1

UNITED STATES DISTRICT COURT

SOUTHERN DISTRICT OF FLORIDA

SECURITIES AND EXCHANGE COMMISSION

Plaintiff,

v.

JUSTIN W. KEENER D/B/A JMJ FINANCIAL,

Defendant.

_______________________________________________

)

)

)

)

)

)

)

)

)

)

)

)

)

No. 20-cv-21254

Hon. Beth Bloom

REPLY TO DEFENDANT’S OPPOSITION TO SEC’S OMNIBUS MOTION IN LIMINE

AND INCORPORATED MEMORANDUM OF LAW

Case 1:20-cv-21254-BB Document 97 Entered on FLSD Docket 09/03/2021 Page 1 of 13
1

INTRODUCTION

Plaintiff Securities and Exchange Commission respectfully submits this reply to 

Defendant’s opposition to its motion in limine, in which the SEC asked this Court to preclude

Defendant from offering evidence or arguments, or mentioning in any way in the presence of the 

jury, the following: (1) allegations or evidence purporting to relate to due process, fair notice and 

estoppel defenses; (2) non-public communications between the SEC’s Office of Interpretation 

and Guidance (“Guidance Office”) and members of the public; (3) advice, involvement or 

presence of counsel; (4) remedies that the SEC might seek; (5) hardships that Defendant 

allegedly might suffer; and (6) Rule 144 under the Securities Act and any opinions of counsel 

relating to Rule 144. 

In his opposition brief to the SEC’s omnibus motion in limine, DE 87, Defendant agrees 

that the court should preclude any evidence regarding: remedies the court may impose after 

finding Defendant liable (id. at 8, concerning number 4 above); advice of counsel relating to 

dealer registration—the only charge at issue here (id. at 10, concerning number 3 above); and

any hardships Defendant has or may suffer as a result of this litigation (id. at 11, concerning 

number 5 above). Defendant also agrees that because he “is not pursuing an affirmative defense 

based on estoppel,” he “does not object” to the Court “precluding evidence or argument on that 

point.” Id. at 4 & n. 4.

Thus, the only remaining questions are whether the Court should preclude evidence 

relating to the following issues: (1) Defendant’s Due Process/fair notice defense (hereinafter 

“Due Process defense”); (2) communications between the Guidance Office and the public that 

Defendant claims are related to his Due Process/fair notice defense; and (3) evidence relating to 

the Rule 144 “safe harbor” provision that applies to the resale of unregistered securities under the 

Securities Act of 1933 (“Securities Act”), including attorney opinion letters regarding the rule. 

Case 1:20-cv-21254-BB Document 97 Entered on FLSD Docket 09/03/2021 Page 2 of 13
2

I. Legal Standard

The decision to admit or exclude evidence is committed to the broad discretion of the

District Court. City of Tuscaloosa v. Harcros Chemicals, Inc., 158 F.3d 548, 556 (11th Cir.

1998); see also Cabello v. Fernandez-Larios, 402 F.3d 1148, 1161 (11th Cir. 2005). The District 

Court has wide discretion in determining the relevance of evidence produced at trial. To be 

admissible, evidence must be relevant. Fed. R. Evid. 402. Evidence is relevant only if: (a) it has 

any tendency to make a fact more or less probable than it would be without the evidence; and (b) 

the fact is of consequence in determining the action. Fed. R. Evid. 401. Even if evidence is

relevant, Federal Rule of Evidence 403 allows a District Court to exclude the evidence if its 

probative value is substantially outweighed by a danger of unfair prejudice, confusing the issues, 

misleading the jury, undue delay, wasting time, or needlessly presenting cumulative evidence. 

Fed. R. Evid. 403. Based upon this standard, the Commission respectfully requests that the 

Court, in its discretion, exclude the evidence detailed below.

II. Argument

A. Defendant’s Due Process Defense Is A Legal Issue To Be Decided By The 

Court And Not A Jury 

In its omnibus motion in limine, the SEC requested that the Court exclude evidence of 

Defendant’s ostensible Due Process defense, because the law is clear that: (1) a constitutional 

Due Process defense necessarily challenges the language of a statute on the basis of vagueness, 

see Papachristou v. City of Jacksonville, 405 U.S. 156, 162 (1972); and (2) “[T]he issue of 

whether a [law] is void for vagueness is a question of law for the court to determine,” not a jury. 

United States v. House, 684 F.3d 1173, 1207 (11th Cir. 2012). DE 64 at 3-4 (SEC MIL). 

