"Regulatory Case Dismissed by Federal Judge Virginia Kendall at Final Hearing on December 16, 2020"
"SEC & DOJ Regulatory Case Dismissal Matters 2012 through 2020 of Charles J Dushek"
SEC and DOJ Legal Matters Update on Case Number 16-CR-811, on December 16, 2020 for Charles J Dushek...United States DOJ Attorney Dismisses Indictment Counts Against Charles Dushek *Source: sec.gov
As of December 16, 2020...Department of Justice (DOJ) Dismisses All Indictment Counts Against Charles J Dushek, (* See POGO Below) Whereby Important Defensive Evidence was Held-Back by DOJ Prosecution Attorneys from Dushek’s Defense Attorneys after the Unfounded DOJ Indictment was issued in December 2016. See: Case Dismissal Court Ducuments below.
This Holdback Implied Efforts to Influence Defendant Charles Dushek to accept a "Plea Bargain", to being guilty of a Lesser Charge, so as to Avoid having the DOJ Admit, that Their Indictment in 2016 was Ill-Conceived and False based upon the DOJ Use of SEC Contrived and Falsified Prosecutorial Allegations Against Dushek, within the Earlier SEC Complaint Filed in 2012 and Settled in 2014 involving Charles Dushek.
See Section 14 Below within this legal post that: ..."prosecutors can directly conduct defamation of character with impunity in the Public Domain to a person’s reputation and further to legally prosecute any individual with the use of: false, fake, spurious, incomplete, schemed, un-verified, prejudicial, unconfirmed, and perjured testimony evidence to create & bring forward allegations of wrongful doing and Grand Jury Indictments by the prosecutorial systems in the US Judicial System".
"Prosecutors have violated its principles so often that it stands more as a landmark to prosecutorial indifference and abuse than a hallmark of justice. Moreover, as interpreted by the judiciary, Brady Rule actually invites prosecutors to bend, if not break, the rules, [6] and many prosecutors have become adept at Brady Rule gamesmanship to avoid compliance.[7] "
* This latest DOJ Case Resolution and Court Findings Legal Brief is by Mr. Awais Bajwa Esq, International Attorney at Law * Corporate Law * Fiduciary Law * Securities Law * Supreme Court & Federal Government Law * Assistant to Supreme Court Justices * University of London LLB & LLM.
DOJ Prosecutors Intentionally withheld Defensive Evidence from Defendant’s Attorneys for 4 Years resulting in Dismissal of DOJ Indictment charges by Federal Judge Virginia Kendall on December 16, 2020.
* If any reader of this Post is interested in obtaining answers to any questions about Mr. Dushek's past and current involvement in the financial services industry, you are invited to connect with me, Mr. Dushek's Legal Representative at Law, using this contact information: AwaisBajwaLawyer@Live.com
* Case Dismissal Document issued by Federal Judge Virginia Kendall is presented below.
* The Dismissal of this Case against Charles Dushek has not been publically published by either of: U.S. Federal Court, Department of Justice (DOJ), or the Securities and Exchange Commission (SEC).
The Assistant United States Attorney Rick D. Young on December 16, 2020, in the Court Hearing presided over by Honorable Judge Virginia M Kendall by leave of court, filed a Case Dismissal, under “Rule 48 Dismissal” of the Indictment, Information or Complaint against Charles J. Dushek and the DOJ prosecution shall thereupon terminate.
Regarding Charles Dushek, Federal Case Number 16-CR-811, DOJ Assistant United States Attorney Rick D. Young Dismisses Indictment Case Charges on, December 16, 2020 in Federal Court with Judge Ms. Virginia M. Kendall Presiding Over this Final Hearing to Close All Matters of the Case. (See all documents below.)
DOJ Dismisal of Indictment Charges by US Attorney
SEC and DOJ Prosecuting Attorneys withheld, suppressed, coveted vital information that is Defensive Exculpatory Evidence in Content that biased the Prosecutions of SEC and DOJ. Said evidence, the Confidential Master Services Agreement between SEI Trust Company and GreatBanc Trust Company of 2007, which, within the Agreement, fundamentally adversely changed the Stocks Trading Accounts Allocations System, which directly caused multi-days delays in having all Current-Day Securities Trades delayed by as much as 5 calendar days from Trade Date of Transactions to the actual GBTC Client Accounts Bookkeeping Posting Date.
This change in Process for handling Securities Transaction Accounting Timing Outcomes violated Illinois Department of Financial and Professional Regulations (IDFPR Regs). This caused CMA Employees to delay their Ontime Same-Day Trades Account Allocations that had been functioning perfectly for same-day posting bookkeeping on the TradersApp GBTC System since April 2003.
* POGO.org Project On Government Oversight (POGO) Insiders state: That US Department of Justice frequently ignores the Discovery and Disclosure of Exculpatory Defensive Evidence to Defendants of a DOJ Indictment, in order to strengthen their Indictment Prosecutorial Cases in an attempt to greviously and unfairly influence Indictment Defendants to make Guilty Pleas to lesser charges to avoid a Federal Court Trial.
Whereas, The Brady Rule in Federal Cases against Individuals Requires Federal Prosecutors to use Full Efforts and Disclosure Ethics to Find and Share to Defendants All Evidence that Can be Used in the Defense of Individuals Indicted in any Federal Case. In the case matters against Dushek, the DOJ Attornies after doing "prosecutorial diligence to seek all evidence in support of a case, intentiaonally supressed the disclosure to Dushek and his Defense Attornies of defensive evidence that Dushek actually achieved substantail capital gains and investment income, that greatly exceeded the major stock index performance for the 4 year period of the SEC and DOJ cases. Whereas the SEC and DOJ falsely alleged that Dushek created investment losses to his clients.
All legal matters of Charles J Dushek regarding his financial services employment and business ownership history going back to the 1970s, when Mr. Dushek entered the regulated financial services industry via a Financial Futures Markets Specialist Role with Merrill Lynch Futures Division in Chicago through and including the ending of the US Department of Justice (DOJ) litigation against Mr. Dushek has been chronicled and assessed by myself, Mr. Awais Bajwa Esq, International Attorney at Law hired and appointed by Mr. Dushek to continually update this Post to provide authoritative reporting on all his legal matters associated to his work and business ownerships in US financial market settings.
