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SEC v. Blockvest, LLC

United States District Court for the Southern District of California

February 14, 2019, Decided; February 14, 2019, Filed

Case No.: 18CV2287-GPB(BLM)

Opinion

ORDER GRANTING PLAINTIFF'S MOTION FOR PARTIAL RECONSIDERATION

[Dkt. No. 44.]

Before the Court is Plaintiff's motion for partial reconsideration of the Court's order denying preliminary injunction. (Dkt. No. 44.) Defendants filed an opposition, (Dkt. No. 53), and Plaintiff replied. (Dkt. No. 55.) A hearing was held on February 8, 2019. (Dkt. No. 58.) Amy Longo, Esq. and Brent Wilner, Esq. appeared on behalf of Plaintiff Securities Exchange Commission and Stanley Morris, Esq. and Brian Corrigan, Esq. appeared on behalf of Defendants. (Dkt. No. 58.) Based on the reasoning below, and the arguments at the hearing, the Court GRANTS Plaintiff's motion for [*2]  partial reconsideration.

Procedural Background

On October 3, 2018, Plaintiff Securities and Exchange Commission ("SEC" or "Plaintiff") filed a Complaint against Defendants Blockvest, LLC and Reginald Buddy Ringgold, III a/k/a Rasool Abdul Rahim El alleging violations of Section 10(b) of the Securities Exchange Act of 1934 ("Exchange Act') and Rule 10b-5(b); violations under Section 10(b) of the Exchange Act and Rule 10b-5(a) and Rule 10b-5(c); fraud in violation of Section 17(a)(2) of the Securities Act of 1933 ("Securities Act"), fraud in violation of Sections 17(a)(1) and 17(a)(3) of the Securities Act; and violations of Sections 5(a) and 5(c) of the Securities Act for the offer and sale of unregistered securities. (Dkt. No. 1, Compl.) Plaintiff also concurrently filed an ex parte motion for temporary restraining order seeking to halt Defendants' fraudulent conduct and freezing their assets, prohibiting the destruction of documents, seeking expedited discovery and an accounting of Defendants' assets. (Dkt. No. 3.) On October 5, 2018, the Court granted Plaintiff's ex parte motion for temporary restraining order. (Dkt. Nos. 5, 6.) In compliance with the temporary restraining order, Defendants filed Ringgold's Declaration of Accounting on October 26, 2018, and a First Supplemental Declaration of Ringgold [*3]  on November 2, 2018. (Dkt. Nos. 18, 21.) Defendants also filed a response to the order to show cause on November 2, 2018. (Dkt. Nos. 23, 24, 25.) On November 7, 2018, Plaintiff filed a reply. (Dkt. Nos. 27, 28.) A hearing on the order to show cause was held on November 16, 2018, (Dkt. No. 37), and on November 27, 2018, the Court denied a preliminary injunction. (Dkt. No. 41.)

In this fully briefed motion, Plaintiff moves for partial reconsideration pursuant to Federal Rule of Civil Procedure 59(e) of the Court's denial of a preliminary injunction against Defendants for future violations of Section 17(a) of the Securities Act and seeks an order preliminarily enjoining Defendants from violating Section 17(a). (Dkt. Nos. 44, 53, 55.)

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2019 U.S. Dist. LEXIS 24446 *; Fed. Sec. L. Rep. (CCH) P100,351

SECURITIES AND EXCHANGE COMMISSION, Plaintiff, v. BLOCKVEST, LLC and REGINALD BUDDY RINGGOLD, III a/k/a RASOOL ABDUL RAHIM EL, Defendants.

Prior History: SEC v. Blockvest, LLC, 2018 U.S. Dist. LEXIS 200773 (S.D. Cal., Nov. 27, 2018)

CORE TERMS

tokens, investors, Defendants', preliminary injunction, violations, Securities Act, website, invested, purchasers, testing, securities law, offering, broker, rental, future violations, reconsideration, violation of section, investment contract, condominium, currency, issuer, facie, pool, seal, individual investor, offer to sell, representations, circumstances, unregistered, injunction