Title: OKLAHOMA DEPT. OF SECURITIES v. BLAIR

State: oklahoma

Issuer: Oklahoma Supreme Court

Document:

OKLAHOMA DEPT. OF SECURITIES v. BLAIR  OKLAHOMA DEPT. OF SECURITIES v. BLAIR 2010 OK 16 231 P.3d 645 Case Number: 104004 Decided: 02/23/2010 Case Numbers 104004; 104161; 104262 (Consol. w/104304); 105682 As Corrected: April 6, 2010 THE SUPREME COURT OF THE STATE OF OKLAHOMA OKLAHOMA DEPARTMENT OF SECURITIES ex rel. IRVING L. FAUGHT, Administrator, and DOUGLAS L. JACKSON, in his capacity as the court appointed receiver for the investors and creditors of Schubert & Assoc. and for the assets of Marsha Schubert, individually, and doing business as Schubert & Associates, and for Schubert & Associates, Plaintiffs/Appellees, v. No. 104,004 OKLAHOMA DEPARTMENT OF SECURITIES ex rel. IRVING L. FAUGHT, Administrator, and DOUGLAS L. JACKSON, in his capacity as the court appointed receiver for the investors and creditors of Schubert & Associates. and for the assets of Marsha Schubert, individually, and doing business as Schubert & Associates, and for Schubert & Associates, Plaintiffs/Appellees, No. 104,161 OKLAHOMA DEPARTMENT OF SECURITIES ex rel. IRVING L. FAUGHT, Administrator, and DOUGLAS L. JACKSON, in his capacity as the court appointed receiver for the investors and creditors of Schubert & Associates. and for the assets of Marsha Schubert, individually, and doing business as Schubert & Associates, and for Schubert & Associates, Plaintiffs/Appellees, v. No. 104,262 (Cons. w/104,304) OKLAHOMA DEPARTMENT OF SECURITIES ex rel. IRVING L. FAUGHT, Administrator Plaintiff/Respondent, v. No. 105,682 ON CERTIORARI TO THE OKLAHOMA COURT OF CIVIL APPEALS, DIVISION I, IN APPEALS NO. 104,004; NO. 104,161; and NO. 104,262/ No. 104,304 AND ON CERTIORARI TO REVIEW A CERTIFIED INTERLOCUTORY ORDER OF THE DISTRICT COURT, OKLAHOMA COUNTY ¶0 A receiver appointed in a proceeding in the District Court of Logan County joined with the Oklahoma Department of Securities and its Administrator and brought actions in the District Court for Oklahoma County against investors in a Ponzi scheme and sought judgments against them for any amounts they had received from the scheme in excess of their original investments. The Honorable Patricia G. Parrish, District Judge, granted summary judgment against the investors by separate orders in Oklahoma County causes CJ-2005-3796 (consolidated with CJ-2005-3299). Several of the defendants appealed in four separate appeals and the Court of Civil Appeals affirmed the judgments of the District Court by separate opinions in Supreme Court Nos. 104,004, 104,161, and consolidated 104,262/104,304. The investors requested that certiorari issue in this Court to the Court of Civil Appeals. In Oklahoma County Cause No. CJ-2005-3799, the Honorable Vicki Robertson, District Judge, granted a partial summary adjudication to the Oklahoma Department of Securities against investors, stayed proceedings in the District Court, and certified three issues for an immediate appeal that was brought in No. 105,682. We hold that the Oklahoma Uniform Securities Act provides authority for the Department of Securities to bring an action against innocent investors in a Ponzi scheme when they received a profit from the Ponzi scheme that is in excess of their original investment and when the profit is an unreasonable return on the investment. We hold that a District Court has subject matter jurisdiction to adjudicate competing claims of ownership to funds that were part of an investment scheme which violated the securities laws. We hold that a court-appointed receiver for the assets of a failed Ponzi-scheme operator may bring a proceeding for equitable relief against innocent investors for recovery of funds that qualify as an unjust enrichment obtained by the investors from the Ponzi scheme. We hold that an innocent investor in a Ponzi scheme may use equitable setoffs in defense against an unjust enrichment claim brought by the Department. CERTIORARI PREVIOUSLY GRANTED IN NOS. 104,004; 104,161; 104,262/104,304; OPINIONS OF THE COURT CIVIL APPEALS VACATED IN NOS. 104,004; 104,161; AND 104,262/104,304; JUDGMENTS OF THE DISTRICT COURT REVERSED; CAUSES REMANDED TO THE DISTRICT COURT FOR FURTHER PROCEEDINGS CONSISTENT WITH THIS COURT'S OPINION CERTIORARI PREVIOUSLY GRANTED IN NO. 105,682; ORDER OF THE DISTRICT COURT REVERSED; CAUSE REMANDED TO THE DISTRICT COURT FOR FURTHER PROCEEDINGS CONSISTENT WITH THIS COURT'S OPINION G. David Bryant and Lisa Wilcox, Kline, Kline, Elliott & Bryant, P.C., Oklahoma City, Oklahoma, for Appellants in Nos. 104,004; 104,161; and 104,262 (Consolidated with No. 104,304). Melanie Hall, Gerri Kavanaugh, and Amanda Cornmesser, Oklahoma City, Oklahoma for Appellee Oklahoma Department of Securities in Nos. 104,004; 104,161; and 104,262 (Consolidated with No. 104,304). Bradley E. Davenport, Gungoll, Jackson, Collins, Box, & Devoll, P.C., Enid, Oklahoma for Appellee, Douglas L. Jackson, Receiver, in Nos. 104,004; 104,161; and 104,262 (Consolidated with No. 104,304). Russell L. Mulinix, Amy G. Piedmont, Mulinix, Ogden, Hall, Andrews & Ludlam, P.L.L.C., Oklahoma City, Oklahoma, for Petitioners in No. 105,682. Melanie Hall, Gerri Kavanaugh, and Amanda Cornmesser, Oklahoma City, Oklahoma for Respondent, Oklahoma Department of Securities in No. 105,682. EDMONDSON, C. J. ¶1 The first-impression principal issue in these appellate proceedings is whether an action may be maintained under the Oklahoma Uniform Securities Act against innocent victims of a Ponzi scheme to force them to pay to the Department of Securities those amounts they received from the Ponzi scheme which are in excess of their investments in that scheme. We hold that the Department may proceed against the innocent investors to recover unreasonable profits received in excess of their investments in the Ponzi scheme. We hold that a court-appointed receiver of a Ponzi-scheme operator may also proceed against innocent investors to recover unreasonable profits in excess of their investments in the scheme. We also hold that the Department's action is subject to equitable setoffs raised in defense by the innocent investors. We consolidate the proceedings for the sole purpose of a single pronouncement from this Court on the issues. I. The Facts of the Controversy ¶2 Marsha Schubert, as a registered agent of registered investment broker-dealers, Schubert's business, Schubert and Associates, received over two hundred million dollars during the period of December 1999 to October 2004 to invest for other people.2 She made verbal statements to investors that their money would be used to make trades in alleged options accounts and day trading accounts, and that their accounts with the broker-dealers held large balances. ¶3 Schubert deposited the funds into various personal bank accounts she controlled as well as her business bank account, in the name of Schubert & Associates. She also deposited some funds she received into brokerage accounts for the investors. For example, money received by Defendants, the Youngs, was split into deposits for the Youngs' brokerage account and the Schubert and Associates bank account. The investment monies deposited into the Schubert & Associate account and Schubert's various personal bank accounts were never directly used to make any investment trades through the broker-dealers on behalf of the investors, although Schubert continually made statements to the contrary to her investors. The money she received for option contracts or day trading, she appropriated as part of a Ponzi scheme. The majority of these funds were eventually deposited into personal accounts of Schubert where they were commingled with Schubert's personal funds.3 ¶4 Schubert kept her Ponzi scheme from discovery by making payments to some of her investors. She paid them with checks drawn on her Schubert & Associates bank account, another bank account listing her name with a tax permit number, as well as payments by wire transfers from her bank accounts directly into the investors' broker-dealer