This case was last updated from U.S. District Courts on 11/27/2021 at 08:33:42 (UTC).

Securities and Exchange Commission v. Birnbaum

Case Summary

On September 28, 2021, the Securities and Exchange Commission (“Commission”), represented by Richard R. Best attorney at SEC’s New York regional office, filed a civil enforcement action against Jaeson Birnbaum (“Birnbaum'' or “Defendant”), seeking injunctive relief and disgorgement of all ill-gotten gains along with prejudgment interest for allegedly defrauding investors and selling them debt securities. This case was filed in the U.S. District Court in the Southern District of New York.

In the complaint, Plaintiff alleged that, “Birnbaum defrauded at least four investors in the course of selling them debt securities in his litigation funding business, Cash4Cases, Inc. (“Cash4Cases”). Birnbaum defrauded investors by, among other things, falsely promising them that their investments were secured by collateral, which did not exist or had already been pledged to others; by making misrepresentations  as  to  the  use  of  investor  funds;  and  by  misappropriating investors’ funds for personal use. Birnbaum was the President of Cash4Cases and he owned, controlled, and operated Cash4Cases as well as its affiliates. Cash4Cases operated in New York and New Jersey from around 2010 until January 2020.”

Plaintiff further alleged that, “In its litigation funding business, Cash4Cases made loans to individual tort litigants (the “Funded Litigants”), taking a security interest in their expected litigation recoveries up to the amount of the loan, plus interest. Cash4Cases funded the loans to the Funded Litigants in part through money borrowed from institutional lenders. Cash4Cases assigned those lenders security interests Cash4Cases held in the expected litigation recoveries of the Funded Litigants. Cash4Cases also raised money by selling its security interests in some Funded Litigants’ recoveries to institutional funders.”

Plaintiff also alleged that, “Cash4Cases also turned to individual investors for funding. Through Birnbaum, Cash4Cases sold individual investors Cash4Cases’ securities styled as promissory notes. Birnbaum and Cash4Cases purported to secure the promissory notes by pledging Cash4Cases’ security interests in certain Funded Litigants’ litigation recoveries to the individual investors. Birnbaum made several material misrepresentations to four individual investors to obtain their investments. Birnbaum also misappropriated investor funds from at least two of the individual investors to support his lifestyle and make Ponzi-like payments to earlier funders and investors.”

There are two claims for relief laid down by Plaintiff. The first claim deals with the alleged violations of and/or aiding and abetting violations of Section 17(a) of the Securities Act. The second claim for relief deals with the alleged violation of and/or aiding and abetting violations of Section 10(b) of the Exchange Act and Rules 10b-5(a), (b) and (c) thereunder.

In its prayer for relief Plaintiff has requested the court to permanently restrain and enjoin Birnbaum and all persons in active concert or participation with him from violating, directly or indirectly, Sections 17(a)(1), (a)(2) and (a)(3) of the Securities Act, order Birnbaum to disgorge all ill-gotten gains, plus prejudgment interest thereon, pursuant to Sections 21(d)(5) and 21(d)(7) of the Exchange Act and order Birnbaum to pay civil money penalties pursuant to 20(d) of the Securities Act and Section 21(d)(3) of the Exchange Act along with such other and further relief as the court deems just and appropriate.

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Case Details Parties Documents Dockets

 

Case Details

  • Case Number:

    1:21-CV-08047

  • Filing Date:

    09/28/2021

  • Case Status:

    Pending - Other Pending

  • Case Type:

    Finance - Security/Commodity/Exchange

Judge Details

Presiding Judge

Jesse M. Furman

 

Party Details

Plaintiff

Securities and Exchange Commission

Defendant

Jaeson Birnbaum

Attorney/Law Firm Details

Plaintiff Attorneys

Richard R. Best

Attorney at U.S. Securities and Exchange Commission

200 Vesey Street, Ste 400

New York, NY 10281

Nancy A Brown

Attorney at Securities & Exchange Commission (3 WFC)

200 Vesey Street, Suite 400

New York, NY 10281

Judith Ann Weinstock

Attorney at Securities and Exchange Commission

200 Vesey Street, Suite 400

New York, NY 10281

Shannon A. Keyes

Attorney at U.S. Securities and Exchange Commission

Brookfield Place, 200 Vesey St., Suite 400

New York, NY 10279

Defendant Attorney

Samuel Michael Braverman

Attorney at Fasulo Braverman & Di Maggio, LLP

225 Broadway, Suite 715

New York, NY 10007

 

