Free Motion for Disbursement of Funds - District Court of Arizona - Arizona

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2 FREY & MCCUE, PLLC
ATTORNEYS AT LAW
3 8270 North Hayden
Suite 2051
4 Scottsdale, AZ 85258
602-508-8389
5 Martin McCue AZ Bar No.18849
6 Attorney for Defendants
7 UNITED STATES DISTRICT COURT
8 DISTRICT OF ARIZONA
9 SECURITIES AND EXCHANGE Case No.: CV03-1862 PHX FJ M
COMMISSION,
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11 Plaintiff, MOTION TO DISTRIBUTE
DISGORGED FUNDS TO THE
12 vs. INVESTORS / LIIVIITED PARTNERS
OF MILLENIUM CAPITAL HEDGE
13 MILLENNIUM CAPITAL HED GE FUND
FUND, L.P.; MILLENNIUM
14 CAPITAL GROUP, LLC; and
· 15 ANDREAS F. ZYBELL,
16 Defendants.
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Defendants Millennium Capital Hedge Fund, L.P. (the "Fund"), Millennium Capital
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Group, LLC, and Andreas, F. Zybell ("DEFENDANTS" or "MCG") hereby move for an
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20 order directing that all funds disgorged from Defendants be immediately distributed to the
21 investors/limited partners on the pro rata basis already determined by order of this Court. A
22 distribution of the disgorged funds to the limited partners is appropriate as the investors have
23 suffered damages for nearly two years since their funds were frozen at the request of the SEC
24 and the resulting cessation of investment activities. Since the Investors were the payors of
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Case 2:03-cv-01862-FJIVI Document 91 Filed O2/O7/2006 Page 1 of 3

1 these fees to the Defendants, and were also damaged by such a long delay of the return of
2 their funds, they are the proper recipients of the disgorged funds. There is no requirement
3 that these funds be held for any other purpose. Fortunately, the securities laws have been
4 drawn in such a way that allow the Court, in addition to the SEC, the ability to protect the
5 investor through reimbursement of disgorged fees from the Defendants.
j An important aspect of the Settlement Agreement between the SEC and the
8 Defendants was the issue of disgorgement. The Settlement Agreement dictated that Eighty-
. 9 two Thousand Dollars ($82,000.00) would be "disgorged", in two installments. The first
10 installment in the amount of Fifty-Five Thousand Dollars ($55,000.00) was due and payable
1] upon execution of the Settlement Agreement and the balance was due one year after entry of
12 this Court’s Final Order. In compliance with the Settlement Agreement, Defendant Zybell
13 paid the first installment of the assessment in the amount of $55,000 in November of 2005.
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As is typical in cases such as the present one, the Defendants simply request that the
E investors be the recipients of the disgorged funds. The investors have filed an amicus brief
17 to inform the- Court of the legal precedent and reasoning as to why such a distribution can
18 and should be made. The Defendants endorse the amicus brief and pray that this Court finds
19 that the method of disbursement of investors’ funds proposed by the SEC through Warfield
20 and Company be utilized to distribute the disgorged funds to the Investors as well, i.e.,
21 distribution to identifiable purchasers at the times Defendants made unlawful profits, is
22 equitable and nonarbitrary, as well as consistent with distribution plans approved by other
23 courts. g gg., SEC v. Shapiro, supra, 399 F.Supp. at 56, SEC v. Lund, supra . Cf Blavin,
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Case 2:03-cv-01862-FJIVI Document 91 Filed O2/O7/2006 Page 2 of 3

1 supra, 760 F.2d at 710; Securities and Exchange Commission v. Manor Nursing Centers,
2 Inc., 340 F.Supp. 913 (S.D.N.Y.1971), a]$"d 458 F.2d 1082 (2d Cir.1972).
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RESPECTFULLY SUBMITTED this 7th day of February, 2006.
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6 ‘ s[ Martin J. McCue
Martin J. McCue
7 FREY & McCue, PLLC
- 8270 North Hayden
Suite 2051
8 Scottsdale, AZ 85258
9 Attorneys for Defendants
10 CERTIFICATE on snnvrcn
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12 I hereby certify that on February 7, 2006, I electronically transmitted the attached
document to the Clerk's Office using the CM/ECF System for filing and transmittal of a
13 Notice of Electronic Filing to the following CM/ECF registrants:
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Thomas A Zaccaro
15 Roberto A. Tercero
16 Cammy C. Dupont
SECURITIES AND EXCHANGE COMl\/IISSION
17 5670 Wilshire Boulevard, 11m Floor
Los Angeles, California 90036-3648
18 Attomeys for Plaintiff
19 1 I
20 s[Martin J. McCue
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22 I
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Case 2:03-cv-01862-FJM

Document 91

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Case 2:03-cv-01862-FJM

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Case 2:03-cv-01862-FJM

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