If any reader of this Post is interested in obtaining answers to any questions about Mr. Dushek's past and current involvement in the financial services industry, you are invited to connect with me, Mr. Dushek's Legal Representative at Law, using this contact information: AwaisBajwaLawyer@Live.com
*Mr. Awais Bajwa Esq is a Practicing Administrative Law Attorney and Legal Expert in United States Civil, Criminal, and other Tort Case Matters to US Citizens and to US Federal & State Bar Attorneys for Legal Case Law Review Assessments, Preparation of Court Documents, Legal Briefs & Motions. and other Legal Assistance Matters in International Remote Services.
(Please Contact Attorney Mr. Awais Baywa Esq at: AwaisBajwaLawyer@Live.com for Advices and Legal Services in Corporate, Fiduciary, Securities, Civil & Criminal Case Research Briefs.)
SEC and DOJ Legal Update on Case Number 16-CR-811, January 1, 2021 for Charles J Dushek...United States DOJ Attorney Dismisses Indictment Counts Against Charles Dushek * DOJ Attorney and Judge Kendall's Court Findings are that Capital Management Associates (CMA) Clients, whereby Charles Dushek Managed Certain Portfolio Investments of 37 Clients, which clients Had No Realized Investment Losses for the Subject 4 Years Investment Time period of 2008 through 2012, and Instead Had a 12.5% Realized Money Capital Gains in Profits on These Client's Investment Portfolios, plus annual stock dividends and bond interest income averaging approximately 4% per year for each of the 4 years, as exclusively managed by Charles Dushek, compared to the S&P 500 Stocks Index Benchmark which had No Capital Gains nor Stock Market Value Appreciation during same period from June 2008 at its 1300 ticker value through its June 2012 ticker value. According to a DOJ Created Investment Analysis Review Study, that was held back by DOJ, and finally entered into Court Records after Defendant Dushek was influenced/steered to enter a Plea Agreement for Minimal Compliance Violations...Read All Details Below....By Mr. Awais Bajway Esq JD, International Attorney's Legal Brief
“Mr. Charles J Dushek, After Having Been Prosecuted by both the SEC and DOJ since 2012, Has Now Completed the Resolution of His 2016 DOJ Indictment Case by Receiving a Minimal Probationary Sentence Concerning an alleged Lack of Full Disclosure of Information, the outcome of a Plea Agreement entered by Mr. Dushek. Yet, Mr. Dushek had provided fully signed Investment Services Agreement Documents Disclosing All Matters of Interest to all clients, countersigned by CMA and Each Client.
Subsequently, probation supervision was officially terminated on January 10, 2023 by Chief U.S. Probation Officer, Marcus Holmes, pursuant to the document displayed below:
*These Minor Compliance Investment Services Document Statement Deficiencies Alleged to Mr. Dushek are Deemed to Have No Criminal Intent nor Fraud Implications.
Since, Mr. Dushek was required by legal due process to admit, or enter a Minimal Plea Bargain, to some degree of guilt, in order to attain a "Judicial Review or Verdict by a Presiding Federal Judge", which is a possible, often-used protocol in Federal Cases as a quid pro quo to settle or dismiss an Invalid Indictment Condition under Rule 48 Dismissal, whereas DOJ Prosecutors failed to have a credible and provable Indictment Case at the onset of this later-determined Invalid Indictment process in December 2016.
What percentage of Department of Justice Indictments are dismissed due to being invalid indictments?
Government Statistics:
"The data tracks numbers from the Department of Homeland Security and Department of Justice, and state that 16.6 to 50 percent of all cases were declined from federal prosecution. A declination is a decision by a U.S. attorney not to pursue criminal prosecution of a referral from a law enforcement agency."
* These Minor Compliance Deficiencies Alleged to Mr. Dushek are Deemed to Have No Criminal Intent nor Fraud Implications.
* The Indictment Dismissal Action by the DOJ Attorney, and Presiding Federal Judge is an action under Federal Rules of Criminal Procedure, TITLE IX. GENERAL PROVISIONS Rule 48. Dismissal.
SEC and DOJ Legal Update on Case Number 16-CR-811, January 1, 2021 for Charles J Dushek...United States Attorney Dismisses Indictment Counts * Capital Management Associates (CMA) the 37 Clients Had No Realized Investment Losses, but Instead Had $1,245,000 of Realized Capital Gain Profits According to a New DOJ Investment Allocations Review Study...Read All Details Below....By Mr. Awais Bajway Esq JD, International Attorney's Legal Brief
See Exhibit A Below, a DOC submitted by Department of Justice at Final Court Hearing on December 16, 2020.
The approximate Average Amount of the total investment assets in the 37 client accounts was $10,000,000, hence the Realized Money Capital gains were $1,245.091 divided by $10,000,000 = 12.45% Realized Capital Gains over the 4 year period. Whereas, the value of the benchmark S&P 500 Common Stocks Index was basically Unchanged from its 1,300 level in 2008 to 2012 at same 1,300 level. The CMA Investment Portfolios of the 37 subject client accounts held a mix of common stocks and bonds having additional average combined annual cash investment income returns of 4% each year in stock dividend income and bond interest coupon payments.
“Mr. Charles J Dushek, After Having Been Prosecuted by both the SEC and DOJ Since 2012, Has Now Completed the Closure of His 2016 DOJ Indictment Case by Receiving a Minimal Probationary Sentence for DOJ general allegations relating to investment advisory non-compliance, No Monetary Restitution was Set by the Court for any Offense, and 1 through 9 Counts of the Indictment Were Dismissed, and Count 10, is effectively Dismissed without Prejudice, as being just a Restatement of all Paragraphs included in Count 1, by the United States Attorney.”…Pursuant to Court Reports Dated: December 16, 2020. (This report, its supporting facts, explanations and its legal opinions are prepared and presented by Mr. Awais Bajwa Esq, International Attorney at Law * Corporate Law * Fiduciary Law * Securities Law * Supreme Court & Federal Government Law * Assistant to Supreme Court Justices * University of London LLB & JD at AwaisBajwaLawyer@Live.com. Attorney Mr. Awais Bajwa Esq was engaged by Mr. Charles J Dushek in 2017 to fully analyze his legal case matters with the SEC and DOJ and produce researched Legal Briefs for Public Disclosure.)
