8:15-cv-00317-LES-FG3 Doc # 21 Filed: 10/05/15 Page 1 of 21 - Page ID # 68

UNITED STATES DISTRICT COURT

DISTRICT OF NEBRASKA

COR CLEARING, LLC, a Delaware limited

liability company,

)
)
)
Plaintiff,
)
)
v.
)
)
CALISSIO RESOURCES GROUP, INC., a
)
Nevada corporation; ADAM CARTER, an
)
individual; SIGNATURE STOCK TRANSFER, )
INC., a Texas corporation; and DOES 1-50.
)
)
Defendants.
)
)

Case No. 8:15-cv-00317-LES-FG3

BRIEF IN SUPPORT OF EXPEDITED
MOTION FOR ORDER APPOINTING
LIMITED PURPOSE RECEIVER

Plaintiff COR Clearing, LLC (COR Clearing) respectfully requests that, on an

expedited basis, this Court appoint a Receiver for defaulted defendant Calissio Resources
Group, Inc. (Calissio) for the limited purpose of instructing The Depository Trust & Clearing
Corporation (DTCC), which is responsible for processing securities transactions, to make postpayable adjustments in accordance with its policies and procedures. COR Clearing recommends
that Ronald F. Greenspan, Esq. be appointed as Receiver as soon as practicable. Such an order is
necessary because Calissio and its affiliates have defrauded COR Clearing and its customers and
have absconded with some ill-gotten funds, as evidenced by, among other things, its default in
this case, and an order from the issuer (Calissio) to DTCC to make these post-payable
adjustments is the only way to prevent Calissio from being unjustly enriched at others expense.
The order is needed on an expedited basis because Calissio is in default, and the order will be
rendered ineffectual if the Receivers instruction is not given within DTCCs 90-day period in
which its policies provide to adjust these transactions, which period commenced running on or

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about August 20, 2015. COR Clearing also proposes to give notice to all potentially affected
parties to ensure full transparency and adequate opportunity to be heard. 1
I.

INTRODUCTION
Calissio is a shadow company operating in the unregulated gray market of stock trading,

without any supervision by an established stock exchange such as NASDAQ or the NYSE.
Calissio also has no tangible physical presence in the United States. Calissio has operated in this
manner as cover to defraud the market and steal COR Clearings and its customers money, and
likely other victims of its scheme as well. Most importantly for purposes of this Motion, Calissio
ultimately refused to take the necessary steps to return the funds to their rightful owners, as
illustrated its presidents e-mail to COR Clearings CEO upon Calissios receipt of this lawsuit
and Calissios subsequent default. As a result, normal legal remedies are inadequate to remedy
the harm caused by Calissio.
Fortunately, DTCC, the entity responsible for processing trillions of dollars of securities
transactions in the United States on a daily basis, has in place post-payment adjustment policies
and procedures that can assist COR Clearing and its customers by reversing the wrongful
transaction if so instructed by Calissio or, as requested here, a Receiver on its behalf. According
to the DTC Distributions Service Guide:
DTC has a standing practice to only allocate monies upon receipt
from the paying agent, trustee and/or issuer. On occasion, after
crediting participants with a dividend or interest payment, DTC
may have to create a post allocation rate change which may result
in either additional credit or a debt to your account. Reasons to
this include but are not limited to, an error on the part of DTC, the
paying agent, trustee or issuer or a change in the principal factor or
rate on a CMO/ABS security.

See infra Section IV and the [Proposed] Order Requiring Notice to Affected Parties by Appointment of Limited
Purpose Receiver lodged concurrently herewith.

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DTC accommodates paying agent requests to approve these types

of post-payable adjustments where the adjustments are within [90]
calendar days from the initial payment date.
Under this policy, if the issuer (Calissio) requests that DTCC make a post-payable adjustment,
DTCC will reverse a transaction to put the parties back in the position they were before it
occurred. In this case, Calissio a defaulting party that is being unjustly enriched, along with its
affiliates, by the transaction at issue will not voluntarily instruct DTCC to adjust the dividend
transaction that wrongfully netted Calissio millions of dollars to which it is not entitled and has
not responded to this court in the present action. Therefore, the solution is for a Receiver to be
appointed on behalf of Calissio for the limited purpose of instructing DTCC to make this
adjustment in Calissios stead. COR has identified Ronald F. Greenspan, Esq. as having the
appropriate qualifications for this Receivership.
This appointment and instruction should occur swiftly to fall within DTCCs proscribed
90 day period and provide adequate time for affected parties to be heard by this Court. Without
the appointment of a Receiver and the giving of the instruction within this time period provided
by the DTCC procedures, there is no foreseeable path for remedying Calissios unjust
enrichment at the expense of COR Clearing, its customers, and countless others in the
marketplace. Thus, an order appointing this Receiver to instruct DTCC, pursuant to its policies
and procedures, to make the necessary post-payable adjustment is required to undo the damage
wrongfully caused by Calissio.
II.

