1

UNITED STATES DISTRICT COURT

EASTERN DISTRICT OF TEXAS

SHERMAN DIVISION

SECURITIES AND EXCHANGE 

COMMISSION

v.

GOPALA KRISHNAN, ET AL.

§

§

§

§

§

§

CIVIL NO. 4:23-CV-885-SDJ

OMNIBUS ORDER ON DEFENDANTS’ MOTION TO DISSOLVE OR 

MODIFY ASSET FREEZE, PLAINTIFF’S MOTION FOR APPOINTMENT OF 

RECEIVER, AND MOTIONS TO SEAL

Before the Court are Defendants Gopala Krishnan (“Krishnan”), Manivannan 

Shanmugam (“Shanmugam”), Sakthivel Palani Gounder (“Gounder”), Nanban 

Ventures LLC (“Nanban Ventures”), GSM Eternal LLC, a/k/a NorthStars FinTech 

(“GSM”), Himalayan FinTech LLC (“Himalayan”), and Centum FinTech LLC, a/k/a 

Sunshines FinTech’s (“Centum”) (collectively, “Defendants”) Emergency Motion to 

Dissolve or, Alternatively, Modify the Asset Freeze Order, (Dkt. #61), and Plaintiff 

Securities and Exchange Commission’s (“SEC”) Motion for Appointment of Receiver 

and Brief in Support, (Dkt. #77). Having considered the motions, subsequent briefing, 

and applicable legal authorities, the Court concludes that Defendants’ Emergency 

Motion to Dissolve or, Alternatively, Modify the Asset Freeze Order, (Dkt. #61), 

should be denied without prejudice and the SEC’s Motion for Appointment of Receiver 

and Brief in Support, (Dkt. #77), should be granted. 

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I. BACKGROUND

A. Factual Background

In this securities fraud civil enforcement action, the SEC alleges five causes of 

action under the federal securities laws. (Dkt. #1). First, the SEC alleges that all 

Defendants violated: (i) Section 10(b) of the Securities Exchange Act of 1934,

15 U.S.C. § 78j(b), and Rule 10b-5 thereunder, 17 C.F.R. § 240.10b-5; and (ii) Section 

17(a) of the Securities Act of 1933, 15 U.S.C. § 77q. (Dkt. #1 at 30–32). Second, the 

SEC alleges three causes of action against Defendants Krishnan, Shanmugam, 

Gounder, and Nanban Ventures: (i) violations of Sections 206(1) and (2) of the 

Investment Advisers Act of 1940 (“Advisers Act”), 15 U.S.C. §§ 80b-6(1), (2); (ii) 

violations of Section 206(3) of the Advisers Act, 15 U.S.C. § 80b-6(3); and (iii) 

violations of Section 206(4) of the Advisers Act, 15 U.S.C. § 80b-6(4), and Rule 206(4)-

8 thereunder, 17 C.F.R. § 275.206(4)-8. (Dkt. #1 at 32–34).

The SEC alleges that since at least April 16, 2021, Defendants Krishnan, 

Shanmugam, and Gounder, acting through their controlled “Nanban” companies, 

have raised at least approximately $129.7 million from over 360 investors in 

fraudulent securities offerings targeting primarily members of the Indian 

community, including approximately $89.8 million from five Nanban branded private 

investment funds that Nanban Ventures offered to retail investors, and $39.9 million 

from selling high-yield promissory notes to so-called “friends and family” investors 

through GSM, Himalayan, and Centum. (Dkt. #14 at 1). The SEC alleges that 

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Defendants made multiple misrepresentations and omissions to investors and 

engaged in deceptive conduct in perpetuating the fraud.

At the root of the alleged fraud are “GK Strategies”—Defendants’ selfdescribed “patented” and “proprietary” investment techniques that they claim are 

guaranteed to make money. To the contrary, the SEC alleges that GK Strategies 

merely implement widely known and publicly available trading techniques. 

Defendants also allegedly misrepresented investments and concealed conflicts of 

interest. Further, Defendants have also allegedly misrepresented and omitted crucial 

information about GK Strategies’ success and paid investors (and themselves) 

millions of dollars in fake profits using, in substantial part, other investor funds—

i.e., Ponzi payments.

Defendants contest these allegations and maintain that they have not violated 

any securities law. 

B. Procedural Background

The SEC filed its Complaint under seal, (Dkt. #1), and promptly filed an 

Emergency Ex Parte Motion for Temporary Restraining Order, Preliminary 

Injunction, Asset Freeze, and Other Ancillary Emergency Relief (“TRO Application”), 

(Dkt. #4). On October 11, 2023, after conducting an ex parte hearing, the Court 

granted the SEC’s motion in part and issued a Temporary Restraining Order, Asset 

Freeze Order, Document Preservation Order, and orders mandating a Sworn 

Accounting and Expedited Discovery (“TRO”). (Dkt. #16). 

After granting two continuances at Defendants’ request, the Court held a 

hearing on the SEC’s motion for a preliminary injunction on November 30, 2023. 

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However, instead of presenting argument or evidence, the parties informed the Court 

that they had reached an agreement regarding entry of an injunction. That same day, 

the Court entered the parties’ Agreed Preliminary Injunction and Order Extending 

Asset Freeze and Other Ancillary Relief as to Defendants, wherein Defendants 

agreed to a number of enjoining provisions and an asset freeze, although they

specifically did not admit any “allegations made in the SEC’s Complaint and TRO 

Application.” (Dkt. #49). 

At the hearing, Defendants also indicated that they intended to move for the 

dissolution or modification of the asset freeze. Nearly two months later, Defendants 

filed an emergency motion to dissolve or, alternatively, modify the asset freeze, 

arguing that they have sufficient assets to satisfy the almost $130 million 

disgorgement the SEC seeks. (Dkt. #61). The SEC responded in opposition, 

(Dkt. #74), and subsequently moved for the appointment of a receiver to manage and 

preserve Defendants’ assets, (Dkt. #77). The Court now considers both motions in 

turn.

II. MODIFICATION OF ASSET FREEZE

“When reviewing a request to modify or terminate [an asset freeze], the Court 

must consider whether doing so is in the best interests of the defrauded investors.” 

