Securities & Exchange Commission v. Long

MEMORANDUM AND ORDER

This matter is before the court on defendant Clarence E. Long’s motion to stay this litigation against him because of the commencement of a Chapter 7 involuntary bankruptcy proceeding against him.

Normally a filing of a petition in bankruptcy operates as an automatic stay of pending civil actions against the debtor. 11 U.S.C. § 362(a). This automatic stay, however, does not operate to stay the continuation of an action by a governmental agency to enforce its police or regulatory powers. 11 U.S.C. § 362(b)(4).

The court finds that the present action is one brought by the SEC to enforce its police and regulatory powers. Thus, this litigation is not subject to the automatic stay under section 362(a).

IT IS BY THIS COURT THEREFORE ORDERED that defendant Long’s motion to stay this litigation is denied.