Notwithstanding this clear precedent—which Defendant does not even cite much less 

address in his opposition—Defendant nonetheless declares: “Mr. Keener’s fair notice defense 

Case 1:20-cv-21254-BB Document 97 Entered on FLSD Docket 09/03/2021 Page 3 of 13
3

must be presented to the jury.” DE 87 at 2. Rather than confront the controlling cases on this 

issue, Defendant seeks to reframe his Due Process defense not as a statutory challenge, but as a 

challenge to an agency’s interpretation of its own regulations. Id. at 3 & n. 1. 

Defendant’s argument is based on the flawed premise that the SEC has departed from its past 

interpretation of “dealer” under the Exchange Act, found primarily in the SEC’s Guide to 

Broker-Dealer Registration (“Guide”), thereby depriving him of fair notice of the requirements 

of the law. See Id. As he does throughout his motion for summary judgment, see DE 71 at 23-

25,1 he attempts to elevate SEC staff guidance, primarily the Guide, to an official agency 

interpretation of the law, such as a fully promulgated rule or regulation, despite that the Guide 

was never subject to the rule-making process of the Administrative Procedure Act. Accordingly, 

the Guide states on its face that it simply “highlights certain provisions of the Act” and is “not 

comprehensive.” DE 88-5 at 3 (“Guide”). The Guide also explicitly warns readers that: “You 

should not rely on this guide without referring to the actual statutes, rules, regulations, and 

interpretations.” Id. at 29 (emphasis in original). A guide that summarizes statutory and 

regulatory obligations of securities professionals to help them conduct an appropriate inquiry is 

not a prior interpretation of a statute, or an agency rule, or a rule itself. 

Properly viewed, this case is about applying the plain language of a federal statute to 

Defendant’s conduct—not an agency rule, regulation, or the language of the Guide. As the Third 

 1 Notably, Defendant’s Due Process defense remains difficult to pin down, because he 

keeps changing it. In his opposition to the SEC’s motion in limine, he asserts that his “fair notice 

defense is based on straightforward concepts” and intimates, but does not state explicitly, that he 

does not intend to make a constitutional challenge to the statutory dealer registration language, 

see DE 87 at 3 & n. 3. But in his motion for summary judgment Defendant takes another tack, 

by contending that the SEC is confused by the meaning of the statute and that “[i]f the SEC itself 

has disagreed as to what the statute requires, that is a clear sign of a due process violation.” DE 

71 at 24 (Defendant’s motion for summary judgment). Then in his opposition to the SEC’s 

motion for summary judgment, DE 90 at 23, he finally admits that he does not contend that the 

dealer registration statue is vague. 

Case 1:20-cv-21254-BB Document 97 Entered on FLSD Docket 09/03/2021 Page 4 of 13
4

Circuit explained in FTC v. Wyndham Worldwide Corp., when applying a statute, “[t]the relevant 

question is not whether [the defendant] had fair notice of the [agency’s] interpretation of the 

statute, but whether [the defendant] had fair notice of what the statute itself requires.” 799 F.3d 

236, 253-54 (3d Cir. 2015) (emphasis in original). The legal authority upon which Defendant 

relies—where courts have analyzed agency regulations and agencies’ interpretations of their own

regulations—is thus inapplicable. See, e.g., FCC v. Fox Television Stations, Inc., 567 U.S. 239, 

253 (2012) (finding a due process violation when the agency abruptly changed its prior 

interpretation of its regulation implementing the indecency provisions of the Communications 

Act); Christopher v. SmithKline Beecham Corp., 567 U.S. 142, 157 (2012) (refusing to defer to 

the Department of Labor’s retroactive application of a changed interpretation of its own 

regulations); Upton v. SEC, 75 F.3d 92, 98 (2d Cir. 1996) (finding that the SEC’s interpretation 

of a specific regulation represented a substantial change in enforcement policy that had not 

reasonably been communicated to the public).2 

It is for this Court to determine whether Defendant comes within the statutory definition 

of a dealer, not the jury. As noted, Defendant does not address Wyndham, the Supreme Court’s 

decision in Papachristou, or the Eleventh Circuit’s House decision, upon which the SEC relied 

in its omnibus motion in limine as dispositive of whether this Court or a jury should decide the 

Due Process question where, as here, it relates to the application of a federal statute. Rather than 

confront the controlling cases, Defendant cites a single case for the proposition that his Due 

 2 Defendant’s other cited cases are inapplicable for the same reason. See Diebold Inc. v. 

Marshall, 585 F.2d 1327, 1336 (6th Cir. 1978) (examining whether a challenged regulation 

“gave Diebold sufficient warning that press brakes were with the scope of its point of operation 

guarding requirements”); SEC v. Kovzan, 2012 WL 4819011, at *5 (D. Kan. Oct. 10, 2012)

(dealing with the SEC’s interpretations of agency regulations); Summit Petroleum Corp. v. EPA, 

690 F.3d 733, 740 (6th Cir. 2012) (holding that the EPA’s interpretation of the term “adjacent” 

in one of its regulations was contrary to the term’s ordinary meaning and the unambiguous 

language of the regulation, as well as prior agency guidance in its regulatory history).