SEC v. Heartland Grp. Ventures, LLC, No. 4:21-CV-01310-O, 2022 WL 1527542, at 

*2 (N.D. Tex. Mar. 18, 2022) (cleaned up), report and recommendation adopted, 2022 

WL 1523471 (N.D. Tex. May 13, 2022). “The touchstone of the Court’s inquiry is 

‘equity’ and a party seeking to unfreeze assets must establish that the funds he seeks 

to release are untainted and that there are sufficient funds to satisfy any 

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disgorgement remedy that might be ordered in the event a violation is established at 

trial.” Id. (citations omitted).

In their Emergency Motion to Dissolve or, Alternatively, Modify the Asset 

Freeze Order, Defendants present the following three “options” to the Court: 

(1) dissolve the asset freeze entirely, (2) limit the asset freeze to Defendants’ claimed 

interest in seven properties, or (3) modify the asset freeze to pay business expenses, 

living expenses, and attorneys’ fees from liquid assets. (Dkt. #61). However, 

Defendants have not shown that any of these three options are in the best interests 

of defrauded investors, that the assets they are seeking to unfreeze are untainted, or 

that there will be sufficient funds remaining available to satisfy a disgorgement 

order. Accordingly, the Court denies this motion without prejudice. And, as detailed 

below, see infra Section III, the Court finds that a receiver will be in the best position 

to evaluate these options, to obtain independent valuation of assets and properties, 

and to make necessary payments from among the liquid funds. If payments are 

required in the interim,1 Defendants may submit a renewed motion with the proper 

showings as detailed above. 

III. APPOINTMENT OF RECEIVER

A. Legal Standard for Appointment of Receiver

A court’s equitable power to appoint a receiver in SEC civil enforcement actions 

is well-established. SEC v. First Fin. Grp. of Tex., 645 F.2d 429, 438 (5th Cir. Unit A 

1 The Court notes that Defendants have labeled their motion as an emergency and 

claim that certain properties are at imminent risk, yet provide no explanation for why they 

waited two months to file said motion. 

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May 1981). Indeed, “the appointment of a temporary receiver is often a necessary 

ancillary form of relief in a SEC civil enforcement action for injunctive relief.” Id.

Particularly, “in instances in which the corporate defendant, through its 

management, has defrauded members of the investing public,” the Fifth Circuit has 

found the district court’s appointment of a temporary receiver to be even more 

critical. Id.

The parties disagree about the applicable standard for appointment of a

receiver. The SEC argues that the First Financial standard applies. Under that 

standard, a court may appoint a receiver simply upon a “prima facie showing of fraud 

and mismanagement.” SEC v. Barton, 79 F.4th 573, 578 (5th Cir. 2023) (quoting First 

Fin., 645 F.2d at 438). In contrast, Defendants argue that the more demanding 

Netsphere standard applies. See Netsphere, Inc. v. Baron, 703 F.3d 296 (5th Cir. 2012). 

Under this standard, a court should only appoint a receiver “where there is a clear 

necessity to protect a party’s interest in property, legal and less drastic equitable 

remedies are inadequate, and the benefits of receivership outweigh the burdens on 

the affected parties.” Id. at 305. 

The Fifth Circuit recently provided guidance on the applicability of these

standards. When “the SEC [has] already obtained injunctive relief,” the First 

Financial standard applies, meaning that the SEC must only make a prima facie 

showing of fraud and mismanagement. Barton, 79 F.4th at 578. In this circumstance, 

the receiver is an “adjunct to” and a “necessary implementation of [the] injunctive 

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relief.” Id. (cleaned up). However, when no injunctive relief has been issued, the more 

onerous Netsphere standard applies. Id. at 578–79. 

The Court agrees with the SEC that the First Financial standard applies here. 

As noted herein, the Court initially entered a TRO in this case, which was premised 

on the determination that “the SEC has clearly demonstrated both a reasonable 

likelihood that the Defendants are engaged or about to engage in practices that 

violate the federal securities laws and that an irreparable injury is imminent.” 

(Dkt. #16 at 7). This Court further explained that:

The SEC has made a sufficient and proper showing in support of the 

relief granted herein . . . by evidence establishing a prima facie case and 

reasonable likelihood that Defendants have engaged in, are engaging in, 

are about to engage in, and unless restrained and enjoined will continue 

to engage in transactions, acts, practices, and courses of business that 

constitute violations of [federal securities laws]. 

(Dkt. #16 at 8–9). The standard for obtaining a temporary restraining order is the 

same as that for obtaining a preliminary injunction. See Bowling v. Dahlheimer, No. 

4:18-CV-00610-ALM-CAN, 2018 WL 6582826, at *1 (E.D. Tex. Oct. 3, 2018). Indeed, 

a TRO has been aptly described as “simply a highly accelerated and temporary form 

of preliminary injunctive relief.” Lee v. Verizon Commc’ns, Inc., No. 3:12–CV–4834–

D, 2012 WL 6089041, at *1 n.2 (N.D. Tex. Dec. 7, 2012). Accordingly, at the time of 

the preliminary injunction hearing, the Court had already concluded that the SEC 

had presented a prima facie case and that there was a reasonable likelihood that 

Defendants had violated, and continued to violate, federal securities laws.

Nothing that occurred at the preliminary injunction hearing changed the 

Court’s analysis of the SEC’s evidence. To the contrary, rather than contest the SEC’s 

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evidence at the hearing, the Defendants agreed to a preliminary injunction. See 

(Dkt. #49 at 2) (“The Defendants . . . agree to the preliminary injunctive relief set 

forth in this order.” (emphasis added)). Nonetheless, Defendants assert that the 

Agreed Preliminary Injunction does not constitute “injunctive relief” because they 

agreed to the injunction and did not admit to the SEC’s allegations. (Dkt. #86 at 9–

10). This puzzling argument fails.

To begin, that Defendants voluntarily agreed to be enjoined does not change 

the fact that the Court has entered injunctive relief—which has remained effective 

since it was entered and will remain effective until further order. In this regard,

Barton does not cabin the application of the First Financial standard to instances 

where the Court has held a contested preliminary injunction hearing. Instead, the 

court distinguished Netsphere from First Financial based on the fact that “the SEC 

already obtained injunctive relief” in First Financial, which was not the case in 

Netsphere. Barton, 79 F.4th at 578. Here, as in First Financial, the SEC has obtained 

injunctive relief. And a receiver is a “necessary implementation of [that] injunctive 

relief,” whether the injunction was agreed to or not. Id. (cleaned up).