Regarding Mr. Dushek and his firm Capital Management Associates (CMA), this Firm became registered as an Investment Advisor in 2001, and FINRA designated the Illinois Department of Securities (IL-DOS) as the Sole Designated Regulator for CMA and Mr. Dushek’s investment practices and general operations.
Furthermore, since the establishment of CMA as an Investment Advisor in 2001, CMA and Mr. Dushek have had on-site discovery audits by IL-DOS Auditors for several days each, and there are no reported findings published by IL-DOS that CMA nor Mr. Dushek were at anytime non-compliant with IL-DOS Regulations for Registered Investment Advisors operating in the State Jurisdiction of Illinois.
The Reader(s) of this Report is invited to read a full professional history of Charles Dushek as composed and presented by:
Mr. Awais Bajwa Esq, International Attorney at Law * Corporate Law * Fiduciary Law * Securities Law * Supreme Court & Federal Government Law * Assistant to Supreme Court Justices * University of London LLB & JD at AwaisBajwaLawyer@Live.com.
SEC and DOJ Legal
Update on Case Number 16-CR-811, January 1, 2021
“Mr. Charles J Dushek, After Having Been Prosecuted
by both the SEC and DOJ Since 2012, Has Now Completed the Closure of His 2016 DOJ
Indictment Case by Receiving a Modest Probationary Sentence for Indictment
Charge #10 Concerning Disclosure Of Information By Commission, No Monetary
Restitution was Set by the Court for any Offense, and the Other 9 Charges of
the Indictment Were Dismissed by the United States Attorney.”…Pursuant to Court
Reports Dated: December 16, 2020.
(This
report, its supporting facts, explanations and its legal opinions are prepared
and presented by Mr. Awais Bajwa, International Attorney at Law * Corporate Law
* Fiduciary Law * Securities Law * Supreme Court & Federal Government Law *
Assistant to Supreme Court Justices * University of London LLM & JD at
AwaisBajwaLawyer@Live.com, and Attorney Mr. Awais Bajwa was engaged by Mr.
Charles J Dushek 3 years ago to fully analyze his legal case matters with the
SEC and DOJ and produce researched Legal Briefs for Public Disclosure.)
Details of Latest Developments
& Court Rulings in the Matter of US Department of Justice (DOJ) vs Mr.
Charles J Dushek Case # 16-CR-811 as narrated by Mr. Awais Bajwa, Personal
Attorney for Mr. Charles J Dushek.
Mr. Dushek was
Virtually Vindicated of Any Wrongful Doings by US Federal Court in Chicago on
December 16, 2020. 9 of the 10 DOJ
Indictment Charges of Securities Fraud were summarily Dismissed by the United
States Attorney, as likely predicated on a lack of sufficient evidence or
grounds to pursue a conviction. The
remaining, Charge 10 was held in status constructed as a general investment
advisory fraud charge based upon DOJ Federal Statutes with arbitrary
interpretations for charging a person with many option choices of fraud, via the
indictment process.
Mr. Dushek was given a minimal duration and
lenient sentencing by the Presiding Judge, based upon a Voluntary Plea entered
by Mr. Dushek, which admitted guilt of not knowing and abiding by the SEC Federal
Regulations for Investment Advisors for client investment management activities,
and therefore Mr. Dushek admitted de-facto illegal operating actions basis SEC
and DOJ statutes, whereas Mr. Dushek was exclusively regulated only by the
Illinois Department of Securities (IL-DOS), whereby US Government Agencies like
the Financial Industry Regulatory Authority (FINRA) help define how different
elements of the US Securities Industry are to be regulated and which Regulatory
Agencies are designated to regulate different areas of the Financial Services
Industry at-large, under the explicit Set of Regulations to be enforced by the
Designated Regulatory, in this Case the IL-DOS and its Investment Advisor
Regulatory Code of Conduct.
Regarding Mr. Dushek
and his firm Capital Management Associates (CMA), this Firm became registered
as an Investment Advisor in 2001, and FINRA designated the Illinois Department
of Securities (IL-DOS) as the sole designated regulator for CMA and Mr.
Dushek’s investment practices and general operations.
Furthermore, since
the establishment of CMA in 2001, CMA and Mr. Dushek have had on-site discovery
audits by IL-DOS Auditors for several days each, and there are no reported
findings published by IL-DOS that CMA nor Mr. Dushek were at anytime non-compliant with IL-DOS
Regulations for Registered Investment Advisors operating in the State
Jurisdiction of Illinois.
Regarding the DOJ
implied or alleged financial harm that Mr. Dushek was purported to have caused
a limited number of CMA clients that Mr. Dushek did portfolio management on,
the DOJ prosecutors did their internal analysis of the profit and loss outcomes
of all the limited number of client accounts that Mr. Dushek exclusively
managed.
These DOJ findings
indicated that for some of the hundreds of Common Stock Purchases made by Mr.
Dushek over the 5 years, and allocated to these limited number of client
accounts, that there were time intervals that these stock purchases went into
unrealized temporary loss conditions of about 1% in value, basis the stock
purchased price compared to later stock market prices, from the stock market
volatility between 2008 through 2012.
Yet, for the
full-term of the client holding periods of months, quarters and years of these
common stocks allocated to client accounts, the outcomes on the eventual sales
of these stocks in client accounts, clients achieved total realized money gains
from these stock holdings equaling $1,245,000, or about a 12% realized capital gain
across the average of all these client stock holdings.
This is a vary
favorable investment gain outcome for this limited group of clients who were
purported to have lost dearly, as a result of Mr. Dushek’s personal success in
day-trading his own account that had a 3 to 1 Win versus Loss ratio on all his
short-term trading. My research indicates
that, it is statistically common for very active professional day traders to
win on trades up to 70% of the time and have 30% or less of day trades be
losing trades.
Furthermore, the
types of Common Stocks that Mr. Dushek selected and purchased for his clients
were nearly all high-dividend paying stocks.
