The Tribune

• Davis & Co get cross-examine go-ahead on 74 SEC questions

By NEIL HARTNELL

Tribune Business Editor

nhartnell@tribunemedia.net

A broker/dealer's former compliance chief has failed in his bid to prevent attorneys acting for his ex-boss from cross-examining him over his answers to 74 questions posed by US federal regulators.

Edward Cooper, former chief compliance officer for Mintbroker International, the defunct Bahamian securities firm that operated as SureTrader, had argued the Supreme Court's new civil procedure rules did not permit Davis & Co, representing his former principal, Guy Gentile, from questioning him over the answers he submitted to Securities & Exchange Commission (SEC) questions.

However, his plea was ultimately rejected by Justice Carla Card-Stubbs in a December 6, 2023, verdict. She found that the examination of witnesses under the Evidence (Proceedings in Other Jurisdictions) Act, as applied in Mr Cooper's particular case, "must be conducted in the same manner as if the witness was giving evidence at trial".

This permitted the various forms of witness questioning seen in Supreme Court trials, including examination, re-examination and the cross-examination that Davis & Co attorneys, Philip McKenzie KC and Glenda Roker, were seeking to do on Mr Gentile's behalf.

Besides Mr Cooper, the SEC is also seeking evidence and witness testimony from multiple other former Bahamian executives at SureTrader to bolster its case against Mr Gentile in their now two-and-a-half year legal battle.

It has also moved to examine Antonio Collie, the now-defunct broker/dealer's ex-chief financial officer; Stephen Darville, its former IT chief; Janay Symonette-Pyfrom, then-chief marketing officer; and Drameko Moore, described as an affiliates professional.

Mr Cooper's bid to block his cross-examination by Davis & Co, filed on November 1, 2023, has further delayed the SEC's efforts to obtain the evidence it desires from The Bahamas. It has now sought, and obtained an extension until January 26, 2024, to complete the pre-trial "discovery" process from the south Florida federal district court.

"The SEC was also successful in its efforts to take testimony from some of the third-party former SureTrader employees located in THe Bahamas through the letters rogatory process, which was started in August 2022 with this court’s approval," the US capital markets regulator said.

"Because of their roles at SureTrader, these former employees have relevant information about SureTrader and Gentile operating an offshore broker/dealer in The Bahamas designed to help day traders in the United States circumvent the US rules that regulate pattern day trading, illegally soliciting US customers and acting as an unregistered securities broker/dealer.

"Although the SEC successfully completed the testimony of three of the five former Bahamian employees subject to testify through the letters rogatory process, the testimony of former compliance officer Edward Cooper was started, but not completed, due to objections made by Mr Cooper’s counsel," the SEC added.

"These objections were raised in a specially set hearing in the local Bahamian court. On November 28, 2023, the Bahamian court overruled Mr Cooper’s objections and stated that his testimony may continue. Thus, the parties are now trying to reschedule a date before the Bahamian registrar to conclude Mr Cooper’s testimony."

Tribune Business understands that the examination of Ms Symonette-Pyfrom was delayed due to incorrect contact details for her, but that has now been overcome and she will be examined accordingly. "The SEC has conferred with Bahamian local counsel regarding scheduling of the remaining testimony and was advised that due to the upcoming holidays there is limited availability," the SEC added in its filings.

"Although the parties are diligently working on finalising discovery, essential discovery from The Bahamas will not be completed by the court’s current discovery deadline of November 30, 2023. Without this discovery, the SEC will be hindered in many aspects of pre-trial preparation. Thus, the SEC requests that the current discovery deadline be extended until January 26, 2024." That was duly granted.

Justice Card-Stubbs, in her ruling, noted that the SEC had submitted some 74 questions for Mr Cooper to answer in his examination before the Supreme Court registrar. She had ordered that all the former SureTrader executives appear on March 10, 2023, having determined that the US request for judicial assistance was proper.

This Order, though, was varied on May 16, 2023, upon the application of Davis & Co. The changes allowed Mr McKenzie and Ms Roker, as Mr Gentile's legal representatives, "to participate in all proceedings" and attend the depositions of the five former Bahamian executives as well as "to cross-examine the said witnesses".

The depositions were proceeding until Mr Cooper's attorneys, Amicus Chambers, objected to him being cross-examined because the proceedings were "non-adversarial in nature". As a result, the civil procedure rules 2022 - especially parts 33 and 69 - "do not contemplate witnesses being cross-examined by counsel for parties to these proceedings, on questions provided by a foreign court".

The process thus stalled until Justice Card-Stubbs delivered her ruling. She took a dim view of Amicus Chambers' last-minute letter, the day before the November 28, 2023, hearing that none of its attorneys would be available to attend on Mr Cooper's behalf.

"While courts may, for practical purposes, attempt to set convenient dates for the hearing of matters before it, a court cannot be constrained or hamstrung by any one party’s diary. To allow such a state of affairs would be disruptive to the justice system," Justice Card-Stubbs said.

"In this case an applicant, not a party to the matter, has filed an application before this court. If this court were to yield to the applicant’s unavailability without question, then a non-party could, without explanation, delay in pursuing an application that has resulted in the stay of one aspect of the matter and thus effectively obstruct the just disposal of the proceedings that the parties have pending against each other.

"That is an undesirable state of affairs," the judge added. "What an applicant cannot be encouraged to do is to derail proceedings by the filing of an application which he does not proceed with in a timely fashion. 'Timely fashion' is to be considered on a case-by-case basis.

"To permit counsel to dictate the diary of this court in these circumstances would result in a process that would be unfair as it would prejudice the proceedings for the named parties given the time constraints. This is a matter that required the observation of time constraints.

"Counsel for the applicant was well aware that the deposition was undertaken in the context of proceedings pending elsewhere. Counsel for the applicant was also aware that the deposition process was stayed pending the hearing of the application."

Having decided to proceed with the hearing, Justice Card-Stubbs found that the law provides for the cross-examination of witnesses at Evidence (Proceedings in Other Jurisdictions Act) especially as there was sufficient protection available to them.

"It seems to me that the law in relation to the conduct of the examination of a witness under this regime is that the examination conducted by the registrar must follow the method known in this jurisdiction as obtains at trial," she found.

"While the RSC (Supreme Court rules) specifically provided for examination, cross-examination and re-examination, the phases of questioning known to trials in this jurisdiction, the current civil procedure rules provide merely for the examination to 'be conducted in the same way as if the witness were giving evidence at a trial'.

"In this jurisdiction, evidence at trial is adduced via examination, cross-examination and re- examination. Therefore, in my opinion, the law allows for the examination, cross-examination and re-examination of a witness ordered deposed pursuant to a request under the Evidence (Proceedings in Other Jurisdictions) Act."