Moreover, Defendants ignore that the Agreed Preliminary Injunction entered 

by the Court was grounded in its preexisting determination that evidence already 

submitted by the SEC “made a sufficient and proper showing in support of [injunctive 

relief] . . . by evidence establishing a prima facie case” that Defendants have engaged 

in violations of the antifraud provisions of the federal securities laws. (Dkt. #16 at 8–

9). Of course, Defendants had the opportunity to present evidence and argument at 

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the preliminary injunction hearing challenging the SEC’s evidence and the Court’s 

conclusion that such evidence met the prima facie standard. Defendants’ failure to do 

so refutes, rather than supports, Defendants’ post hoc position that the SEC lacked 

evidence establishing a prima facie case.

Since the SEC has obtained injunctive relief, first in the form of a TRO and 

later in an Agreed Preliminary Injunction, both of which were premised on the same, 

unchallenged evidence submitted by the SEC, the First Financial standard applies.

Thus, the SEC is only required to make a prima facie showing of fraud and 

mismanagement. See First Fin., 645 F.2d at 438.

B. The Appointment of a Receiver is Warranted.

As explained herein, the Court found that the SEC had made a prima facie

showing of fraud and mismanagement when it granted a TRO, and that finding 

remained in place when the Court entered an Agreed Preliminary Injunction. The 

Court reaffirms that finding now. 

The SEC has presented comprehensive evidence demonstrating that 

Defendants misrepresented GK Strategies’ novelty, misstated and omitted crucial 

details about their “cash flow” model and its efficacy, misrepresented their “FinTech” 

companies and failed to disclose that they were wholly owned by Defendants, and 

made Ponzi Payments. Meanwhile, Defendants have failed to overcome this evidence.

Taking into consideration the exhibits and affidavits attached in support of 

Defendants’ opposition to injunctive relief and their motion to dissolve or modify the 

asset freeze, the Court still finds that Defendants have failed to rebut the SEC’s 

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evidence.2

Whether the SEC will ultimately prove that Defendants violated the securities 

laws for which it sued is not the question before the Court at this stage. Instead, the 

Court is merely tasked with assessing whether the SEC has provided evidence 

establishing a prima facie case of fraud and mismanagement. And the Court finds 

that it has. Further, the Court finds that, based on the record in these proceedings, 

the appointment of a receiver in this action is necessary and appropriate for the 

purposes of marshaling and preserving all assets of Defendants Nanban Ventures,

GSM, Himalayan, and Centum (“Receivership Assets”). Therefore, the Court will 

appoint a receiver. 

It is therefore ORDERED, ADJUDGED, and DECREED that:

1. This Court hereby takes exclusive jurisdiction and possession of the 

assets, of whatever kind and wherever situated, of the following Defendants: 

• Nanban Ventures LLC; 

• GSM Eternal LLC a/k/a NorthStars FinTech; 

• Himalayan FinTech LLC; and 

• Centum FinTech LLC a/k/a Sunshines FinTech 

2 Defendants continue to focus on the quantity of documents that they have produced, 

rather than the substance of those documents. While Defendants have attached over one 

hundred documents to their motion, (Dkt. #61), they have still failed to establish that they 

have sufficient assets to satisfy a potential disgorgement award. As the SEC has highlighted, 

questions remain as to the quantity, value, and disposition of Defendants’ assets. To use 

Defendants’ own words, they have provided “too little, too late.” (Dkt. #86 at 5). Accordingly, 

the Court finds that a receiver would be in the best position to identify and determine the 

value of those assets, and secure, preserve, and potentially monetize that value for the benefit 

of investors.

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(collectively, “Receivership Defendants”).

2. Until further Order of this Court, Anthony Box of the law firm Gray 

Reed & McGraw LLP is hereby appointed to serve without bond as receiver (the 

“Receiver”) for the estates of the Receivership Defendants.

i. Asset Freeze

3. Except as otherwise specified herein, all Receivership Assets remain 

frozen in accordance with the Agreed Preliminary Injunction and Order Extending 

Asset Freeze and Other Ancillary Relief as to Defendants, (Dkt. #49), until further 

order of this Court. Accordingly, all persons and entities with direct or indirect control 

over any Receivership Assets, other than the Receiver, are hereby restrained and 

enjoined from directly or indirectly transferring, setting off, receiving, changing, 

selling, pledging, assigning, liquidating, or otherwise disposing of or withdrawing 

such assets. This freeze shall include, but not be limited to, Receivership Assets that 

are on deposit with financial institutions such as banks, brokerage firms, and mutual 

funds.

ii. General Powers and Duties of Receiver

4. The Receiver shall have all powers, authorities, rights, and privileges 

heretofore possessed by the officers, directors, managers, and general and limited 

partners of the Receivership Defendants under applicable state and federal law, by 

the governing charters, by-laws, articles, and/or agreements, in addition to all powers 

and authority of a receiver at equity, and all powers conferred upon a receiver by the 

provisions of 28 U.S.C. §§ 754, 959, and 1692, and Federal Rule of Civil Procedure 66.

5. The trustees, directors, officers, managers, employees, investment 

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advisors, accountants, attorneys, and other agents of the Receivership Defendants 

(except for the counsel of record in the above captioned case) are hereby dismissed 

and the powers of any general partners, directors, and/or managers are hereby 

suspended. Such persons and entities shall have no authority with respect to the 

Receivership Defendants’ operations or assets, except to the extent as may hereafter 

be expressly granted by the Receiver. The Receiver shall assume and control the 

operation of the Receivership Defendants and shall pursue and preserve all of their 

claims.

6. No person holding or claiming any position of any sort with any of the 

Receivership Defendants shall possess any authority to act by or on behalf of any of 

the Receivership Defendants.