REQUEST FOR EXPEDITED HEARING AND ORDER

COR Clearing respectfully requests that this Motion be heard on as expeditious basis as

possible to avoid irreparable harm. The relief sought here the appointment of a Receiver to
Calissio to instruct DTCC to reverse improper charges assessed against innocent parties that
resulted in a fraudulent gain by Calissio and its affiliates needs this Courts immediate
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attention because of the looming deadline under DTCCs procedures to receive that instruction,
which is estimated as November 13, 2015 based on the running of 90 days from the payment
date of August 17, 2015. Because of the lead time required to identify a Receiver and have the
Receiver educate him/herself on the subject transaction, COR Clearing respectfully requests that
the notice to affected parties and hearing on this matter be held in accordance with the proposed
order.
To the best of COR Clearings knowledge, this Motion will be unopposed because
(1) Calissio is in default and thus barred from appearing in Opposition; and (2) the relief sought
indirectly benefits the remaining defendant, Signature Stock Transfer, the transfer agent. (Dkt.
19; Declaration of David L. Aronoff (Aronoff Decl.) 10.)
III.

STATEMENT OF FACTS
A.

COR Clearing

COR Clearing is a settlement and clearing firm, which means it has execution and
clearance capabilities for all domestic and foreign securities including multi-currency settlement
and reporting. COR Clearing supports straight through processing of equities, options, mutual
funds and fixed income products complemented by a fully automated back office staffed with
responsive professionals. Its trading technology integrates information and analytics from a
variety of data providers, sophisticated order execution functionality and post-trade processing
applications to ensure timely and accurate trade execution and settlement. (Declaration of Carlos
Salas (Salas Decl.) 7.)
In this capacity, COR Clearing supports independent broker dealers (IBDs) who have
customers who want to trade stock on the various markets, including the OTC Markets serving

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corporations such as Calissio. 2 COR Clearing facilitates trades supported by the market, which
allows IBD customers to buy and sell stock through their accounts. (Salas Decl. 8.)
B.

DTCCs Policies and Procedures

DTCC is a post-trade financial services company providing clearing and settlement

services to the United States financial markets, including the market in which Calissios shares
were sold by COR Clearings customers. One of DTCCs products is performing interim
accounting, which entails debiting and crediting the accounts of member clearing firms (of which
COR Clearing is one) in connection with due bills that accompany certain shares of stock, in the
event that dividends are attached to those shares. Essentially, when a share that has a dividend
attached (i.e., coming due) is sold between the record date and the ex-dividend date (see Salas
Decl. 9 and Dkt. 1, 24-26, 28 for further explanation of this system), DTCC will debit the
account of the seller of that stock (or, in the present case, the sellers clearing and settlement
firm) and credit the account of the purchaser. (Salas Decl. 9.) This occurs even when (1) the
purchaser in this case the stock issuer, Calissio, and its affiliates are ineligible to be the
receiver of a dividend, and (2) when the stock is not entitled to receive a dividend because it was
issued after the record date. (Salas Decl. 17.) As in this case, DTCCs performance of the
interim accounting allocations may result in funds being initially debited from accounts not
obligated to pay dividends and credited to accounts not entitled to receive dividends, causing
substantial injustice.
Pursuant to its policies and procedures, which include its Distributions Service Guide,
DTCC can make certain adjustments to these transactions:
DTC has a standing practice to only allocate monies upon receipt
from the paying agent, trustee and/or issuer. On occasion, after
2

Over-The-Counter (or OTC) is a security traded in some context other than on a formal exchange such as the
NYSE, TSX, AMEX, etc.

