United States Securities and Exchange Commission v. Qin

UNITED STATES DISTRICT COURT SOUTHERN DISTRICT OF NEW YORK UNITED STATES SECURITIES AND EXCHANGE COMMISSION, Plaintiff, 20-CV-10849 (JGLC) -against- ORDER STEFAN QIN, et al., Defendants.

JESSICA G. L. CLARKE, United States District Judge: WHEREAS, on January 21, 2022, Robert A. Musiala, Jr. Esq. of Baker & Hostetler LLP (“BakerHostetler”) was appointed as the Receiver in this action. ECF No. 31.

WHEREAS, on July 1, 2024, the Receiver submitted the Thirteenth Fee Application, ECF No. 321, seeking approval of the payment of fees and expenses incurred between January 1, 2024 and March 31, 2024 (the “Application Period”). The Thirteenth Fee Application seeks approval of payments in the following amounts: $308,549.92 to BakerHostetler; $248,186.17 to Ankura Consulting Group, LLC (“Ankura”); $5,187.50 to the Law Office of Dennis O. Cohen, PLLC; and $3,696.00 to Miller Kaplan Arase, LLP (collectively, the “Receiver Team”). In connection with the Thirteenth Fee Application, the Receiver and the Receiver Team submitted invoices detailing the work performed.

It is hereby ORDERED that the Thirteenth Fee Application is GRANTED. The Receiver is authorized to make payments for the total amounts requested in the application. “A receiver appointed by a court who reasonably and diligently discharges his duties is entitled to be fairly compensated for services rendered and expenses incurred.” SEC v. Amerindo Inv. Advisors Inc., No. 05-CV-5231 (RJS), 2019 WL 3526590, at *4 (S.D.N.Y. Aug. 2, 2019) (quoting SEC v. Byers, 590 F. Supp. 2d 637, 644 (S.D.N.Y. 2008)). “Like fee awards in other contexts, the reasonableness of a receiver’s fee application is determined in the court’s discretion, and is judged by, among other things, the reasonableness of the hourly rate charged and the reasonableness of the number of hours billed.” Id. (internal citations omitted). In determining a reasonable fee, the Court considers a number of factors, including “(1) the complexity of problems faced, (2) the benefits to the receivership estate, (3) the quality of the work performed, and (4) the time records presented.” SEC v. Morgan, 504 F. Supp. 3d 221, 223 (W.D.N.Y. 2020) (quoting SEC v. Platinum Mgmt. (NY) LLC, No. 16-CV-6848 (BMC), 2018 WL 4623012, at *4 (E.D.N.Y. Sept. 26, 2018)).

Here, the SEC reviewed and approved the fee application and the invoices for the Receiver and the Receiver Team. ECF No. 321 ¶ 1. The SEC’s approval is “given great weight” in determining the reasonableness of the compensation and reimbursement sought by a receiver.

Morgan, 504 F. Supp. 3d at 223 (quoting Byers, 590 F. Supp. 2d at 644). The Thirteenth Fee Application and billing records reflect the significant efforts of the Receiver Team, which continues to engage in highly complex and time-intensive work on behalf of the Receivership.

During the Application Period, the Receiver Team performed work that was beneficial to the Receivership, including collecting and analyzing data; coordinating with a foreign-based cryptocurrency exchange to receive cryptocurrency value into the Receiver’s institutional account and convert the cryptocurrencies into U.S. dollars; entering into a settlement agreement with a third party for the return of Receivership Property; negotiating with third parties to freeze and return Receivership Property; filing a motion and memorandum of law setting forth a proposed process for the determination of submitted claims; updating the list of answers to frequently asked questions on the Receivership website; and reviewing and responding to claimant inquiries. ECF No. 321 ¶ 4. The hourly rates remain significantly discounted from the ordinary rates of the Receiver and Ankura, resulting in a combined total discount and fee write- off of $441,701.50 and $132,122.50, respectively, for the Application Period. Jd. § 28.

Dated: September 26, 2024 New York, New York SO ORDERED.

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