7. Subject to the specific provisions in Sections iii through xiv below, the 

Receiver shall have the following general powers and duties:

A. To use reasonable efforts to determine the nature, location, and 

value of all property interests of the Receivership Defendants, 

including, but not limited to, monies, funds, securities, credits, 

effects, goods, chattels, lands, premises, leases, claims, rights,

and other assets, together with all rents, profits, dividends, 

interest, or other income attributable thereto, of whatever kind, 

which the Receivership Defendants own, possess, have a 

beneficial interest in, or control directly or indirectly 

(“Receivership Property” or, collectively, the “Receivership 

Estates”);

B. To take custody, control, and possession of all Receivership 

Property and records relevant thereto from the Receivership 

Defendants; to sue for and collect, recover, receive, and take into 

possession from third parties all Receivership Property and 

records relevant thereto;

C. To manage, control, operate, and maintain the Receivership 

Estates and hold in his possession, custody, and control all 

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Receivership Property, pending further Order of this Court;

D. To use Receivership Property for the benefit of the Receivership 

Estates, making payments and disbursements, and incurring 

expenses as may be necessary or advisable in the ordinary course 

of business in discharging his duties as Receiver;

E. To take any action which, prior to the entry of this Order, could 

have been taken by the officers, directors, partners, managers, 

trustees, and agents of the Receivership Defendants;

F. To engage and employ persons in his discretion to assist him in 

carrying out his duties and responsibilities hereunder, including, 

but not limited to, accountants, attorneys, securities traders, 

registered representatives, financial or business advisers, 

liquidating agents, real estate agents, forensic experts, brokers, 

traders, or auctioneers;

G. To take such action as necessary and appropriate for the 

preservation of Receivership Property or to prevent the 

dissipation or concealment of Receivership Property;

H. To issue subpoenas for documents and testimony consistent with 

the Federal Rules of Civil Procedure; 

I. To bring such legal actions based on law or equity in any state, 

federal, or foreign court as the Receiver deems necessary or 

appropriate in discharging his duties as Receiver;

J. To pursue, resist, and defend all suits, actions, claims, and 

demands which may now be pending or which may be brought by 

or asserted against the Receivership Estates; and

K. To take such other action as may be approved by this Court.

iii. Access to Information

8. Krishnan, Shanmugan, and Gounder (collectively, the “Founders”)

and the past and/or present officers, directors, agents, managers, general and limited 

partners, trustees, attorneys, accountants, and employees of the Receivership 

Defendants, as well as those acting in their place, are hereby ordered and directed to 

preserve and turn over to the Receiver forthwith all paper and electronic information 

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of, and/or relating to, the Receivership Defendants and/or all Receivership Property; 

such information shall include but not be limited to books, records, documents, 

accounts, and all other instruments and papers.

9. Within thirty (30) days of the entry of this Order, the Receivership 

Defendants shall file with the Court and serve upon the Receiver and the SEC a 

sworn statement, listing: (a) the identity, location, and estimated value of all 

Receivership Property; (b) all employees (and job titles thereof), other personnel, 

attorneys, accountants, and any other agents or contractors of the Receivership 

Defendants; and (c) the names, addresses, and amounts of claims of all known 

creditors of the Receivership Defendants.

10. Within twenty (20) days of the entry of this Order, the Receivership 

Defendants shall file with the Court and serve upon the Receiver and the SEC a 

sworn statement and accounting, with complete documentation, covering the period 

from December 31, 2020, to the present:

A. Of all Receivership Property, wherever located, held by or in the 

name of the Receivership Defendants, or in which any of them, 

directly or indirectly, has or had any beneficial interest, or over 

which any of them maintained or maintains and/or exercised or 

exercises control, including, but not limited to: (a) all securities, 

investments, funds, real estate, automobiles, jewelry, and other 

assets, stating the location of each; and (b) any and all accounts, 

including all funds held in such accounts, with any bank, 

brokerage or other financial institution held by, in the name of, 

or for the benefit of any of them, directly or indirectly, or over 

which any of them maintained or maintains and/or exercised or 

exercises any direct or indirect control, or in which any of them 

had or has a direct or indirect beneficial interest, including the 

account statements from each bank, brokerage or other financial 

institution;

B. Identifying every account at every bank, brokerage, or other 

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financial institution: (a) over which Receivership Defendants 

have signatory authority; and (b) opened by, in the name of, or for 

the benefit of, or used by, the Receivership Defendants;

C. Identifying all credit, bank, charge, debit, or other deferred 

payment card issued to or used by each Receivership Defendant, 

including but not limited to the issuing institution, the card or 

account number(s), all persons or entities to which a card was 

issued and/or with authority to use a card, the balance of each 

account and/or card as of the most recent billing statement, and 

all statements for the last twelve months;

D. Of all assets received by any of the Receivership Defendants from 

any person or entity, including the value, location, and disposition 

of any assets so received;

E. Of all funds received by the Receivership Defendants, and each of 

them, in any way related, directly or indirectly, to the conduct 

alleged in the SEC’s Complaint. The submission must clearly 

identify, among other things, all investors, the securities they 

purchased, the date and amount of their investments, and the 

current location of such funds;

F. Of all expenditures exceeding $1,000 made by any of them, 

including those made on their behalf by any person or entity; and

G. Of all transfers of assets made by any of them.

11. Within thirty (30) days of the entry of this Order, the Receivership 

Defendants shall provide to the Receiver and the SEC copies of the Receivership 

Defendants’ federal income tax returns for 2020–2023 with all relevant and necessary 

underlying documentation.

12. The Founders and the Receivership Defendants’ past and/or present 

officers, directors, agents, attorneys, managers, shareholders, employees, 

accountants, debtors, creditors, managers, and general and limited partners, and 

other appropriate persons or entities shall answer under oath to the Receiver all 

questions which the Receiver may put to them and produce all documents as required 

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by the Receiver regarding the business of the Receivership Defendants, or any other 

matter relevant to the operation or administration of the receivership or the collection 

of funds due to the Receivership Defendants. In the event that the Receiver deems it 

necessary to require the appearance of the aforementioned persons or entities, the 

Receiver shall make its discovery requests in accordance with the Federal Rules of 

Civil Procedure.

13. The Receiver shall have the power to issue subpoenas to compel 

testimony of persons or production of records, consistent with the Federal Rules of 

Civil Procedure and applicable Local Rules, except for the provisions of Federal Rule

of Civil Procedure 26(d)(1), concerning any subject matter within the powers and 

duties granted by this Order.

14. The Receivership Defendants are required to assist the Receiver in 

fulfilling his duties and obligations. As such, they must respond promptly and 

truthfully to all requests for information and documents from the Receiver.

iv. Access to Books, Records and Accounts

15. The Receiver is authorized to take immediate possession of all assets, 

bank accounts or other financial accounts, books, and records and all other documents 

or instruments relating to the Receivership Defendants. All persons and entities 

having control, custody, or possession of any Receivership Property are hereby 

directed to turn such property over to the Receiver.

