SEC v. LEGEND VENTURE PARTNERS, No. 1:23-cv-05326, Southern District of New York (June 28, 2023)

UNITED STATES DISTRICT COURT
SOUTHERN DISTRICT OF NEW YORK

SECURITIES AND EXCHANGE COMMISSION,

                                             Plaintiff,

                        -against-

LEGEND VENTURE PARTNERS LLC,

                                             Defendant.

23 Civ. 5326

[PROPOSED] ORDER TO SHOW CAUSE,
TEMPORARY RESTRAINING ORDER, AND ORDER FREEZING ASSETS,
APPOINTING A RECEIVER, AND GRANTING OTHER RELIEF

 On the application of Plaintiff Securities and Exchange Commission (“Plaintiff” or
“Commission”) for an Order:
(1) Directing Defendant Legend Venture Partners LLC (“Legend” or “Defendant”) to show
cause why an order should not be entered, pending a final disposition of this action:
(a) enjoining Legend from violating Sections 5(a), 5(c) and 17(a) of the Securities Act of
1933 (“Securities Act”); Sections 10(b) and 15(a) of the Securities Exchange Act of
1934 (“Exchange Act”) and Rule 10b-5 thereunder; and Section 206 of the
Investment Advisers Act of 1940 (“Advisers Act”) and Rule 206(4)-8 thereunder;
(b) freezing the assets of Legend and the five private funds it manages—Legend
Ventures Fund 1 LLC, Legend Ventures Fund 2 LLC, Legend Ventures Fund 3
LLC, Legend Ventures Fund 4 LLC, and Legend Ventures Fund 5 LLC (collectively,
the “Legend Funds”)—including the bank accounts listed on Exhibit A to this Order
(the “Legend Assets”), until such time as the Court appoints a receiver over Legend
and the Legend Funds;

2
(c) appointing a receiver (the “Receiver”) over Legend and the Legend Funds
(collectively, the “Receivership Entities”), by entering the proposed Order
Appointing Receiver filed herewith;
(d) enjoining the filing of any new bankruptcy, foreclosure, receivership or other actions
by or against the Receivership Entities;
(e) directing Legend to provide a verified accounting of (i) the current assets, money,
and property held directly or indirectly by the Receivership Entities, or by others for
the direct or indirect beneficial interest of the Receivership Entities; and (ii) the use
of all investor funds raised by the Receivership Entities; and
(f) prohibiting Legend from destroying, altering, concealing, or otherwise disposing of
relevant documents, or directing other individuals or entities to do so;
(2) pending adjudication of the foregoing, an Order:
(a) temporarily restraining Legend from violating Securities Act Sections 5(a), 5(c) and
17(a); Exchange Act Sections 10(b) and 15(a) and Rule 10b-5 thereunder; and
Advisers Act Section 206 and Rule 206(4)-8 thereunder;
(b) freezing the Legend Assets until such time as the Court appoints a receiver over the
Receivership Entities;
(c) enjoining the filing of any new bankruptcy, foreclosure, receivership, or other actions
by or against the Receivership Entities;
(d) directing Legend to provide a verified accounting of (i) the current assets, money,
and property held directly or indirectly by the Receivership Entities, or by others for
the direct or indirect beneficial interest of the Receivership Entities; and (ii) the use
of all investor funds raised by the Receivership Entities; and

3
(e) prohibiting Legend from destroying, altering, concealing, or otherwise disposing of
relevant documents, or directing other individuals or entities to do so.
 The Court has considered the following documents filed by Plaintiff on June 22, 2023:
(1) the Complaint; (2) the Declaration of Kerri L. Palen and exhibits thereto; (3) the Declaration of
Melanie L. Cyganowski and exhibits thereto; (4) the Declaration of Joshua D. Tannen and exhibits
thereto; (5) the Declaration of Gregory Buckis; (6) the Declaration of Robert Cliatt; (7) the Local
Civil Rule 6.1(d) Declaration of Lee A. Greenwood; and (8) Plaintiff’s Memorandum of Law in
Support of its Emergency Application for an Order to Show Cause, Temporary Restraining Order,
Preliminary Injunction, Asset Freeze, Receiver, and Other Relief.
 Based upon the foregoing documents, the Court finds that a proper showing, as required by
Securities Act Section 20(b), Exchange Act Section 21(d)(1), and Advisers Act Section 209(d) has
been made for the relief granted herein, for the following reasons:
1. It appears from the evidence presented that Defendant has violated and, unless
temporarily restrained, will continue to violate, Securities Act Sections Section 5(a), 5(c), and 17(a);
Exchange Act Sections 10(b) and 15(a) and Rule 10b-5 thereunder; and Advisers Act Section 206
and Rule 206(4)-8 thereunder, as charged in the Complaint.
2. It appears that Legend may attempt to dissipate, deplete, or transfer from the
jurisdiction of this Court, funds, property, and other assets that could be subject to an order of
disgorgement or an order imposing civil penalties.  It appears that an order freezing the assets of
Legend and the Legend Funds, as specified herein, is necessary to preserve the status quo, to protect
investors from further dissipation of assets, to protect this Court’s ability to award equitable relief in
the form of disgorgement of ill-gotten gains and civil penalties, and to preserve the Court’s ability to
approve a fair distribution for victims of the fraud.

