Inc. et al Doc 25 filed 13 Oct 15.pdf

1/12

C ~ I

"'0

, 11 , RT

UNITED STATES DISTRICT COURTlJ.S. m s u u c ~ _ B c ~ i s K A

FOR

THE DISTRICT

OF

NEBRASKl\\STRICT

Of

.

COR CLEARING, LLC, a Delaware limited

Liability company,

Plaintiff,

vs.

CALISSIO RESOURCES GROUP, INC.,

a Nevada corporation; ADAM CARTER,

an individual; SIGNATURE STOCK

TRANSFER, INC., a Texas corporation;

and DOES 1-50

Defendants.

2Gl5

OCl

\

3

Pt\

\:OS

Case No. 8:15-cv-317

BENJAMIN RILEY'S

EXPEDITED MOTION

FOR

LEAVE TO FILE

MICUS

BRIEF

Benjamin Riley, shareholder

of

Calissio Resources Group, Inc. which is a publicly traded

corporation (hereinafter referred to as CRGP) respectfully moves in his individual capacity, pro

se, pursuant to the Court's inherent authority and sole discretion, to file a brief as amicus curiae

arguing why a temporary receiver should not be appointed for the sole purpose

of

directing the

DTCC to perform certain post payable adjustments.

I. DISTRICT COURTS HAVE AUTHORITY

TO

ACCEPT AMICUS BRIEFS

A District Court has broad inherent authority to permit or deny an appearance as

amicus curiae

in a given case. UnitedStatesv.Ahmed 788F.Supp.196,

198n 1

(S.D.N.Y.1992),affd,980F.2d

6

(2d Cir.1992). The amicus privilege rests in the discretion

of

the court which may grant or

refuse leave according as it deems the proffered information timely, useful, or otherwise.

Leigh

8:15-cv-00317-LES-FG3 Doc # 25 Filed: 10/13/15 Page 1 of 12 - Page ID # 182


2/12

assist in their proceedings. ); Jin v. Ministry of State Security, 557 F. Supp.

2d

131, 136 (D.D.C.

2008) ( district courts have inherent authority to appoint or deny amici which is derived from Rule

29 of the Federal Rules of Appellate Procedure ); United States v. Davis, 180 F. Supp. 2d 797,

800 (E.D. La. 2001) (noting that district courts have authority to permit the filing ofamicus briefs).

The role of amici is to assist the court

in

cases of general public interest by making suggestions

to the court, by providing supplementary assistance to existing counsel, and by insuring a complete

and plenary presentation ofdifficult issues so that the court may reach a proper decision. Newark

Branch, N.A.A. C.P. v. Town

of

Harrison, N.J., 940 F.2d 792, 808 (3d Cir. 1991). This authority

supports the Court's exercise of its discretion to accept Mr. Riley, CRGP shareholder's amicus

brief.

II. BENJAMIN RILEY'S PROPOSED BRIEF PROVIDES IMPERATIVE FACTS ND LAW

NOT YET PROVIDED

TO

TIDS COURT

ND

THAT ARE ABSOLUTELY NECESSARY

FOR

THE COURT

TO

CONSIDER IN DETERMINING

WHETHER

OR

NOT

TO

APPOINT A RECIEVER

First,

COR'S

pleadings and statements to this honorable court have failed to mention the

fact that FINRA deemed the shareholder dividend to be a special dividend. Special dividends

are governed by nasdaq Rule 11140(b )(2) which states: In respect to cash dividends

or

distributions, stock dividends and/or splits, and the distribution of warrants, which are 25% or

greater of the value of the subject security, the ex-dividend date shall be the first business day

following the payable date. With respect to special dividends'', and contrary to COR Clearing's

viewpoint, the record date is irrelevant. Instead, the only date that matters regarding who is eligible



3/12


4/12

Third, the shareholders ofCRGP are unrepresented in this case and the notice to be heard

procedure proposed by ORwill not allow shareholders ofCRGP the ultimate individuals bearing

the burden

of

a receiver) the opportunity to be heard, it will instead, allow brokerage firms the

opportunity to be heard.