Court Documents

#1

#2

#3

(#3) NOTICE OF APPEARANCE by Nancy A Brown on behalf of Securities and Exchange Commission..(Brown, Nancy) (Entered: 09/29/2021)

#4

(#4) NOTICE OF APPEARANCE by Judith Ann Weinstock on behalf of Securities and Exchange Commission..(Weinstock, Judith) (Entered: 09/29/2021)

#5

(#5) NOTICE OF INITIAL PRETRIAL CONFERENCE: Initial Conference set for 12/17/2021 at 04:30 PM in Courtroom 1105, 40 Centre Street, New York, NY 10007 before Judge Jesse M. Furman. SO ORDERED. (Signed by Judge Jesse M. Furman on 9/30/2021) (jca) (Entered: 09/30/2021)

#6

(#6) REQUEST FOR ISSUANCE OF SUMMONS as to Jaeson Birnbaum, re: #1 Complaint. Document filed by Securities and Exchange Commission..(Brown, Nancy) (Entered: 09/30/2021)

#7

(#7) NOTICE OF APPEARANCE by Samuel Michael Braverman on behalf of Jaeson Birnbaum..(Braverman, Samuel) (Entered: 09/30/2021)

#8

(#8) ELECTRONIC SUMMONS ISSUED as to Jaeson Birnbaum. (vf) (Entered: 10/01/2021)

#9

(#9) PROPOSED JUDGMENT. Document filed by Securities and Exchange Commission..(Brown, Nancy) Proposed Judgment to be reviewed by Clerk's Office staff. (Entered: 10/12/2021)

#10

(#10) LETTER addressed to Judge Jesse M. Furman from Nancy A. Brown dated 10.12.2021 re: Proposed Judgment on Consent. Document filed by Securities and Exchange Commission..(Brown, Nancy) (Entered: 10/12/2021)

#11

(#11) CERTIFICATE OF SERVICE of Notice of Initial Pretrial Conference served on Jaeson Birnbaum c/o Samuel Braverman, Esq. on 10.07.2021. Service was made by Mail. Document filed by Securities and Exchange Commission..(Brown, Nancy) (Entered: 10/12/2021)