4
3. It appears that the appointment of a Receiver for the Receivership Entities, as
described above and as set forth in the proposed Order Appointing Receiver filed herewith, is
necessary to:  (a) preserve the status quo, (b) ascertain the true financial condition of the
Receivership Entities and the disposition of investor funds; (c) prevent further dissipation of the
property and assets of the Receivership Entities; (d) prevent the encumbrance or disposal of
property or assets of the Receivership Entities and the investors; (e) preserve the books, records,
and documents of the Receivership Entities; (f) be available to respond to investor inquiries; and (g)
protect investors’ assets.
4. It appears that an order requiring Legend to provide a verified accounting of (i) the
current assets, money, and property held directly or indirectly by the Receivership Entities, or by
others for the direct or indirect beneficial interest of the Receivership Entities; and (ii) the use of all
investor funds raised by the Receivership Entities is necessary to effectuate and ensure compliance
with the freeze imposed on the assets of the Receivership Entities and to locate additional assets for
the benefit of investors.
5. Good and sufficient reasons have been shown why procedure other than by notice
of motion is necessary, including those set forth in the Local Civil Rule 6.1(d) Declaration of Lee A.
Greenwood.
6. This Court has jurisdiction over the subject matter of this action and over Legend,
and venue properly lies in this District.

6
other assets, which are hereby frozen, including, but not limited to, such funds held in the bank
accounts listed on Exhibit A.
1

III.
 IT IS FURTHER ORDERED that Defendant show cause at that time why this Court
should not also enter an Order appointing a Receiver for the Receivership Entities, as described
above and as set forth in the proposed Order Appointing Receiver, to (a) preserve the status quo;
(b) ascertain the true financial condition of the Receivership Entities and the disposition of investor
funds; (c) prevent further dissipation of the property and assets of the Receivership Entities and all
entities they control or have an ownership interest in; (d) prevent the encumbrance or disposal of
property or assets of the Receivership Entities and the investors; (e) preserve the books, records and
documents of the Receivership Entities; (f) be available to respond to investor inquiries; and (g)
protect the assets of the Receivership Entities.
IV.
 IT IS FURTHER ORDERED that Defendant show cause at that time why this Court
should not also enter an Order enjoining the filing of any new bankruptcy, foreclosure, receivership,
or other actions by or against the Receivership Entities.
V.
IT IS FURTHER ORDERED that Defendant show cause at that time why this Court
should not also enter an Order directing Defendant to serve upon Plaintiff, within five (5) business
days, or within such extension of time as the Plaintiff agrees to, a verified written accounting
identifying (i) the current assets, money, and property held directly or indirectly by the Receivership

1
The Commission is authorized to transmit a version of Exhibit A that contains the full bank
account numbers subject to this Order to the relevant financial institutions listed on Exhibit A.

7
Entities, or by others for the direct or indirect beneficial interest of the Receivership Entities; and (ii)
the use of all investor funds raised by the Receivership Entities.  Legend shall serve such sworn
statement on Plaintiff’s counsel, Daniel Loss, by email sent to [email protected].
VI.
 IT IS FURTHER ORDERED that Defendant show cause at that time why this Court
should not also enter an Order enjoining and restraining Defendant, and any person or entity acting
at its direction or on its behalf, or any other person, from destroying, altering, concealing, or
otherwise interfering with the access of Plaintiff and the receiver (if appointed) to any and all
documents, books and records, that are in the possession, custody or control of Defendant, and
each of its officers, agents, employees, servants, accountants, financial or brokerage institutions,
attorneys-in-fact, subsidiaries, affiliates, predecessors, successors and related entities, that refer,
reflect or relate to the allegations in the Complaint, including, without limitation, documents, books,
and records referring, reflecting or relating to the Receivership Entities’ finances or business
operations.
VII.
 IT IS FURTHER ORDERED that, pending a hearing and determination of Plaintiff’s
application for a preliminary injunction, Defendant is temporarily restrained from violating
Securities Act Section 17(a) [15 U.S.C. § 77q(a)], in the offer or sale of any security by the use of any
means or instruments of transportation or communication in interstate commerce or by use of the
mails, directly or indirectly:
(a) to employ any device, scheme, or artifice to defraud;

