SEC Adams File 5

Case 3:18-cv-00252-CWR-FKB Document 33 Filed 06/22/18 Page 1 of 15
____________________
No. 3:18-CV-00252-CWR-FKB
SECURITIES & EXCHANGE COMMISSION,

Plaintiff,
v.
ARTHUR LAMAR ADAMS,

et al.,
Defendants.
____________________
ORDER APPOINTING RECEIVER

____________________
Before CARLTON W. REEVES, District Judge.

Defendants engaged in a multi-million dollar Ponzi scheme
that defrauded hundreds of investors. This order appoints a
receiver to manage Defendants’ estates and describes the
scope of receivership.
Thirty applicants submitted receivership applications to the
Court. This pool of men and women was extremely impres-
sive and unusually diverse. Applicants included lawyers
(ranging from solo practitioners to partners in law firms

larger than any in Mississippi), accountants, academics, and
other professionals from a dozen states across the country.
Out-of-state applicants recognized the talents of Mississippi
attorneys by proposing substantive alliances with them. The
Secretary of State was right to support an open application
process, without which many would never have had the op-
portunity to reveal their talents to this Court. Applicants of-
fered compelling reasons for their appointment. The breadth
and depth of their experiences made this Court’s choice a dif-
ficult one.
The Court considered many factors when screening applica-
tions. A number of applicants lacked the appropriate profes-
sional experience for this case. Some with the right experience
proposed hourly rates that were too high to justify, including
rates of over $1,000 an hour. Others proposed to work with
partner professionals less qualified than others in the pool.
Occasionally, applicants or the firms they partnered with had,
in practicing before this Court, demonstrated that they are un-
suited to serve as a receiver.
Nearly all candidates, however, proposed laudable and bold
steps to ensure that their recruitment and retention policies
were inclusive. The Court was particularly impressed with
members of the Mississippi bar who crossed long-established
lines to forge entrepreneurial partnerships. The diversity of
the applicant pool and the creativity of the respective pro-
posals is worth noting.
Encouraging diversity in the judiciary is not a cure-all for the
lack of that feature in the broader legal profession. Nor is en-
couraging diversity destined to result in true representation,
2
rather than tokenism masquerading as such. Nevertheless, in

order to do justice, the judiciary must incorporate a wide ar-
ray of experiences, facts, and perspectives into its deci-
sionmaking processes – including the decisionmaking pro-
cess of receivers, who act as extensions of the courts. When
courts hire and appoint individuals to assist in their mission,
they must ensure those opportunities are extended to all
whom the judiciary serves. As this case proves, doing so en-
hances – rather than diminishes – the quality of the applicant
pool.
Of all the candidate qualifications the Court took into account,
perhaps the most important was the ability to exercise disin-
terested and informed judgment. This case involves what
may be the largest Ponzi scheme in Mississippi’s history, one
in which many Mississippi residents and entities are entan-
gled. Mississippi is a small state. The Receiver and her staff
must be close enough to the state to understand its workings.
But the Receiver must also be distant enough to preserve her
impartiality, a key trait in a process that may involve clawing
back funds from the connected and powerful. Many other-
wise capable candidates were unequipped to navigate the real
and apparent conflicts of interest their appointment would
create.1
After weighing the applicants’ professional experience,
hourly rates, candor, judgment, and other qualifications, the
Court believes that Alysson L. Mills, a member of the Missis-
sippi bar and partner at the Louisiana firm of Fishman
1 This should come as no surprise to the parties, given their discussion of

a specific candidate’s conflicts of interest at the hearing on this matter.
3
Haygood, LLP, is best suited to be Receiver. Mills is a gradu-