accounts. Investors would receive statements from their broker-dealers showing funds in their accounts. ¶5 After discovery of the Ponzi scheme the Oklahoma Department of Securities (Department) brought an action in the District Court for Logan County against Schubert and sought injunctive relief and appointment of a receiver for her and her business, Schubert and Associates. The trial court appointed a receiver and by a subsequent order directed that Receiver, Douglas L. Jackson, also serve as "receiver for the benefit of claimants and creditors of Marsh Schubert and Schubert and Associates." The order authorized the receiver to "institute actions . . . Against paid investors . . . that the Receiver deems necessary to recover assets and to protect the interests of and promote equity among the investors." The order defined "assets" as including the "proceeds of the investment program described in the Petition (i.e., the Schubert Investment Program) by which certain participants were unjustly enriched or received fraudulent transfers." ¶6 In May of 2005 the receiver and the Department brought a joint action in the District Court for Oklahoma County and named one-hundred and fifty-eight defendants. Approximately eighty-seven people allegedly lost in excess of nine million dollars, and over one-hundred and fifty people allegedly made approximately six million dollars from Schubert.4 The record appears to indicate that the 158 investors were paid with Schubert and Associates funds received from other investors. The defendants were not charged with securities violations. ¶7 The Petition asserted claims against the defendants on grounds of unjust enrichment, fraudulent transfer and an equitable lien "against all real property and personal property purchased with unearned investor assets" received by the defendants. The Petitioners later withdrew their claim of fraudulent transfers. The Receiver and Department then proceeded to obtain summary judgments solely on the unjust enrichment theory and the trial court granted judgment against the defendants based upon this theory. Several of the defendants appealed. We issue one opinion for the multiple appeals. II. District Court Jurisdiction in Actions by the Oklahoma Department of Securities Against Innocent Investors ¶8 The first issue presented is whether the District Court has jurisdiction in an action seeking equity/restitution brought by the Administrator and/or the Department against innocent investors in a securities fraud scheme when the investors received more money from their investment than they invested in the scheme. At one point in the trial court the Administrator/Department summarized its legal basis for actions against Defendants in a District Court. It is true that the text of the Act [Oklahoma Uniform Securities Act of 2004] and the Predecessor Act [Oklahoma Securities Act, 2001 as amended thru 2003] do not specifically address the ability to recover from relief defendants [the 158 defendants whom allegedly made a Ponzi profit], nor have the Oklahoma courts addressed this issue. However, Section 1-602 (B) [1-603 (B)] of the Act and Section 406.1 of the Predecessor Act clearly confer equitable jurisdiction upon the district courts when securities law violations occur. The Act and Predecessor Act also explicitly reference the important objective of promoting "greater uniformity in securities matters" among the state and federal government. In acknowledgment of the goal of uniformity, the Oklahoma Supreme Court has stated that the interpretative history of the federal securities acts, upon which Oklahoma's securities laws are modeled, is properly considered in the interpretation of similar state securities provisions. Day, at ¶ 30-31, [State ex rel. Day v. Southwest Mineral Energy, Inc., 1980 OK 118, 617 P.2d 1334 ]. More specifically, the Oklahoma Supreme Court found that the Oklahoma Legislature intended equitable remedies be available to the Administrator for enforcement under the Oklahoma securities laws and that the Administrator has the power to seek such remedial relief. Day at ¶ 18-21. Department's response to a motion to dismiss in the trial court.5 ¶9 The Oklahoma Securities Commission and the Oklahoma Department of Securities are created by statute, with the Commission as the policy-making and governing authority of the Department. 71 O. S. Supp. 2003 § 1-601 (B). ¶10 The Administrator relies upon a provision of the Oklahoma Uniform Securities Act of 2004, If the Administrator believes that a person has engaged, is engaging, or is about to engage in an act, practice, or course of business constituting a violation of this act . . . or that a person has, is, or is about to engage in an act, practice, or course of business that materially aids a violation of this act . . . the Administrator may . . . maintain an action in the district court of Oklahoma County . . to enjoin the act, practice, or course of business and to enforce compliance with this act . . . . Statutory language that confers powers upon a governmental entity is construed according to the general and ordinary meaning of the words used unless the statute authorizes a separate and specific definition for those words. Boydston v. State, ¶11 Title 71 § 1-603, paragraph "B" has three numbered parts as follows: B. In an action under this section and on a proper showing, the court may: 1. Issue a permanent or temporary injunction, restraining order, or declaratory judgment; 2. Order other appropriate or ancillary relief, which may include: a. an asset freeze, accounting, writ of attachment, writ of general or specific execution, and appointment of a receiver or conservator, that may be the Administrator, for the defendant or the defendant's assets, b. ordering the Administrator to take charge and control of a defendant's property, including investment accounts and accounts in a depository institution, rents, and profits; to collect debts; and to acquire and dispose of property, c. imposing a civil penalty up to a maximum of Five Thousand Dollars ($5,000.00) for a single violation or up to Two Hundred Fifty Thousand Dollars ($250,000.00) for more than one violation; an order of rescission, restitution, or disgorgement directed to a person that has engaged in an act, practice, or course of business constituting a violation of this act or the predecessor act or a rule adopted or order issued under this act or the predecessor act, and d. ordering the payment of prejudgment and postjudgment interest; or 3. Order such other relief as the court considers appropriate. 71 O. S. Supp. 2003 § 1-603 (B), (emphasis added). The Department argues that "[o]rder other appropriate or ancillary relief" and "[o]rder such other relief as the court considers appropriate" include relief in the form of obtaining a money judgment against the innocent investors. ¶12 The Department relies upon State ex rel. Day v. Southwest Mineral Energy, Inc., ¶13 The innocent investors argue that the language in ¶14 Our opinion in State ex rel. Day, supra, is consistent with federal courts' construction of the purpose of federal securities laws to divest a wrongdoer of ill-gotten gains by the equitable remedy of disgorgement. ¶15 Disgorgement is an exercise of a state's police or regulatory powers. . . . litigants and legal commentators have contended that SEC actions seeking disgorgement do not constitute the pursuit of a public interest or right because the SEC regularly turns over the disgorged proceeds to the victims of the violations; as a result, they assert, SEC enforcement actions serve as simple substitutes of the Rule 10b-5 actions that the victims might otherwise bring and consequently vindicate the rights of those private victims and not the public as a whole. . . . Notwithstanding what appears to be the practical equivalence of SEC actions and those that private parties can bring, the SEC's position finds great support in the fact that its statutory authorization to bring civil enforcement actions does not require it to turn disgorged proceeds over to the private investors who have been damaged by the violator's activity; rather, disgorged proceeds can very well end up in the United States Treasury, for example, (1) where numerous victims suffered relatively small amounts thereby making distribution of the disgorged proceeds to them impractical, . . .