Oklahoma Department of Securities ex rel. Faught v. Wilcox
2011 OK 82
Okla.2011Background
- Marsha Schubert operated Schubert & Associates in a Ponzi scheme, as discussed in Blair.
- Defendants Marvin and Pamela Wilcox were among the relief defendants in Blair who profited from the scheme.
- The Department of Securities and a court-appointed Receiver sought equitable relief for unjust enrichment against relief defendants who received more than their investments.
- Blair held that innocent investors who profited unreasonably may be subject to equitable relief; it also recognized subject-matter jurisdiction over competing equitable claims to funds from the securities scheme.
- On remand, the Department moved for summary judgment arguing the Wilcoxes were not innocent investors due to involvement in a check-kiting scheme that funded Schubert’s operations.
- Evidence showed extensive check exchanges and a large net transfer between the Wilcox accounts and Schubert’s accounts, with the Wilcoxes receiving substantial profits.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether Wilcoxes were innocent investors entitled to Blair relief | Wilcoxes were not innocent due to partnership in check-kiting. | Wilcoxes were innocent investors; no day trading records, claimed lack of partnership. | Wilcoxes not innocent; they were partners via check-kiting; ineligible for Blair relief. |
| Whether the trial court exceeded Blair's mandate | Blair permits equitable relief against misappropriated funds from Ponzi scheme. | Court should adhere to Blair's framework; no misapplication. | No error; court properly applied Blair’s framework to deny innocent-investor status. |
| Whether judicial estoppel barred challenged inquiries | Department had conceded innocence; estoppel should apply. | Estoppel not properly invoked; issues waived on appeal. | Not preserved for review; appellate consideration denied. |
| Whether the amount of Wilcox profits was properly calculated | Net profits were at least $509,505 or more; use independent calculation. | Dispute genuine facts; amount should be tried. | No genuine factual dispute; summary judgment on amount affirmed; net profits supported. |
| Whether material facts remained for trial on investor status | Undisputed facts show non-innocent status; no need for trial. | Fact issues existed regarding innocence. | No material facts remaining; summary judgment appropriate. |
Key Cases Cited
- Department of Securities v. Blair, 231 P.3d 645 (Okla. 2010) (establishes Blair framework for innocent investors and equitable relief)
- Culpepper v. Lloyd, 583 P.2d 500 (Okla. 1978) (summary judgment review standard; record-based appraisal)
- Frey v. Independence Fire & Casualty Co., 698 P.2d 17 (Okla. 1985) (summary judgment principles in Oklahoma)
- Steiger v. City National Bank of Tulsa, 424 P.2d 69 (Okla. 1967) (summary judgment and issue preservation guidance)
- Spirgis v. Circle K Stores, Inc., 743 P.2d 682 (Okla. Civ. App. 1987) (evidence-admissibility and undisputed facts for summary judgment)
- Reeds v. Walker, 157 P.3d 100 (Okla. 2006) (burden-shifting in summary judgment context)
- Roberson v. Waltner, 108 P.3d 567 (Okla. Civ. App. 2005) (proper response to bare assertions in opposition to summary judgment)
- Runyon v. Reid, 510 P.2d 943 (Okla. 1973) (directive on resolving genuine issues of material fact)
- Arkansas Louisiana Gas Co. v. Cable, 585 P.2d 1113 (Okla. 1978) (procedural waiver and raising issues in trial court)