| SEC Virtual Bench Trial
Against Paulsen Day 2 Has Kang Not Getting
Context and Cross Exam
By Matthew
Russell Lee, Patreon
BBC
- Guardian
UK - Honduras
- The
Source
SDNY COURTHOUSE,
July 16 – On Valentine's Day
weekend in 2015, the
Securities and Exchange
Commission alleges, John A.
Paulsen took part in bribing
Navnoor S. Kang of the New
York State Common Retirement
Fund to steer business to
Paulsen's then-firm Sterne
Agee. The bribe include a
skiing trip to Park City,
Utah.
On July 15, 2020
a bench trial began in the
case, before U.S. District
Court for the Southern
District of New York Judge
Paul G. Gardephe. Inner City
Press is covering it. The
SEC's opening statement quoted
Paulsen's messages to
co-workers about concealing
the trip and which client was
on it.
Judge
Gardephe indicated he will
need more from the parties on
the applicable (scienter)
legal standard the SEC much
meet.
Paulsen's
lawyer painted a different
picture, and before the 45
minute lunch break undertook
two cross-examinations of SEC
witnesses who had filed
declarations as their direct
testimony.
He was also able,
after a time, to have defense
exhibits appear on the screens
before the parties. So it it
goes during the Coronavirus
pandemic.
On Day 2 of
the trial, there was talk at
the beginning and end and in
between about a "fluttering"
sounds, "like a mechanical
bird." In between, Inner City
Press tweeted including:
It's the next day
in SEC v. Paulsen trial, and
former NYSCRF Kang is being
questioned.
He says, Why are
you asking me about the Paul
McCartney concert in New
Orleans? I thought this was
about Paulsen and Park City.
Can you give me some context?
Judge Gardephe:
Re-cross of Kang
by Paulsen's lawyer:
Q: Were you ever
told the Park City ski trip
was planned for a number of
client?
Kang: Ms Kelley
had it booked, more than 2
rooms. She was planning it
with my girlfriend of the
time, Shireen...
Q: Was it a month
in advance?
Kang: I
don't know when the rooms were
booked. Q: But you knew it was
a couples' trip?
Kang: Yeah. Me
and my girlfriend, Ms Kelley
and her husband.
Q: But then you
saw Mr. Paulsen was there.
Kang: Yes, it was
a surprise that he was there.
Now
defendant Paulsen is on the
"stand" being grilled by the
SEC.
Q: As of
Feb 19, you knew not to put
Kang's name on the expense
report? Paulsen: Right. Q: Why
did you lie to the lawyers in
the internal investigation?
Paulsen: I didn't think it was
a big deal.
Paulsen:
Obviously, that was a mistake.
Judge Gardephe: It wasn't a
big deal?
Paulsen: I was
called by the chief counsel of
Sterne Agee, he said it was
about the ski trip, it seemed
to be only about expense
reporting. So I called Ms
Kelley...
Judge Gardephe:
It didn't occur to you this
had something to do with Kang
not being allowed to accept
any gift?
Paulsen: It
didn't fully occur to
me.
SEC: You threw
your lot in with Ms Kelley,
and lied?
Paulsen: She was
concerned about Mr Kang.
Paulsen: Ms
Kelley told me, I was
surprised, 'Here's what I told
the investigators, it would be
good if you followed my lead.'
We decided to align our
stories
Is that
enough to sustain a verdict
for the SEC?
Inner City Press
will continue to follow this
trial.
The case is
SEC v. Paulsen, 18-cv-6718
(Gardephe)
***
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