(2) where the victims cannot be identified, . . . and (3) where there are no victims entitled to damages, . . . In this way, the SEC's actions differ from actions brought by the EEOC, discussed in Occidental Life, [Occidental Life Insurance Co. v. EEOC, I therefore find that the SEC action at issue here operates to vindicate a public interest and, accordingly, that it is improper to "borrow" a limitation period. The element of SEC actions that I find dispositive in terming them public interest actions is their allowance for the United States to itself obtain a monetary benefit. The fact that SEC actions often benefit private parties does not persuade me that they cannot simultaneously serve the public interest. See also Comment, Christopher R. Dollase, The Appeal of Rind: Limitations of Actions in Securities and Exchange Commission Civil Enforcement Actions, 49 Bus.Law. 1793, 1814 (1994) ("There does not need to be a complete demarcation between public interest and benefits to individuals."). Several cases have recognized, in other contexts, the dual benefit that SEC actions create. SEC v. Tome, 833 F.2d 1086, 1096 (2d Cir.1987) ("The paramount purpose of ... disgorgement is to make sure that wrongdoers will not profit from their wrongdoing." (emphasis added)), cert. denied, 486 U.S. 1014, 108 S. Ct. 1751, 100 L. Ed. 2d 213 (1988); SEC v. Commonwealth Chem. Sec., Inc., 574 F.2d 90, 102 (2d Cir.1978) ("[T]he primary purpose of disgorgement is not to compensate investors. Unlike damages, it is a method of forcing a defendant to give up the amount by which he was unjustly enriched." (emphasis added)); cf. SEC v. Penn Cent. Co., 425 F. Supp. 593 , 599 (E.D.Pa.1976) ("The fact that one consequence of the action may be to benefit private parties does not detract from the public purpose of effectuating the goals of the securities laws." (emphasis added). SEC v. Lorin The potential payment to the U. S. Treasury was a dispositive element showing that the SEC was litigating a public interest when seeking disgorgement. While Congressional authority was given to the SEC to retain disgorged funds with their ultimate payment to the U. S. Treasury, no similar legislative authority is shown for the Department to seize disgorged or restitution funds and pay them to the State Treasurer. ¶16 SEC v. Lorin also refers to the public purpose of effectuating the goals of securities laws. Section 1-603 expressly authorizes both disgorgement and restitution involving a person who has violated the securities laws. B. In an action under this section and on a proper showing, the court may: . . . 2. Order other appropriate or ancillary relief, which may include: . . . c. imposing a civil penalty up to a maximum of Five Thousand Dollars ($5,000.00) for a single violation or up to Two Hundred Fifty Thousand Dollars ($250,000.00) for more than one violation; an order of rescission, restitution, or disgorgement directed to a person that has engaged in an act, practice, or course of business constituting a violation of this act or the predecessor act or a rule adopted or order issued under this act or the predecessor act, and . . . . 71 O.S.Supp. 2003 § 1-603 (B)(2)(c) (emphasis added and material omitted). Departmental action for disgorgement and restitution against one who has violated securities laws serves an obvious public purpose. Does the Department's action for restitution against an innocent investor serve a public purpose? The short answer is yes, if the nature of the transaction between the Ponzi operator and innocent investor is inequitable and the innocent investor's right to the funds becomes merely possessory. ¶17 Typical of the authority cited by the Department in the present case is SEC v. Cross Financial Services, Inc., 908 F. Supp. 718 (C.D. Cal.1995), where the court stated the following: According to Cherif, a district court has power to grant relief with respect to property to which non-violators have no valid claim. Under these circumstances, the touchstone is whether the non-party's claim to the property is legitimate, not whether the party is innocent of fraud or wrongdoing. Id. at 732, emphasis added. The Department construes this language to mean that the SEC has power to grant disgorgement against non-violators. Cross Financial Services relied upon SEC v. Cherif, 933 F.2d 403 (7th Cir. 1991), for the proposition that disgorgement is an equitable remedy available against a non-violator if it is established that the non-violator possesses illegally obtained profits but has no legitimate claim to them. In SEC v. Cherif, 933 F.2d 403 (7th Cir. 1991), the SEC made an argument virtually identical to that of the Department in this case. One party therein, Sanchou, objected to being named in an action brought by the SEC because he had not been accused of any securities violations. The federal court explained that the SEC's reading of the applicable federal statute was incorrect. 15 U.S.C. §§ 78u(d) and (e) also cannot aid the SEC since the statute is not so broadly written as the SEC contends. The statute has been construed to allow the granting of "any form of ancillary relief * * * where necessary and proper to effectuate the purposes of the statutory scheme." SEC v. Cherif, 933 F.2d 403, 414 (emphasis added)., The Seventh Circuit rejected the SEC's position that securities statutes authorized an asset freeze against a person it classified as a "non-party" since he had not violated the securities laws. Id. The Oklahoma Department of Securities recognizes this holding of Cherif because it relies not upon the holdings of the opinion, but upon a footnote therein stating that "A court can obtain equitable relief from a non-party against whom no wrongdoing is alleged if it is established that the non-party possesses illegally obtained profits but has no legitimate claim to them." Id. at 414, n. 11 (emphasis added). ¶18 A party added by the SEC as a nominal defendant has no legal claim to the proceeds of the property other than a possessory claim. A nominal defendant is a person who "holds the subject matter of the litigation in a subordinate or possessory capacity as to which there is no dispute." . . . The paradigmatic nominal defendant is "a trustee, agent, or depositary ... [who is] joined purely as a means of facilitating collection." Id. (internal quotations and citation omitted). As the nominal defendant has no legitimate claim to the disputed property, he is not a real party in interest. Accordingly, "there is no claim against him and it is unnecessary to obtain subject matter jurisdiction over him once jurisdiction of the defendant is established." SEC v. Colello A usual nominal defendant is a bank or trustee, which has only a custodial claim to the property. SEC v. Colello, supra at 677. For example, one court has recognized that the SEC could freeze assets held by a non-culpable third party when the assets belong to, or are in route to, a securities-culpable entity, or when the culpable entity controlled the assets as a matter of law, or when the non-party is innocent with respect to the securities violation and is named as a "nominal party" to recover proceeds of fraud. SEC v. Black, 163 F.3d 188, 196-197 (3d Cir. 1998).21 Thus, the "nominal party" distinction maintains the concept that the funds are being disgorged by the wrongdoer, although those funds were held by a non-culpable third party. In Colello the SEC characterized a nominal party's claim to funds as an affirmative defense, but the court disagreed and stated that "the lack of a legitimate claim to the funds is the defining element of a nominal defendant." SEC v. Colello, 139 F.3d at 677. ¶19 The Defendants cast this issue as