SEC v. Braverman: Declarations in Support of SEC’s Emergency Application for an Asset Freeze and Other Relief

We are following SEC v. Braverman, No. 1:14-cv-07482 (S.D.N.Y. Sept 16, 2014).

On September 16, 2014 the SEC alleged Braverman engaged in unlawful insider trading and sought disgorgement of Braverman’s illegally acquired gains. After filing its complaint, the SEC promptly filed an emergency application to freeze all assets associated with Braverman (the “Application”), including assets controlled by Braverman and assets Braverman allegedly transferred abroad to and through relief defendant, Vitaly Pupynin (“Pupynin”). This post examines separate, but concurrent declarations filed on September 17, 2014 by Jordan Bakerand Charu A. Chandrasekhar in support of the SEC’s Application. 

Jordan Baker, a securities compliance examiner for the SEC, supported the Application based on personal knowledge obtained through an investigation of the case. Pursuant to 28 U.S.C. § 1746, Baker declared the following: (1) Braverman signed an agreement to be bound by the confidentiality and insider trading policies of his employer, Wilson Sonsini Goodrich & Rosati, Professional Corporation (“Wilson Sonsini”); (2) Wilson Sonsini represented eight companies in eight separate merger and acquisition transactions, producing documents to which Braverman had access; (3) trade records for brokerage accounts held by Braverman, Pupynin, and Braverman’s brother revealed profits associated with the trading of these companies in the amount of $304,837.39; and (4) phone records revealed calls between Braverman and his brother on relevant dates.

With regard to Pupynin, Baker declared the following: (1) between October 2013 and August 2014 transfers of over $25,000 were made to accounts held by Pupynin, and a transfer of $26,000 was made to a Latvian account through an account under Pupynin’s name, but associated with Braverman’s email; (2) flight records reveal Pupynin was not in the United States at times relevant to the transactions; (3) Braverman and his wife were subscribers to IP addresses from which the Pupynin account was accessed preceding such transactions; and (4) the IP address used to access the Pupynin account matched the IP address used to access Braverman’s other brokerage accounts.

Charu A. Chandrasekhar, a Senior Attorney at the SEC’s New York Regional Office, supported the Application based on personal knowledge of Braverman’s illegal trading and Baker’s declaration. Chandrasekhar declared the Application essential to the effective adjudication and relief associated with the complaint. A notice by motion, he asserted, would trigger Braverman’s deliberate transfer of illegally gained assets outside the reach of the court and the SEC. In support of this assertion, Chandrasekhar proffered three reasons for the Application: (1) to maintain the status quo until judgment on the Application; (2) to protect future judgment ordering disgorgement; and (3) to avert the corruption of evidence. 

The primary materials for this post can be found at the DU Corporate Governance website under the subsequent citations:  

Local Rule 6.1 Decl. of Charu A. Chandrasekhar in Support of Pl’s. Emergency Appl. For an Asset Freeze and Other Relief, SEC v. Braverman, No. 1:14-cv-07482 (S.D.N.Y. Sept. 17 2014).

Decl. of Jordan Baker in Support of Pl. SEC’s Emergency Appl. For an Asset Freeze and Other Relief, SEC v. Braverman, No. 1:14-cv-07482 (S.D.N.Y. Sept. 17 2014).