CRESSKILL, N.J., Aug. 22, 2016 /PRNewswire/ — Today, hedge fund adviser RD Legal Capital, LLC, and its president, Roni Dersovitz, filed a federal lawsuit against the Securities and Exchange Commission challenging its decision to bring civil claims against them in an unfair and unconstitutional administrative proceeding.
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"This is not a typical case of alleged investor fraud. Instead, it is a case where RD Legal Capital and Mr. Dersovitz fully disclosed all material facts in the relevant offering memoranda, used investor funds exactly as represented in those offering documents, and have consistently generated double-digit cumulative and compounded annual returns for all fund investors for nearly a decade," said Terence Healy, counsel to RD Legal Capital.
In July, the SEC chose to file its case in an administrating proceeding that fails to provide RD Legal Capital and Mr. Dersovitz the even playing field and due process protections guaranteed in open federal courts. "By doing so, the SEC is seeking to avoid the pleading requirements, evidentiary standards, and procedural protections every defendant deserves when fighting claims made by law enforcement agencies such as the SEC," said David Willingham, who is counsel for Mr. Dersovitz.
As explained in the federal complaint filed today in the United States District Court for the District of New Jersey, the administrative forum in which the SEC initiated this case violates multiple provisions of the United States Constitution, including the Due Process Clause of the Fifth Amendment. Through their lawsuit, RD Legal Capital and Mr. Dersovitz hope to put a stop to the SEC's unconstitutional conduct, and to protect their own rights and the rights of other citizens to have civil charges by the SEC heard in open court and a fair and impartial forum that comports with the basics of due process.
According to Mr. Willingham, "whatever the forum, RD Legal Capital and Mr. Dersovitz are confident that they will prevail against the SEC in this case where no allegations have been made of investor funds being lost or misappropriated in any way, and where Mr. Dersovitz utilized those funds as described in offering documents to generate large returns for his investors." RD Legal Capital and Mr. Dersovitz look forward to helping fund investors continue to receive the financial benefits promised in the offering documents.
CONTACTS:
Terence Healy
Vice-Chair, Securities Enforcement
Hughes Hubbard & Reed LLP
202-721-4676
Email
David Willingham
Chair, White Collar Crime & Corporate
Compliance
Caldwell Leslie & Proctor, PC
213-629-9040
Email