a jurisdictional dispute. Subject matter jurisdiction exists when a court has power to proceed in a case of the character presented, or power to grant the relief sought in a proper cause. State ex rel. Turpen v. A 1977 Chevrolet Pickup Truck, 1988 OK 38, ¶ 10, 753 P.2d 1356 , 1359 quoting, Consolidated Mtr. Frt. Terminal v. Vineyard, 1943 OK 358, 143 P.2d 610 , 612. The power to proceed is acquired by an application of a party showing the general nature of the case and requesting relief of the kind the court has power to grant. Id. Subject matter jurisdiction is invoked by the pleadings filed with the court. State ex rel. Oklahoma Tax Com'n v. Texaco Exploration, 2005 OK 52, ¶ 14, 131 P.3d 705 , 709. ¶20 In our case today the Defendants allege that the Department's action is not against nominal parties, but against parties who have more than possessory rights to the funds and that the Department lacks jurisdiction to proceed against them. The Department alleges that Defendants possess funds transferred to them as part of an investment scheme which violated securities laws that the Department has authority to enforce, that these funds rightfully belong to other investors, that the Department has authority file a claim in a District Court to gain funds wrongfully transferred pursuant to violations of securities laws, that the Defendants are nominal parties, and that a District Court has jurisdiction to adjudicate competing claims concerning ownership of funds that were part of that scheme. The status of the defendants as nominal, as alleged by the Department, goes to the merits of the Defendants' claim to ownership of the contested funds. We hold that an Oklahoma District Court has subject matter jurisdiction to adjudicate competing claims of ownership to funds that were part of an investment scheme which violated the securities laws.22 III. Equitable Relief Against Innocent Investors ¶21 The Department argues that when an innocent investor receives a profit from investment in a Ponzi scheme the amount of the profit is inequitable as a matter of law, the investor's right to the profit is merely possessory as a matter of law, and equity provides relief in the form of a legal proceeding for restitution of those funds to the innocent investors who did not make a profit. We agree with the Department that the nature of the transaction between the Ponzi operator and innocent investor may be inequitable and the innocent investor's right to the funds becomes merely possessory, but we disagree that the profit is, as a matter of law, inequitable and thereby subject to a restitution proceeding. Whether a profit is unjust enrichment that a District Court should rectify presents a mixed question of fact and law. ¶22 Unjust enrichment is a condition which results from the failure of a party to make restitution in circumstances where not to do so is inequitable, i.e., the party has money in its hands that, in equity and good conscience, it should not be allowed to retain. Harvell v. Goodyear Tire & Rubber Co., ¶ 18, 164 P.3d 1028 , 1035.23 Some states define unjust enrichment with four parts: (1) the unjust (2) retention of (3) a benefit received (4) at the expense of another.24 We explained in Harvell v. Goodyear Tire & Rubber Co., supra, that elements of unjust enrichment claims differ markedly from state to state. 2006 OK 24, ¶ 20, 164 P.3d at 1036. One element of the claim which does not receive uniform treatment by courts is whether the party against whom relief is sought has engaged in wrongful conduct.25 ¶23 We have explained that a "careful reading" of opinions in Oklahoma shows that when a constructive trust is sought to remedy unjust enrichment, there must be some active wrongdoing on the part of the person against whom recovery is sought: The primary reason for imposing a constructive trust is to avoid unjust enrichment. It is imposed against one who "by fraud, actual or constructive, by devices or abuse of confidence, by commission of wrong, or by any form of unconscionable conduct, artifice, concealment, or questionable means, or who in any way against equity and good conscience, either obtained or holds the legal right to property which he ought not, in equity and good conscience, hold and enjoy." . . . A careful reading of the cases in this jurisdiction, in which the imposition of a constructive trust was sought, reveals that an element of unfairness in allowing the legal title holder to retain the property is not sufficient to justify the imposition of a constructive trust. There must also be some active wrongdoing on the part of the person against whom recovery is sought . . . . Easterling v. Ferris In French Energy, Inc. v. Alexander, ¶24 The Department's arguments that the Defendants were unjustly enriched may be summarized by the following quote from the Department's briefs: To allow defendants to keep money that does not belong to them in exchange for nothing would result in them being substantially unjustly enriched. [And] or The Department is authorized to seek the disgorgement of the funds received by Defendants that were in excess of the reasonable equivalent value exchanged. ¶25 Bankruptcy-related actions against innocent investors in a Ponzi scheme who received a profit on their investments is common. One commentator in 1998 observed the following: The largest assets of a Ponzi-scheme [bankruptcy] estate typically are the claims that the estate has against those investors who received "returns" on their investments. A trustee of a Ponzi-scheme estate may sue to recover such payments to investors pursuant to the fraudulent transfer and preference provisions of the Bankruptcy Code. In March 1998, the trustee of Bennett Funding filed over 10,000 lawsuits against former investors, seeking recovery of $100 million in alleged fraudulent transfers. Amounts recovered from such investors can then be ratably distributed to all of the creditors, both investors who lost money in the scheme, and other, noninvestor creditors of the estate. Mark A. McDermott, Ponzi Schemes and the Law of Fraudulent and Preferential Transfers, 72 Am. Bankr.L.J. 157, 158 -159(1998), (note omitted). One court has explained that the examination by bankruptcy courts of alleged fraudulent transfers in Ponzi schemes has resulted in two distinct lines of cases. As the district court noted in Daly v. Deptula (Carrozzella & Richardson), 286 B.R. 480 , 487 (D.Conn.2002) "[t]here is sharp split of authority on the issue of whether the payment of interest [or some other form of return to a Ponzi scheme investor] by a Ponzi scheme operator can ever constitute reasonably equivalent value." 286 B.R. at 487. Describing the legal reasoning supporting the first line of authority, which holds that any transfer by a debtor to a Ponzi scheme investor over and above the amount of the transferee's initial investment is not, as a matter of law, supported by reasonably equivalent value, . . . . (Discussion of first of two competing principles/rationales and citations omitted.) Rieser v. Hayslip This first line of cases makes all Ponzi profits, as a matter of law, unsupported by the exchange of a reasonably equivalent value. [The second line of authority] focuses on the discrete transaction between the debtor and the defendant, without regard to the nature of the debtor's overall enterprise. The[se] cases have cited the narrow language of the Uniform Fraudulent Transfer Act that refers to the transfer at issue [ see, e.g., Ohio Rev.Code Ann. § 1336.05, which provides that a transfer is avoidable if the debtor made the transfer "without receiving reasonably equivalent value in exchange for the transfer"]. The[se] courts have measured what was given against what was received in that transaction .... [and have] described the "fatal legal flaw" in the reasoning adopted by the ... [first] line of cases ... as follows: [I]t focuses not on a comparison of the values of the mutual consideration actually exchanged in the transaction between the [transferee] and the [d]ebtor, but