8
(b) to obtain money or property by means of any untrue statement of a material fact or
any omission of a material fact necessary in order to make the statements made, in
light of the circumstances under which they were made, not misleading; or
(c) to engage in any transaction, practice, or course of business which operates or would
operate as a fraud or deceit upon the purchaser.
 IT IS FURTHER ORDERED that, as provided in Federal Rule of Civil Procedure
65(d)(2), the foregoing paragraph also binds the following who receive actual notice of this Order by
personal service or otherwise:  (a) Defendant’s officers, agents, servants, employees, and attorneys;
and (b) other persons in active concert or participation with Defendant or with anyone described in
(a).
VIII.
 IT IS FURTHER ORDERED that, pending a hearing and determination of Plaintiff’s
application for a preliminary injunction, Defendant is temporarily restrained from violating
Exchange Act Section 10(b) [15 U.S.C. § 78j(b)] and Rule 10b-5 promulgated thereunder [17 C.F.R.
§ 240.10b-5], by using any means or instrumentality of interstate commerce, or of the mails, or of
any facility of any national securities exchange, in connection with the purchase or sale of any
security:
(a) to employ any device, scheme, or artifice to defraud;
(b) to make any untrue statement of a material fact or to omit to state a material fact
necessary in order to make the statements made, in the light of the circumstances
under which they were made, not misleading; or
(c) to engage in any act, practice, or course of business which operates or would operate
as a fraud or deceit upon any person.

9
 IT IS FURTHER ORDERED that, as provided in Federal Rule of Civil Procedure
65(d)(2), the foregoing paragraph also binds the following who receive actual notice of this Order by
personal service or otherwise:  (a) Defendant’s officers, agents, servants, employees, and attorneys;
and (b) other persons in active concert or participation with Defendant or with anyone described in
(a).
IX.
 IT IS FURTHER ORDERED that, pending a hearing and determination of Plaintiff’s
application for a preliminary injunction, Defendant is temporarily restrained from violating Advisers
Act Section 206 [15 U.S.C. § 80b-6] and Rule 206(4)-8 promulgated thereunder [17 C.F.R.
§ 275.206(4)-8], by, while acting as an investment adviser, using any means or instrumentalities of
interstate commerce, or any means or instruments of transportation or communication in interstate
commerce, or by the mails or any facility of any national securities exchange:
(a) to employ any device, scheme, or artifice to defraud any client or prospective client;
(b) to engage in any transaction, practice, or course of business which operates as a
fraud or deceit upon any client or prospective client;
(c) acting as principal for his own account, knowingly to sell any security to or purchase
any security from a client, or acting as broker for a person other than such client,
knowingly to effect any sale or purchase of any security for the account of such
client, without disclosing to such client in writing before the completion of such
transaction the capacity in which it is acting and obtaining the consent of the client
to such transaction; or
(d) to engage in any acts, practices, or courses of business which are fraudulent,
deceptive, or manipulative.

10
 IT IS FURTHER ORDERED that, as provided in Federal Rule of Civil Procedure
65(d)(2), the foregoing paragraph also binds the following who receive actual notice of this Order by
personal service or otherwise:  (a) Defendant’s officers, agents, servants, employees, and attorneys;
and (b) other persons in active concert or participation with Defendant or with anyone described in
(a).
X.
 IT IS FURTHER ORDERED that, pending a hearing and determination of Plaintiff’s
application for a preliminary injunction, Defendant is temporarily restrained from violating
Securities Act Sections 5(a) and 5(c) [15 U.S.C. §§ 77e(a) and (c)] by, directly or indirectly, in the
absence of any applicable exemption:
 (a) Unless a registration statement is in effect as to a security, making use of any means
or instruments of transportation or communication in interstate commerce or of the
mails to sell such security through the use or medium of any prospectus or
otherwise; or carrying or causing to be carried through the mails or in interstate
commerce, by any means or instruments of transportation, any such security for the
purpose of sale or for delivery after sale; or
 (b) Making use of any means or instruments of transportation or communication in
interstate commerce or of the mails to offer to sell or offer to buy through the use or
medium of any prospectus or otherwise any security, unless a registration statement
has been filed with the Commission as to such security, or while the registration
statement is the subject of a refusal order or stop order or (prior to the effective date
of the registration statement) any public proceeding or examination under Securities
Act Section 8 [15 U.S.C. § 77h].

11
 IT IS FURTHER ORDERED that, as provided in Federal Rule of Civil Procedure
65(d)(2), the foregoing paragraph also binds the following who receive actual notice of this Order by
personal service or otherwise:  (a) Defendant’s officers, agents, servants, employees, and attorneys;
and (b) other persons in active concert or participation with Defendant or with anyone described in
(a).
XI.
 IT IS FURTHER ORDERED that, pending a hearing and determination of Plaintiff’s
application for a preliminary injunction, Defendant is temporarily restrained from violating
Exchange Act Section 15(a)(1) [15 U.S.C. § 78o(a)(1)] by making use of the mails or any means or
instrumentality of interstate commerce to effect any transactions in, or to induce or attempt to
induce the purchase or sale of, any security (other than an exempted security or commercial paper,
bankers’ acceptances, or commercial bills) unless registered as a broker or dealer in accordance with
subsection Exchange Act Section 15(b) [15 U.S.C. § 78o(b)].
 IT IS FURTHER ORDERED that, as provided in Federal Rule of Civil Procedure
65(d)(2), the foregoing paragraph also binds the following who receive actual notice of this Order by
personal service or otherwise:  (a) Defendant’s officers, agents, servants, employees, and attorneys;
and (b) other persons in active concert or participation with Defendant or with anyone described in
(a).
XII.
   IT IS FURTHER ORDERED that, pending a hearing and determination of Plaintiff’s
application for a preliminary injunction, Defendant and each of its officers, agents, servants,
employees and attorneys and those persons in active concert or participation with it who receive
actual notice of this Order by personal service or otherwise, including facsimile transmission,