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crediting participants with a dividend or interest payment, DTC

may have to create a post allocation rate change which may result
in either additional credit or a debt to your account. Reasons to
this include but are not limited to, an error on the part of DTC, the
paying agent, trustee or issuer or a change in the principal factor or
rate on a CMO/ABS security.
DTC accommodates paying agent requests to approve these types
of post-payable adjustments where the adjustments are within [90]
calendar days from the initial payment date.
(Aronoff Decl. 2, Ex. A at p. 32.) However, DTCC will only make these post-payable
adjustments upon request of the issuer or a party acting on behalf of the issuer.
C.

Defendants Fraudulent Scheme

On September 30, 2010, Calissio issued a large number of shares to be issued at a cost
basis of $.01. On June 1, 2015, Calissio announce[d] that its Board of Directors has authorized
a share repurchase program of up to $1.5 million of the Companys outstanding common
shares. (Aronoff Decl. 3, Ex. B.) Under this stock repurchase program, [Calissio was]
authorized to repurchase, from time-to-time, shares of its outstanding common stock in the open
market. (Id.) Between then and August 21, 2015, Calissio announced that it had purportedly
repurchased 158,865,114 shares for [a] total of USD$588,448.00. (Aronoff Decl. 4, Ex. C.)
At the same time, Calissio had scheduled a dividend payment for August 17, 2015, in which
Calissio announced a cash dividend of $0.011 per common share of the Company, to be paid to
the holders of the issued and outstanding Common Shares as of the close of business on June 30,
2015. (Aronoff Decl. 5, Ex. D, emphasis added.) Those shareholders not Calissio or any of
its affiliates who purchased shares after June 30 who owned the stocks as of August 19, 2015
were the ones entitled to this dividend. (Salas Decl. 17; Dkt. 1, 24.)
What Calissio failed to disclose in its multiple press releases, however, was that after
June 30, 2015 (the record date), it had issued hundreds of millions of new shares of common

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stock in connection with the conversion of convertible debt previously issued by Calissio. (Salas
Decl. 18.) These new shares which should have been ineligible for the dividend due to the
timing of when they were issued totaled approximately four times the number of shares
outstanding as of the record date of June 30th. (Id.) Because the new shares (which totaled
approximately 80% of all Calissio shares available) were issued after the record date, they in fact
were not eligible for the dividends attached to the previous shares. (Salas Decl. 17.)
Even though only roughly 20% of the available Calissio shares were eligible for the
dividend, DTCC paid dividends on all shares on its system, even if they were not actually
eligible for such dividends. (Salas Decl. 10.) This resulted in two massive errors that took
money belonging to others out of their accounts and into the accounts of Calissio and other
parties who were not entitled to it. First, DTCC paid dividends on the 80% of shares that were
not dividend eligible because they were issued after the record date of June 30th. Second, as it
admitted in a press release, Calissio itself re-purchased over 158 million shares before the exdividend date and wrongfully took ownership of the dividend funds attached to shares it
repurchased. (Aronoff Decl. 4, Ex. C.) And the number of additional shares purchased by
affiliates of Calissio is unknown to COR Clearing at this time. Essentially, Calissio defrauded
the market by discreetly issuing shares of Calissio stock that were not dividend-eligible and then
buying back those shares, knowing that DTCCs normal course of action is to collect from
companies like COR Clearing and pay to Calissio and its affiliates, as the current holders of the
shares, dividends on all shares in its system without verifying whether all of the shares or the
recipients were actually eligible.
Between July 29, 2015, and August 19, 2015, Nobilis Consulting LLC (Nobilis),
through its broker J.H. Darbie & Co. (Darbie)an IBD who settles trades through COR

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Clearingobtained over 327 million shares of stock in Calissio through a conversion of debt to
equity. (Salas Decl. 11.) All 327 million of these shares were issued after the record date of
June 30th, and therefore Nobilis was not entitled to receive a dividend on any of these shares, as
none was owed to it. (Id.) Darbie, on behalf of Nobilis, sold more than 277 million of these
shares on the open market, and therefore some of these directly or indirectly back to Calissio as a
result of Calissios repurchase program. 3 Because Nobilis determined that no dividend rights
attached to its shares, Nobilis sold its shares to the open market and therefore in large part back
to Calissio for only $700,000. (Id. at 12.) Calissio also perpetrated this fraud against another
customer of Darbies with a COR Clearing account, Beaufort Capital Partners (Beaufort). (Id.)
On August 20 and 21, 2015, DTCC debited COR Clearing for over $3.3 million in
respect of these erroneous due bills assessed on the shares sold by Nobilis and another $690,000
for erroneous due bills assessed on Beauforts sharessignificantly more than the amount
Nobilis or Beaufort received for their shares. (Salas Decl. 13.) DTCC made this debit against
its member firm COR Clearing, who custodies the customer accounts entering the trades on
behalf of Darbie for both Nobilis and Beaufort. (Id.) However, because no dividends were ever
to be received in relation to these shares by these former shareholders, the debit was improperly
assessed.
To reverse the harm caused by the assessment of the dividend by adjusting the collection
to only eligible shares and eligible recipients, COR Clearing estimates that the request to adjust
this debit should be tendered by the Receiver no later than November 13, 2015 to comply with
DTCCs published rules. (Salas Decl. 6.)