on the value, or more accurately stated, the supposed significance or consequence of the [transferee-debtor] transaction in the context of the [d]ebtor's whole Ponzi scheme.... [T]he statutes and case law do not call for the court to assess the impact of an alleged fraudulent transfer in a debtor's overall business. The statutes require an evaluation of the specific consideration exchanged by the debtor and the transferee in the specific transaction which the trustee seeks to avoid, and if the transfer is equivalent in value, it is not subject to avoidance under the law. . . . [In the decisions comprising the second line of authority] [t]he courts have ... looked to the plain language of the Bankruptcy Code and the state-law fraudulent transfer acts that define "value" as including "satisfaction ... of an antecedent debt." 11 U.S.C. § 548(d)(2)(A);[Ohio Rev.Code Ann. § 1336.03(A) ]. [They hold] that the payment of interest to innocent investors pursuant to a contractual obligation clearly constitute[s] the satisfaction of an antecedent debt and, therefore, based upon the clear language of the statute, should be considered as the receipt of value by the debtor [,] ... reason[ing] that the debtor's use of the investor's funds for a period of time supported the payment of reasonable contractual interest and, [these courts further note that] if Congress did not intend such a result when the debtor was involved in a Ponzi scheme, it should so specify in the Bankruptcy Code rather than leaving it to the courts to ignore what is clearly value and fair consideration under the fraudulent conveyance statutes. To hold otherwise, the[se] [c]ourt[s] [reason], would ignore the universally accepted fundamental commercial principal that, when you loan an entity money for a period of time in good faith, you have given value and you are entitled to a reasonable return. The[se] [c]ourt[s] also question[ ] why innocent investors should be treated any differently than a Ponzi-scheme operator's trade creditors, such as utility companies and landlords, since the payment of contractual debts owing to these trade creditors diminishes the debtor's estate in the same manner that payment of reasonable contractual interest to innocent investors diminishes the estate.... [Cases adhering to this view] note[ ] that the[ ] decisions [comprising the first line of authority] have failed to explain why [an] illegal and unenforceable contract allows the repayment of principal but not interest.... [These courts point out] that allowing an investor to retain reasonable contractual interest does not further a Ponzi scheme any more than allowing that investor to retain repaid principal. Rieser v. Hayslip Ths second line of cases examines whether the innocent investor received the funds for satisfaction of an antecedent debt and if the funds received by the investor were based upon a reasonable contractual interest. This second line of authority points out that for the purpose of fraudulent transfers and if the first line of cases is followed, then a Ponzi investor should return both the repaid initial investment and any profit received if a court treats the Ponzi transactions as lacking an exchange of reasonably equivalent value. In other words, if the first line of cases is followed and a court holds that a profit is transferred for less than a reasonable contractual interest as a matter of law, such holding would also necessitate an investor returning the recovered original investment to a receiver for pro rata distribution to all investors. ¶27 We prefer to follow the second line of authority and apply it to a claim in equity for restitution. Equity is based upon the circumstances of the particular case before the court. We are aware that it may create a significant hardship when an innocent investor such as Kowell is informed that he must disgorge profits he earned innocently, often years after the money has been received and spent. Nevertheless, courts have long held that it is more equitable to attempt to distribute all recoverable assets among the defrauded investors who did not recover their initial investments rather than to allow the losses to rest where they fell. See Scholes, 56 F.3d at 757 ("[I]t may seem 'only fair' that [the early investor] should be entitled to the profits ... made with his money.... [However, h]e should not be permitted to benefit from a fraud at [later investors'] expense merely because he was not himself to blame for the fraud."). Donell v. Kowell The inequity in forcing restitution of profits from innocent investors has kept some courts from ordering the restitution. Some investors who received "fictitious profits" may have spent the money on education or other necessities many years ago. What else in equity and good conscience should plaintiffs who received money in good faith pursuant to an "investment contract" have done? In contrast, some investors who lost money may have been speculators who were prepared to lose their investments. There is simply no neat answer to the various equities involved here where the investors never knew each other and were equally at fault for trusting Chilcott. "Unexpected gains or losses by equally innocent parties may present similar problems, not capable of resolution by unjust enrichment principles." Dobbs, Remedies, § 4.1 (1973). There is no precedent in law or equity for applying unjust enrichment principles in these circumstances. In such circumstances the courts may simply leave the parties where they were found. Johnson v. Studholme All of the circumstances present "various equities" with different investors and some courts have declined to find an equitable right to restitution from Ponzi profits held by another investor, and others have found that equitable right. ¶29 The SEC protects investors ¶30 We hold that the Department may seek relief against Ponzi investors who received profits that are artificially high dividends. However, we decline to recognize authority by the Department to seek restitution from innocent Ponzi-scheme investors who received their investment with a reasonable interest thereon. Our holding is based upon the principle that the Department possesses a public interest in seeking restitution for investors who did not receive the return of their initial investment, and that the Department's unjust enrichment claim is brought against investors who received unreasonable high dividends in a Ponzi-scheme. IV. Action by Court Appointed Receiver Against Innocent Investors ¶31 A District Court appointed Douglas L. Jackson as a receiver for the investors and creditors of Schubert & Assoc. and for the assets of Marsha Schubert, individually, and doing business as Schubert & Associates, and for Schubert & Associates. An issue raised by these appeals is whether a court appointed receiver may proceed against the innocent investors. ¶32 Defendants argue Receivers are appointed to conserve the property pending litigation, for the benefit of those interested as parties to the action. Usually, as in this case, the property is taken charge of before judgment is rendered. Its supervision and disposition is under the direction of the court. A receiver has only such powers as are granted by order of the court, and he acts under the direction of the court . . . . In re O K Investment Corp. The statutory power of a receiver is as follows: The receiver has, under the control of the court, power to bring and defend actions in his own name, as receiver; to take and keep possession of the property, to receive rents, to collect debts, to compound for and compromise the same, to make transfers, and generally to do such acts respecting the property as the courts may authorize. 