#12

(#12) JUDGMENT AS TO DEFENDANT JAESON BIRNBAUM. IT IS HEREBY ORDERED, ADJUDGED, AND DECREED that Defendant is permanently restrained and enjoined from violating, directly or indirectly, Section 1 0(b) of the Securities Exchange Act of 1934 (the "Exchange Act") [15 U.S.C. 78j(b)] and Rule l0b-5 promulgated thereunder [17 C.F.R. 240. l0b-5], by using any means or instrumentality of interstate commerce, or of the mails, or of any facility of any national securities exchange, in connection with the purchase or sale of any security: to employ any device, scheme, or artifice to defraud; to make any untrue statement of a material fact or to omit to state a material fact necessary in order to make the statements made, in the light of the circumstances under which they were made, not misleading; or to engage in any act, practice, or course of business which operates or would operate as a fraud or deceit upon any person. IT IS FURTHER ORDERED, ADJUDGED, AND DECREED that, as provided in Federal Rule of Civil Procedure 65(d)(2), the foregoing paragraph also binds the following who receive actual notice of this Judgment by personal service or otherwise: (a) Defendant's officers, agents, servants, employees, and attorneys; and (b) other persons in active concert or participation with Defendant or with anyone described in (a). IT IS HEREBY FURTHER ORDERED, ADJUDGED, AND DECREED that Defendant is permanently restrained and enjoined from violating Section 17(a) of the Securities Act of 1933 (the "Securities Act") [15 U.S.C. 77q(a)] in the offer or sale of any security by the use of any means or instruments of transportation or communication in interstate commerce or by use of the mails, directly or indirectly: (a)to employ any device, scheme, or artifice to defraud; (b)to obtain money or property by means of any untrue statement of a material fact or any omission of a material fact necessary in order to make the statements made, in light of the circumstances under which they were made, not misleading; or (c)to engage in any transaction, practice, or course of business which operates or would operate as a fraud or deceit upon the purchaser. IT IS FURTHER ORDERED, ADJUDGED, AND DECREED that, pursuant to Section 21(d)(2) of the Exchange Act [15 U.S.C. 78u(d)(2)] and Section 20(e) of the Securities Act [15 U.S.C. 77t(e)], Defendant is prohibited from acting as an officer or director of any issuer that has a class of securities registered pursuant to Section 12 of the Exchange Act [15 U.S.C. 781] or that is required to file reports pursuant to Section 15(d) of the Exchange Act [15 U.S.C. 78o(d)]. IT IS HEREBY FURTHER ORDERED, ADJUDGED, AND DECREED that Defendant shall pay disgorgement of ill-gotten gains, prejudgment interest thereon, and a civil penalty pursuant to Section 20(d) of the Securities Act [15 U.S.C. 77t(d)] and Section 21(d)(3) of the Exchange Act [15 U.S.C. 78u(d)(3)]. The Court shall determine the amounts of the disgorgement and civil penalty upon motion of the Commission. Prejudgment interest shall be calculated from July 21, 2017, based on the rate of interest used by the Internal Revenue Service for the underpayment of federal income tax as set forth in 26 U.S.C. 6621(a)(2). In connection with the Commission's motion for disgorgement and/or civil penalties, and at any hearing held on such a motion: (a) Defendant will be precluded from arguing that he did not violate the federal securities laws as alleged in the Complaint; (b) Defendant may not challenge the validity of the Consent or this Judgment; (c) solely for the purposes of such motion, the allegations of the Complaint shall be accepted as and deemed true by the Court; and (d) the Court may determine the issues raised in the motion on the basis of affidavits, declarations, excerpts of sworn deposition or investigative testimony, and documentary evidence, without regard to the standards for summary judgment contained in Rule 56(c) of the Federal Rules of Civil Procedure. In connection with the Commission's motion for disgorgement and/or civil penalties, the parties may take discovery, including discovery from appropriate non-parties. IT IS FURTHER ORDERED, ADJUDGED, AND DECREED that, for purposes of exceptions to discharge set forth in Section 523 of the Bankruptcy Code, 11 U.S.C. 523, the allegations in the complaint are true and admitted by Defendant, and further, any debt for disgorgement, prejudgment interest, civil penalty or other amounts due by Defendant under this Judgment or any other judgment, order, consent order, decree or settlement agreement entered in connection with this proceeding, is a debt for the violation by Defendant of the federal securities laws or any regulation or order issued under such laws, as set forth in Section 523(a)(19) of the Bankruptcy Code, 11 U.S.C. 523(a)(19). IT IS FURTHER ORDERED, ADJUDGED, AND DECREED that this Court shall retrain jurisdiction of this matter for the purposes of enforcing the terms of this Judgment. All deadlines are hereby STAYED. In light of that, the conference scheduled for December 17, 2021, is ADJOURNED sine die. By January 13, 2022, the parties shall file a joint letter proposing a plan for how this case shall proceed. SO ORDERED. (Signed by Judge Jesse M. Furman on 10/12/21) (yv) (Entered: 10/13/2021)

13 #13

Main Document

13 #1

Affidavit Notarized Keyes Affidavit in support of Motion To Appear Pro Hac Vice

13 #2

Keyes Certificate of Good Standing

13 #3

Text of Proposed Order

5 More Documents Available
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Docket Entries

  • 10/15/2021
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  • Docket(#14) ORDER granting #13 Motion for Shannon Keyes to Appear Pro Hac Vice (HEREBY ORDERED by Judge Jesse M. Furman)(Text Only Order) (Furman, Jesse) (Entered: 10/15/2021)

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  • 10/15/2021
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  • Docket>>>NOTICE REGARDING PRO HAC VICE MOTION. Regarding Document No. #13 MOTION for Shannon Keyes to Appear Pro Hac Vice . Motion and supporting papers to be reviewed by Clerk's Office staff.. The document has been reviewed and there are no deficiencies. (wb) (Entered: 10/15/2021)

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  • 10/14/2021
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  • Docket(#13) MOTION for Shannon Keyes to Appear Pro Hac Vice . Motion and supporting papers to be reviewed by Clerk's Office staff. Document filed by Securities and Exchange Commission. (Attachments: #1 Affidavit Notarized Keyes Affidavit in support of Motion To Appear Pro Hac Vice, #2 Keyes Certificate of Good Standing, #3 Text of Proposed Order).(Keyes, Shannon) (Entered: 10/14/2021)