Case 1:20-cv-21254-BB Document 97 Entered on FLSD Docket 09/03/2021 Page 5 of 13
5

Process defense “is a quintessential jury question ....” DE 87 at 3. Defendant’s exclusive 

reliance on U.S. v. Harra, 985 F.3d 196, 204 (3d Cir. 2021), is misplaced.

Harra was a criminal case involving the false reporting of past due loans pursuant to 

reporting instructions provided by the SEC and the Federal Reserve. Id., 985 F.3d at 207. The 

issue on appeal involved the sufficiency of the evidence to convict the defendant where those 

reporting instructions were ambiguous. Id. The case did not involve any challenge to the clarity 

of the Federal fraud statute under which the defendant had been charged. Id. The case does not 

hold that a jury should decide whether the language of a federal statute is vague or ambiguous 

and, therefore, violates Due Process. Rather, the Court held that “where falsity turns on how an 

agency has communicated its reporting requirements to the entities it regulates, and those 

communications are ambiguous, fair warning demands that the Government prove a Defendant’s 

statement false under each objectively reasonable interpretation of the relevant requirement.” 

Id., 985 F.3d at 213. The Court should reject Defendant’s argument and exclude evidence of his 

Due Process defense from any trial in this case. Wyndham, 799 F.3d at 253-54 (“The court ... is 

the ultimate arbiter of the statute’s meaning.”); see also House, 684 F.3d at 1207. 

B. The Court Should Exclude All Non-Public Communications Between the 

SEC’s Office of Investor Guidance and Members of the Public

Defendant insists that communications between the SEC’s Guidance Office and members 

of the public are necessary to his Due Process defense. He asserts, “These documents are highly 

relevant to Mr. Keener’s fair notice defense because they demonstrate both (i) industry 

understanding regarding dealer registration requirements and (ii) the inconsistency between the 

SEC’s current litigation posture and how it has explained dealer registration requirements to 

market participants for years.” DE 87 at 5. Because he plans to only use these documents to 

support his Due Process defense, the Court should exclude them on the same basis that it should 

Case 1:20-cv-21254-BB Document 97 Entered on FLSD Docket 09/03/2021 Page 6 of 13
6

preclude the jury from considering the purely legal question of whether he had fair notice of 

what the law required. 

Even if the jury were permitted to determine whether Defendant had fair notice that his 

conduct was illegal, the Guidance Office’s communications with the public do not support his 

defense. First, the communications do not show the industry’s understanding of the dealer 

registration statute, but rather simply reveal questions that industry participants asked the 

Guidance Office. To the extent that the Guidance Office referred industry participants to the 

Guide or to factors in the Guide, that also does not show the industry’s understanding of the 

statute, nor would it be of any consequence. Obviously, considering certain factors may be 

useful way to determine whether one fits the definition of the term “dealer.” Indeed, as 

explained in the SEC’s opposition to Defendant’s motion for summary judgment [DE 89], 

Defendant met several of those factors. In any event, neither the Guide nor the communications 

set a different standard in the industry as the Guide specifically instructs readers to follow the 

law and the communications from the Guidance Office consistently stated the same. As noted 

previously, in support of his position, Defendant cites as legal authority the inapposite Due 

Process cases discussed above that concern fair notice of an agency’s regulation or the agency’s 

interpretation of its regulations. See, e.g, id. at 5 (citing Gen. Elec. Co. v. EPA, 53 F.3d 1324, 

1332 (D.C. Cir. 1995) for the proposition that the court found “no fair notice when agency 

regulations were internally inconsistent”) (emphasis added).3

 

 3 Defendant cites the Magistrate Judge’s order in SEC v. Ripple Labs, Inc., No. 20 Civ.

10832 (AT) (SN), 2021 WL 1814771, at *1 (S.D.N.Y. May. 6, 2021), for the proposition that 

“non-public SEC communications with third parties [are] relevant to a defendant's fair notice 

defense.” DE 87 at 4. The cited order does not refer to “fair notice” apart from a letter from the 

SEC. 