5/12

CERTIFICATE OF SERVICE

I hereby certify that on October 9, 2015, I filed the foregoing 1) Motion for Leave to File

Amicus Brief and 2) Proposed Amicus Brief

by U.S. Mail. A copy was sent by U.S. Mail to all

parties of record:

Andrew G. Smith

WINSTON STRAWN L W

FIRM -

LOS ANGELES

333 South Grand Avenue

Suite 3800

os Angeles, CA 90071-1543

213) 615-1700

Fax: 213) 615-1750

[email protected]

PROH CVICE

ATIORNEY TO BE NOTICED

Saul S. Rostamian

WINSTON STRAWN L W

FIRM - LOS

ANGELES


Suite 3800

Los Angeles, CA 90071-1543

213) 615-1700

Fax: 213) 615-1750

[email protected]

PROH CVICE


David L Aronoff

WINSTON STRAWN L W FIRM -

LOS ANGELES


Suite 3800

os Angeles, CA 90071-1543

213) 615-1700

Fax: 213) 615-1750

[email protected]

PROH CVICE


Michael T. Hilgers

GOBER HILGERS

L W FIRM -

OMAHA

14301 FNB Parkway

Suite 100

Omaha, NE 68154

402) 218-2106

Fax: 877) 437-5755

[email protected]

TIORNEY TO BE NOTICED

Carrie S.

Dolton

GOBER HILGERS

L W

FIRM

-

OMAHA

14301 FNB Parkway

Suite 100

Omaha, NE 68154

402) 218-2106

Fax: 877) 437-5755

[email protected]

TIORNEY TO BE NOTICED

Calissio Resources Group, Inc.

Clark Agency, LLC

5915 Edmond Ste 125

Las Vegas,

NV

89118

Jason Bogutski

Signature Stock Transfer, Inc.

2632 Coachlight Ct.

Plano, TX 7 5093



6/12

UNITED STATES DISTRICT COURT

FOR THE

DISTRICT

OF

NEBRASKA

COR CLEARING, LLC, a Delaware limited )

Liability company, )

Plaintiff,

vs.

CALISSIO RESOURCES GROUP, INC.,

a Nevada corporation; ADAM CARTER,

an individual; SIGNATURE STOCK

TRANSFER, INC., a Texas corporation;

and DOES 1-50

Defendants.

Case No. 8:15-cv-317

PRO

SE LITIGANT AND

CRGP

SHAREHOLDER BENJAMIN

RILEY'S MICUS CURI E BRIEF IN

OPPOSITION

TO

PLAINTIFF'S

MOTION

TO

APPOINT RECIEVER

Benjamin Riley is a shareholder of Calissio Resources Group, Inc. which is a publicly

traded corporation (hereinafter referred to as CRGP). Mr. Riley opposes

plaintiffs

motion

to

appoint a receiver and is litigating in his individual capacity,

prose

A temporary receiver should not be appointed for the sole purpose of directing the DTCC

to

perform certain post payable adjustments because there are facts and law not yet provided to

this court which are necessary for the court to take into consideration in determining whether or

not to appoint a receiver. This honorable court appointing a receiver will result in a miscarriage of

justice to innocent dividend recipient shareholders who are unrepresented in this case.

I. ARGUMENT

A Plaintiff Failed to Disclose the Special Dividend Rule to the

Court and

Failed to



7/12

have intended for the dividend to

be

a special dividend, it was classified as such by FINRA. Special

dividends are governed by Nasdaq Rule l l l 40(b )(2) which states: In respect to cash dividends or

distributions, stock dividends and/or splits, and the distribution

of

warrants, which are 25% or

greater of the value of the subject security, the ex-dividend date shall be the first business day

following the payable date. With respect to special dividends , and contrary to COR Clearing's

viewpoint, the record date is irrelevant. Instead, the only date that matters regarding who

s

eligible

or who is not eligible to receive the dividend, is the ex-dividend date. Consequently, although

millions of shares were converted after the record date, all stockholders who held shares in CRGP

until the ex-dividend date were eligible to receive the dividend. As a matter

of

fact, the special

cash dividend was approved by FINRA, cleared through the DTCC, and settled into shareholder

accounts. Even if plaintiff s correct in its assertion that shares issued after 6/30/15 were not

dividend eligible, COR itself admits that most

of

the ineligible' shares were bought back by

CRGP. This would mean that CRGP shareholders held dividend eligible

shares and were

entitled to

the

dividend

and

the

ineligible dividends

were

in

the

pockets

of

CRGP

itself

and

not the individual shareholders. Therefore, COR should not be seeking recourse against innocent

shareholders because they

are not

a part of

the transaction

which resulted from COR s own

clients converting debt to equity

and

thus flooding the market with newly issued shares.

Plaintiff stated to the court that some brokers are holding the dividend funds for their

clients. This

s

misleading to

the court

because

the

only

broker

known to be holding/freezing

the dividend funds s

E-Trade

Financial . Numerous CRGP shareholders received the dividend



8/12

the only broker holding the funds and sinceE-Trade dido

t

impose the hold until weeks after

being paid to clients, a huge miscarriage

of

justice will occur to CRGP shareholders if a

receiver is appointed for the purpose

of

directing DTCC to make post payable adjustments.