COR Clearing notes that certain other entities, who were not involved in Calissios fraudulent scheme, also
purchased some of these shares and thus innocently received dividends to which they are not entitled. Some of the
DTCC member firms who will be noticed pursuant to the procedures listed in Section IV are holding this money for
their customers, pending the outcome of this Motion.

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D. Calissios Admission that the Dividends Were Paid in Error and It Was Not
Entitled to the Dividends It Received from DTCC
On August 25, 2015, having been alerted that Nobilis, Darbie, and COR Clearing were
aware of the dividend scheme, Defendant Carter, Calissios president, sent a number of e-mails
to these impacted parties, admitting that no dividend payments had been received and thus did
not need to be returned by Nobilis, and asserting that DTCCs collection of the money from
COR Clearing was a mistake. For instance, on August 25, he told Michael Yarmish of Darbie
and a representative of Nobilis:
As you are aware there has been a huge glitch/error on how the
dividend was supposed to be paid out. We are currently in
conversations with DTCC and will be resolving this issue over the
next couple of days. There is absolutely no reason for closing your
clients [sic] account as they are not at fault here. Once again this
was a problem created by FINRA and not your client Nobilis
Consulting LLC.
(Salas Decl. 14, Ex. E.) Later that day, he then told Carlos Salas, CEO of COR Clearing, much
the same thing:
As you are aware there has been a huge glitch/error on how the
dividend was supposed to be paid out. We are currently in
conversations with DTCC and will be resolving this issue over the
next couple of days.
(Salas Decl. 15, Ex. F.) After more pressing by Mr. Salas, Carter delayed by purportedly
reporting, Unfortunately we cant make any decisions until DTCC gives us a concrete answer
on how this problem that they created can be resolved. (Id.)
Then, on August 28, 2015, Carter told Jason Bogutski, president of Defendant Signature
Stock Resources (Signature), [w]e sent both wires to COR yesterday (Nobilis/Beaufort) but
now with this lawsuit our lawyers have advised us not to proceed and we requested an immediate
stop on both transfers. (Aronoff Decl. 6, Ex. G.) He then attached purported proof that the
wires, in the amount of approximately $3 million, had been initially sent to Nobilis. (Id.)

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In retrospect, these assurances that Calissio would properly unwind the erroneous
transaction were likely false, and that Carter made false statements to buy himself time to leave
the country. Tellingly, on August 28, Carter told Bogutski that he was in a remote location at
our mining property in Mexico, and then later told Mr. Salas,
You should have been more patient and waited for funds to be
sent out as I discussed with your people. Instead, you
carelessly jumped the gun and filed a lawsuit against Calissio.
There will be no funds to COR. Our legal counsel has advised
us not to send you any further wires. Good luck with the
lawsuit.
(Salas Decl. 16, Ex. H.) Carter then cut off all contact with everyone, including Signature, and
disappeared; the purported counsel he referred to has never been identified or surfaced. (Aronoff
Decl. 9.) Indeed, it appears that the purported wire transfer that Carter cancelled may have
been a fake.
D.

Calissios Shadow Existence

Since the filing of the Complaint, it has been revealed that Calissio is essentially a ghost
corporation, and that during its known existence it only disappeared further into the unregulated
markets more each day. Indeed, it appears that it is a fly-by-night operation set up for the sole
purpose of defrauding the marketplace, and Adam Carter, the purported president, may not even
exist.
First, addresses attributed to Calissio in Las Vegas have turned out to be false and/or nonexistent. (Declaration of Leonard Hirschhorn (Hirschhorn Decl.) 2-3.) Second, even the
directors and executives listed for Calissio appear to be either entirely made up or, at the very
least, residents of countries other than the United States. (Declaration of Thomas Pikor (Pikor
Decl.) 3-8.) Calissio also has no real estate holdings in the United States. (Pikor Decl. 10.)