Case 1:20-cv-21254-BB Document 97 Entered on FLSD Docket 09/03/2021 Page 7 of 13
7

Second, the communications do not demonstrate that the SEC's current litigation position 

is different from how the Guide and the Guidance Office have addressed the dealer registration 

requirements. As the SEC’s motion in limine demonstrates—and Defendant does not 

meaningfully contest—none of the almost 600 communications the SEC produced to Defendant 

demonstrates that the SEC staff members were anything but consistent in their responses to the 

members of the public who contacted them. Nothing staff said contradicted in any way the plain 

language of the dealer registration statute, or arguably caused confusion of any sort (let alone 

such confusion that would somehow give rise to a fair notice defense). See DE 64 at 5-8 (SEC 

MIL). Defendant asserts that the communications (which he had never seen) are “direct 

evidence of [his] contention” that “through this litigation, the SEC is imposing a broader 

definition of ‘dealer’ under the Exchange Act than it ever has before to encompass individuals 

like” Defendant. DE 87 at 7-8. This is incorrect. 

In its Complaint and throughout this litigation, the SEC has maintained that Defendant 

was required to register as a dealer because he operated a regular business of buying and selling 

securities. That language comes directly from the statutory definition of the term “dealer,” and

the Eleventh Circuit cases interpreting it. Indeed, the SEC has applied the plain language of the 

statute, the Guide instructs readers to follow the statute, and the communications from the 

Guidance Office do the same. Because the communications fail to advance Defendant’s Due 

Process defense, they should be excluded. Otherwise, allowing the jury to view those 

communications would only “confuse[e] th[e] issues” cause “undue delay” and “wast[e] time,” 

and therefore they also should be excluded under Fed. R. Evid. 403.4

 

 4 Although Defendant concedes that issues related to remedies should await a 

determination on liability, he claims that the SEC failed to meet its disclosure requirements with 

respect to it summary witness, Dr. Carmen A. Taveras. DE 87 at 9-10. To the contrary, pursuant 

to Federal Rules of Civil Procedure 26(a)(3)(A)(iii) and (B), summaries may be disclosed 30 

Case 1:20-cv-21254-BB Document 97 Entered on FLSD Docket 09/03/2021 Page 8 of 13
8

C. The Court Should Exclude All Evidence and Argument Relating to

Defendant’s Purported Compliance With Rule 144 Under the Securities Act

Defendant’s opposition to the SEC’s motion in limine underscores that he will seek to 

confuse the jury about his status as an unregistered dealer under Exchange Act Section 15(a)(1)

[15 U.S.C. § 78o(a)(1)] by introducing evidence that he: (1) complied with SEC Rule 144,

5

(which he agrees is a separate inquiry) and (2) received the advice of counsel in many attorney 

opinion letters regarding his purported compliance with the rule. DE 87 at 14. Contrary to 

Defendant’s allegations, complying with Rule 144 does not relieve him of the obligation to 

comply with Section 15(a)(1), and any reference to Rule 144 or the related attorney opinion 

letters are legally irrelevant and likely prejudicial. 

The Court should find that Defendant’s compliance with Rule 144 is irrelevant to the 

dealer analysis, and that Defendant’s compliance with the Rule is not a fact necessary to the 

determination of this case. As the SEC explained in its motion in limine, and Defendant does not 

dispute, Rule 144 is a safe harbor that applies to the resale of unregistered securities under 

Section 4(a)(1) of the Securities Act; it is not a safe harbor from registering as a dealer pursuant 

to Section 15(a) of the Exchange Act. See DE 64 at 13. Section 4(a)(1) of the Securities Act 

allows individuals, who possess unregistered securities and are not issuers, underwriters or 

dealers under the Securities Act, to resell those securities without registering them with the 

Commission. 15 U.S.C. § 77d(a)(1). Rule 144 is a safe harbor from underwriter status under 

Section 4(a)(1), and so those who comply with the rule when selling unregistered securities will 

not be deemed to have engaged in an unlawful distribution of the securities (i.e., acting as a 

 

days prior to trial. With trial several months away, the SEC has more than met its burden under 

the rules.

5 17 C.F.R. § 230.144, promulgated under the Securities Act, 15 U.S.C. § 77a et seq.

Case 1:20-cv-21254-BB Document 97 Entered on FLSD Docket 09/03/2021 Page 9 of 13
9

“statutory underwriter”). But those who rely on Rule 144 must still register as a dealer under the 

Exchange Act if they are in the regular business of buying and selling securities. 

Defendant alleges that “the SEC has put Mr. Keener’s compliance with Rule 144 directly 

at issue” in the Complaint. DE 87 at 11. But the SEC has never claimed that Defendant failed to

comply with Rule 144. In fact, in its Complaint, the SEC alleged: 

Keener timed his conversions and sales in an effort to comply 

with the holding period under Rule 144. For that reason, 

Keener generally waited six months after purchasing a 

convertible note before he began to exercise his right to convert 

the note to stock, which he then resold in the market.