12
electronic mail, or overnight delivery service, shall hold and retain funds and other assets
constituting Legend Assets that are presently held by them, for their direct or indirect benefit, under
their direct or indirect control or over which they exercise actual or apparent investment or other
authority, in whatever form such assets may presently exist and wherever located, and shall prevent
any withdrawal, sale, payment (including, but not limited to, any charges on any credit card or draws
on any other credit arrangement), transfer, dissipation, assignment, pledge, alienation, encumbrance,
disposal, or diminution in value of any such funds or other assets, which are hereby frozen,
including, but not limited to, such funds held in the accounts listed on Exhibit A.

XIII.
 IT IS FURTHER ORDERED that, pending a hearing and determination of Plaintiff’s
application for a preliminary injunction, all banks, brokerage and other financial institutions and
other persons or entities which receive actual notice of this Order by personal service or otherwise,
including facsimile transmissions, electronic mail, or overnight delivery service, holding any funds or
other assets in the name, for the direct or indirect benefit, or under the direct or indirect control of
the Receivership Entities or over which they exercise actual or apparent investment or other
authority, in whatever form such assets may presently exist and wherever located, including but not
limited to all such funds held in the accounts listed in Exhibit A, shall hold and retain within their
control and prohibit the withdrawal, removal, sale, payment (including, but not limited to, any
charges on any credit card or draws on any other credit arrangement), transfer, dissipation,
assignment, pledge, alienation, encumbrance, diminution in value, or other disposal of any such
funds or other assets; and that such funds and assets are hereby frozen.

13
XIV.
 IT IS FURTHER ORDERED that, pending a hearing and determination of Plaintiff’s
application for a preliminary injunction, no person or entity, including any creditor or claimant
against any of the Receivership Entities, or any person acting on behalf of such creditor or claimant,
shall take any action to interfere with the taking control, possession, or management of the assets,
including, but not limited to the filing of any lawsuits, liens or encumbrances or bankruptcy cases to
impact the property and assets subject to this Order.
XV.
 IT IS FURTHER ORDERED that, pending a hearing and determination of Plaintiff’s
application for a preliminary injunction, Defendant, any person or entity acting at its direction or on
its behalf, and any other third party, be and hereby is enjoined and restrained from destroying or
altering any and all documents, books, and records that are in the possession, custody or control of
the Receivership Entities and each of their respective officers, agents, employees, servants,
accountants, financial or brokerage institutions, or attorneys-in-fact, subsidiaries, affiliates,
predecessors, successors and related entities, that refer, reflect or relate to the allegations in the
Complaint, including, without limitation, documents, books and records referring, reflecting or
relating to the Receivership Entities’ finances or business operations or the offer, purchase or sale of
securities and the use of proceeds therefrom.
XVI.
 IT IS FURTHER ORDERED that a copy of this Order and the papers supporting the
Plaintiff’s application for a preliminary injunction be served upon Defendant on or before June 23,
2023, by personal delivery, facsimile, email, overnight courier, or first-class mail.

UNITED STATES DISTRICT COURT 
SOUTHERN DISTRICT OF NEW YORK 
 
 

SECURITIES AND EXCHANGE COMMISSION, 
 
                                             Plaintiff, 
 
                        -against- 
 

LEGEND VENTURE PARTNERS LLC,    
  
                                             Defendant. 
 
 

 
 

 
  

23 Civ. 5326 
 

   
  

           
          

 
[PROPOSED] ORDER TO SHOW CAUSE,  

TEMPORARY RESTRAINING ORDER, AND ORDER FREEZING ASSETS, 
APPOINTING A RECEIVER, AND GRANTING OTHER RELIEF 

 
 On the application of Plaintiff Securities and Exchange Commission (“Plaintiff” or 

“Commission”) for an Order:  

(1) Directing Defendant Legend Venture Partners LLC (“Legend” or “Defendant”) to show 

cause why an order should not be entered, pending a final disposition of this action:  

(a) enjoining Legend from violating Sections 5(a), 5(c) and 17(a) of the Securities Act of 

1933 (“Securities Act”); Sections 10(b) and 15(a) of the Securities Exchange Act of 

1934 (“Exchange Act”) and Rule 10b-5 thereunder; and Section 206 of the 

Investment Advisers Act of 1940 (“Advisers Act”) and Rule 206(4)-8 thereunder; 

(b) freezing the assets of Legend and the five private funds it manages—Legend 

Ventures Fund 1 LLC, Legend Ventures Fund 2 LLC, Legend Ventures Fund 3 

LLC, Legend Ventures Fund 4 LLC, and Legend Ventures Fund 5 LLC (collectively, 

the “Legend Funds”)—including the bank accounts listed on Exhibit A to this Order 