He would buy only common stocks having 3% to as high at 8% annual
dividend yields of solid and stable companies. These included mainly Commercial
Real-estate Investment Companies in stable economic settings, Natural Gas and
oil stocks of MLP energy production, refining and distribution firms with
tax-free dividend distributions, and common stocks of non-tech consumer staples
and drug companies in the US, Canada and European Economies.
Conservatively, the
average dividend payout yields of these types of common stocks averaged over 4%
per year. Hence, the holding of these
high-dividend common stocks within the limited number of client accounts that
Mr. Dushek managed produced an added money return to these clients of 4% per
year dividend cash flows for the 5 years of 2008 through 2012 that equaled an
average added total return of 20% in dividend income to these clients. This all appears to clearly indicate that
these clients would have achieved a near 30% total return of appreciation and
dividend incomes for this 5-year period.
Summary of Case
Observations: In comparing the
relative performance of the S&P 500 Major Stock Market Index, the S&P
500 Index Price on June 30 2008 was 1315, and 4 years later, the price on June
30 2012 was the same at 1314….no change.
The S&P 500 Stock Index had no appreciation at all from the
beginning to the end of the 4-year interval to which the DOJ Indictment case
was based upon. Yet, Mr. Dushek’s investment
selection skills indicate that he made favorable investment selections and
common stock purchases that yield a near 12% realized capital gains of
$1,245,000 for his clients, and a further 20% total dividends and interest
income realized cash gains for his clients over the course of the SEC and DOJ
cases period of time from 2008 to 2012.
Legal Case Brief
Prepared by Attorney Mr. Awais Bajwa in 2018 at request of Mr. Charles J Dushek
I, Mr. Awais Bajwa,
Attorney at Law was engaged by Mr. Dushek in 2017 to do legal analysis, facts
finding, and legal briefs regarding Mr. Dushek’s SEC and DOJ cases that
commenced in 2012.
This is a Legal
Brief Evaluating the Wrongful Prosecution by Securities & Exchange
Commission (SEC), and the Department of Justice (DOJ) in Alleged Wrongful
Doings Violations and the DOJ Indictment of Charles J Dushek in 2016.
This Legal Brief by Mr. Awais Bajwa, International Attorney at Law
* Corporate Law * Fiduciary Law * Securities Law * Supreme Court & Federal
Government Law * Assistant to Supreme Court Justices * University of London LLM
& JD AwaisBajwaLawyer@Live.com.
The foremost object of this
research Legal Brief is to narrate the story of Mr. Charles J. Dushek with
respect to the legal battle fought by him against the United States Securities
and Exchange Commission (SEC) and the Department of Justice (DOJ), wherein, he
had been made victim of wrongful prosecution through so-called cherry-picking
allegations that resulted in an unjust indictment charges by DOJ.
At the outset, I would like to mention
that I was invited by Mr. Charles J Dushek to do some public research on his
legal cases from 2012 onwards and to publish in the public domain any legal
findings, opinions, disclosures, defensive arguments, and public presentation
of public-domain information of any kind whatsoever that may or could be
considered as exculpatory (defensive) facts and evidence that Charles J. Dushek
may have no guilt whatsoever regarding the allegations put against him by the
SEC in 2012 onwards, and thereafter by the US Department of Justice (DOJ) in
2016 in the form of a criminal indictment for noted wrong-doings alleged below.
This legal brief is in aid of the
defensive arguments and facts supporting past and current legal matters of Mr.
Dushek, and for “Social Justice Advocacy” for his legal cases to help the
General Public understand that US Government Agencies, State Agencies, and
Departments of Regulation that do monitoring and enforcement of financial
services industries, businesses, and persons thereof are all/each subject to
the human errors and omission proclivities within the U.S. Judicial
prosecutorial processes or system.
In the landmark Judgement of Brady v. Maryland, the court held that
the suppression by the prosecution of evidence favorable to an accused upon
request violates due process where the evidence is material either to guilt or
innocence, irrespective of the good faith or bad faith of the prosecution. The
case involving Mr. Dushek also involves blatant violations of the rules
enshrined in Brady’s case.
1. Historical
Background of the Matter
In 2012, a financial professional by the name
of Charles J. Dushek of Illinois was put through a legal prosecution
(persecution) process by the Securities and Exchange Commission (SEC) for
alleged wrongful doings by himself as President of Capital Management
Associates, an Illinois Registered Investment Advisory (RIA) firm that he
established in 2001.
The federal grand jury in Chicago indicted Mr.
Charles J Dushek in December 2016 on securities fraud charges for allegedly
allocating profitable trades to his accounts while assigning unprofitable
trades to his client accounts. According to the indictment, Mr. Dushek, the
president of Lisle, Illinois-based Capital Management Associates Inc.
("CMA") allegedly made purchases of publicly traded securities
without designating in advance whether he was trading personal funds or client
funds. He then reportedly waited up to five days to allocate the trades so that
he could select the profitable trades for his personal accounts and assign the
losing ones to the accounts of unsuspecting clients. From July 2008 to August
2012, Dushek allegedly withdrew from his own accounts more than $1 million in
gains realized from the alleged scheme.
2. Professional
Reputation and Character of Mr. Charles J Dushek
I understand from the
available records that Mr. Dushek has been a thorough professional with an
esteemed reputation as a person and an expert. He has remained a shareholder
and president of CMA and was registered as an Investment Adviser Representative
and Registered Investment Advisor (RIA) with the Illinois Department of
Securities (IL-DOS) since 2001.
According
to Mr. Dushek, CMA as an RIA has never been determined by the IL-DOS of any non-compliance as per FINRA
records that go back to 2001 nor has any client complaint or from otherwise
ever been filed against CMA or its President Mr. Charles J Dushek.
Both Mr.
Dushek and CMA have maintained a perfect compliance regulatory history with
IL-DOS since CMA as an RIA that was started in 2001. This discovery prompted me
to look back even further in Mr. Dushek’s professional history within the
financial services industry dating back to 1973. From the available records as
discovered by Research and Fact-finding by me, there were no records nor notes
of any non-compliant activities, complaints or judgments of any kind about
financial crimes or non-compliance with any regulations.
