Local Resident Battles Government Corruption

Richard R. Lawless

30279 Redding Avenue

Murrieta, CA 92563

951-440-5230

[email protected]

Plaintiff

United States District Court

For the Central District of California

Eastern Division

RICHARD R. LAWLESS No. 5:21-cv-01637-JWH-SP

Plaintiff,

PLAINTIFFS RESPONSE TO SEC'S MOTION FOR SUMMARY JUDGEMENT

V.

Securities and Exchange Commission

Defendant.

_______________________________ Hon. John W. Holcomb

Defense Counsel

Alexandra Verdi

[email protected]

U.S Securities and Exchange Commission

100 F Street, NE

Washington, D.C. 20549-9613

202-551-5057

Motions Brief

For one to consider a summary judgement in this case the court must suspend all common sense and reasonable jurisprudence to consider this motion.

1. Between 2010 and 2022 the Municipal Agencies in Puerto Rico Issued seventy-four-billion-dollars in fraudulent bonds. Neither the

The Department of Justice or the Securities and Exchange Commission denies this fact.

2. In research done by a municipal bond expert in 2012 the review of the bonds indicated that a massive Ponzi Scheme was in play and Forbes Magazine picked up this research and published an article about it.

3. FOIA Search Request 22-00610-FOIA determined that in 2012, the Ponzi Scheme article generated 568,200 pages of internal communications at the SEC. That search request response has been entered into evidence.

4. The Chairwomen at the time, Mary Jo White left the SEC without taking any action on the “Ponzi Scheme”. Mrs. White left the SEC where she was making approximately $227,000 a year and went to work for at Debevoise & Plimpton in New York City as Senior Chair.

Debevoise & Plimpton represents almost every major Wall Street bank that issued the fraudulent bonds. Mrs. Whites failure to act on these crimes benefited the law firm’s clients by saving billions of dollars in lawsuits that would have resulted from Mrs. White’s action against their clients. According to public records Mrs. White now makes over 20X what she was paid at the SEC. A simple google search can confirm that Mrs. White is the Senior Chair at this law firm. A copy of Mrs. Whites web page at the law firm was entered into evidence. A Google search regarding Mrs. White compensation will confirm she is now being paid between four and five million dollars per year. This is a clear conflict of interest at a minimum. The court is preventing discovery so additional data about this relationship will likely come during the discovery phase.

Mr. Lawless, the Plaintiff mailed Mrs. White information about the crimes before she left the SEC and will present a federal express receipt confirming this when all of the Plaintiffs evidence is submitted for trial.

The Chairman and the SEC rank and file were fully informed about these crimes as early as 2012 and confirmed through the agency's own FOIA documents.

Defense Counsel claims the FOIA search document confirming this has not been authenticated properly but has not denied that the SEC issued that, and other documents received by the plaintiff. The court has not allowed discovery at this pre-trial stage therefore it is not reasonable to deny this evidence and the confirmations of the evidence that would take place during discovery.

The next Chairman, Jay Clayton served from 2017 to 2020. The plaintiff mailed and emailed the Chairman all manner of evidence about these crimes. At the same time, FOIA search requests that have been entered into evidence show that the number of internal documents about this Puerto Rico Ponzi Scheme had grown from 568,200 pages to over a million pages. There was no shortage of information within the SEC about these crimes. Plaintiff sent extensive emails and federal express packages to Jay Clayton about what he knew about these crimes. Some are now part of the formal FOIA record available as submitted pre-trial evidence; others will be submitted as evidence before trial.

Jay Clayton did not act on these crimes, and he left the SEC and accepted a board seat with the Apollo Group. An investment bank that traded extensively in Puerto Rico fraudulent bonds. If the SEC had acted while Jay Clayton was Chairman, the Apollo Group would have lost billions of dollars. A clear conflict of interest at a minimum. A simple Google search will confirm both the board seat and Apollo's trading activities. A screenshot of the Board Seat Offer in a press release was entered into evidence

5. During the research for newspaper articles and Plaintiffs book, Capitol Hills Criminal Underground, whistleblowers from the FBI, CIA, NSA, SEC and British Intelligence explained how U.S. Senators maintained control of the Department of Justices, New York, Southern District Office so they could send federal criminal complaints against their campaign contributors there for special treatment. The book will be entered into evidence before trial.

The DOJ received hundreds of criminal complaints about this Ponzi Scheme, all routed to the Southern District Office where they were summarily dismissed without comment.

Before accepting the SEC Chairwomen position, Mary Jo White was in charge of the Southern District Office. After leaving the SEC, Jay Clayton took over the Southern District Office. The book (Capitol Hills Criminal Underground) which explained how the Southern District Office was used by Senators, was written years before Jay Clayton accepted that position.

Neither Mrs. White or Mr. Clayton have allowed any criminal cases to move forward at the Southern District Office. Plaintiff will subpoena DOJ records regarding the dismissal of these criminal complaints during discovery.