(the “Legend Assets”), until such time as the Court appoints a receiver over Legend 

and the Legend Funds;  

Case 1:23-cv-05326-UA   Document 7   Filed 06/22/23   Page 1 of 14Case 1:23-cv-05326-UA   Document 21   Filed 06/23/23   Page 1 of 14



 
 2

(c) appointing a receiver (the “Receiver”) over Legend and the Legend Funds 

(collectively, the “Receivership Entities”), by entering the proposed Order 

Appointing Receiver filed herewith; 

(d) enjoining the filing of any new bankruptcy, foreclosure, receivership or other actions 

by or against the Receivership Entities;  

(e) directing Legend to provide a verified accounting of (i) the current assets, money, 

and property held directly or indirectly by the Receivership Entities, or by others for 

the direct or indirect beneficial interest of the Receivership Entities; and (ii) the use 

of all investor funds raised by the Receivership Entities; and 

(f) prohibiting Legend from destroying, altering, concealing, or otherwise disposing of 

relevant documents, or directing other individuals or entities to do so;  

(2) pending adjudication of the foregoing, an Order:  

(a) temporarily restraining Legend from violating Securities Act Sections 5(a), 5(c) and 

17(a); Exchange Act Sections 10(b) and 15(a) and Rule 10b-5 thereunder; and 

Advisers Act Section 206 and Rule 206(4)-8 thereunder; 

(b) freezing the Legend Assets until such time as the Court appoints a receiver over the 

Receivership Entities;  

(c) enjoining the filing of any new bankruptcy, foreclosure, receivership, or other actions 

by or against the Receivership Entities;  

(d) directing Legend to provide a verified accounting of (i) the current assets, money, 

and property held directly or indirectly by the Receivership Entities, or by others for 

the direct or indirect beneficial interest of the Receivership Entities; and (ii) the use 

of all investor funds raised by the Receivership Entities; and 

Case 1:23-cv-05326-UA   Document 7   Filed 06/22/23   Page 2 of 14Case 1:23-cv-05326-UA   Document 21   Filed 06/23/23   Page 2 of 14



 
 3

(e) prohibiting Legend from destroying, altering, concealing, or otherwise disposing of 

relevant documents, or directing other individuals or entities to do so. 

 The Court has considered the following documents filed by Plaintiff on June 22, 2023:  

(1) the Complaint; (2) the Declaration of Kerri L. Palen and exhibits thereto; (3) the Declaration of 

Melanie L. Cyganowski and exhibits thereto; (4) the Declaration of Joshua D. Tannen and exhibits 

thereto; (5) the Declaration of Gregory Buckis; (6) the Declaration of Robert Cliatt; (7) the Local 

Civil Rule 6.1(d) Declaration of Lee A. Greenwood; and (8) Plaintiff’s Memorandum of Law in 

Support of its Emergency Application for an Order to Show Cause, Temporary Restraining Order, 

Preliminary Injunction, Asset Freeze, Receiver, and Other Relief. 

 Based upon the foregoing documents, the Court finds that a proper showing, as required by 

Securities Act Section 20(b), Exchange Act Section 21(d)(1), and Advisers Act Section 209(d) has 

been made for the relief granted herein, for the following reasons: 

1. It appears from the evidence presented that Defendant has violated and, unless 

temporarily restrained, will continue to violate, Securities Act Sections Section 5(a), 5(c), and 17(a); 

Exchange Act Sections 10(b) and 15(a) and Rule 10b-5 thereunder; and Advisers Act Section 206 

and Rule 206(4)-8 thereunder, as charged in the Complaint.  

2. It appears that Legend may attempt to dissipate, deplete, or transfer from the 

jurisdiction of this Court, funds, property, and other assets that could be subject to an order of 

disgorgement or an order imposing civil penalties.  It appears that an order freezing the assets of 

Legend and the Legend Funds, as specified herein, is necessary to preserve the status quo, to protect 

investors from further dissipation of assets, to protect this Court’s ability to award equitable relief in 

the form of disgorgement of ill-gotten gains and civil penalties, and to preserve the Court’s ability to 

approve a fair distribution for victims of the fraud. 

Case 1:23-cv-05326-UA   Document 7   Filed 06/22/23   Page 3 of 14Case 1:23-cv-05326-UA   Document 21   Filed 06/23/23   Page 3 of 14



 
 4

3. It appears that the appointment of a Receiver for the Receivership Entities, as 

described above and as set forth in the proposed Order Appointing Receiver filed herewith, is 

necessary to:  (a) preserve the status quo, (b) ascertain the true financial condition of the 

Receivership Entities and the disposition of investor funds; (c) prevent further dissipation of the 

property and assets of the Receivership Entities; (d) prevent the encumbrance or disposal of 

property or assets of the Receivership Entities and the investors; (e) preserve the books, records, 

and documents of the Receivership Entities; (f) be available to respond to investor inquiries; and (g) 

protect investors’ assets. 