It was fascinating that Mr.
Dushek has authored the following publications of educational articles for
annual “Commodity Research Bureau.”
•
Trading the Foreign Currency Futures Markets - by Charles J. Dushek and
Carol J. Harding
•
Understanding the U.S. Treasury Bill Futures Market - by Charles J.
Dushek and William M. Bradt
•
Understanding the GNMA Futures Market - by Charles J. Dushek
3. No
History of Non-compliance
At the time in 2013, when
cases were alleged against Mr. Dushek, the Illinois State Regulator for Capital
Management Associates Inc. and Charles J Dushek, an Investment Advisor, the
IL-DOS was directed to conduct annual reviews and investigations from 2001
onwards onsite at CMA, and at RIA offices of all Illinois RIA firms, ADV
Disclosure Reviews under its Illinois jurisdiction, and to assure that each
Illinois RIA firm and its officers were compliant with IL-DOS Regulations for
RIAs.
It is pertinent to note that it is the
discretion of IL-DOS to conduct any RIA surprise audits or to do “for cause”
any investigations of RIA firms. If there are any Findings by Regulators of
non-compliant activities by RIA firms and/or other financial industry entities,
these Findings are to be enforced upon by IL-DOS and reported to FINRA for
viewing by all interested persons in the public domain.
However, as per Mr. Charles J
Dushek, there are no Non-Compliance reports or records from IL-DOS about CMA
nor Mr. Dushek as having engaged in any wrongful doings regarding any client
account trading nor allocations process. Nor, are there any IL-DOS Regulations
within the IL-DOS Regulations that speak to practices of allocations within
their Code.
This review of outstanding
compliant conduct and credibility by Mr. Dushek encouraged me that there seemed
to be something very wrongful in the prosecutorial endeavors by the SEC and DOJ
for alleging illegal doings by Mr. Dushek while President of CMA. It became even more puzzling that his
designated Regulator, IL DOS, had no findings of wrong-doings nor
non-compliance when IL-DOS did several onsite audits and routine investigations
for potential non-compliance of CMA and interviewed each employee of CMA to
detect any non-compliance by either CMA employees, Dushek of CMA and of CMA
itself as a RIA since 2001.
4. First
Amendment Right of Free Speech
While exercising his First
Amendment right of Free Speech, Mr. Dushek wanted to make his version known to
the public, through me an attorney of many years in financial and international
law, as he believes that the US Government Agencies SEC has victimized him, DOJ
and FBI (FBI as interviewers and investigators hired by SEC and DOJ).
5. Allegation
of Cherry-Picking appears Unfounded against Dushek in the Prosecution’s Cases
In conversations with Mr. Dushek, there
seemed no definitive inculpatory (wrongful-doing) evidence that had any
validation of any wrongful-doings by him as President of CMA. I was provided
with the public Contractual Investment Advisory Agreement form between Mr.
Dushek and his firm’s clients and the Agreements between Mr. Dushek and the CMA
Clients Custody and Services firm (Corporate Fiduciary) GreatBanc Trust Company
(GBTC) of Illinois that provided account custodial, accounting, and many other
services which are usual and customary for a Corporate Fiduciary Custodian to
exclusively perform to/for CMA clients.
The allegation
of So-Called ( "So-Called" because I could not find nor discover any
Codified Statute or Regulation within SEC Regulations that were published that
charged any act like this as a crime.) Cherry-Picking as leveled against Mr.
Dushek seemed to be unfounded. According
to "Investopedia" reference source, Cherry Picking refers to the act
of choosing top popular common stock securities, likened to so-called
"Blue Chip Stocks" or "Bell Weather Stocks" for investment
for client portfolios from the long-term favorable research history on these
favored companies, that generally overlooks large amounts of public data and/or
disregards broad market metrics. So,
Cherry Picking in stock selections by investment managers have typically meant
for decades the picking of stocks that are of such high quality and favorable
company reputation, that market philosophy is that a Cherry Picked stock could
be a "Can't Lose Investment." [1]
The prosecutors failed to
present evidence in support of their allegations that Mr. Dushek engaged in any
Cherry Picking scheme. There is a further undocumented and sketchy definition
of Cherry-Picking by the SEC that seems to have a high variation of meaning in
arbitrary prosecutorial conduct by enforcement attorneys. It appears that when the SEC purportedly
finds allegations of Cherry-Picking (as per an SEC non-published definition in
any SEC Code definition) as an offense, they can act on it punitively.
In
such cases, the SEC levies arbitrary high fines, mostly over a million dollars,
that is paid only to the SEC and typically (or never) none of the fine dollars
are ever received by any clients that were alleged to have been financially
damaged by a so-called different arbitrary definition by the SEC Cherry-Picking
process or scheme. This fining process
seems to promote an inducement by SEC prosecutors, whose job is to prosecute,
to work on civil cases that have the potential to generate large fines revenues
for their employers.
6. Description
of Dushek’s Personal Trading as Approved by GreatBanc Trust Company
Regarding the so-called
Cherry-Picking and late alleged trade allocations done by Mr. Dushek for years,
he explained that he has been doing short-term multi-day buys and sells of
stocks and day-trading purchases and sells of stocks for himself into his accounts
utterly separate from long-term stock investments for CMA clients, where he was
Investment Advisor for a limited number of individual client accounts.
7. Client
Agreements Do Not Permit Short-Term Trading in Client Accounts
Mr.
Dushek further noted that every CMA client had executed a “CMA Investment
Advisory Agreement” that prohibited doing any short-term trading or day-trading
in any client accounts whatsoever as controlled by Article 1 “Appointment of
Investment Manager”, and further expressed in Article 7 “Other Investment
Activities”. These provisions are
explicitly stated in all the blank-copy IA Agreements exhibits available in
Public Domain.
Paragraph
1…Investment Manager is to do only long-term investments into Client accounts.
Paragraph
2…Investment Manager is to do only securities transactions that are in
accordance with the Client’s Long-Term Investment Objective.
Paragraph
3…Custodian (GBTC) provides securities execution services. In no event will the Custodian be obligated
to execute any transaction which it believes to be in violation of any State or
Federal law or regulation or in violation of the custodian’s regulator.
