Case Summary: Securities & Exchange Commission, et al. v. Behrens, et al., 08-cv-13, (D. Ne.)
On January 10, 2008, plaintiff Securities & Exchange Commission filed a complaint for violations of the Securities Exchange Act of 1934 and the Securities Act of 1933 in the United States District Court for the District of Nebraska against Bryan S. Behrens and National Investments, Inc. arising out of a fraudulent Ponzi-like scheme. The complaint alleged that Behrens misled investors that National, an entity he controls, would lend the investors' money out to others at a higher interest rate to generate profits when he actually paid old investors with the money from new investors and used the funds for personal use.
On July 28, 2008, defendants consented to entry of judgment, without admitting or denying the allegations of the complaint, and to appointment of receiver to (1) locate, preserve, and protect all assets subject to disgorgement and penalties, and (2) maximize returns to investors. On May 20, 2009, the court entered an order approving the receiver's claim handling procedures. On November 17, 2011, the receiver filed a motion to set a hearing on the claim of Marion Gail Buchanan to a constructive trust in receivership assets. Buchanan asserted that she was the last known victim of defendants' conduct and that the funds she gave to defendants could be traced. The receiver opposed Buchanan's claim.
The court heard oral argument on December 28, 2011. On December 29, 2011, the court issued its memorandum and order, denying Buchanan's claim to a constructive trust because she had failed to meet her burden in proving: (1) she would not have loaned the disputed funds to Behrens but for the abuse of an influential or confidential relationship; and (2) the rules of equity and good conscience dictate that she should have priority over the disputed funds.
- Claim to a Constructive Trust in Receivership Assets
- Hearing on 12/28/2011
- Memorandum and Order filed 12/29/2011: Claim Denied. [Doc # 285]
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