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Calissio also keeps shifting its identity and receding further from the regulated markets.
Calissio was formerly called Amarium Technologies, an entity against which an investor
obtained a judgment for $2.25 million in 2008. (Pikor Decl. 9.) This demonstrates that once
Calissio got caught in its scheming, it changed identities again to more easily defraud more
victims.
Along with changing its identity, Calissio announced that it will become a privately held
company and its shares will no longer be listed on the OTC Markets. (Aronoff Decl. 7, Ex. I.)
This means that Calissio had now completely changed to a system that avoids any regulatory
scrutiny that previously existed through the OTC markets, and it will now wholly operate on the
gray market, which consists of distribution channels which are legal but are unofficial and/or
unauthorized.
Significantly, Calissios website, www.calissioresources.com, no longer contains any
information. And, relevant to this case, Calissio never made any appearance in this case or
responded to the allegations against it, leading to an entry of default. (Dkt. 19.)
Importantly, Jason Bogutski, president of Signaturetransfer agent for Calissioalso
informed counsel for COR Clearing that he had never met Adam Carter before and that he could
no longer reach Carter once Carter stopped corresponding with COR Clearing. (Aronoff Decl.
9.)
Based on the above results of COR Clearings thorough investigation, it is clear that
Calissio is at most a ghost corporation in the United States. Consequently, it can be reasonably
assumed that Calissios ill-gotten funds from COR Clearing and its customers are now out of the
United States and thus out of the reach of COR Clearing and this Court, all as a part of
Defendants fraudulent scheme.

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III.

PROCEDURAL BACKGROUND
COR Clearing filed its Complaint against Defendants on August 26, 2015. (Dkt. 1.) On

August 27, 2015, COR Clearing personally served the Complaint on Calissio, through its
registered agent. (Dkt. 11.) As Calissio is a ghost corporation, it did not respond to the
Complaint or enter any sort of appearance in this case within the 21-day window prescribed by
the Federal Rules. Consequently, COR Clearing moved for a Clerks Entry of Default against
Calissio, which was granted on September 25, 2015. (Dkt. 18-19.) Not coincidentally, this
occurred after Calissio had been served with this lawsuit. (Dkt. 11.)
IV.

NOTICE TO AFFECTED PARTIES

In the interest of providing full and fair notice and opportunity to be heard to all parties,

namely the Calissio shareholders, that may be affected by the appointment of the Receiver and
the subsequent post-payable adjustments by DTCC, COR Clearing, with the endorsement and
full cooperation of DTCC, proposes a process by which all parties who may be affected are
given notice of the appointment of the Receiver and given a chance to be heard before this Court
enters the order appointing the Receiver.
Counsel for COR Clearing has engaged in discussions with counsel for DTCC about the
best method to remedy Calissios fraud by way of the requested Receiver. (Aronoff Decl. 11.)
The parties agreed that the method fairest to all parties potentially affected by the Receivers
request to DTCC for post-payable adjustments is to give them an opportunity to be heard by this
Court before the Receiver is appointed. (Id.) This method is especially useful for those DTCC
member firms whose clients innocently received some of COR Clearings money through
Calissios scheme, and who are currently awaiting instructions as to what to do with these funds.
To carry this out, DTCC has, in response to a subpoena, provided COR Clearing with a list
of all DTC member firms who were credited and/or debited with dividends/allocations for
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the CRGP shares in the relevant time period (Affected Parties), protected by a
confidentiality agreement. (Aronoff Decl. 12.)
COR Clearing thus proposes the following procedure: (1) this Court first issues an order
that COR Clearing issue notice to the Affected Parties of the plan to appoint a Receiver, to which
the Affected Parties may file a response within seven (7) court days; COR Clearing is then given
seven (7) court days to reply to any such response; and the Court may conduct a hearing not
more than 10 days after that for all Affected Parties and COR Clearing to be heard; and (2) after
this period, the Court may issue the order appointing the Receiver.
For the reasons below, the appointment of a Receiver is necessary to ensure that Calissio
and others are not unjustly enriched. The notice procedures set out in this section will ensure
that all Affected Parties are assured a fair and adequate opportunity to be heard.
V.

ARGUMENT
A.

