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# Other

# SEC v. James Michael Murray, et al. Case No. 12-cv-1288-EMC (N.D. Cal.)

                            Oct. 14, 2022                       

On January 9, 2013, the Commission amended its complaint (“Amended Complaint”) against James Michael Murray (“Murray”) filed on March 15, 2012 and named Event Trading GP, LLC (“Event Trading”) as a relief defendant. In the Amended Complaint, the Commission alleged Murray, an investment adviser, defrauded potential and actual investors of Market Neutral Trading, LLC, an investment fund he controlled, by providing them grossly inflated representations of the fund’s historical performance and phony audit reports issued by a fictitious audit firm. By engaging in the acts alleged, Murray violated the antifraud provisions of the federal securities laws and a Commission rule prohibiting fraud by investment advisers on investors in a pooled investment vehicle. See Amended Complaint.

The Commission filed a motion for summary judgment against Murray seeking disgorgement of $2,519,114.47, prejudgment of $31,162.87, and a $150,000.00 civil penalty as monetary relief. On November 23, 2016, the Court entered an order denying the Commission’s request for disgorgement and prejudgment interest because the amounts requested should be entirely offset by the restitution obligation of $3,480,379.90 ordered in the related criminal case against Murray, 12-cr-00278-EMC. The Court granted the request for a civil penalty and ordered Murray to pay a $150,000.00 civil penalty. See Murray’s Judgment. Murray filed an appeal to the Ninth Circuit Court of Appeals, which was dismissed on March 7, 2017. See USCA’s Dismissal.

On July 28, 2017, the Court entered a revised final judgment against Event Trading. Event Trading was ordered liable for disgorgement in the amount of the monies contained in the Interactive Brokers account previously frozen by the Court. The Clerk was ordered to hold the funds in an interest bearing account with the Court Registry Investment System (collectively, the “Fund”), pending submission by the Commission of a proposed plan to distribute the Fund to the Market Neutral Trading investors subject to the Court’s approval and subsequent order. See Event Trading’s Judgment.

The Fund consists of the $361,302.65 received from Interactive Brokers; any additional monies received pursuant to the judgments entered against Murray and Event Trading will be added to the Fund.

On November 9, 2017, the Court entered an order appointing Miller Kaplan Arase LLP as the Tax Administrator of the Fund.

On June 27, 2018, the Commission filed a motion for an order approving the distribution plan and disbursement of funds, together with the distribution plan (the “Plan”), and appointing Keshia Ellis, a Commission employee, as distribution agent.  See the Commission’s Motion and the Plan.

On July 30, 2018, the Court issued an order that approved the Plan and the disbursement of $355,439.76 from the Distribution Fund to eligible investors, and appointed Keshia W. Ellis as the Distribution Agent to oversee the administration and distribution of the Distribution Fund.  See the Court’s Order. 

The Plan provides that the distribution of the Distribution Fund shall be made to investors identified by staff who incurred net losses from investments in Market Neutral Trading and investment fund controlled by Murray. 

On July 25, 2019, the Court entered an order authorizing a second tranche disbursement from the Fair Fund for distribution by the Distribution Agent to harmed investors in accordance with the Plan.  See the Court's Order.

For more information, please contact the Distribution Agent:

Keshia W. EllisSecurities and Exchange CommissionTelephone Number: 202-551-4406Email: elliskw@sec.gov

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