ate of the University of Mississippi School of Law, and clerked
for Fifth Circuit Judge E. Grady Jolly. She has extensive fed-
eral court experience, including representation of bankruptcy
trustees and securities purchasers in suits involving fraud and
mismanagement. She has authored Supreme Court briefs and
frequently argues in the Fifth Circuit.
Mills has proposed an experienced team of lawyers from Fish-
man Haygood to serve as her counsel, including individuals
who have handled matters involving Ponzi schemes, complex
bankruptcy disputes, and securities arbitration. Her team has
represented individuals, companies, pension funds, hospi-
tals, cities, and states. Firm partner Brent B. Barriere’s experi-
ence makes him particularly qualified to serve as primary
counsel to the Receiver. Most team members will bill at rates
not to exceed $275 an hour, while two partners will bill at
rates not to exceed $325 an hour.
The Court is satisfied that Mills has the experience, judgment,
and talent to perform the duties and responsibilities of a re-
ceiver and act as an officer of the Court. Therefore, it is hereby
ORDERED that Alysson L. Mills is appointed to serve with-
out bond as Receiver for the estate of the Receivership De-
fendants, Arthur Lamar Adams and Madison Timber Proper-
ties, LLC. The Receiver shall take possession of the entirety of
the Receivership Defendants’ assets. The Receiver is author-
ized to retain the services of Fishman Haygood, LLP and
other appropriate professionals. The scope of receivership is
as follows.
4
I
General Powers & Duties of Receiver
The Receiver shall have all powers, authorities, rights, and
privileges now possessed by the officers, managers, and in-
terest holders of and relating to the Receivership Defendants,
in addition to all powers and authority of a receiver at equity
under all applicable state and federal law in accordance the
provisions of 28 U.S.C. §§ 754, 959, and 1692, and Fed. R. Civ.
P. 66, and shall assume and control the operation of the Re-
ceivership Defendants and shall pursue and preserve all of
their claims.
No person holding or claiming any position of any sort with
the Receivership Defendants shall possess any authority to act
by or on behalf of the Receivership Defendants, with the ex-
ception that attorneys representing Defendant Adams in U.S.
v. Adams, Case No. 3:18-CR-0088-CWR-LRA (S.D. Miss) may
continue their representation.
The Receiver and her agents, acting within the scope of such
agency as Retained Personnel, are entitled to rely on all out-
standing rules of law and Orders of this Court and shall not
be liable to anyone for their own good faith compliance with
any order, rule, law, judgment, or decree. In no event shall the
Receiver or Retained Personnel be liable to anyone for their
good faith compliance with their duties and responsibilities
as Receiver or Retained Personnel, nor shall the Receiver or
Retained Personnel be liable to anyone for any actions taken
or omitted by them except upon a finding by this Court that
they acted or failed to act as a result of malfeasance, bad faith,
gross negligence, or in reckless disregard of their duties.
5
The Receivership Defendants shall indemnify, defend, and

hold harmless the Receiver and the Retained Personnel from
and against all actions (pending or threatened and whether at
law or in equity in any forum), liabilities, damages, losses,
costs, and expenses, including but not limited to reasonable
attorneys’ and other professionals’ fees, arising from conduct
or omission of the Receiver and the Retained Personnel under
the terms of this Order, except for any such conduct or omis-
sion adjudged by this Court to be the result of gross negli-
gence or willful misconduct.
Subject to the specific provisions below, the Receiver shall
have the following general powers and duties:
(1) to use reasonable efforts to determine the nature,
location, and value of all property interests of the Re-
ceivership Defendants, including but not limited to
monies, funds, securities, credits, effects, goods, chat-
tels, lands, premises, leases, claims, rights and other as-
sets, together with all rents, profits, dividends, interest
or other income attributable thereto, of whatever kind
and description, wherever located, which the Receiv-
ership Defendants own, possess, have a beneficial in-
terest in, or control directly or indirectly (“Receiver-
ship Property” or, collectively, the “Receivership Es-
tate”), including, but not limited to, (i) the following
bank accounts: First Bank of Clarksdale, Account No.
7315736, Southern Bancorp Account Nos. 6454774,
6454367, and 6454359, and River Hills Bank Account
No. 6755060 and (ii) Defendant Adams’ principal resi-
dence located at 134 Saint Andrews Drive, Jackson,
Mississippi, 39211;
6
(2) to use reasonable efforts to determine the nature