Summary of Argument

As explained above, Calissio exists only as a shadow corporation, with no real physical
presence in the United States. Fortunately for COR Clearing and the public, DTCC has a
procedure in place to reverse Calissios fraud through its interim accounting and post-payable
adjustment rules. As DTCC has made clear, in its Distributions Service Guide, Calissios
fraudulent dividend transaction can be adjusted by DTCC in a way that can return the dividends
to the parties from which they were improperly taken, including COR Clearing, and away from
Calissio and other entities that received dividends to which they were not entitled. (Aronoff
Decl. 2, Ex. A, p. 32.)
But, because DTCC can only make this post-payable adjustment when requested by the
issuer, i.e., Calissio, or a party acting on the issuers behalf, COR Clearing cannot make use of
this policy on its own, as Calissio will certainly not emerge and voluntarily request that DTCC
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make an adjustment that will lead to the return of its ill-gotten dividends. The appointment of a
Receiver is the only remedy available to COR Clearing. For this reasons, COR Clearing asks
this Court to issue the order appointing a Receiver for the limited purpose of instructing DTCC,
in Calissios stead, to make these post-payable adjustments in accordance with DTCCs policies
and procedures. This is necessary to protect COR Clearing and the public at large who were
impacted by Calissios wrongful retention of dividends which it was patently ineligible to
receive.
B.

The Court is Empowered to Appoint Receivers in Situations Such As the One

Presented Here

Under the applicable authorities, the appointment of a Receiver is more than warranted
here. In diversity cases, such as this one, the appointment of Receivers is governed by federal
law, specifically Federal Rule of Civil Procedure 66. Aviation Supply Corp. v. R.S.B.I.
Aerospace, Inc., 999 F.2d 314, 316 (8th Cir. 1993) (The appointment of a receiver in a diversity
case is a procedural matter governed by federal law and federal equitable principles.); see also
Canada Life Assurance Co. v. LaPeter, 563 F.3d 837, 842 (9th Cir. 2009). [A] district court has
within its equity power the authority to appoint receivers and to administer receiverships.
Gilchrist v. Gen. Elec. Capital Corp., 262 F.3d 295, 302 (4th Cir. 2001).
Courts in this circuit apply the following framework in determining whether appointment
of a Receiver is warranted:
Although there is no precise formula for determining when a
receiver may be appointed, factors typically warranting
appointment are a valid claim by the party seeking the
appointment; the probability that fraudulent conduct has occurred
or will occur to frustrate that claim; imminent danger that property
will be concealed, lost, or diminished in value; inadequacy of legal
remedies; lack of a less drastic equitable remedy; and likelihood
that appointing the receiver will do more good than harm.
Aviation Supply Corp., 999 F.2d at 316-17.
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Appointment of a Receiver lies within the sound discretion of the district court where
necessary to protect the public interest and where it is obvious . . . that those who have inflicted
serious detriment in the past must be ousted. U.S. Commodity Futures Trading Commn v.
Yellowstone Partners, Inc., No. 5:10-CV-85-FL, 2014 WL 619478, at *3 (E.D.N.C. Feb. 18,
2014) (quoting SEC v. Bowler, 427 F.2d 190, 198 (4th Cir. 1970)); cf. Warfield v. Alaniz, 453 F.
Supp. 2d 1118, 1132 (D. Ariz. 2006) (in context of SEC enforcement action, The purpose of the
appointment of a receiver is to prevent further violations of federal securities laws and to protect
the public.) (citing SEC v. Wencke, 577 F.2d 619, 623 (9th Cir. 1978)). Much like recent cases
where a Receiver has been appointed to take over an alleged Ponzi scheme, a Receiver is
necessary here to protect the public and any participants in the marketplace who were harmed by
the fraudulent companys actions. See, e.g., Janvey v. Brown, 767 F.3d 430, 433 (5th Cir. 2014)
(discussing district courts appointment of a Receiver over entities involved in a Ponzi scheme);
Wiand v. Morgan, 919 F. Supp. 2d 1342, 1347 (M.D. Fla. 2013) (referring to appointment of
Receiver appointed to deal with the aftermath of a massive Ponzi scheme).
The Receiver stands in the shoes of the entity for which it was appointed. See Javitch
v. First Union Securities, Inc., 315 F.3d 619, 625 (6th Cir. 2003); Weiss v. Weinberger, No. 2:04CV-463, 2005 WL 1432190, at *3 (N.D. Ind. June 9, 2005) ([T]he receiver is stepping in the
shoes of the absentee owner.). In Weiss, the defendant disappeared and abandoned his
practice, and at the time of the case his whereabouts [were] unknown. 2005 WL 1432190, at
*1. As a result, a state court granted an emergency petition for the appointment of a Receiver.
Id.