16. The Receivership Defendants, as well as their agents, servants, 

employees, attorneys, any persons acting for or on behalf of the Receivership 

Defendants, and any persons receiving notice of this Order by personal service, 

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facsimile transmission or otherwise, having possession of the property, business, 

books, records, accounts, or assets of the Receivership Defendants are hereby directed 

to deliver the same to the Receiver, his agents, and/or employees.

17. All banks, brokerage firms, financial institutions, and other persons 

or entities which have possession, custody or control of any assets or funds held by, 

in the name of, or for the benefit of, directly or indirectly, and of the Receivership 

Defendants that receive actual notice of this Order by personal service, facsimile 

transmission or otherwise shall:

A. Not liquidate, transfer, sell, convey, or otherwise transfer any 

assets, securities, funds, or accounts in the name of or for the 

benefit of the Receivership Defendants except upon instructions 

from the Receiver;

B. Not exercise any form of set-off, alleged set-off, lien, or any form 

of self-help whatsoever, or refuse to transfer any funds or assets 

to the Receiver’s control without the permission of this Court;

C. Within five (5) business days of receipt of that notice, file with the 

Court and serve on the Receiver and counsel for the SEC a 

certified statement setting forth, with respect to each such 

account or other asset, the balance in the account or description 

of the assets as of the close of business on the date of receipt of 

the notice; and

D. Cooperate expeditiously in providing information and 

transferring funds, assets, and accounts to the Receiver or at the 

direction of the Receiver.

v. Access to Real and Personal Property

18. The Receiver is authorized to take immediate possession of all 

personal property of the Receivership Defendants, wherever located, including but 

not limited to electronically stored information, computers, laptops, hard drives, 

external storage drives, and any other such memory, media or electronic storage 

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devices, books, papers, data processing records, evidence of indebtedness, bank 

records and accounts, savings records and accounts, brokerage records and accounts, 

certificates of deposit, stocks, bonds, debentures, and other securities and 

investments, contracts, mortgages, furniture, office supplies, and equipment.

19. The Receiver is authorized to take immediate possession of all real 

property of the Receivership Defendants, wherever located, including but not limited 

to all ownership and leasehold interests and fixtures. Upon receiving actual notice of 

this Order by personal service, facsimile transmission, or otherwise, all persons other 

than law enforcement officials acting within the course and scope of their official 

duties, are (without the express written permission of the Receiver) prohibited from: 

(a) entering such premises; (b) removing anything from such premises; or (c) 

destroying, concealing, or erasing anything on such premises.

20. In order to execute the express and implied terms of this Order, the 

Receiver is authorized to change door locks to the premises described above. The 

Receiver shall have exclusive control of the keys. The Receivership Defendants, or 

any other person acting or purporting to act on their behalf, are ordered not to change 

the locks in any manner, nor to have duplicate keys made, nor shall they have keys 

in their possession during the term of the receivership.

21. The Receiver is authorized to open all mail directed to or received by 

or at the offices or post office boxes of the Receivership Defendants, and to inspect all 

mail opened prior to the entry of this Order, to determine whether items or 

information therein fall within the mandates of this Order.

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vi. Notice to Third Parties

22. The Receiver shall promptly give notice of his appointment to all 

known officers, directors, agents, employees, shareholders, creditors, debtors, 

managers, and general and limited partners of the Receivership Defendants, as the 

Receiver deems necessary or advisable to effectuate the operation of the receivership.

23. All persons and entities owing any obligation, debt, or distribution 

with respect to an ownership interest to any Receivership Defendant shall, until 

further ordered by this Court, pay all such obligations in accordance with the terms 

thereof to the Receiver and its receipt for such payments shall have the same force 

and effect as if the Receivership Defendant had received such payment.

24. In furtherance of his responsibilities in this matter, the Receiver is 

authorized to communicate with, and/or serve this Order upon, any person, entity, or 

government office that he deems appropriate to inform them of the status of this 

matter and/or the financial condition of the Receivership Estates. All government 

offices which maintain public files of security interests in real and personal property 

shall, consistent with such office’s applicable procedures, record this Order upon the 

request of the Receiver or the SEC.

25. The Receiver is authorized to instruct the United States Postmaster 

to hold and/or reroute mail which is related, directly or indirectly, to the business, 

operations, or activities of any of the Receivership Defendants (the “Receiver’s Mail”), 

including all mail addressed to, or for the benefit of, the Receivership Defendants.

The Postmaster shall not comply with, and shall immediately report to the Receiver, 

any change of address or other instruction given by anyone other than the Receiver 

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concerning the Receiver’s Mail. The Receivership Defendants shall not open any of 

the Receiver’s Mail and shall immediately turn over such mail, regardless of when 

received, to the Receiver. All personal mail of any Founders, and/or any mail 

appearing to contain privileged information, and/or any mail not falling within the 

mandate of the Receiver, shall be released to the named addressee by the Receiver.

The foregoing instructions shall apply to any proprietor, whether individual or entity, 

of any private mail box, depository, business or service, or mail courier or delivery 

service, hired, rented, or used by the Receivership Defendants. The Receivership 

Defendants shall not open a new mailbox, or take any steps or make any 

arrangements to receive mail in contravention of this Order, whether through the 

U.S. mail, a private mail depository, or courier service.

26. Subject to payment for services provided, any entity furnishing water, 

electric, telephone, sewage, garbage, or trash removal services to the Receivership 

Defendants shall maintain such service and transfer any such accounts to the 

Receiver unless instructed to the contrary by the Receiver.

vii. Injunction Against Interference with Receiver

27. The Receivership Defendants and all persons receiving notice of this 

Order by personal service, facsimile, or otherwise, are hereby restrained and enjoined 

from directly or indirectly taking any action or causing any action to be taken, without 

the express written agreement of the Receiver, which would:

A. Interfere with the Receiver’s efforts to take control, possession, or 

management of any Receivership Property; such prohibited 

actions include but are not limited to, using self-help or executing 

or issuing or causing the execution or issuance of any court

attachment, subpoena, replevin, execution, or other process for 

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the purpose of impounding or taking possession of or interfering 

with or creating or enforcing a lien upon any Receivership 

Property;

B. Hinder, obstruct, or otherwise interfere with the Receiver in the 

performance of his duties; such prohibited actions include but are 

not limited to, concealing, destroying, or altering records or 

information;

C. Dissipate or otherwise diminish the value of any Receivership 

Property; such prohibited actions include but are not limited to, 

releasing claims or disposing, transferring, exchanging, 

assigning, or in any way conveying any Receivership Property, 

enforcing judgments, assessments, or claims against any 

Receivership Property or any Receivership Defendant, 

attempting to modify, cancel, terminate, call, extinguish, revoke,

or accelerate (the due date) of any lease, loan, mortgage, 

indebtedness, security agreement, or other agreement executed 

by any Receivership Defendant or which otherwise affects any 

Receivership Property; or

D. Interfere with or harass the Receiver, or interfere in any manner 

with the exclusive jurisdiction of this Court over the Receivership 

Estates.

