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SEC v. Milan Capital Group, Inc.

United States District Court for the Southern District of New York

February 29, 2000, Decided ; March 1, 2000, Filed

00 CIV. 108 (DLC)

Opinion

OPINION and ORDER

DENISE COTE, District Judge:

On February 14, 2000, on the application of Aaron Marcu (the "Receiver"), as Receiver for defendant Milan Capital Group, Inc. ("Milan"), this Court issued a temporary restraining order ("TRO") and other relief against several parties, including defendant Ira A. Monas ("Monas"). 1 The other parties having entered into stipulations consenting to the entry of a preliminary injunction or agreeing to an extended schedule for preliminary injunction proceedings, the Receiver now seeks entry of a preliminary injunction against Monas.

 [*2] PROCEDURAL HISTORY

This case was brought by plaintiff the Securities and Exchange Commission ("SEC") on January 7, 2000; the SEC filed an amended complaint on February 29, 2000. The SEC alleges that Milan is an unregistered broker-dealer that is offering or purports to sell securities to investors in several states. The SEC further alleges that since October 1999, Milan has received funds from dozens of investors based on representations that it would use the funds to purchase shares in initial public offerings ("IPO shares"), but that Milan lacked access to and did not obtain any IPO shares for these investors. Monas is alleged to be Milan's president and sole owner. On January 7, 2000, the Court granted the SEC's application for a TRO restraining Milan from acting as a broker and freezing Milan's assets; the SEC and Milan stipulated to the entry of a preliminary injunction on January 18.

On January 21, 2000, on an ex parte application of the SEC, the Court appointed Aaron Marcu as Receiver for Milan. The Court's January 21 Order empowered the Receiver, inter alia, to take and retain immediate possession, custody, and control of all assets of Milan; to take all steps [*3]  the Receiver deemed necessary to secure and protect the assets of Milan; and to commence legal proceedings to sue for, collect, receive and take into possession monies of Milan, with a view to preventing loss, damage and injury to investors.

On February 14, 2000, the Court granted the Receiver's application for a TRO freezing certain bank accounts into which assets of Milan were alleged to have been wrongfully transferred and restraining Monas and members of his family from using or disposing of a Mercedes automobile alleged to have been wrongfully purchased with funds from Milan. The Receiver also moved for a preliminary injunction (i) freezing all assets received from Milan since September 1, 1999, pending trial, (ii) requiring Monas and others to provide a verified accounting of all assets received from Milan since September 1, 1999, and (iii) requiring the return of the Mercedes. On February 14, 2000, the Court issued a scheduling order setting a preliminary injunction hearing for February 29, 2000, and requiring the parties to appear before the Court for a status conference on February 18, and to submit proposed findings of fact and conclusions of law as well as other prehearing [*4]  papers on February 23.

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2000 U.S. Dist. LEXIS 2191 *; Fed. Sec. L. Rep. (CCH) P90,906

SECURITIES AND EXCHANGE COMMISSION, Plaintiff, -v- MILAN CAPITAL GROUP, INC., INVESTMENT OFFICES d/b/a AC FINANCIAL, INC., IRA A. MONAS, MICHAEL IRWIN LAMHUT and JASON M. COPE, Defendants, and RITA A. MONAS, JENNIFER MONAS, SANDS POINT INTERNATIONAL CORP., DOUGLAS H. MONAS, MICHAEL'S CAPITAL CONSULTANTS, INC. and HWK CONSULTANTS, INC., Relief Defendants.

Subsequent History: Findings of fact/conclusions of law at SEC v. Milan Capital Group, Inc., 2000 U.S. Dist. LEXIS 2873 (S.D.N.Y., Mar. 10, 2000)

Related proceeding at SEC v. Cope, 2016 U.S. Dist. LEXIS 178156 (S.D.N.Y., Dec. 23, 2016)

CORE TERMS

investors, funds, preliminary injunction, freeze, shares, accounting, deposited, merits

Civil Procedure, Remedies, Receiverships, General Overview, Injunctions, Preliminary & Temporary Injunctions, Provisional Remedies, Judgments, Relief From Judgments, Independent Actions, Securities Law, Securities Act Actions, Civil Liability