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C.

Appointment of Receiver Warranted in this Case

Under this framework discussed above, the Court should exercise its sound discretion and
appoint a Receiver. A Receiver empowered to instruct DTCC is necessary to protect not only
COR Clearing and its customers, but all parties who were defrauded by Calissios scheme and its
wrongful retention of dividends for which it was ineligible. Each of the elements considered by
courts in this circuit have been met and fall in favor of appointing a Receiver, and thus the Court
should grant this Motion.
1.

COR Clearing Has a Valid Claim

First, it cannot be disputed that Calissio failed to respond to service of this lawsuit, and
that the Clerk of this Court has already entered default in this action against Calissio. For that
reason alone, COR Clearing is already entitled to a judgment in its favor on its claims against
Calissio and the allegations against it are deemed admitted. Fed. R. Civ. P. 8(b)(6) (a defaulting
party is deemed to admit factual allegations of the plaintiffs complaint, other than [those]
relating to the amount of damages).
Even if that were not the case, the evidence before the Court in support of this Motion
demonstrates that COR Clearing has a valid claim here that Calissio engaged in fraud by
flooding the market with dividend-ineligible shares, leading to harm to COR Clearing and its
customers. The evidence is undisputable that as a result of Calissio discreetly issuing shares of
its stock that it knew were not dividend-eligible, buyers of these shares collected dividends on
the shares to which they were not entitled, and Calissio has refused to return these dividends.
Customers of COR Clearing obtained millions of shares of Calissios stock that were issued after
the record date, and therefore never received a dividend on any of the shares. These customers
then sold millions of shares on the open market (some or all of these directly or indirectly back to

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Calissio as a result of the purchase program) for lower value, under the correct belief that
dividends were not attached to these shares. (Salas Decl. 17-18.)
2.

Calissio Has Engaged in Fraudulent Conduct

As the evidence presented demonstrates, Calissio has clearly engaged in fraudulent

conduct, from its scheme to defraud the marketplace to perhaps the very existence of the
company. Calissio intentionally flooded the market with non-dividend-eligible shares in such a
way that it triggered DTCCs interim accounting procedures and received millions of dollars in
improper dividends collected from unsuspecting sellers and their brokerage firms. (Salas Decl.
10, 17-18.) Then, once Calissios fraud was discovered, it further lied to COR Clearing and
others, purporting that the inappropriate collection of dividends was due to a glitch and
providing a fake wire transfer that it later cancelled. (Salas Decl. 15-16, Ex. F & H;
Aronoff Decl. 6, Ex. G.) Calissios president, Defendant Carter, then disappeared, cutting off
contact. (Aronoff Decl. 9.)
Additionally, Calissio has deceived everyone by asserting that it is an actual, viable
company in the United States, while in reality its purported office space, officers, and directors
do not even exist (at least not in the form put forth by Calissio), and it now only claims to exist in
the unregulated gray market. (See generally Hirschhorn & Pikor Decls.) Calissio is nothing
more than a shadow corporation, the sole purpose of which was to defraud the marketplace,
including both COR Clearing and DTCC. The fact that Calissio has no actual ties to the United
States frustrates COR Clearings ability to retrieve the funds COR believes to have been
unlawfully collected by Calissio. However, DTCC has the ability to reverse the transactions at
issue, upon receipt of a request from Calissio, or a Receiver standing in Calissios shoes.

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3.

Immediate Danger Exists that the Funds Are Being Concealed

Calissio is undisputedly concealing the funds. Carter (or whoever is operating under the
name Adam Carter) is in Mexico and has impliedly told COR Clearing to pound sand: Good
luck with the lawsuit. (Salas Decl. 16, Ex. H.) This statement, combined with the fact that
COR Clearing has yet to locate any Calissio assets in the United States (see generally Hirschhorn
& Pikor Decls), makes it clear that Calissio is concealing the ill-gotten funds gained through its
scheme. While proof of fraud is not required to support a district courts discretionary decision
to appoint a Receiver, Receivers are appropriate to address the secreting of assets outside the
country. See Citronelle-Mobile Gathering, Inc. v. Watkins, 934 F.2d 1180, 1184 (11th Cir. 1991)
(transfers to related entities and funneling money out of the country). Here, a Receivers
instruction to reverse the erroneous dividend transaction is the most immediate and justified
manner of reaching Calissios pocket, especially with the risk that Calissio now operates
somewhere outside of the country where this Court and COR Clearing cannot reach them. (See
generally Hirschhorn & Pikor Decls.)
4.

