Securities and Exchange Commission v. MintBroker International, Ltd.
1:21-cv-21079
S.D. Fla.May 20, 2024Background
- The SEC brought a civil enforcement action against MintBroker International, Ltd. (SureTrader) and Guy Gentile, alleging violations of the Exchange Act’s broker-dealer registration requirements for alleged unregistered solicitation of U.S. customers via a Bahamas-based trading platform.
- Gentile founded and controlled SureTrader during much of the relevant period (2016–2019), but contended there were intervals when he was not in charge and acted in good faith.
- SureTrader was registered as a Bahamas broker-dealer but not with the SEC, providing access to U.S. securities trading for U.S. residents while seeking to disclaim solicitation through website pop-ups, written customer certifications, and disclaimers in marketing agreements.
- The SEC moved for summary judgment on three counts: SureTrader’s violation of Section 15(a)(1) by acting as an unregistered broker-dealer, Gentile’s control-person liability under Section 20(a), and Gentile’s direct liability under Section 20(b). Gentile opposed, disputing whether actionable solicitation occurred.
- Secondary motions were filed regarding evidentiary issues (motions in limine), admissibility of certain expert testimony, and whether Good Faith and other affirmative defenses could be asserted by Gentile.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Violation of Section 15(a)(1) (Solicitation) | SureTrader solicited U.S. clients via website, emails, and ads | SureTrader used disclaimers, required certifications, and did not solicit | Not resolved on summary judgment; genuine disputes of material fact |
| Control Person Liability (Section 20(a)) | Gentile controlled SureTrader and thus is liable for violations | Gentile was not always in control; acted in good faith | Not resolved; depends on outcome of underlying violation |
| Direct Liability (Section 20(b)) | Gentile acted through SureTrader to commit primary violation | Gentile denied sufficient control and knowledge | Not resolved; depends on outcome of underlying violation |
| Admissibility of Expert/Other Evidence | Defendant's expert and certain evidence should be excluded | Expert qualifications and good faith evidence are relevant | Expert testimony largely allowed; legal conclusions precluded; certain good faith evidence admissible |
Key Cases Cited
- Anderson v. Liberty Lobby, Inc., 477 U.S. 242 (standard for summary judgment)
- Shiver v. Chertoff, 549 F.3d 1342 (burden-shifting in summary judgment motions)
- United States v. Diebold, Inc., 369 U.S. 654 (viewing evidence in light most favorable to non-movant)
- Cook ex rel. Estate of Tessier v. Sheriff of Monroe Cnty., Fla., 402 F.3d 1092 (Daubert standards for expert opinions)
- United States v. Frazier, 387 F.3d 1244 (limitations on expert legal conclusions)
- Kumho Tire Co. v. Carmichael, 526 U.S. 137 (experience as foundation for reliability of expert testimony)
- Miccosukee Tribe of Indians of Fla. v. United States, 516 F.3d 1235 (summary judgment standards)