DE 1 at ¶ 12. Defendant also asserts that the Rule 144 opinion letters from counsel are necessary 

to rebut the SEC’s claim that he “engaged in a ‘distribution’ of ‘newly issued’ stock.” DE 87 at 

11. But whether he was permitted to sell that newly issued stock under the Securities Act, 

because of Rule 144, is irrelevant to the question of whether selling newly stock into the market 

made him a dealer under the Exchange Act. Rule 144 just addresses the legal status of the sales

under the Securities Act; it does not change the underlying fact that they were sales to the public 

of newly issued stock.

If anything, these facts demonstrate that Defendant was a sophisticated industry 

participant who was able to navigate the registration provisions of the Securities Act, the 

exemptions to registration, and the Rule 144 “safe harbor.” Yet, he purports to have been

completely confused by the dealer registration provisions of the Exchange Act. 

Defendant’s technique of blurring and conflating the Exchange Act (this case) with the 

Securities Act (Rule 144) is compelling evidence of the danger that he will seek to confuse the 

jury with evidence that is wholly irrelevant to the issues in this case. That is exactly why the 

SEC raised this issue with the Court in the first place. See DE 64 at 13. The Court should reject 

Defendant’s transparently slick reasoning and exclude any evidence relating to Rule 144 because 

Case 1:20-cv-21254-BB Document 97 Entered on FLSD Docket 09/03/2021 Page 10 of 13
10

it is irrelevant and any marginal relevance would be substantially outweighed by the danger of 

unfair prejudice. 

Perhaps more importantly, despite Defendant’s statement in his opposition to the SEC’s 

motion for summary judgment, that he “is no longer asserting an ... advice of counsel defense,”

he seeks to introduce the advice of counsel embedded in attorney opinion letters on Rule 144. 

See DE 90 at 30 n. 12 (Def. Opp. to SEC MSJ). He seeks to have his cake and eat it too—

disclaiming an advice of counsel defense (and the burden of proving it) while seeking to put into

evidence dozens of attorney opinion letters that state, among other things, that Defendant “is Not 

a Dealer.” See, e.g., DE 73-8, at JMJ-SEC-005-008412 (June 6, 2017 letter of Laura Anthony to 

Old Monmouth Transfer Co., Inc.) (emphasis in original). A jury would inevitably be confused 

by Defendant’s ruse where, although he is not formally invoking an advice of counsel defense 

(which would require him to prove its elements), he may convince a jury that he was acting on 

wholly separate advice from an attorney stating that he was not a dealer. There can be no more 

prejudicial evidence in a case like this, and the Court must exclude it. 

CONCLUSION

The SEC respectfully requests that the Court enter an order in limine that Defendant and 

his counsel shall not, while in the presence of the jury, offer or elicit any testimony or other 

evidence about and shall not mention or make any reference to: (1) allegations or evidence 

purporting to relate to a Due Process/fair notice defense; (2) non-public communications 

between the SEC’s Office of Interpretation and Guidance and members of the public; (3) advice, 

involvement or presence of counsel; (4) remedies that the SEC might seek; (5) hardships that 

Defendant allegedly might suffer; and (6) Rule 144 under the Securities Act and any opinions of 

counsel relating to Rule 144. 

Case 1:20-cv-21254-BB Document 97 Entered on FLSD Docket 09/03/2021 Page 11 of 13
11

DATE: September 3, 2021 Respectfully submitted, 

By: 

/s/ Joshua E. Braunstein

Joshua E. Braunstein

Antony Richard Petrilla

Attorneys for Plaintiff

SECURITIES AND EXCHANGE COMMISSION

100 F Street NE 

Washington, DC 20549

Telephone: (202) 551-8470

Braunsteinj@sec.gov

ATTORNEYS FOR PLAINTIFF 

SECURITIES AND EXCHANGE 

COMMISSION 

Case 1:20-cv-21254-BB Document 97 Entered on FLSD Docket 09/03/2021 Page 12 of 13
12

CERTIFICATE OF SERVICE

I hereby certify that on September 3, 2021, I filed Plaintiff Securities And Exchange 

Commission’s Reply to Defendant’s Opposition to the SEC’s Omnibus Motion in Limine

through the Court’s CM/ECF system, which automatically sends notices to counsel of record in 

this case. 

 s/ Joshua E. Braunstein

Joshua E. Braunstein

Attorney for Plaintiff 

Securities and Exchange Commission

Case 1:20-cv-21254-BB Document 97 Entered on FLSD Docket 09/03/2021 Page 13 of 13