Legal Remedies Are Inadequate and the Remedy Sought Is the Only
One Available

As a result of Calissios concealment of the funds, any legal remedy, namely a default
judgment awarding COR Clearing the $3.7 million taken from it and its customers through
Calissios fraud, would be inadequate, as no funds or other assets of Calissios currently exist
that are reachable by an order of this Court. Thus, a money judgment in favor of COR Clearing
would do nothing to return COR Clearing and its customers to the position they were in before
Calissios fraud, and it will have no practical effect on Calissio or Carter.
The only available remedy is to have DTCC make post-payable adjustments in
accordance with its policies and procedures. (Aronoff Decl. 2, Ex. A at p. 32.) That

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adjustment will only happen upon an instruction by the issuer here Calissio itself or someone
standing in its shoes. (Id.) Since Calissio (through Carter) is not going to voluntarily come out
of the woodwork and reverse its fraudulent dividend collection that netted it millions of dollars
from COR Clearings customers and others, the only possible remedy is for a Receiver to instruct
DTCC to make this adjustment.
5.

Appointing the Receiver Will Do More Good than Harm

Appointing a Receiver will obviously do more good than harm. Here, the Receiver can
ensure that the funds wrongfully taken from COR Clearings customers and all other victims of
Calissios fraud are returned, and ensure that Calissio does not engage in any further fraudulent
conduct that further exposes Calissio to risk of lawsuits. Indeed, the only way to reverse the
harm done to Calissios victims is to appoint a Receiver to request DTCC to make post-payable
adjustments. The appointment of a Receiver will thus protect the public and any participants in
the marketplace who were harmed by Calissios fraudulent actions.
Second, no harm will come from the limited appointment because Calissio has effectively
abandoned its US operations. The appointment of the Receiver will not impact any ongoing
operations a normal concern in a proposed receivership because there are none.
VI.

IDENTIFICATION OF SUGGESTED RECEIVER

For the position of the limited purpose Receiver that COR Clearing requests with this

Motion, COR Clearing suggests Ronald F. Greenspan, Esq., Senior Managing Director
Corporate Finance of FTI Consulting, Inc. He is an internationally respected finance and
business reorganization professional with 25 years of diverse, hands-on experience. (Aronoff
Decl. 8, Ex. J.) Given his extensive experience in consulting, litigation, and bankruptcy
matters, Mr. Greenspan is a prudent choice for the role of Receiver in this case. (Id.)

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VII.

CONCLUSION
Accordingly, for the reasons above, the Court should grant COR Clearings Motion for

Order Appointing Limited Purpose Receiver and appoint as receiver Ronald F. Greenspan, Esq.
for the limited purpose of instructing DTCC to make post-payable adjustments in accordance
with DTCCs policies and procedures.

Dated: October 5, 2015

By:

s/ David L. Aronoff
Michael T. Hilgers (#24483)
mhilgers@goberhilgers.com
Carrie S. Dolton (#24221)
cdolton@goberhilgers.com
GOBER HILGERS PLLC
14301 FNB Parkway, Suite 100
Omaha, NE 68154
Telephone: (402) 218-2106
Facsimile: (877) 437-5755
David L. Aronoff*
daronoff@winston.com
Saul S. Rostamian*
srostamian@winston.com
Andrew G. Smith*
agsmith@winston.com
WINSTON & STRAWN LLP
333 S. Grand Avenue, 38th Floor
Los Angeles, CA 90071-1543
Telephone: (213) 615-1700
Facsimile: (213) 615-1750
* admitted pro hac vice
Attorneys for Plaintiff COR Clearing, LLC

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CERTIFICATE OF SERVICE
I hereby certify that on October 5, 2015, a true and exact copy of the foregoing was
served on Defendant Calissio Resources Group, Inc. via U.S. Mail, postage pre-paid:
Clark Agency, LLC
5915 Edmond Ste 125
Las Vegas, NV 89118
s/ David L. Aronoff
David L. Aronoff

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