4. It appears that an order requiring Legend to provide a verified accounting of (i) the 

current assets, money, and property held directly or indirectly by the Receivership Entities, or by 

others for the direct or indirect beneficial interest of the Receivership Entities; and (ii) the use of all 

investor funds raised by the Receivership Entities is necessary to effectuate and ensure compliance 

with the freeze imposed on the assets of the Receivership Entities and to locate additional assets for 

the benefit of investors. 

5. Good and sufficient reasons have been shown why procedure other than by notice 

of motion is necessary, including those set forth in the Local Civil Rule 6.1(d) Declaration of Lee A. 

Greenwood. 

6. This Court has jurisdiction over the subject matter of this action and over Legend, 

and venue properly lies in this District. 

  

Case 1:23-cv-05326-UA   Document 7   Filed 06/22/23   Page 4 of 14Case 1:23-cv-05326-UA   Document 21   Filed 06/23/23   Page 4 of 14



Case 1:23-cv-05326-UA   Document 21   Filed 06/23/23   Page 5 of 14



 
 6

other assets, which are hereby frozen, including, but not limited to, such funds held in the bank 

accounts listed on Exhibit A.1   

III. 

 IT IS FURTHER ORDERED that Defendant show cause at that time why this Court 

should not also enter an Order appointing a Receiver for the Receivership Entities, as described 

above and as set forth in the proposed Order Appointing Receiver, to (a) preserve the status quo; 

(b) ascertain the true financial condition of the Receivership Entities and the disposition of investor 

funds; (c) prevent further dissipation of the property and assets of the Receivership Entities and all 

entities they control or have an ownership interest in; (d) prevent the encumbrance or disposal of 

property or assets of the Receivership Entities and the investors; (e) preserve the books, records and 

documents of the Receivership Entities; (f) be available to respond to investor inquiries; and (g) 

protect the assets of the Receivership Entities. 

IV. 

 IT IS FURTHER ORDERED that Defendant show cause at that time why this Court 

should not also enter an Order enjoining the filing of any new bankruptcy, foreclosure, receivership, 

or other actions by or against the Receivership Entities.  

V. 

IT IS FURTHER ORDERED that Defendant show cause at that time why this Court 

should not also enter an Order directing Defendant to serve upon Plaintiff, within five (5) business 

days, or within such extension of time as the Plaintiff agrees to, a verified written accounting 

identifying (i) the current assets, money, and property held directly or indirectly by the Receivership 

                                                           
1 The Commission is authorized to transmit a version of Exhibit A that contains the full bank 
account numbers subject to this Order to the relevant financial institutions listed on Exhibit A. 

Case 1:23-cv-05326-UA   Document 7   Filed 06/22/23   Page 6 of 14Case 1:23-cv-05326-UA   Document 21   Filed 06/23/23   Page 6 of 14



 
 7

Entities, or by others for the direct or indirect beneficial interest of the Receivership Entities; and (ii) 

the use of all investor funds raised by the Receivership Entities.  Legend shall serve such sworn 

statement on Plaintiff’s counsel, Daniel Loss, by email sent to [email protected]. 

VI. 

 IT IS FURTHER ORDERED that Defendant show cause at that time why this Court 

should not also enter an Order enjoining and restraining Defendant, and any person or entity acting 

at its direction or on its behalf, or any other person, from destroying, altering, concealing, or 

otherwise interfering with the access of Plaintiff and the receiver (if appointed) to any and all 

documents, books and records, that are in the possession, custody or control of Defendant, and 

each of its officers, agents, employees, servants, accountants, financial or brokerage institutions, 

attorneys-in-fact, subsidiaries, affiliates, predecessors, successors and related entities, that refer, 

reflect or relate to the allegations in the Complaint, including, without limitation, documents, books, 

and records referring, reflecting or relating to the Receivership Entities’ finances or business 

operations. 

VII. 

 IT IS FURTHER ORDERED that, pending a hearing and determination of Plaintiff’s 

application for a preliminary injunction, Defendant is temporarily restrained from violating 

Securities Act Section 17(a) [15 U.S.C. § 77q(a)], in the offer or sale of any security by the use of any 

means or instruments of transportation or communication in interstate commerce or by use of the 

mails, directly or indirectly: 

(a) to employ any device, scheme, or artifice to defraud; 

Case 1:23-cv-05326-UA   Document 7   Filed 06/22/23   Page 7 of 14Case 1:23-cv-05326-UA   Document 21   Filed 06/23/23   Page 7 of 14



 
 8

(b) to obtain money or property by means of any untrue statement of a material fact or 

any omission of a material fact necessary in order to make the statements made, in 

light of the circumstances under which they were made, not misleading; or 

(c) to engage in any transaction, practice, or course of business which operates or would 

operate as a fraud or deceit upon the purchaser. 

 IT IS FURTHER ORDERED that, as provided in Federal Rule of Civil Procedure 

65(d)(2), the foregoing paragraph also binds the following who receive actual notice of this Order by 

personal service or otherwise:  (a) Defendant’s officers, agents, servants, employees, and attorneys; 

and (b) other persons in active concert or participation with Defendant or with anyone described in 

(a).  

