Securities and Exchange Commission v. MintBroker International, Ltd.
1:21-cv-21079
S.D. Fla.May 14, 2024Background
- The SEC sued Mintbroker International d/b/a SureTrader and its principal, Guy Gentile, alleging violations of U.S. securities law for operating as an unregistered broker-dealer.
- Gentile's motion concerns the handling and alleged deletion of certain emails by Philip Dorsett, SureTrader’s former Chief Compliance Officer and a key SEC witness.
- Dorsett originally produced 11,000 SureTrader work emails to the SEC, after being instructed to exclude emails with SureTrader’s legal counsel due to privilege concerns.
- During deposition, Dorsett stated he had "deleted" attorney-client emails, prompting Gentile to seek spoliation sanctions against the SEC.
- The SEC clarified that no emails were actually lost; Dorsett's files were intact and turned over after further review, with errors in Dorsett’s deposition testimony corrected via supplemental declaration and production.
- The court considered Gentile's renewed sanctions motion alleging evidence spoliation and seeking severe remedies, including dismissal of claims or exclusion of testimony.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument (Gentile) | Held |
|---|---|---|---|
| Whether evidence (emails) was actually destroyed (spoliation) | No evidence lost; all emails produced | Emails between Dorsett and attorneys deleted; relevant evidence spoliated | No spoliation; emails produced |
| Whether sanctions under Rule 37(e) are warranted | No loss or prejudice; no bad faith | Intentional deletion; prejudice to defense | Motion denied; sanctions not warranted |
| Whether SEC engaged in discovery misconduct | Followed procedures, supplemented production | SEC aided/allowed spoliation | No misconduct by SEC |
| Whether Dorsett acted in bad faith | Honest mistake/misstatement, not bad faith | Intentional concealment, bad faith | No bad faith by Dorsett |
Key Cases Cited
- Graff v. Baja Marine Corp., 310 F. App’x 298 (11th Cir. 2009) (defines spoliation and standard for sanctions)
- Flury v. Daimler Chrysler Corp., 427 F.3d 939 (11th Cir. 2005) (spoliation sanctions require bad faith)
- S.E.C. v. Goble, 682 F.3d 934 (11th Cir. 2012) (adverse inference requires bad faith)
- Bashir v. Amtrak, 119 F.3d 929 (11th Cir. 1997) (bad faith needed for adverse inference due to spoliation)
- Mann v. Taser Int'l, Inc., 588 F.3d 1291 (11th Cir. 2009) (no adverse inference without evidence of bad faith)