Paragraph
7…CMA employees may buy, sell or trade in any securities for their respective
personal accounts. Such transactions may
differ from the timing or nature of action taken with respect to Client’s
account…
Paragraph
8…Investment Manager is to act with the care, skill, prudence, and diligence
under the circumstances then prevailing (Circumstances meaning: GBTC did not
provide CMA and Mr. Dushek with any systematic process to do client account
transaction allocations at the time of transaction executions) that a prudent
man acting in like capacity and familiar with such matters would use in the
conduct of an enterprise of a like character and with like aims. Mr. Dushek
used his best efforts to comply with any regulations expressed or implied in
doing client account allocations within the processes, as inadequately provided
by GBTC to CMA and Mr. Dushek, to always act prudently and credibly.
Paragraph
11 c …Investment Adviser is properly registered and in compliance with the
state laws under which the RIA is under IL-DOS jurisdiction and IL-DOS
Regulations.
Paragraph
16…Both parties (CMA and Client) agree that the representations within the
Agreement do not violate any obligation of either party.
Paragraph
17…The validity of this Agreement and of any of its provisions, as well as
rights and duties of the parties hereunder, shall be governed by the laws of
the State of Illinois. (Not laws of the SEC).
8. Explanation
of Client and Personal Trading Via GBTC Brokerage Accounts
It was further revealed by Mr.
Dushek as to how he did his personal short-term and day-trading, as he
confirmed that he utilized brokerage industry common stock trade accounts set
up by the custodian GBTC of all CMA’s client accounts and Dushek’s accounts,
who is GreatBanc Trust Company, an Illinois Trust Company. And, that the brokerage accounts were
actually in the name of GreatBanc Trust Company as Principal of these accounts,
whereby GreatBanc Trust Company did all fulfillment of making and taking stock
deliveries and handling cash settlement payments between counter-parties of all
trades.
According to Mr. Dushek,
GreatBanc Trust Company gave an entirely unconditional authorization to Mr.
Dushek and other CMA employees, such as Greg Nickum of CMA, to utilize these
brokerage accounts without having in-place any user procedures set up by
GreatBanc Trust Company management.
GreatBanc Trust Company failed and did not require to have Dushek or
other authorized users/traders to input trade allocations data (Client Names
nor Account Numbers) into the DVP trading Brokerage account platform at the
time of trade executions, so that each trade could be allocated as: 1. a
Long-Term Trade for Clients, or 2. as a Short-Term or Day-Trade for CMA
employee account(s).
Further, GreatBanc Trust Company failed to establish separate stock
trade brokerage accounts for CMA to utilize as: “One brokerage account for only
Personal Employee Trades, and another brokerage account for only CMA Client
Accounts trades, to thus allow CMA to follow the so-called “Best Practices”
rule of trade allocations within the money management industry, which means in
general that for all securities transactions done by an RIA for clients, that
the client accounts to receive the trades are to be noted (allocated) at the
moment that any securities trade is entered and executed. But, no explicit Rule nor Regulation within
the IL-DOS RIA Regulations codifies rules or regulations for this activity.
Therefore, if there is no Regulation nor Code to reference to, then the
financial services industry can only adopt a so-called Best Practice process if
the RIA firm doing the trades is provided with the Means or System or Platform
to utilize a Best Practice, such as noted previously, but neither CMA nor Mr.
Dushek was given any access to follow any Best Practice of simultaneously
entering account allocations information at the same time as trades were
executed. GreatBanc Trust Company is regulated by the Illinois Department of Professional &
Financial Regulation.
9.
No
Jurisdiction of SEC
The Prosecutors also
failed to appreciate that the SEC did not have the jurisdiction to take
cognizance of the matter. Rule 203A-2(c)
allows a new firm to directly register with the SEC on day-one instead
of initially registering with the relevant state(s) before or shortly
thereafter having to transition to SEC registration once it reaches $100
million in regulatory assets. RIA Code states that only RIAs that have in
excess of $100 million in client assets under management are to be Registered
with the SEC, whereas all RIA firms of Illinois that hold less than $100
million in client assets are only Registered and under the single jurisdiction
of IL-DOS. CMA had only $60 million in
client assets under its management, therefore the SEC had no jurisdiction over
the compliance of CMA nor Mr. Dushek as an RIA firm.
10. No Requirement of recording details of
transaction
This provision
of the IL-DOS for RIAs doing Transactions states the compliance for doing
client account transactions. This Regulation makes no statement that the RIA
must note or record the name of each client account at the moment that any
securities transaction is executed by the RIA, Mr. Dushek for any client
account.
Section 130.853 Account Transactions
Effecting
or causing to be effected by or for any client's account, any transactions of
purchase or sale which are excessive in size or frequency or unsuitable in view
of the financial resources and character of the account, shall constitute an
act, practice, or course of business on the part of the registered
investment adviser or its representative effecting such transactions or
causing the transactions to be effected that is fraudulent, deceptive or
manipulative.[2]
It was further revealed by Mr. Dushek that
GreatBanc Trust Company had full access to view any and all trades being placed
to these brokerage accounts by simply logging into the brokerage account admin
platform with their USER ID and Password to observe and supervise any/all
trades on a real-time basis every day. Dushek further explained that the
general usage operations of these brokerage accounts were known about by IL DOS
regulators and CMA employees. GreatBanc
Trust Company officers and employees also knew about the usage operations, and
that GreatBanc Trust Company never created nor installed any electronic or
digital interface between their brokerage account trade executions information
to be immediately propagated or recorded into the account allocations system
for GreatBanc Trust Company for Client Accounts accounting/bookkeeping. After 2013, it was learned by Mr. Dushek that
there existed a stock purchase and sale transaction executed fill report system
called FIX for Financial Information Exchange, that GBTC should have
implemented/integrated in 2008, but GBTC failed to provide a compliant fills
electronic reporting system.
11. Negligent
Actions & Inactions & Agreement Violations of GreatBanc Trust Company
This “Lack of Compliant or Best Practice
Processes” by GreatBanc Trust Company looks to have been a knowingly negligent
or inappropriate trading process set up by GreatBanc Trust Company to not have
linked client account(s) allocations information and trade execution
information flows into its proprietary accounting and allocation bookkeeping
processes in 2008.