28. The Receivership Defendants shall cooperate with and assist the 

Receiver in the performance of his duties. 

29. The Receiver shall promptly notify the Court and the SEC’s counsel of 

any failure or apparent failure of any person or entity to comply in any way with the 

terms of this Order.

viii. Stay of Litigation

30. As set forth in detail below, the following proceedings, excluding the 

instant proceeding and all police or regulatory actions and actions of the SEC related 

to the above-captioned enforcement action, are stayed until further Order of this 

Court:

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All civil legal proceedings of any nature, including, but not limited to, 

bankruptcy proceedings, arbitration proceedings, foreclosure actions, 

default proceedings, or other actions of any nature involving: (a) the 

Receiver, in his capacity as Receiver; (b) any Receivership Property, 

wherever located; (c) any of the Receivership Defendants, including 

subsidiaries and partnerships; or (d) any of the Receivership 

Defendants’ past or present officers, directors, managers, agents, or 

general or limited partners sued for, or in connection with, any action 

taken by them while acting in such capacity of any nature, whether as 

plaintiff, defendant, third-party plaintiff, third-party defendant, or 

otherwise (such proceedings are hereinafter referred to as “Ancillary 

Proceedings”).

31. The parties to any and all Ancillary Proceedings are enjoined from 

commencing or continuing any such legal proceeding, or from taking any action, in 

connection with any such proceeding, including, but not limited to, the issuance or 

employment of process.

32. All Ancillary Proceedings are stayed in their entirety, and all Courts 

having any jurisdiction thereof are enjoined from taking or permitting any action 

until further Order of this Court. Further, as to a cause of action accrued or accruing 

in favor of one or more of the Receivership Defendants against a third person or party, 

any applicable statute of limitation is tolled during the period in which this injunction 

against commencement of legal proceedings is in effect as to that cause of action.

ix. Managing Assets

33. For each of the Receivership Estates, the Receiver shall establish one 

or more custodial accounts at a federally insured bank to receive and hold all cash 

equivalent Receivership Property (the “Receivership Funds”).

34. The Receiver’s deposit account shall be entitled “Receiver’s Account, 

Estate of Nanban Ventures LLC, GSM Eternal LLC a/k/a NorthStars FinTech, 

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Himalayan FinTech LLC, and Centum FinTech LLC a/k/a Sunshines FinTech” 

together with the name of the action.

35. The Receiver may, without further Order of this Court, transfer, 

compromise, or otherwise dispose of any Receivership Property, other than real 

estate, in the ordinary course of business, on terms and in the manner the Receiver 

deems most beneficial to the Receivership Estate, and with due regard to the 

realization of the true and proper value of such Receivership Property.

36. Subject to Paragraph 38, immediately below, the Receiver is 

authorized to locate, list for sale or lease, engage a broker for sale or lease, cause the 

sale or lease, and take all necessary and reasonable actions to cause the sale or lease 

of all real property in the Receivership Estates, either at public or private sale, on 

terms and in the manner the Receiver deems most beneficial to the Receivership 

Estate, and with due regard to the realization of the true and proper value of such 

real property.

37. Upon further Order of this Court, pursuant to such procedures as may 

be required by this Court and additional authority such as 28 U.S.C. §§ 2001 and 

2004, the Receiver will be authorized to sell, and transfer clear title to, all real 

property in the Receivership Estates.

38. The Receiver is authorized to take all actions to manage, maintain, 

and/or wind-down business operations of the Receivership Estates, including making 

legally required payments to creditors, employees, and agents of the Receivership 

Estates and communicating with vendors, investors, governmental and regulatory 

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authorities, and others, as appropriate.

39. The Receiver shall take all necessary steps to enable the Receivership 

Funds to obtain and maintain the status of a taxable “Settlement Fund,” within the 

meaning of Section 468B of the Internal Revenue Code and of the regulations.

x. Investigate and Prosecute Claims

40. Subject to the requirement in Section vii above that leave of this Court 

is required to resume or commence certain litigation, the Receiver is authorized, 

empowered, and directed to investigate, prosecute, defend, intervene in or otherwise 

participate in, compromise, and/or adjust actions in any state, federal, or foreign court 

or proceeding of any kind as may in his discretion, and in consultation with SEC 

counsel, be advisable or proper to recover and/or conserve Receivership Property.

41. Subject to his obligation to expend receivership funds in a reasonable 

and cost-effective manner, the Receiver is authorized, empowered, and directed to 

investigate the manner in which the financial and business affairs of the Receivership 

Defendants were conducted and (after obtaining leave of this Court) to institute such 

actions and legal proceedings, for the benefit and on behalf of the Receivership Estate, 

as the Receiver deems necessary and appropriate; the Receiver may seek, among 

other legal and equitable relief, the imposition of constructive trusts, disgorgement 

of profits, asset turnover, avoidance of fraudulent transfers, rescission and 

restitution, collection of debts, and such other relief from this Court as may be 

necessary to enforce this Order. Where appropriate, the Receiver should provide prior 

notice to Counsel for the SEC before commencing investigations and/or actions.

42. The Receiver hereby holds, and is therefore empowered to waive, all 

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privileges, including the attorney-client privilege, held by all Receivership 

Defendants.

43. The receiver has a continuing duty to ensure that there are no 

conflicts of interest between the Receiver, his Retained Personnel (as that term is 

defined below), and the Receivership Estate.

xi. Bankruptcy Filing

44. The Receiver may seek authorization of this Court to file voluntary 

petitions for relief under Title 11 of the United States Code (the “Bankruptcy Code”) 

for the Receivership Defendants. If a Receivership Defendant is placed in bankruptcy 

proceedings, the Receiver may become and may be empowered to operate each of the 

Receivership Estates as a debtor in possession. In such a situation, the Receiver shall 

have all of the powers and duties as provided a debtor in possession under the 

Bankruptcy Code to the exclusion of any other person or entity. Pursuant to 

Paragraph 4 above, the Receiver is vested with management authority for all 

Receivership Defendants and may therefore file and manage a Chapter 11 petition.