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  • 10/13/2021
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  • Docket(#12) JUDGMENT AS TO DEFENDANT JAESON BIRNBAUM. IT IS HEREBY ORDERED, ADJUDGED, AND DECREED that Defendant is permanently restrained and enjoined from violating, directly or indirectly, Section 1 0(b) of the Securities Exchange Act of 1934 (the "Exchange Act") [15 U.S.C. 78j(b)] and Rule l0b-5 promulgated thereunder [17 C.F.R. 240. l0b-5], by using any means or instrumentality of interstate commerce, or of the mails, or of any facility of any national securities exchange, in connection with the purchase or sale of any security: to employ any device, scheme, or artifice to defraud; to make any untrue statement of a material fact or to omit to state a material fact necessary in order to make the statements made, in the light of the circumstances under which they were made, not misleading; or to engage in any act, practice, or course of business which operates or would operate as a fraud or deceit upon any person. IT IS FURTHER ORDERED, ADJUDGED, AND DECREED that, as provided in Federal Rule of Civil Procedure 65(d)(2), the foregoing paragraph also binds the following who receive actual notice of this Judgment by personal service or otherwise: (a) Defendant's officers, agents, servants, employees, and attorneys; and (b) other persons in active concert or participation with Defendant or with anyone described in (a). IT IS HEREBY FURTHER ORDERED, ADJUDGED, AND DECREED that Defendant is permanently restrained and enjoined from violating Section 17(a) of the Securities Act of 1933 (the "Securities Act") [15 U.S.C. 77q(a)] in the offer or sale of any security by the use of any means or instruments of transportation or communication in interstate commerce or by use of the mails, directly or indirectly: (a)to employ any device, scheme, or artifice to defraud; (b)to obtain money or property by means of any untrue statement of a material fact or any omission of a material fact necessary in order to make the statements made, in light of the circumstances under which they were made, not misleading; or (c)to engage in any transaction, practice, or course of business which operates or would operate as a fraud or deceit upon the purchaser. IT IS FURTHER ORDERED, ADJUDGED, AND DECREED that, pursuant to Section 21(d)(2) of the Exchange Act [15 U.S.C. 78u(d)(2)] and Section 20(e) of the Securities Act [15 U.S.C. 77t(e)], Defendant is prohibited from acting as an officer or director of any issuer that has a class of securities registered pursuant to Section 12 of the Exchange Act [15 U.S.C. 781] or that is required to file reports pursuant to Section 15(d) of the Exchange Act [15 U.S.C. 78o(d)]. IT IS HEREBY FURTHER ORDERED, ADJUDGED, AND DECREED that Defendant shall pay disgorgement of ill-gotten gains, prejudgment interest thereon, and a civil penalty pursuant to Section 20(d) of the Securities Act [15 U.S.C. 77t(d)] and Section 21(d)(3) of the Exchange Act [15 U.S.C. 78u(d)(3)]. The Court shall determine the amounts of the disgorgement and civil penalty upon motion of the Commission. Prejudgment interest shall be calculated from July 21, 2017, based on the rate of interest used by the Internal Revenue Service for the underpayment of federal income tax as set forth in 26 U.S.C. 6621(a)(2). In connection with the Commission's motion for disgorgement and/or civil penalties, and at any hearing held on such a motion: (a) Defendant will be precluded from arguing that he did not violate the federal securities laws as alleged in the Complaint; (b) Defendant may not challenge the validity of the Consent or this Judgment; (c) solely for the purposes of such motion, the allegations of the Complaint shall be accepted as and deemed true by the Court; and (d) the Court may determine the issues raised in the motion on the basis of affidavits, declarations, excerpts of sworn deposition or investigative testimony, and documentary evidence, without regard to the standards for summary judgment contained in Rule 56(c) of the Federal Rules of Civil Procedure. In connection with the Commission's motion for disgorgement and/or civil penalties, the parties may take discovery, including discovery from appropriate non-parties. IT IS FURTHER ORDERED, ADJUDGED, AND DECREED that, for purposes of exceptions to discharge set forth in Section 523 of the Bankruptcy Code, 11 U.S.C. 523, the allegations in the complaint are true and admitted by Defendant, and further, any debt for disgorgement, prejudgment interest, civil penalty or other amounts due by Defendant under this Judgment or any other judgment, order, consent order, decree or settlement agreement entered in connection with this proceeding, is a debt for the violation by Defendant of the federal securities laws or any regulation or order issued under such laws, as set forth in Section 523(a)(19) of the Bankruptcy Code, 11 U.S.C. 523(a)(19). IT IS FURTHER ORDERED, ADJUDGED, AND DECREED that this Court shall retrain jurisdiction of this matter for the purposes of enforcing the terms of this Judgment. All deadlines are hereby STAYED. In light of that, the conference scheduled for December 17, 2021, is ADJOURNED sine die. By January 13, 2022, the parties shall file a joint letter proposing a plan for how this case shall proceed. SO ORDERED. (Signed by Judge Jesse M. Furman on 10/12/21) (yv) (Entered: 10/13/2021)