12 O.S.2001 § 1554. A receiver not only takes possession of property, In re O K Investment Corp., supra, but also has authority to bring an action in a District Court to obtain property possessed by a person or entity other than the entity the receiver is appointed for. While Defendants appear to recognize that a receiver may bring an action in District Court, they argue that a receiver may not bring this particular action seeking equitable relief. ¶33 In this case the District Court of Logan County defined the assets over which the receiver was appointed as including the proceeds obtained by certain participants in the Ponzi-scheme whereby they were "unjustly enriched or received fraudulent transfers." Defendants argue that a receiver may not be appointed for such a purpose. In Farrimond v. State ex rel. Fisher, 200 OK 52, 8 P.3d 872 , we explained that a receiver holds property and funds coming into the receiver's hands by the same right and title as the person or entity from whom the receiver has been appointed. Id. at ¶ 14, 8 P.3d at 875 quoting, Norman v. Trison Development Corp., 1992 OK 67 ¶ 7, 832 P.2d 6 . ¶34 Defendants argue that Marsha Schubert and the investors in her financial schemes do not possess any right or title to the funds in question, and thus the receiver has no such right. They argue that Jackson is not really suing on behalf of Schubert and her associated entities, but on behalf of the investors (creditors) and that a receiver in cases such as this, as a matter of law, does not have standing to sue on behalf of the investors. Their argument rests upon the following: "The rule is that the maker of the fraudulent conveyance and all those in privity with him - which certainly includes the corporations - are bound by it." Scholes v. Lehmann, 56 F.3d 750, 754 (7th Cir.), cert. denied, 516 U.S. 1028, 116 S. Ct. 673, 133 L. Ed. 2d 522 (1995). In summary, the receiver is bound by the actions that were allegedly fraudulent and unjust. Scholes ultimately concluded that a receiver could bring an action to recover Ponzi-scheme profits, but its holding rests, in part, upon a receiver acting through a corporation. We reach the same conclusion as Scholes that a receiver may seek restitution from investors in a Ponzi scheme, but for a reason not expressed by the Scholes court. ¶35 This Court has explained on several occasions that when a corporation is being mismanaged and its property in danger of being lost to the stockholders through mismanagement, collusion, or fraud of its officers and directors, or through diversion of corporate property to individual officers, a court of equity has the inherent power to appoint a receiver for the property of such corporation to preserve the property of the corporation.35 A similar principle is found in opinions discussing business trusts and associations, Grohoma Growers Ass'n v. Tomlinson, 1938 OK 32, 76 P.2d 404 , as well as a joint venture where the parties possessed "rights and liabilities as between themselves were similar to or the same as those of partners." Vilbig Const. Co. v. Whitham, 1944 OK 259, 152 P.2d 916 , 919. The commission of fraud by those exercising control in a commercial enterprise is a ground which supports the appointment of a receiver by a court. Id. 152 P.2d at 920. ¶36 A receiver controls property and claims for the ultimate benefit of the interested parties, including creditors, subject to claims and defenses possessed by all interested parties. For example, in Harn v. Smith, 1921 OK 328, 204 P. 642, we stated the following: The receiver of an insolvent, nongoing corporation takes the property of the company for the creditors, subject to such equities, liens, or incumbrances, whether created by operation of law or by act of the corporation, which existed against the property at the time of his appointment. Id Historically, a receiver's primary duty was to take charge of a debtor's assets and make pro rata payments of all debts. D. Dobbs, Handbook on the Law of Remedies,§ 2.12 , n. 43, (1973) citing R. Clark, Receivers, § 232 (2d ed. 1929). ¶37 While the power to appoint receivers is governed by statute, when deciding non-statutory receivership issues the court must look for guidance to the established usages and customs prevailing in the courts of equity. Smoot v. Barker, 1944 OK 319, 153 P.2d 227 , 228 . A receivership is ancillary or auxiliary to proper equitable relief; that is, such relief is a provisional remedy granted only in connection with an action for some other purpose. Fidelity Trust & Deposit Co. v. Certified Oil Properties, 1941 OK 250, 119 P.2d 83 , 84; Harris v. National Loan Co., 1934 OK 624, 43 P.2d 1038 , 1040. In discussing the equitable rights of members in an association, this Court stated, "The flexible rules of equity apply in all such cases, and the courts of equity are always open to those wronged by the acts of mismanagement of the officers." Grohoma Growers Ass'n v. Tomlinson, 76 P.2d at 407. ¶38 In summary, a receivership is a procedural vehicle to protect the underlying equitable rights possessed by stockholders, partners, joint venturers, and members of an association to funds that have been grossly mismanaged and dissipated by fraud. The protection of those equitable rights includes applying flexible procedural rules to effectuate the protection of equitable substantive rights possessed by those who participated in a business relationship, whether by corporation, business venture, or association. The property taken by Receiver in this case includes those equities that are attached to the property created by law or acts of Schubert, and the property is subject to all setoffs, liens, and encumbrances. Harn v. Smith, supra. To deny a receiver the ability to litigate the equitable rights of the Ponzi investors in this case because of Schubert's choice of using, or not using, a particular business vehicle would elevate procedure over substance in an equitable proceeding where flexible rules of procedure are used to guarantee equity. We therefore hold that a court-appointed receiver for the failed business ventures of a Ponzi-scheme operator may seek equitable relief against Ponzi-scheme investors.36 V. Tracing and Setoffs ¶39 Appeal No. 105,682 is from a certified interlocutory order issued in Oklahoma County District Court Cause No. CJ-2005-3799 granting a partial summary adjudication. The three issues certified by the trial court are: 1. Whether the Department is required to trace funds received by the investor as belonging to other investors in order to prove unjust enrichment and require disgorgement of such monies? 2. Whether the Department may recover monies received by the investors under a Ponzi scheme based on the theory of unjust enrichment? 3. Whether the Pollards are entitled to setoff or offset against any monies ordered to be disgorged? ¶40 The United States Supreme Court has recognized that, in equity, certain tracing rules should be suspended. Cunningham v. Brown, 265 U.S. 1 , 44 S. Ct. 424, 427, 68 L. Ed. 873 (1924). One federal court explained Cunningham's tracing analysis this way: In Cunningham, creditors argued that they were rescinding their contracts with Ponzi because of fraud. They attempted to use a tracing presumption to remove their money from a fund before other defrauded creditors could reach it. Although their money had been removed from the bank account, the creditors argued that if a fund is composed partly of the wrongdoer's money and the defrauded person's money, the court should presume the wrongdoer has removed his money and left the victim's money in the account. 265 U.S. at 12, 44 S. Ct. at 427. However, the Supreme Court recognized that the other money in the account belonged to other victims, not Ponzi, and that the use of this presumption would harm other victims. 