and location of the books and records, client lists, ac-
count statements, financial and accounting documents,
computers, computer hard drives, computer disks, in-
ternet exchange servers, telephones, personal digital
devices and other informational resources, of whatever
kind and description, wherever located, in possession
of the Receivership Defendants, or issued by the Re-
ceivership Defendants and in possession of third par-
ties (“Receivership Records”);
(3) to take custody, control, and possession of all Re-
ceivership Property, Receivership Records, and any as-
sets traceable to assets owned by the Receivership Es-
tate; and, with prior approval of this Court upon ex
parte request, institute such actions or proceedings to
impose a constructive trust, to sue for and collect, re-
cover, receive or take into possession from third parties
all Receivership Property, Receivership Records, and
any assets traceable to assets of the Receivership Es-
tate;
(4) to manage, control, operate, and maintain the Re-
ceivership Estate and hold in her possession, custody,
and control all Receivership Property, pending further
Order of this Court;
(5) to open bank accounts for the Receivership Defend-
ants;
(6) to use Receivership Property for the benefit of the
Receivership Estate, making payments and disburse-
ments and incurring expenses as may be necessary or
7
advisable in the ordinary course of business in dis-

charging her duties as Receiver;
(7) to take any action which, prior to the entry of this
Order, could have been taken by the officers, manag-
ers, and agents of and relating to the Receivership De-
fendants; including the termination of any personnel
that the Receiver deems appropriate;
(8) to terminate any and all leases of the Receivership
Defendants’ personal or real property, or to sell any of
the Receivership Defendants’ personal or real prop-
erty;
(9) to access all of the Receivership Defendants’ bank
accounts, securities accounts, and IT systems;
(10) to collect any management or advisory fees due
and owing to the Receivership Defendant;
(11) to produce Receivership Defendants’ records and
to share information as reasonably requested with the
staff of the Commission without a subpoena;
(12) with this Court’s approval, to engage and employ
persons in her discretion to assist her in carrying out
her duties and responsibilities hereunder, including
but not limited to accountants, attorneys, securities
traders, registered representatives, financial or busi-
ness advisers, liquidating agents, real estate agents, fo-
rensic experts, brokers, traders, or auctioneers;
(13) to take such action as necessary and appropriate
for the preservation of Receivership Property or to pre-
vent the dissipation or concealment of Receivership
Property;
8
(14) to obtain, by presentation of this Order, docu-

ments, books, records, accounts, deposits, testimony,
or other information within the custody or control of
any person or entity sufficient to identify accounts,
properties, assets, liabilities, or agents of and relating
to the Receivership Estate or Receivership Defendants;
(15) without further order of this Court, to issue sub-
poenas for documents and testimony consistent with
the Federal Rules of Civil Procedure;
(16) to investigate and, following this Court’s approval
upon ex parte request, to bring such legal actions based
on law or equity in any state, federal, or foreign court
as the Receiver deems necessary or appropriate in dis-
charging her duties as Receiver;
(17) following this Court’s approval upon ex parte re-
quest, to file a petition in bankruptcy for either or both
the Receivership Defendants if the Receiver deter-
mines it to be necessary; and
(18) to take such other action as may be approved by
this Court.
II
Duty to File Recommendation & Report
Within 60 days, the Receiver shall file a report with the Court
as to the status of the Receivership Estate. Such report shall
include:
(1) a description of all known assets of the Receivership
Estate, their location, and to the extent possible, the Re-
ceiver’s good faith estimate of the value of those assets;
9
(2) a list of secured creditors and other financial insti-