See In re Bayou Group, LLC, 564 F.3d 541, 548–49 (2nd Cir. 2009).

45. The provisions of Section viii above bar any person or entity, other 

than the Receiver, from placing any of the Receivership Defendants in bankruptcy 

proceedings.

xii. Liability of Receiver

46. Until further Order of this Court, the Receiver shall not be required 

to post bond or give an undertaking of any type in connection with his fiduciary 

obligations in this matter.

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47. The Receiver and his agents, acting within the scope of such agency 

(“Retained Personnel”) are entitled to rely on all outstanding rules of law and Orders 

of this Court and shall not be liable to anyone for their own good faith compliance 

with any order, rule, law, judgment, or decree. In no event shall the Receiver or 

Retained Personnel be liable to anyone for their good faith compliance with their 

duties and responsibilities as Receiver or Retained Personnel, nor shall the Receiver 

or Retained Personnel be liable to anyone for any actions taken or omitted by them 

except upon a finding by this Court that they acted or failed to act as a result of 

malfeasance, bad faith, gross negligence, or in reckless disregard of their duties.

48. This Court shall retain jurisdiction over any action filed against the 

Receiver or Retained Personnel based upon acts or omissions committed in their 

representative capacities.

49. In the event the Receiver decides to resign, the Receiver shall first 

give written notice to the SEC’s counsel of record and the Court of its intention, and 

the resignation shall not be effective until the Court appoints a successor. The 

Receiver shall then follow such instructions as the Court may provide.

xiii. Recommendations and Reports

50. The Receiver is authorized, empowered, and directed to develop a plan 

for the fair, reasonable, and efficient recovery and liquidation of all remaining, 

recovered, and recoverable Receivership Property (the “Liquidation Plan”).

51. Within ninety (90) days of the entry date of this Order, the Receiver 

shall file the Liquidation Plan in the above-captioned action, with service copies to 

counsel of record.

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52. Within thirty (30) days after the end of each calendar quarter, the 

Receiver shall file and serve a full report and accounting of each Receivership Estate 

(the “Quarterly Status Report”), reflecting (to the best of the Receiver’s knowledge as 

of the period covered by the report) the existence, value, and location of all 

Receivership Property, and of the extent of liabilities, both those claimed to exist by 

others and those the Receiver believes to be legal obligations of the Receivership 

Estates.

53. The Quarterly Status Report shall contain the following:

A. A summary of the operations of the Receiver;

B. The amount of cash on hand, the amount and nature of accrued 

administrative expenses, and the amount of unencumbered funds 

in the estate;

C. A schedule of all the Receiver’s receipts and disbursements 

(attached as Exhibit A to the Quarterly Status Report), with one 

column for the quarterly period covered and a second column for 

the entire duration of the receivership;

D. A description of all known Receivership Property, including 

approximate or actual valuations, anticipated or proposed 

dispositions, and reasons for retaining assets where no 

disposition is intended;

E. A description of liquidated and unliquidated claims held by the 

Receivership Estate, including the need for forensic and/or 

investigatory resources; approximate valuations of claims; and 

anticipated or proposed methods of enforcing such claims 

(including likelihood of success in: (a) reducing the claims to 

judgment; and (b) collecting such judgments);

F. A list of all known creditors with their addresses and the amounts 

of their claims;

G. The status of Creditor Claims Proceedings, after such proceedings 

have been commenced; and

H. The Receiver’s recommendations for a continuation or 

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discontinuation of the receivership and the reasons for the 

recommendations.

54. On the request of the SEC, the Receiver shall provide the SEC with 

any documentation that the SEC deems necessary to meet its reporting requirements, 

that is mandated by statute or Congress, or that is otherwise necessary to further the 

SEC’s mission.

55. The Court may refer to the Receiver any matters concerning the Asset 

Freeze, including any renewed request by Defendants to dissolve or modify the Asset 

Freeze. Upon the Court’s request, the Receiver shall prepare a formal report and 

issue a formal recommendation (“Report and Recommendation”) on the matter for 

which the Court has made a request. The Receiver shall reduce any formal Report 

and Recommendation to writing and shall file it electronically on the case docket via 

Electronic Case Filing. Any party who wishes to file an objection to the Receiver’s 

Report and Recommendation shall do so no later than fourteen (14) days from the 

filing date of the Receiver’s Report and Recommendation. The parties shall not 

include—and the Court will not consider—any evidence or argument that was not 

presented to the Receiver. 

xiv. Fees, Expenses, and Accountings

56. Subject to Paragraphs 57–63 immediately below, the Receiver need 

not obtain Court approval prior to the disbursement of Receivership Funds for 

expenses in the ordinary course of the administration and operation of the 

receivership. Further, prior Court approval is not required for payments of applicable 

federal, state, or local taxes.

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57. Subject to Paragraph 60 below, the Receiver is authorized to solicit 

persons and entities (“Retained Personnel”) to assist him in carrying out the duties 

and responsibilities described in this Order. The Receiver shall not engage any 

Retained Personnel without first obtaining an Order of the Court authorizing such 

engagement.

58. The Receiver and Retained Personnel are entitled to reasonable 

compensation and expense reimbursement from the Receivership Estates as 

described in the “Billing Instructions for Receivers in Civil Actions Commenced by 

the U.S. Securities and Exchange Commission” (the “Billing Instructions”) agreed to 

by the Receiver. Such compensation shall require the prior approval of the Court.

59. Within forty-five (45) days after the end of each calendar quarter, the 

Receiver and Retained Personnel shall apply to the Court for compensation and 

expense reimbursement from the Receivership Estates (the “Quarterly Fee 

Applications”). At least thirty (30) days prior to filing each Quarterly Fee Application 

with the Court, the Receiver will serve upon counsel for the SEC a complete copy of 

the proposed Quarterly Fee Application, together with all exhibits and relevant 

billing information in a format to be provided by SEC staff.

60. All Quarterly Fee Applications will be interim and will be subject to 

cost-benefit and final reviews at the close of the receivership. At the close of the 

receivership, the Receiver will file a final fee application, describing in detail the costs 

and benefits associated with all litigation and other actions pursued by the Receiver 

during the course of the receivership.