265 U.S. at 13, 44 S. Ct. at 427. Moreover, since these creditors occupied the same legal position as other creditors, equity would not permit them a preference; for "equality is equity." Id. Securities and Exchange Commission v. Elliott, et al., Generally, we agree with Cunningham that when a Ponzi-scheme operator has commingled funds of several Ponzi-scheme investors with the operator's funds the Department need not show that the funds received by the innocent investor came from a defrauded Ponzi-scheme investor. However, the Pollards claim that this tracing is necessary because they gave amounts to Schubert for investment in addition to the Ponzi-scheme investments. ¶41 The Pollards allege that over an eleven year period more than $616,626.00 was invested with Shubert. Barry Pollard alleges that he obtained a judgment against Schubert in the amount of $827,000.00 in the District Court of Logan County. The Pollards were assigned a claim from L & S Pollard Farms, L.L.C. against Schubert in the amount of $284,464.05. L & S Pollard Farms, L.L.C. is designated as a "short investor" and is purportedly one of the investors for which the Department seeks equity. The Department alleges that the Pollards invested $59,100 "with Receivership Subjects and received, directly or indirectly, $445,268.06 in return, for a net gain of $386,158.06." Pollard alleges that the Department's lawsuit for equitable relief is "seeking disgorgement for monies that the Department alleges the Pollards received out of the same transactions for which the Pollards obtained their judgment against Schubert." There are contested facts concerning the source of the monetary obligation reduced to judgment in the amount of $827,000.00 and whether it involves the same commingled accounts used in the Ponzi scheme, the amounts invested by Pollard in the scheme, the amounts invested by Pollard with Schubert in other investments, and the amounts received by Pollard attributed to the Ponzi scheme. ¶42 The Department's unjust enrichment action recognizes, according to the Department, that money received from Schubert's Ponzi scheme should be offset by money invested in the scheme. This is, of course, a form of tracing. The Department is tracing funds into and out of the scheme, and apparently omitting funds from its calculations that it contends are not involved in the scheme. The Department uses both the phrase "Receivership subjects" as well as specific bank accounts to determine the status of Ponzi funds. In the record on appeal the Department's filings do not link specific bank accounts with specific receivership subjects for the purpose of the Pollards' claims, and that fact issue is not before us in these proceedings. The record does appear to show that Schubert's clients, including the Pollards, could receive funds from securities accounts that were unrelated to the Ponzi scheme. ¶43 Schubert had access to several accounts and commingled many of them with investor and personal funds. We agree with the Department that a simple netting out of funds received and deposited into accounts used for the Ponzi scheme with disbursements from those accounts to investors is a sufficient method to show whether an investor received his initial investment and a profit or loss thereon. However, we also agree with the Pollards that if Schubert's Ponzi-scheme funds were used to pay a legitimate non-Ponzi investment dividend, such payment does not represent a return on the Ponzi investment and should not be considered for the unjust enrichment claim. We agree with the Department that the facts of the nature of a legitimate investment and the alleged dividend payments are facts in the nature of an affirmative defense37 to be pled by the Pollards and should not be considered as an element of the unjust enrichment claim brought by the Department. ¶44 In Securities and Exchange Commission v. Elliott, supra, the court stated that the right to setoff exists where there are mutual debts between parties,38 and other federal courts have recognized a strong federal policy to allow setoffs.39 A receiver's argument that a setoff creates, by itself, an inequitable preference has been repeatedly rejected. The Receiver argues that if Hagstrom is allowed a setoff, he will receive a preference over other creditors. While other creditors will only receive a percentage of their investments, Hagstrom would receive, up to $280,000, a dollar per dollar return on his investment. The Receiver's argument has been rejected repeatedly for almost a century. As early as 1892, the United States Supreme Court recognized that if a debtor has a valid right to a setoff, it is not a preference. Scott v. Armstrong, 146 U.S. 499 , 13 S. Ct. 148, 151, 36 L. Ed. 1059 (1892). Despite having the effect of a preference, a setoff is a long-recognized right and is generally favored. Cumberland Glass Mfg. Co. v. De Witt & Co., 237 U.S. 447 , 455, 35 S. Ct. 636, 639, 59 L. Ed. 1042 (1915); In re Applied Logic Corp., 576 F.2d 952, 957 (2d Cir.1978); Bohack, 599 F.2d at 1165. Equity's general principle of equality among creditors is not an appropriate consideration when considering whether to grant setoff, which is itself equitable in origin. Applied Logic, 576 F.2d at 961; Johnson, 552 F.2d at 1079. Thus, if the Receiver is to prevail, he must do more than argue that Hagstrom is being treated better than other creditors. SEC v. Elliott The receiver then argued in SEC v. Elliott that in a mass fraud scheme, such as a Ponzi scheme, a court should not allow setoffs. The Court rejected this argument. The Receiver argues that the special circumstances of mass fraud with hundreds of defrauded creditors require special rules, but this argument can only go so far. The cases of each creditor must be examined individually to determine the rights of that individual. The Receiver cannot, for the sake of expediency, group together claimants with different claims. The law recognizes a right to setoff, and courts are not "free to ignore [the setoff rule] when they think [its] application would be 'unjust.' " Applied Logic, 576 F.2d at 957. The Receiver fails to cite any cases which grant an exception to the setoff rule in a situation similar to this one. SEC v. Elliott Although this federal jurisprudence is not controlling, it agrees with the equitable principles adopted by this Court in its precedential opinions. ¶45 In Jones v. England, 1989 OK 142, 782 P.2d 119 , we said that: "Insolvency of one of the parties may create an equity, or at least strengthen it, sufficient to allow a setoff of the mutual obligations." Id. at 122, citing 3 J. Story, Commentaries on Equity Jurisprudence, § 1872 (14th ed 1918). We then explained the "grave injustice" of denying a setoff. The grave injustice of denying a setoff . . . is no less an injustice when an insolvent plaintiff is bringing suit on a guaranty agreement and the defendant desires to setoff the guaranty obligation with payments allegedly made to the plaintiff. Thus, we hold that Howard's counterclaim raises a permissible defense to the action on the guaranty. Jones v. England This Court has recognized that a court applying equity may use one judgment to setoff another judgment. ¶46 The record does not state whether the $827,000.00 judgment against Schubert relates to Ponzi-scheme activities or non-Ponzi investments. The Department offsets dividends against Ponzi investments and thereby limits setoff calculations to Ponzi-related funds. We decline to hold that the right of an investor to an equitable setoff by a judgment against the operator of the Ponzi scheme is dependent upon whether the judgment relates to the Ponzi scheme. Separate judgments used in equity to setoff obligations are, or least should be, based upon different or separate causes of action or separate transactions and occurrences. This is so because a judgment is the final determination of the rights of the parties where the cause of action is merged into the judgment, and separate judgments on the same claim (or cause of action) do not usually coexist without issues frustrating their enforcement such as preclusion, estoppel, and splitting a cause of action. ¶47 The Department is seeking equity, and doing equity depends upon the circumstances of individual parties. The fact that a massive fraud scheme was used does not change the nature of equity. As observed in SEC v. Elliott, supra, A claimant is not treated better in the eyes of the law if the controlling facts surrounding his or her case lead to a different legal conclusion. To