tutions with an interest in the Receivership Estate;
(3) to the extent practicable, a list of investors in the se-
curities sold by the Receivership Defendants;
(4) any other known liabilities of the Receivership Es-
tate;
(5) the Receiver’s preliminary plan for the administra-
tion of the Receivership Estate, including a recommen-
dation regarding whether bankruptcy cases should be
filed for all or a portion of the assets subject to the re-
ceivership, a recommendation as to the appropriate-
ness of forfeiture proceedings for any assets subject to
the receivership, and a recommendation as to whether
litigation against third parties should be commenced
on a contingent fee basis to recover assets for the ben-
efit of the receivership;
(6) to the extent not provided in response to the prior
subject matters, the Receiver’s preliminary recommen-
dation as to the most reasonable and efficient methods
for recovery, liquidation, and distribution of the Re-
ceivership Estate;
(7) the Receiver’s recommendation as to whether the
receivership created by this Order should be continued
and the benefits of any such action; and
(8) any additional information that the Receiver deems
relevant.
Upon consideration of this report, the Court shall consider
whether to terminate the receivership or order such other re-
lief as it deems appropriate.
10
III
Injunction Against Interference with Receiver
The Receivership Defendants and all persons receiving notice
of this Order by personal service, facsimile, or otherwise, are
hereby restrained and enjoined from directly or indirectly tak-
ing any action or causing any action to be taken, without the
express written agreement of the Receiver, which would:
(1) interfere with the Receiver’s efforts to take control,
possession, or management of any Receivership Prop-
erty; such prohibited actions include but are not lim-
ited to, using self-help or executing or issuing or caus-
ing the execution or issuance of any court attachment,
subpoena, replevin, execution, or other process for the
purpose of impounding or taking possession of or in-
terfering with or creating or enforcing a lien upon any
Receivership Property;
(2) hinder, obstruct, or otherwise interfere with the Re-
ceiver in the performance of her duties; such prohib-
ited actions include but are not limited to concealing,
destroying, or altering records or information;
(3) dissipate or otherwise diminish the value of any Re-
ceivership Property; such prohibited actions include
but are not limited to releasing claims or disposing,
transferring, exchanging, assigning, or in any way con-
veying any Receivership Property, enforcing judg-
ments, assessments or claims against any Receivership
Property or any Receivership Defendant, attempting to
modify, cancel, terminate, call, extinguish, revoke, or
accelerate the due date of any lease, loan, mortgage, in-
debtedness, security agreement, or other agreement
11
executed by any Receivership Defendant or which oth-

erwise affects any Receivership Property; or
(4) interfere with or harass the Receiver, or interfere in
any manner with the exclusive jurisdiction of this
Court over the Receivership Estate.
The Receivership Defendants and their past or present offic-
ers, managers, and agents and all persons in active concert or
participation with them, including any financial institution,
shall provide the Receiver immediate access to and control
and possession of Receivership Records and the Receivership
Estate’s assets, including securities and property of any kind,
real and personal, as well as all keys, passwords, entry codes,
and the original of all books, records, documents, accounts,
computer printouts, disks, and the like.
The Receivership Defendants shall cooperate with and assist
the Receiver in the performance of her duties, including by
promptly acknowledging to third parties the Receiver’s au-
thority to act on behalf of the Receivership Estate and by
providing such authorizations, signatures, releases, attesta-
tions, and access as the Receiver may reasonably request.
The Receiver shall promptly notify the Court and the Com-
mission of any failure or apparent failure of any person or en-
tity to comply in any way with the terms of this Order.
IV
Stay of Litigation
The following Ancillary Proceedings, excluding the instant
proceeding and all police or regulatory actions and actions of
the Commission related to the above-captioned enforcement
action, are stayed until further Order of this Court: all civil
12
legal proceedings of any nature, including but not limited to

bankruptcy proceedings, arbitration proceedings, foreclosure
actions, default proceedings, or other actions of any nature in-
volving:
(1) the Receiver, in her capacity as Receiver;
(2) any Receivership Property, wherever located;
(3) any of the Receivership Defendants, including sub-
sidiaries and partnerships; or
(4) any of the Receivership Defendants’ or Receiver-
ship Estate’s past or present officers, directors, manag-
ers, agents, or general or limited partners sued for, or
in connection with, any action taken by them while act-
ing in such capacity of any nature, whether as plaintiff,
defendant, third-party plaintiff, third-party defendant,
or otherwise.
The parties to any and all Ancillary Proceedings are enjoined
from commencing or continuing any such legal proceeding,
or from taking any action, in connection with any such pro-
ceeding, including but not limited to the issuance or employ-
ment of process.
All Ancillary Proceedings are stayed in their entirety, and all
Courts having any jurisdiction thereof are enjoined from tak-
ing or permitting any action until further Order of this Court.
Further, as to a cause of action accrued or accruing in favor of
one or more of the Receivership Defendants against a third
person or party, any applicable statute of limitation is tolled
during the period in which this injunction against commence-
ment of legal proceedings is in effect as to that cause of action.
13
These provisions bar any person or entity, other than the Re-
ceiver, from placing either of the Receivership Defendants in
bankruptcy proceedings.
V
Receiver Compensation
The Receiver is to be paid her reasonable compensation and
expense reimbursement from the Receivership Estate. Such
compensation and expense reimbursement shall require the
prior approval of this Court.
Within 30 days after the end of each full month while the Re-
ceivership is in effect, the Receiver shall apply to this Court
for compensation and expense reimbursement from the Re-
ceivership Estate through Monthly Fee Applications.
Monthly Fee Applications shall contain representations that:
(i) the fees and expenses included therein were incurred in the
best interests of the Receivership Estate; and (ii) with the ex-
ception of her Receivership application, the Receiver has not
entered into any agreement, written or oral, express or im-
plied, with any person or entity concerning the amount of
compensation paid or to be paid from the Receivership Estate,
or any sharing thereof.
Monthly Fee Applications will be interim and will be subject
to cost-benefit and final reviews at the close of the receiver-
ship. At the close of the receivership, the Receiver will file a
final fee application, describing in detail the costs and benefits
associated with all litigation and other actions pursued by the
Receiver during the course of the receivership.
Monthly Fee Applications may, in the Court’s discretion, be
subject to a holdback in the amount of 25% of the amount of
14
fees and expenses for each application filed with the Court.
The total amounts held back during the course of the receiv-
ership will be paid out at the discretion of the Court as part of
the final fee application submitted at the close of the receiver-
ship.
At the close of the receivership, the Receiver shall submit a
Final Accounting, in a format to be provided by Commission
staff, as well as the Receiver’s final application for compensa-
tion and expense reimbursement.
This Order supersedes prior orders of this Court only to the
extent they conflict.
SO ORDERED, this the 22nd day of June, 2018.
s/ CARLTON W. REEVES
United States District Judge
15
IN THE UNITED STATES DISTRICT COURT

