Source: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-caed-2_09-cv-00665/USCOURTS-caed-2_09-cv-00665-130/pdf.json

Nature of Suit Code: 850
Nature of Suit: Securities, Commodities, Exchange
Cause of Action: 15:77 Securities Fraud

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UNITED STATES DISTRICT COURT 

EASTERN DISTRICT OF CALIFORNIA 

SECURITIES AND EXCHANGE 

COMMISSION, 

Plaintiff, 

v. 

ANTHONY VASSALLO, KENNETH 

KENITZER, and EQUITY 

INVESTMENT MANAGEMENT AND 

TRAINING, INC., 

Defendants. 

No. CIV. S-09-0665 LKK/DAD 

ORDER 

The court has determined that this motion can be decided on 

the papers already submitted, and accordingly VACATES the hearing 

on this matter scheduled for July 28, 2014. 

On November 6, 2009, the Receiver for defendant Equity 

Investor Management and Training, Inc. (“EIMT”), instituted a 

summary proceeding against Michael Callahan, a non-party, seeking 

an order requiring Callahan to disgorge $2 million in defrauded 

investor funds.1

 See ECF NO. 171. 

 

1

 A non-party, known as a “nominal defendant” or “relief 

defendant,” may be held liable for disgorgement of such funds, 

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Callahan objected that there was an insufficient evidentiary 

basis for the order. The court accordingly referred the matter 

to a Magistrate Judge for an evidentiary hearing. The 

evidentiary hearing was held on March 29-30, 2010. On July 21, 

2010, the Magistrate Judge filed his Findings and 

Recommendations, concluding that Callahan should be held jointly 

and severally liable for the $2 million, and that an order of 

disgorgement should issue in that amount. See ECF No. 309. 

On August 11, 2010, Callahan filed his objections to the 

Findings and Recommendations. See ECF No. 319. Callahan argued 

that (1) the court’s own standard ordering disgorgement was not 

met, (2) the evidentiary hearing was not what this court ordered, 

(3) the hearing violated Callahan’s Due Process rights, (4) there 

was no basis for joint and several liability, (5A) the Magistrate 

Judge’s findings were unsupported by the evidence, (5B) the 

Magistrate Judge acted beyond the authority assigned him by this 

court, (6) there was no evidence that Callahan received 

$2 million, (7A) there was no basis for a finding of liability, 

(7B) the findings and/or the proceedings were procedurally 

incorrect, and (8) the Tucker declaration was improperly 

rejected. See ECF No. 319. 

On September 29, 2010, this court filed its order which 

considered and rejected Callahan’s objections. See ECF No. 347. 

The court adopted the findings and recommendations in full, found 

 

when he is possession of the funds and “has no legitimate claim” 

to them. See SEC v. Colello, 139 F.3d 674 (9th Cir. 1998). 

Moreover, summary proceedings are authorized for such matters. 

See SEC v. Wencke, 783 F.2d 829, 836 (9th Cir. 1986), cert. 

denied, 479 U.S. 818 (1986).

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Callahan jointly and severally liable for the $2 million and 

ordered him to disgorge that amount. Id. 

Callahan did not at that time seek reconsideration of, nor 

relief from, this court’s order. Moreover, Callahan did not 

appeal the court’s order, nor did he request the entry of a final 

judgment, if he believed the order was not otherwise appealable. 

See Fed. R. Civ. P. 54(b) (permitting entry of a final judgment 

as to one or more of multiple parties or claims). Now, nearly 

four years later, he seeks relief from the court’s order. 

Although Callahan, proceeding pro se, does not cite any rule 

or statute as the basis for his motion, his request is controlled 

by Fed. R. Civ. P. 60(b) & (c), governing requests for relief 

from final judgments, orders or proceedings. Rule 60(b) motions 

“must be made within a reasonable time.” Rule 60(c)(1).2 The 

motion must also demonstrate the existence of “new or different 

facts or circumstances ... which did not exist or were not shown” 

at the time of the disgorgement order. E.D. Cal. R. 230(j); 

Brodheim v. Dickinson, 2014 WL 897084 at *1 (E.D. Cal. 2014) 

(Karlton, J.) (“The rule derives from the ‘law of the case’ 

doctrine which provides that the decisions on legal issues made 

in a case ‘should be followed unless there is substantially 

different evidence, ... new controlling authority, or the prior 

decision was clearly erroneous and would result in injustice’”) 

(quoting Handi Investment Co. v. Mobil Oil Corp., 653 F.2d 391, 

 

2

 If the basis for reconsideration is “mistake,” “newly 

discovered evidence” or “fraud,” the request must be made “no 

more than a year after the entry of the judgment or order or the 

date of the proceeding.” Rule 60(c)(1). 

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392 (9th Cir. 1981)). 

Callahan’s current motion contains several arguments, all of 

which were, or years ago could have been, argued to the 

Magistrate Judge, included in Callahan’s Objections filed with 

this court, or argued to this court on a timely motion for 

reconsideration. Callahan does claim that he has two pieces of 

“new evidence” that justify reconsideration. ECF No. 501 

at 52-54. 

First, Callahan points to the “new” Declaration of Matthew 

Tucker. See ECF No. 501 at 65-67. However, this declaration is 

nearly identical to the Tucker Declaration filed in support of 

Callahan’s objections four years ago. See ECF No. 319 at 14-17. 

Callahan does not identify any of the differences between these 

declarations, nor explain why they justify reconsideration. The 

court’s examination of the two does not reveal any new evidence 

justifying reconsideration. 

Second, Callahan asserts that he now has evidence that 

Tucker received $1.875 million of the $2 million transferred from 

EIMT. However, the Magistrate Judge and this court were aware of 

this assertion. The Magistrate Judge found, and this court 

agreed, that even assuming the truth of the assertion, Callahan 

was a “joint tortfeasor” with Tucker, and therefore “jointly and 

severally” liable with Tucker for the entire $2 million, 

regardless of which of them physically received the money. See 

ECF No. 309 at ¶ 16. 

There being no new evidence or other basis for 

reconsideration, Callahan’s egregiously belated motion for 

reconsideration or relief from the 2010 order of this court (ECF 

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No. 501), is DENIED. 

IT IS SO ORDERED. 

DATED: July 21, 2014. 

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