VIII. 

 IT IS FURTHER ORDERED that, pending a hearing and determination of Plaintiff’s 

application for a preliminary injunction, Defendant is temporarily restrained from violating 

Exchange Act Section 10(b) [15 U.S.C. § 78j(b)] and Rule 10b-5 promulgated thereunder [17 C.F.R. 

§ 240.10b-5], by using any means or instrumentality of interstate commerce, or of the mails, or of 

any facility of any national securities exchange, in connection with the purchase or sale of any 

security: 

(a) to employ any device, scheme, or artifice to defraud; 

(b) to make any untrue statement of a material fact or to omit to state a material fact 

necessary in order to make the statements made, in the light of the circumstances 

under which they were made, not misleading; or 

(c) to engage in any act, practice, or course of business which operates or would operate 

as a fraud or deceit upon any person. 

Case 1:23-cv-05326-UA   Document 7   Filed 06/22/23   Page 8 of 14Case 1:23-cv-05326-UA   Document 21   Filed 06/23/23   Page 8 of 14



 
 9

 IT IS FURTHER ORDERED that, as provided in Federal Rule of Civil Procedure 

65(d)(2), the foregoing paragraph also binds the following who receive actual notice of this Order by 

personal service or otherwise:  (a) Defendant’s officers, agents, servants, employees, and attorneys; 

and (b) other persons in active concert or participation with Defendant or with anyone described in 

(a). 

IX. 

 IT IS FURTHER ORDERED that, pending a hearing and determination of Plaintiff’s 

application for a preliminary injunction, Defendant is temporarily restrained from violating Advisers 

Act Section 206 [15 U.S.C. § 80b-6] and Rule 206(4)-8 promulgated thereunder [17 C.F.R. 

§ 275.206(4)-8], by, while acting as an investment adviser, using any means or instrumentalities of 

interstate commerce, or any means or instruments of transportation or communication in interstate 

commerce, or by the mails or any facility of any national securities exchange: 

(a) to employ any device, scheme, or artifice to defraud any client or prospective client; 

(b) to engage in any transaction, practice, or course of business which operates as a 

fraud or deceit upon any client or prospective client;  

(c) acting as principal for his own account, knowingly to sell any security to or purchase 

any security from a client, or acting as broker for a person other than such client, 

knowingly to effect any sale or purchase of any security for the account of such 

client, without disclosing to such client in writing before the completion of such 

transaction the capacity in which it is acting and obtaining the consent of the client 

to such transaction; or 

(d) to engage in any acts, practices, or courses of business which are fraudulent, 

deceptive, or manipulative. 

Case 1:23-cv-05326-UA   Document 7   Filed 06/22/23   Page 9 of 14Case 1:23-cv-05326-UA   Document 21   Filed 06/23/23   Page 9 of 14



 
 10 

 IT IS FURTHER ORDERED that, as provided in Federal Rule of Civil Procedure 

65(d)(2), the foregoing paragraph also binds the following who receive actual notice of this Order by 

personal service or otherwise:  (a) Defendant’s officers, agents, servants, employees, and attorneys; 

and (b) other persons in active concert or participation with Defendant or with anyone described in 

(a). 

X. 

 IT IS FURTHER ORDERED that, pending a hearing and determination of Plaintiff’s 

application for a preliminary injunction, Defendant is temporarily restrained from violating 

Securities Act Sections 5(a) and 5(c) [15 U.S.C. §§ 77e(a) and (c)] by, directly or indirectly, in the 

absence of any applicable exemption: 

 (a) Unless a registration statement is in effect as to a security, making use of any means 

or instruments of transportation or communication in interstate commerce or of the 

mails to sell such security through the use or medium of any prospectus or 

otherwise; or carrying or causing to be carried through the mails or in interstate 

commerce, by any means or instruments of transportation, any such security for the 

purpose of sale or for delivery after sale; or 

 (b) Making use of any means or instruments of transportation or communication in 

interstate commerce or of the mails to offer to sell or offer to buy through the use or 

medium of any prospectus or otherwise any security, unless a registration statement 

has been filed with the Commission as to such security, or while the registration 

statement is the subject of a refusal order or stop order or (prior to the effective date 

of the registration statement) any public proceeding or examination under Securities 

Act Section 8 [15 U.S.C. § 77h]. 

Case 1:23-cv-05326-UA   Document 7   Filed 06/22/23   Page 10 of 14Case 1:23-cv-05326-UA   Document 21   Filed 06/23/23   Page 10 of 14



 
 11 

 IT IS FURTHER ORDERED that, as provided in Federal Rule of Civil Procedure 

65(d)(2), the foregoing paragraph also binds the following who receive actual notice of this Order by 

personal service or otherwise:  (a) Defendant’s officers, agents, servants, employees, and attorneys; 

and (b) other persons in active concert or participation with Defendant or with anyone described in 

(a). 

XI. 