FOR THE SOUTHERN DISTRICT OF MISSISSIPPI
NORTHERN DIVISION
SECURITIES & EXCHANGE PLAINTIFFS

COMMISSION, et al.,
V. CAUSE NO. 3:18-CV-252-CWR-FKB
ARTHUR LAMAR ADAMS, DEFENDANTS

et al.
ORDER FOR INTERIM RELIEF PENDING

APPOINTMENT OF A TEMPORARY RECEIVER
This Court, having determined that certain interim relief is appropriate to preserve the
assets of the Defendants pending the selection of a Temporary Receiver, orders as follows:
A. The Defendants and all persons receiving notice of this Order by personal service,
facsimile or otherwise, are hereby restrained and enjoined from directly or indirectly taking any
action or causing any action to be taken, without the prior order from this Court, which would:
1. Interfere with the Temporary Receiver’s eventual efforts to take control,

possession, or management of monies, funds, securities, credits, effects, goods, chattels,
lands, premises, leases, claims, rights and other assets, together with all rents, profits,
dividends, interest or other income attributable thereto, of whatever kind, which the
Defendants own, possess, have a beneficial interest in, or controls directly or indirectly
(“Receivership Property” or, collectively, the “Receivership Estate”); such prohibited
actions include but are not limited to, using self-help or executing or issuing or causing
the execution or issuance of any court attachment, subpoena, replevin, execution, or other
process for the purpose of impounding or taking possession of or interfering with or
creating or enforcing a lien upon any Receivership Property;
2. Dissipate or otherwise diminish the value of any Receivership Property;

such prohibited actions include but are not limited to, releasing claims or disposing,
transferring, exchanging, assigning or in any way conveying any Receivership Property,
enforcing judgments, assessments or claims against any Receivership Property or any
Receivership Defendant, attempting to modify, cancel, terminate, call, extinguish, revoke
or accelerate (the due date), of any lease, loan, mortgage, indebtedness, security
agreement or other agreement executed by any Defendant or which otherwise affects any
Receivership Property; or,
3. Interfere in any manner with the exclusive jurisdiction of this Court over
the Receivership Estate.
4. Nothing in paragraph A herein shall prohibit any business in which either

defendant owns an interest and which is managed by a third party from entering into
commercially reasonable agreements on behalf of that business or continuing to pay
operating expenses for that business as they come due in the ordinary course of business.
Management of any such businesses shall maintain a list of any such agreements and
payments and shall, upon appointment of a Temporary Receiver in this matter, provide
that list to the Temporary Receiver. This paragraph specifically authorizes the majority
owners of Delta Farm Land Investments LLC (“DFLI”), a Mississippi limited liability
company in which Defendant, Arthur Lamar Adams, owns a one-third interest, to take the
following actions:
a. To continue to operate and manage DFLI, including temporarily replacing