argue that all claimants should be treated similarly, without presenting facts, is an empty argument. One of the basic purposes of law and the courts is to determine which facts are legally relevant or irrelevant. If relevant facts differ, then the law will treat the claimants differently. Thus, it is incorrect to say the law prefers one claimant if that claimant's situation differs in a legally cognizable way. Id Doing equity in this State, since at least the 1916 opinion of Elms v. Arn, ¶48 The Department challenges the right of the Pollards to use the judgment obtained against Schubert with the argument that privity of parties is necessary for a setoff, and that the judgment is not against the Department. In Sarkeys v. Marlow, ¶49 We have explained herein that setoffs are proper when a receiver presses claims for unjust enrichment based upon a Ponzi scheme. The Department's argument is thus based upon the idea that although equity may require a setoff if the receiver is a party, the same rule of equity does not apply when the Department is the party pressing for payment. Equity elevates substance over form. Cobb v. Whitney ¶50 We have answered the first two certified questions by our opinion. The third, whether the Pollards are actually entitled to a setoff, cannot be answered today. Whether a setoff should be granted or denied, based upon the disposition of certain non-Ponzi investments and the calculation of Ponzi-scheme investments and Ponzi-scheme dividends, cannot be made due to the uncertainty of the facts in the record before us. Similarly, whether the assignment of the claim to the Pollards from L & S Pollard Farms, L.L.C. in the amount of $284,464.05 was a bona fide assignment for value, in addition to other potential issues relating to this claim, are not determinable from the record before us and were not determined by the trial court in the first instance. Finally, we note that this proceeding is on certiorari review from the District Court of Oklahoma County, the truncated District Court record on appeal does not appear to contain the judgment roll of the proceeding in the District Court of Logan County which resulted in a judgment or a certified copy of that judgment, and the District Court's ruling on a partial summary adjudication did not reach the factual issue of the existence of the judgment and the equity of its application. We decline to adjudicate these issues in the first instance and they must be left for the District Court on remand. VI. Application of the Court's Holdings to the Individual Appeals ¶51 The assignments of error in appeal Nos. 104,004, 104,161, and 104,262 consolidated with 104,304, challenge summary judgments granted in the same action in the District Court for Oklahoma County, Cause No. CJ-2005-3796 (consolidated with CJ-2005-3299). The petitions for certiorari in these appeals challenge the Department's action against innocent investors and the ability of the court-appointed receiver to seek equitable refunds from innocent investors who received more than their original investments. ¶52 Summary judgment was granted based upon the principle that a profit to a Ponzi-scheme investor is, as a matter of law, unjust enrichment, and subject to an action by the Department for restitution. We have rejected that concept today and explained that equitable recovery against an innocent investor must be based upon that investor's receipt of an unreasonably high dividend on his or her investment, a mixed question of law and fact that must be decided by the trier of fact on remand. ¶53 The substantive equitable rights sought to be vindicated by the court-appointed receiver's unjust enrichment claim against the innocent investors are no greater in scope than those by the Department against the innocent investors. Judgment for the receiver must be based upon the investor's receipt of an unreasonably high dividend on his or her investment, an issue that must be decided by the trier of fact on remand. ¶54 A moving party is entitled to summary judgment as a matter of law only when the pleadings, affidavits, depositions, admissions or other evidentiary materials establish that no genuine issue of material fact exists. Miller v. David Grace, Inc., ¶55 Appeal No. 105,682 is an appeal of a certified interlocutory order issued in Oklahoma County District Court Cause No. CJ-2005-3799 which granted the Department a partial summary adjudication after the trial court declined to consider the Pollards' arguments and claims relating to setoffs. The opinion herein explains that an equity claim for unjust enrichment allows for equity defenses based upon setoffs. Whether the facts support setoffs for the Pollards is an issue for adjudication by the trial court upon remand. The partial summary adjudication was based upon the concept that unjust enrichment is based merely upon whether an innocent investor received more than his or her initial investment. The opinion herein shows that unjust enrichment must be based upon an unreasonable dividend obtained by a defendant. The record on appeal shows contrary allegations of fact concerning how much the Pollards invested with Schubert, the nature of those investments, and which should be attributed to the Ponzi scheme. A genuine issue of fact exists concerning the nature of the Pollards' investments and dividends. The summary adjudication for the Department must be reversed. Young v. Macy , supra; Miller v. David Grace, Inc., supra. The cause is remanded for further proceedings consistent with this opinion. VII. Conclusion ¶56 The Oklahoma Legislature could expressly state that the Department is authorized to seek equitable relief against innocent investors in a Ponzi scheme for the benefit of other innocent investors and define the rights and liabilities of such investors in such proceedings. There is nothing in the record submitted by the Department showing that the Oklahoma Legislature has expressly considered and weighed the competing equities of the two classes of innocent investors. We have declined to adopt the Department's view that every innocent investor who received a return on his or her investment in excess of the initial investment has, as a matter of law, been unjustly enriched and is subject to an action seeking equitable restitution brought by either the Department or an appropriate court-appointed receiver. We have instead opted for defining the presence of unjust enrichment upon the true nature of a Ponzi-scheme and its perpetuation - the payment of an unreasonably high dividend. Innocent investors ignorant of the Ponzi scheme may not hide behind their ignorance when unreasonably high dividends are paid to them and then claim that their high dividends are insulated from equity. ¶57 We recognize that our opinion precludes recovery from innocent investors who receive a reasonable rate of return, or even less than a reasonable rate of return and after several years recover their investment. The Department's arguments herein do not address what course of conduct an innocent investor should pursue if that investor wants to make a reasonable rate of return without fear of a potential District Court action for restitution of dividends at some unspecified time in the future. Should an investor segregate and hold financial profits until a statute of limitations or laches expires? In the alternative, should an innocent investor be held to a higher standard of accountability and inquiry concerning his or her investments placed with a licensed securities dealer? These and similar questions are for the Legislature should it consider if public policy requires unjust enrichment to be defined as the Department contends, or whether unjust enrichment should be defined, as we have here, based upon a reasonably-equivalent-value-exchanged model used in fraudulent transfers as interpreted by some courts. ¶58 EDMONDSON, C.J., TAYLOR, V.C.J., OPALA, COLBERT, and REIF, JJ., CONCUR. ¶59 HARGRAVE, KAUGER, WINCHESTER, JJ., DISSENT. ¶60 WATT, J., NOT PARTICIPATING. FOOT