Mr. Dushek further described
that the “GreatBanc Custody Agreements” (a public document that was always
given out by CMA to Clients since 2003 to examine as they desired), that each
and every CMA Client executed the GBTC Custodial Agreement along with GreatBanc
Trust Company as “Agent” and each CMA client as “Principal”, who are the only
two parties as Signors of these Agreements.
The Agreements explicitly designated only the Agent, GreatBanc Trust
Company to execute Buy and Sell securities transactions on behalf of Principals
(CMA Clients) pursuant to Article III, POWERS AND DUTIES of AGENT, para 1)
General Power, or upon the instructions of an Investment Manager duly appointed
by Principal. This leaves GBTC in a non-compliant
condition by directing CMA and Mr. Dushek to directly execute transactions for
Principal’s accounts in the usage of an inferior and non-compliant securities
trading accounts and information gathering platform, both operated and
controlled by GBTC.
Further under Article VI
Paragraph 12 Successors and Assigns of the GBTC Custodial Agreements…GBTC
seemed to have assigned all the Provisions of this Agreement to SEI Trust
Company in July 2008, which included all trade execution processes that were
inferior to Best Practices of a compliant Trust Company, thereby making SEI
Trust Company a culpable partner of GBTC in all wrongdoings and violations of
Agent within the Custodial Agreements.
Further under Article VI
Paragraph 2 Degree of Care….GBTC violated Custodial services of care, skill,
prudence and diligence as to how a prudent person should act in not utilizing a
credible securities trading execution and client account(s) trade allocation
bookkeeping system.
12. CMA
and Dushek are Faultless & Guilt-Free of Wrong-Doings
In light of the above, neither
Mr. Dushek nor CMA had any legal operations power nor authority within the GBTC
Custodial Agreements to be doing any securities purchase and sell transactions,
nor to do Trade Allocations entries into Personal Accounts nor CMA Client
Accounts, and the entirely of the allocation processes and trade settlements
was the legal and contractual burden/responsibility/obligation of only
GreatBanc Trust Company (and Assignee SEI Trust Company), not a responsibility
of either Dushek nor anyone else, employee or otherwise of CMA, who all were
“Clients” of GreatBanc Trust Company (and Assignee SEI Trust Company), and NOT
Employees nor Agents of GreatBanc Trust Company (and Assignee SEI Trust
Company).
Within all known regulatory
frameworks of law, the Client, being either a CMA Public Client or Mr. Dushek
also being a GBTC Custody Agreement Client (Principal) is always to remain
powerless and disabled from making or doing any “accounting transactions” into
his/her accounts at any bank, trust company, brokerage or other
institution. Therefore, the allegation
of Cherry-Picking and delayed allocations do not appear to be substantiated.
13. GreatBanc
Trust Company Operates a Flawed Accounting and Trade Allocations System
On the other hand, the alleged
wrongful doings appear to be upon GreatBanc Trust Company (and Assignee SEI
Trust Company), as being willfully negligent in providing a “Best Practices”
trade executions system under the control of GreatBanc Trust Company (Pursuant
to Article III Para 1 of the “GBTC Custodial Agreement”), and a process so as
to have enabled CMA employees and Dushek “to have only compiled personal
account and client account trade allocations information” for GreatBanc Trust
Company (and Assignee SEI Trust Company)” to do the actual physical entry accounts
transaction allocations bookkeeping postings as a systematic data input
condition of brokerage trade entries and executions. Further, all the brokerage account trades
allocations information should have followed through in an integrity system
sponsored exclusively by the Custodian GBTC into the Custodian’s bookkeeping
process as required by GBTC’s regulator, the Illinois Department of Financial
& Professional Regulation (IDFPR).
GreatBanc Trust Company, was
contractually operating its business in a Fiduciary Capacity to be doing all
things in the best interests of its Clients, per the GreatBanc Trust Company
Custodial Agreement terms. All of the
following were Principals (Not Agents) of the Agreements: CMA Clients accounts,
Charles J. Dushek accounts, and CMA entity accounts. CMA was also a Customer/Client and
never an Agent of or to GreatBanc Trust Company.
GreatBanc Trust Company of Illinois is
regulated by Illinois
Department of Financial & Professional Regulation. There
is no Regulation that allows a Trust Company custodian to direct or delegate
the bookkeeping and investment purchases and sales functions to any
non-employee of the Trust Company nor to any unaffiliated firm or organization
of the Trust Company. Whereas, GBTC
delegated and directed CMA, its employees and Mr. Dushek to make not only
direct client account allocations transactions into client accounts, but also
directed and facilitated a non-compliant trade allocations system known as MOXY
Advent for CMA to utilize that gave over “direct entry securities trading and
client account transaction bookkeeping functions to CMA. Whereas GBTC was in
violation of Illinois Department of Financial & Professional Regulations: TRUSTS AND FIDUCIARIES (760 ILCS 5/)
Trusts and Trustees Act. And FINANCIAL
REGULATION (205 ILCS 620/)
Corporate Fiduciary Act.
14. Violations
of Rationale of Brady’s Case
Continually, It appears
as if the Prosecutors of SEC failed to disclose the Brady evidence in the
Dushek’s case. Since a prosecutor's Brady duty is a continuing one[3],
a prosecutor is obligated-throughout the pre-trial and trial proceedings-to
disclose Brady evidence when he learns about it, and is required to make
a diligent search for Brady (defensive) evidence in places where Brady
evidence is readily available.