 IT IS FURTHER ORDERED that, pending a hearing and determination of Plaintiff’s 

application for a preliminary injunction, Defendant is temporarily restrained from violating 

Exchange Act Section 15(a)(1) [15 U.S.C. § 78o(a)(1)] by making use of the mails or any means or 

instrumentality of interstate commerce to effect any transactions in, or to induce or attempt to 

induce the purchase or sale of, any security (other than an exempted security or commercial paper, 

bankers’ acceptances, or commercial bills) unless registered as a broker or dealer in accordance with 

subsection Exchange Act Section 15(b) [15 U.S.C. § 78o(b)]. 

 IT IS FURTHER ORDERED that, as provided in Federal Rule of Civil Procedure 

65(d)(2), the foregoing paragraph also binds the following who receive actual notice of this Order by 

personal service or otherwise:  (a) Defendant’s officers, agents, servants, employees, and attorneys; 

and (b) other persons in active concert or participation with Defendant or with anyone described in 

(a). 

XII. 

   IT IS FURTHER ORDERED that, pending a hearing and determination of Plaintiff’s 

application for a preliminary injunction, Defendant and each of its officers, agents, servants, 

employees and attorneys and those persons in active concert or participation with it who receive 

actual notice of this Order by personal service or otherwise, including facsimile transmission, 

Case 1:23-cv-05326-UA   Document 7   Filed 06/22/23   Page 11 of 14Case 1:23-cv-05326-UA   Document 21   Filed 06/23/23   Page 11 of 14



 
 12 

electronic mail, or overnight delivery service, shall hold and retain funds and other assets 

constituting Legend Assets that are presently held by them, for their direct or indirect benefit, under 

their direct or indirect control or over which they exercise actual or apparent investment or other 

authority, in whatever form such assets may presently exist and wherever located, and shall prevent 

any withdrawal, sale, payment (including, but not limited to, any charges on any credit card or draws 

on any other credit arrangement), transfer, dissipation, assignment, pledge, alienation, encumbrance, 

disposal, or diminution in value of any such funds or other assets, which are hereby frozen, 

including, but not limited to, such funds held in the accounts listed on Exhibit A. 

XIII. 

 IT IS FURTHER ORDERED that, pending a hearing and determination of Plaintiff’s 

application for a preliminary injunction, all banks, brokerage and other financial institutions and 

other persons or entities which receive actual notice of this Order by personal service or otherwise, 

including facsimile transmissions, electronic mail, or overnight delivery service, holding any funds or 

other assets in the name, for the direct or indirect benefit, or under the direct or indirect control of 

the Receivership Entities or over which they exercise actual or apparent investment or other 

authority, in whatever form such assets may presently exist and wherever located, including but not 

limited to all such funds held in the accounts listed in Exhibit A, shall hold and retain within their 

control and prohibit the withdrawal, removal, sale, payment (including, but not limited to, any 

charges on any credit card or draws on any other credit arrangement), transfer, dissipation, 

assignment, pledge, alienation, encumbrance, diminution in value, or other disposal of any such 

funds or other assets; and that such funds and assets are hereby frozen.  

 

 

Case 1:23-cv-05326-UA   Document 7   Filed 06/22/23   Page 12 of 14Case 1:23-cv-05326-UA   Document 21   Filed 06/23/23   Page 12 of 14



 
 13 

XIV. 

 IT IS FURTHER ORDERED that, pending a hearing and determination of Plaintiff’s 

application for a preliminary injunction, no person or entity, including any creditor or claimant 

against any of the Receivership Entities, or any person acting on behalf of such creditor or claimant, 

shall take any action to interfere with the taking control, possession, or management of the assets, 

including, but not limited to the filing of any lawsuits, liens or encumbrances or bankruptcy cases to 

impact the property and assets subject to this Order. 

XV. 

 IT IS FURTHER ORDERED that, pending a hearing and determination of Plaintiff’s 

application for a preliminary injunction, Defendant, any person or entity acting at its direction or on 

its behalf, and any other third party, be and hereby is enjoined and restrained from destroying or 

altering any and all documents, books, and records that are in the possession, custody or control of 

the Receivership Entities and each of their respective officers, agents, employees, servants, 

accountants, financial or brokerage institutions, or attorneys-in-fact, subsidiaries, affiliates, 

predecessors, successors and related entities, that refer, reflect or relate to the allegations in the 

Complaint, including, without limitation, documents, books and records referring, reflecting or 

relating to the Receivership Entities’ finances or business operations or the offer, purchase or sale of 

securities and the use of proceeds therefrom.    

XVI. 

 IT IS FURTHER ORDERED that a copy of this Order and the papers supporting the 

Plaintiff’s application for a preliminary injunction be served upon Defendant on or before June 23, 

2023, by personal delivery, facsimile, email, overnight courier, or first-class mail. 

 

Case 1:23-cv-05326-UA   Document 7   Filed 06/22/23   Page 13 of 14Case 1:23-cv-05326-UA   Document 21   Filed 06/23/23   Page 13 of 14



Case 1:23-cv-05326-UA   Document 21   Filed 06/23/23   Page 14 of 14