6. The current Chairman, Gary Gensler comes to the SEC from Goldman Sachs where he was a Senior Executive and Partner. Mr. Gensler was exposed to over one million internal SEC documents detailing these crimes, three government reports, sworn testimony taken at Senate hearings, a video recap of the crimes and a book (Capitol Hills Criminal Underground) explaining how this criminal syndicate operated. Mr. Gensler has refused to act against his former employer. The conflicts of interest here are stunning and form a tapestry of circumstantial evidence that would convince any Jury that the SEC leadership is a critical component in this Mafia style criminal organization.

7. There is so much more for the court to consider. The Defense Counsel submission of sworn statements by employees that the exemptions could apply to the request documents is meaningless. The employees could say that about almost any document in any FOIA case. The issue here is, should these exemptions be allowed to cover-up a decades long history of participation in these crimes?

8. The SEC’s primary mission is stated on its opening web page.

“The mission of the SEC is to protect investors; maintain fair, orderly, and efficient markets; and facilitate capital formation. The SEC strives to promote a market environment that is worthy of the public's trust.”

The SEC failed to do so in the largest Municipal Bond Default in American history. The American people deserve to know why? Over fifty billion dollars was lost or stolen in this decades-long scheme.

9. The SEC initially claimed they lacked information about the crimes in court documents while sitting on over one million pages of evidence.

10. The SEC claimed that they didn’t participate in the 2016 video presentation about the crimes but there they are in the video.

11.The SEC claimed that Richard Lawless was not the only SEC whistleblower in the case and that Sue Curtin was not assigned to him as the SEC investigative attorney. All proven false by evidence submissions.

The SEC went on in court documents in this case to make sixteen more demonstrably false claims to sway the court. The court has refused to act on this perjury.

12.The SEC is now acting against the Plaintiff, an acknowledged SEC whistleblower because the evidence now shows they likely participated in these crimes in exchange for jobs, board seats, promotions and money. The SEC is violating all manner of whistleblower protections by subpoenaing the whistleblowers personal email, files and web activity. This is not just about intimidating the Plaintiff, but it is also about undercovering the whistleblowers within the SEC that told the Plaintiff where to look for these documents. The court has allowed all of this to take place.

These facts have everything to do with this FOIA case because it identifies strong motivations to abuse the FOIA exemptions to avoid embarrassing and likely criminal participation in one of the largest financial crimes in American history. The American people have a right to know what happened here.

At a minimum the court should review all of the unredacted documents and/or hire a special master to review the unredacted documents and only allow redactions when there is good cause to do so.

The Plaintiff worked with the SEC as an acknowledged whistleblower in this seventy-four – billion-dollar crime for six years. The Defense Counsel fears any further discovery because the Plaintiff has been told who to depose and where to look for further evidence of SEC participation. For the court to allow the use of these FOIA exemptions to prevent further transparency would erode the rapidly declining trust the American people have in our government and the judicial system.

SERVICE

I am over the age of 18 years and not a party to this action. My address is:

30279 Redding Avenue, Murrieta, CA 92563, Telephone No. (951) 440-5230

On August 18th, 2022, I caused to be served the document entitled Motions Brief. This response was sent to the Alexandra Verdi, SEC Attorney.

☐ OFFICE MAIL: By placing in sealed envelope(s), which I placed for collection and mailing today following ordinary business practices. I am readily familiar with this agency’s practice for collection and processing of correspondence for mailing; such correspondence would be deposited with the U.S. Postal Service on the same day in the ordinary course of business.

☐ PERSONAL DEPOSIT IN MAIL: By placing in sealed envelope(s), which I personally deposited with the U.S. Postal Service. Each such envelope was deposited with the U.S. Postal Service at Los Angeles, California, with first class postage thereon fully prepaid.

☐ EXPRESS U.S. MAIL: Each such envelope was deposited in a facility regularly maintained at the U.S. Postal Service for receipt of Express Mail at Los Angeles, California, with Express Mail postage paid.

☐ HAND DELIVERY: I caused to be hand delivered each such envelope to the office of the addressee as stated on the attached service list.

☒ UNITED PARCEL SERVICE: By placing in sealed envelope(s) designated by United Parcel Service (“UPS”) with delivery fees paid or provided for, which I

deposited in a facility regularly maintained by UPS or delivered to a UPS courier, at Buffalo, New York.

☐ ELECTRONIC MAIL: By transmitting the document by electronic mail to the electronic mail address as stated on the attached service list.

☐ E-FILING: By causing the document to be electronically filed via the Court’s CM/ECF system, which effects electronic service on counsel who are registered with the CM/ECF system.

☐ FAX: By transmitting the document by facsimile transmission. The transmission was reported as complete and without error.

I declare under penalty of perjury that the foregoing is true and correct.

Date: August 18th, 2022 /s/ Vicki Medlen