When a defendant pleads
guilty or the case goes to trial, there is a presumption that a prosecutor has
complied with his disclosure obligations.[4]
However, it is commonly believed that most Brady evidence never gets disclosed
by prosecutors; rather, it remains buried in huge-capacity digital file
hard-drives, drawers, boxes, and file cabinets in the offices of the
prosecutor, the police, and other law enforcement and government agencies
connected to the case.[5]
Courts continue to
recite the litany that prosecutors who may lack knowledge of the existence of Brady
evidence have a constitutional and ethical duty to learn about its
existence, but prosecutors continue to invoke their own familiar litany when a
defendant requests Brady evidence. However, prosecutors are aware that
if they lack knowledge of the existence of Brady evidence, nor seek to
uncover exculpatory evidence, there is nothing for them to suppress or
disclose. Thus, prosecutors can avoid complying with Brady by asserting
either that they are unaware of the existence of Brady evidence, or that
any Brady evidence, even if it exists, is not in their possession or
control. Clearly, a claim of ignorance offers a prosecutor a convenient
opportunity to engage in gamesmanship to avoid compliance with Brady.
Further, that prosecutors can
directly conduct defamation of character with impunity in the Public Domain to
a person’s reputation and further to legally prosecute any individual with the
use of: false, fake, spurious, incomplete, schemed, un-verified, prejudicial,
unconfirmed, and perjured testimony evidence to create & bring forward
allegations of wrongful doing and Grand Jury Indictments by the prosecutorial
systems in the US Judicial System.
Prosecutors have violated its
principles so often that it stands more as a landmark to prosecutorial
indifference and abuse than a hallmark of justice. Moreover, as interpreted by
the judiciary, Brady actually invites prosecutors to bend, if not break, the
rules,[6]
and many prosecutors have become adept at Brady gamesmanship to avoid
compliance.[7]
15. Conclusion
In summary, this is one of the
Legal Briefs, in my “Legal Brief Articles” for the purposes of “Social Justice
Advocacy” for a legal case involving Charles J. Dushek to help the public
understand that the US system of administration of justice is subject to human
errors, vile manipulations, and omission proclivities within self-greed and in
prosecutorial processes. And, that a
reputable and honorable man such as Charles J Dushek having maintained a
40-year period of compliant business behavior and in his ethics within
financial regulated industry positions, has been unfoundedly persecuted and
prosecuted by very questionable prosecutorial tactics that in many instances
violate his fundamental rights, Brady vs. Maryland and Due Process.
_______________________
Mr. Awais
Bajwa
Attorney
at Law
International
Attorney, Researcher & Brief Writer
Email: awaisbajwalawyer@live.com
[2] TITLE 14: COMMERCE: SUBTITLE A: REGULATION OF
BUSINESS: CHAPTER I: SECRETARY OF STATE: PART 130 REGULATIONS UNDER ILLINOIS
SECURITIES LAW OF 1953 : SECTION 130.853 ACCOUNT TRANSACTIONS
[3]
The Supreme Court's treatment of Brady has routinely viewed the prosecutor's
duty as a continuing one. See, e.g., Mooney v. Holohan, 294 U.S. 103, 112
(1935) (due process violated where prosecutor learned during trial that
committed perjury but failed to inform defendant). See also Advisory Committee
Report, supra note 14, at 13, 26 (noting federal and state courts that
explicitly make the prosecutor's disclosure obligation "a continuing
one."). Moreover, the prosecutor's duty under Brady does not end with the
verdict but continues. See Canion v. Cole, 91 P.3d 355, 360 (Ariz. Ct App.
2004) ("The defendant's right to due process with regard to the disclosure
of exculpatory evidence does not cease to exist after the verdict is rendered;
the prosecution has a continuing duty to provide such evidence as was
unlawfully withheld.
[4]
See Bracy v. Gramley, 520 U.S. 899,909 (1997) (quoting United States v.
Chemical Foundation, Inc., 272 U.S. 1, 14-15 (1926)) ("Ordinarily, we
presume that public officials have properly discharged their official
duties.").
[5]
See United States v. Alvarez, 86 F.3d 901, 905 (9th Cir. 1996) (''the
government's failure to turn over exculpatory information in its possession is
unlikely to be discovered and thus largely unreviewable"); United States
v. Oxman, 740 F.2d 1298, 1310 (3d Cir. 1984) ("material favorable to the
defense may never emerge from secret government files"). See a/so
Elizabeth Napier Dewar, A Fair Trial Remedy for Brady Violations, 115 YALE L.J.
1450, 1455 (2006) ("Defendants only rarely unearth suppressions.");
Stephen A. Saltzburg, Perjury and False Testimony: Should the Difference Matter
So Much?, 68 FORDHAM L. REv. 1537, 1579 (2000) (arguing that in most cases,
"withheld evidence will never see the light of day"); Tracy L.
Meares, Rewards for Good Behavior: Influencing Prosecutorial Discretion and
Conduct With Financial Incentives, 64 FORDHAM L. REv. 851, 909 (1995) ("it
is probably fair to say that many instances of Brady-type misconduct are never
discovered and hence never reported").
[6]
See Joseph R. Weeks, No Wrong Without a Remedy: The Effective Enforcement of
the Duty of ProsecutoT'3 to Disclose Exculpatory Evidence, 22 OKLA. CITY U.L.
REv. 833, 836. (1997) (Brady "is a right that almost begs to be violated;
Eugene Cerruti, Through the Looking Glass at the Brady Doctrine: Some New
Reflections on White Queens, Hobgoblins, and Due Process, 94 KY. L.J. 211, 274
(2005) ("Brady is now best understood as a rule of prosecutorial privilege
rather than a rule of disclosure. I am reminded of Judge Jerome Frank's famous
aphorism that the rules regulating misconduct by prosecutors are seen by
prosecutors as "pretend rules" when courts do not enforce them. See
United States v. Antonelli Fireworks Co., 155 F.2d 631, 661 (2d Cr. 1946) (Frank,
J., dissenting).
[7]
The tern "gamesmanship" has been employed to describe a prosecutor's
treatment of Brady. See United States v. Oxman, 740 F.2d 1298,,1310 (3d Cir.
1984)("this court has been faced with annoying frequency with gamesmanship
by some prosecutors with respect to the duty to disclose United States v.
Starusko, 729 F.2d 256, 265_ (3d Cir. 1984) ("the [Brady] game will go on,
but justice will suffer"). See also Stephanos Bibas, Brady v. Maryland:
From Adversarial Gamesmanship Toward the Search for Innocence?, CRIMINAL
PROCEDURE STORIES, (Carol S. Streiker ed. 2006), at 129.
Comments
Post a Comment