This is so, because shareholders received the dividend in good faith without reason to know

that it was susceptible to being reversed.

B. The Appointment

of

a Receiver Will Have a Detrimental

Impact

on the Innocent

Shareholders

of CRGP

The appointment ofa receiver will have a detrimental impact on innocent shareholders who

are ultimately the end users burdened by the appointment

of

a receiver. Plaintiff COR is a

sophisticated party who clears transactions in the OTC stock market. As a clearing firm in the OTC

markets, COR assumes many risks involved ofoperating in the clearing industry and with dealing

with clients who operate in an unregulated industry Over the counter stocks). In this case, COR

is attempting to shift their risk of loss to innocent shareholders who received a dividend in good

faith and without reason to know that a reversal would possibly occur through the appointment of

a receiver. Shareholders will ultimately be burdened by the appointment of a receiver because the

receiver will request post payable adjustments to the DTCC, and the DTCC will pull the money

from the brokerage firms who will then pull the money from their clients who are CRGP current

and former shareholders. Once this case was filed against CRGP, a FINRA investigation halted

the stock and the ticker went from being traded on the OTC market to the grey market. The grey

market is like a death sentence for shareholders. Once moved to the grey market, the value of



9/12

'

pull this money out of shareholder accounts and if the cash is not there, (as is this case for most

CRGP dividend recipient shareholders) margin calls will be issued, credit scores will be ruined,

and disaster will occur between brokers and broker's clients. Consequently,

the appointment

of

a receiver will cause more

harm

than good. Many shareholders, will be hit with margin calls

that they cannot afford to pay back because they either reinvested the dividend or they spent the

cash on other investments and misc items. Why should shareholders be punished with margin calls

and return of dividend funds when they received the dividend in good faith without reason to

believe that it would be taken back from them? CRGP shareholders had no reason to believe

that

their dividend

that

they received in

their

brokerage accounts were susceptible to being

reversed. They received the dividend in good faith

and

should not be held liable for

CRGP s

actions.

COR clearing stated that the appointment

of

a receiver is the only way to reach the pockets

of CRGP. On the contrary, the appointment

of

a receiver will not reach the pockets

of

CRGP, it

will reach the pockets of shareholders who have already been beaten with losses of their entire

investment.

C. Plaintiff's Motion to Appoint Receiver Serves the Purpose of Reaching the

Pockets

of

Innocent Shareholders, which is Unprecedented

There are no cases on point attempting to disregard the corporate form to go after the pockets

of shareholders ofa publicly traded corporation who innocently received a dividend in good faith

and without knowledge of fraudulent conduct. The only cases on point, involve the corporate form

being disregarded where the shareholders were actively involved in the fraudulent conduct and



10/12

result, appointment of a receiver may result in

COR

Clearing being unjustly enriched with

funds

that

belong to shareholders.

D

Notice to be

Heard

Procedure Proposed by

COR

Will Allow Brokerage Firms the

Opportunity to be Heard but Not Shareholders ofCRGP Who Are the Ultimate

Individuals Bearing the Burden of the Appointment of a Receiver

The shareholders

of

CROP are unrepresented n this case and the notice to be heard

procedure proposed by

COR

will not allow shareholders

of

CROP (the ultimate individuals bearing

the burden

of

a receiver) the opportunity to be heard. Instead, it will allow brokerage firms an

opportunity to be heard. However, since brokerage firms will issue margin calls and hold their

clients responsible for the dividend funds, the brokerage firm s clients (CROP shareholders)

deserved to be heard in their own individual capacities. Especially since their pockets will be

reached.

II. CONCLUSION

The appointment of a receiver will result in a huge miscarriage of ustice. Accordingly,

for the reasons above, the Court should deny

COR

Clearing s Motion for Order Appointing

Limited Purpose Receiver and should not appoint as receiver Ronald F. Greenspan, Esq. for the

limited purpose of instructing DTCC to make post-payable adjustments in accordance with

DTCC s policies and procedures.



11/12


12/12

\ • )

I

i

·

•

U.S. POSTAGE i

1.42

LG ENV

'l 4

6376 l

Oateofsale .. J

:ii10 09 15 12

ci

06

2500

'

a:>08310294 :

Re:

~ oR c eo,r:µJ Uc v Cv.1 :ss:o

Resouf(

cor clearing, llc v. calissio resources group, inc. et al doc 25 filed 13 oct 15.pdf

Documents