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  • 10/12/2021
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  • Docket(#11) CERTIFICATE OF SERVICE of Notice of Initial Pretrial Conference served on Jaeson Birnbaum c/o Samuel Braverman, Esq. on 10.07.2021. Service was made by Mail. Document filed by Securities and Exchange Commission..(Brown, Nancy) (Entered: 10/12/2021)

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  • 10/12/2021
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  • Docket***NOTICE TO COURT REGARDING PROPOSED JUDGMENT. Document No. #9 Proposed Judgment was reviewed and approved as to form. (km) (Entered: 10/12/2021)

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  • 10/12/2021
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  • Docket(#10) LETTER addressed to Judge Jesse M. Furman from Nancy A. Brown dated 10.12.2021 re: Proposed Judgment on Consent. Document filed by Securities and Exchange Commission..(Brown, Nancy) (Entered: 10/12/2021)

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  • 10/12/2021
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  • Docket(#9) PROPOSED JUDGMENT. Document filed by Securities and Exchange Commission..(Brown, Nancy) Proposed Judgment to be reviewed by Clerk's Office staff. (Entered: 10/12/2021)

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  • 10/01/2021
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  • Docket(#8) ELECTRONIC SUMMONS ISSUED as to Jaeson Birnbaum. (vf) (Entered: 10/01/2021)

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  • 09/30/2021
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  • Docket(#7) NOTICE OF APPEARANCE by Samuel Michael Braverman on behalf of Jaeson Birnbaum..(Braverman, Samuel) (Entered: 09/30/2021)

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  • 09/30/2021
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  • Docket(#6) REQUEST FOR ISSUANCE OF SUMMONS as to Jaeson Birnbaum, re: #1 Complaint. Document filed by Securities and Exchange Commission..(Brown, Nancy) (Entered: 09/30/2021)

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  • 09/30/2021
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  • Docket(#5) NOTICE OF INITIAL PRETRIAL CONFERENCE: Initial Conference set for 12/17/2021 at 04:30 PM in Courtroom 1105, 40 Centre Street, New York, NY 10007 before Judge Jesse M. Furman. SO ORDERED. (Signed by Judge Jesse M. Furman on 9/30/2021) (jca) (Entered: 09/30/2021)

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  • 09/29/2021
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  • Docket(#4) NOTICE OF APPEARANCE by Judith Ann Weinstock on behalf of Securities and Exchange Commission..(Weinstock, Judith) (Entered: 09/29/2021)

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  • 09/29/2021
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  • Docket(#3) NOTICE OF APPEARANCE by Nancy A Brown on behalf of Securities and Exchange Commission..(Brown, Nancy) (Entered: 09/29/2021)

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  • 09/29/2021

  • DocketCase Designated ECF. (pc) (Entered: 09/29/2021)

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  • 09/29/2021

  • DocketMagistrate Judge Katharine H. Parker is so designated. Pursuant to 28 U.S.C. Section 636(c) and Fed. R. Civ. P. 73(b)(1) parties are notified that they may consent to proceed before a United States Magistrate Judge. Parties who wish to consent may access the necessary form at the following link: #https://nysd.uscourts.gov/sites/default/files/2018-06/AO-3.pdf. (pc) (Entered: 09/29/2021)

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  • 09/29/2021

  • DocketCASE OPENING INITIAL ASSIGNMENT NOTICE: The above-entitled action is assigned to Judge Jesse M. Furman. Please download and review the Individual Practices of the assigned District Judge, located at #https://nysd.uscourts.gov/judges/district-judges. Attorneys are responsible for providing courtesy copies to judges where their Individual Practices require such. Please download and review the ECF Rules and Instructions, located at #https://nysd.uscourts.gov/rules/ecf-related-instructions..(pc) (Entered: 09/29/2021)

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  • 09/29/2021

  • Docket***NOTICE TO ATTORNEY REGARDING CIVIL. CASE OPENING STATISTICAL ERROR CORRECTION: Notice to attorney Richard R. Best. The following case opening statistical information was erroneously selected/entered: Fee Status code none (no fee required);. The following correction(s) have been made to your case entry: the Fee Status code has been modified to wv (waived);. (pc) (Entered: 09/29/2021)

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  • 09/28/2021
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  • Docket(#2) CIVIL COVER SHEET filed..(Best, Richard) (Entered: 09/28/2021)

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  • 09/28/2021
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  • Docket(#1) COMPLAINT against Jaeson Birnbaum. Document filed by Securities and Exchange Commission..(Best, Richard) (Entered: 09/28/2021)

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