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61. Quarterly Fee Applications may be subject to a holdback in the 

amount of 20% of the amount of fees and expenses for each application filed with the 

Court. The total amounts held back during the course of the receivership will be paid 

out at the discretion of the Court as part of the final fee application submitted at the 

close of the receivership.

62. Each Quarterly Fee Application shall:

A. Comply with the terms of the Billing Instructions agreed to by the 

Receiver; and

B. Contain representations (in addition to the Certification required 

by the Billing Instructions) that: (a) the fees and expenses 

included therein were incurred in the best interests of the 

Receivership Estate; and (b) with the exception of the Billing 

Instructions, the Receiver has not entered into any agreement, 

written or oral, express or implied, with any person or entity 

concerning the amount of compensation paid or to be paid from 

the Receivership Estate, or any sharing thereof.

63. At the close of the Receivership, the Receiver shall submit a Final 

Accounting, in a format to be provided by SEC staff, as well as the Receiver’s final 

application for compensation and expense reimbursement.

xv. Access to Confidential Information and Documents

64. For purposes of the Protective Order, (Dkt. #35), the Receiver and 

Retained Personnel, as agents of the Court, constitute Court “personnel,” (Dkt. #35

¶ 9(h)), and are entitled to receive and use “Confidential Information” subject to the 

terms of the Protective Order.

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IV. SEALING MOTIONS

A. Defendants’ Motion to Seal its Appendix in Support of its Motion to 

Dissolve, or, Alternatively, Modify the Court’s Asset Freeze Order.

(Dkt. #58).

Before the Court is Defendants’ Motion to Seal its Appendix in Support of its 

Motion to Dissolve, or, Alternatively, Modify the Court’s Asset Freeze Order.

(Dkt. #58). Therein, Defendants move to file various exhibits under seal. The Court

has reviewed the exhibits that Defendants unambiguously seek to seal, (Dkt. #62,

#63), and finds that they contain confidential information such that there is good 

cause to file them under seal. See Binh Hoa Le v. Exeter Fin. Corp., 990 F.3d 410, 419 

(5th Cir. 2021). 

Defendants take alternative positions as to whether Exhibits D, E, and F 

should be filed under seal. Compare (Dkt. #58 at 11–12), with (Dkt. #58 at 16). To the 

extent that Defendants request to file these exhibits under seal, the Court denies 

Defendants’ motion without prejudice.3

B. The SEC’s Unopposed Motion to Seal Exhibits in Support of its Response 

to Defendants’ Emergency Motion to Dissolve, or, Alternatively, Modify 

the Court’s Asset Freeze Order. (Dkt. #75).

Before the Court is the SEC’s Unopposed Motion to Seal Exhibits in Support 

of its Response to Defendants’ Emergency Motion to Dissolve, or, Alternatively, 

Modify the Court’s Asset Freeze Order. (Dkt. #75). The SEC states that Defendants 

3 The Court notes that Exhibits D, E, and F are not currently filed under seal. 

(Dkt. #61, #43).

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have designated the documents in these exhibits as “Confidential Information,” and, 

therefore, they must be filed under seal. 

These arguments misunderstand the relationship between documents marked 

“confidential” within the context of discovery production and documents that are to 

be filed as part of the judicial record. The Fifth Circuit has made clear that “courts 

are duty-bound to protect public access to judicial proceedings and records,” a duty 

that is all too “easy to overlook” in the context of stipulated sealings, and that it is 

inappropriate to “presum[e] that whatever satisfies the lenient protective-order 

standard will necessarily satisfy the stringent sealing-order standard.” Binh Hoa Le, 

990 F.3d at 417–18. That’s because a strict balancing test applies to a sealing request 

once a document becomes a judicial record. Id. at 419. The Court must “undertake a 

case-by-case, document-by-document, line-by-line balancing of the public’s common 

law right of access against the interests favoring nondisclosure.” Id. (cleaned up). 

Courts are instructed to be “ungenerous with their discretion to seal judicial records.” 

Id. at 418.

The SEC, therefore, should have provided the Court with information 

sufficient to undertake this analysis in its request that the exhibits be filed under 

seal. But it did not. Instead, the SEC merely suggests that the exhibits should be 

sealed because they have been designated “confidential” by Defendants. Considering 

the public’s right of access to inspect judicial records and the presumption in favor of 

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disclosure, the Court finds that the SEC has failed to articulate sufficient reasons to 

support its motions to file under seal.

V. CONCLUSION

It is therefore ORDERED that the SEC’s Motion for Appointment of Receiver 

and Brief in Support, (Dkt. #77), is GRANTED. Anthony Box of the law firm Gray 

Reed & McGraw LLP is hereby APPOINTED to serve as receiver for the estates of 

the Receivership Defendants.

It is further ORDERED that Defendants’ Emergency Motion to Dissolve or, 

Alternatively, Modify the Asset Freeze Order, (Dkt. #61), is DENIED without 

prejudice.

It is further ORDERED that Defendants’ Corrected Motion for Leave to 

Exceed Page Limits Under Local Rule CV-7(a)(2), (Dkt. #60), is GRANTED and 

Defendants’ Emergency Motion to Dissolve or, Alternatively, Modify the Asset Freeze 

Order, (Dkt. #61), is deemed properly filed.

It is further ORDERED that Defendants’ Motion for Leave to Exceed Page 

Limits Under Local Rule CV-7(a)(2), (Dkt. #85), is GRANTED and Defendants’ 

Opposition to SEC’s Request to Appoint a Receiver, (Dkt. #86), is deemed properly 

filed. 

It is further ORDERED that Defendants’ Motion to Seal its Appendix in 

Support of its Motion to Dissolve, or, Alternatively, Modify the Court’s Asset Freeze 

Order, (Dkt. #58), is GRANTED in part and DENIED in part.

It is further ORDERED that all documents and exhibits referenced in

Defendants’ sealing motion, except for Exhibits D, E, and F, shall remain under seal. 

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It is further ORDERED that the SEC’s Unopposed Motion to Seal Exhibits in 

Support of its Response to Defendants’ Emergency Motion to Dissolve, or, 

Alternatively, Modify the Court’s Asset Freeze Order, (Dkt. #75), is DENIED 

without prejudice.

It is further ORDERED that the SEC’s exhibits, (Dkt. #76), shall remain 

under seal until Thursday, March 21, 2024. In the interim, either party may submit 

a renewed motion to seal that is consistent with Fifth Circuit precedent as explained 

in this order.

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