Arthur Lamar Adams as the managing member and registered agent for
service of process until the appointment of a Temporary Receiver (and the
filing with the Mississippi Secretary of State the documentation necessary to
effectuate such temporary appointment);
b. To open and maintain bank accounts and to make deposits and withdrawals
therefrom so as to continue to receive income and pay expenses, including all
taxes and assessments of any kind, as they come due in the ordinary course of
business (subject to audit and challenge as specified below by the Temporary
Receiver);
c. With regard to the real property described on the Promissory Note attached
hereto as Exhibit “A” (the “Subject Property”), which is owned by DFLI and
pledged as collateral for the Promissory Note, to make all payments as and
when due under the terms of the Promissory Note. The next such payment is
due on June 30, 2018, in the amount of $43,356.00. The majority members of
DFLI are authorized to make all payments due under the Promissory Note,
including the portion of such payments that would otherwise be due from
Arthur Lamar Adams. The majority members of DFLI are authorized to
recoup the amount of payments made on behalf of Arthur Lamar Adams from
future revenue of DFLI, including revenue from lease agreements or the
proceeds from a sale of the Subject Property, provided that no such
recoupment shall decrease Arthur Lamar Adams’s membership interest in
DFLI;
d. To enter into the following agreements regarding the Subject Property, which
are substantially similar to arrangements DFLI has previously entered into and
which generate revenue for DFLI: (i) an Agricultural Lease Contract in the
form attached hereto as Exhibit “B” and (ii) a Hunting Lease Agreement in
the form attached hereto as Exhibit “C”;
e. To continue to collect the income on and to renew when necessary, two
Conservation Reserve Program Contracts attached hereto as Exhibits “D” and
“E”; and
f. To continue to market for sale the Subject Property, provided that the
approval of the final terms of any sale of the Subject Property will be reserved
to this Court or the receiver, as appropriate.
DFLI shall maintain a list of payments and agreements necessary to effectuate the actions
listed above to be provided to this Court and the Temporary Receiver upon appointment.
The Temporary Receiver may challenge any of the actions taken pursuant to this
paragraph only on the basis of (1) not being in the ordinary course of business; (2)
pursuant to any contractual right that Arthur Lamar Adams may have under the DFLI
operating agreements; or (3) pursuant to any rights provided by Mississippi law to
minority members of limited liability companies.
B. As set forth in detail below, the following proceedings, excluding the instant
proceeding and all police or regulatory actions and actions of the Commission related to the
above-captioned enforcement action, are stayed until further Order of this Court:
All civil legal proceedings of any nature, including, but not limited to, bankruptcy
proceedings, arbitration proceedings, foreclosure actions, default proceedings, or other
actions of any nature involving: (a) any Receivership Property, wherever located; (b) any
of the Defendants, including but not limited to its subsidiaries and partnerships; or, (c)
any of the Defendants’ past or present officers, directors, managers, agents, or general or
limited partners sued for, or in connection with, any action taken by them while acting in
such capacity of any nature, whether as plaintiff, defendant, third-party plaintiff, third-
party defendant, or otherwise (such proceedings are hereinafter referred to as “Ancillary
Proceedings”).
C. The parties to any and all Ancillary Proceedings are enjoined from commencing
or continuing any such legal proceeding, or from taking any action, in connection with any such
proceeding, including, but not limited to, the issuance or employment of process.
D. All Ancillary Proceedings are stayed in their entirety, and all Courts having any
jurisdiction thereof are enjoined from taking or permitting any action until further Order of this
Court. Further, as to a cause of action accrued or accruing in favor of one or more of the
Defendants against a third person or party, any applicable statute of limitation is tolled during the
period in which this injunction against commencement of legal proceedings is in effect as to that
cause of action.
E. The provisions of Paragraphs B – D above bar any person or entity from placing
either of the Defendants in bankruptcy proceedings.
SO ORDERED, this the 5th day of June, 2018.
s/ Carlton W. Reeves
UNITED STATES DISTRICT JUDGE
____________________

et al.,
Plaintiffs,
v.
ARTHUR LAMAR ADAMS,

et al.,
Defendants.
____________________
ORDER ON RECEIVERSHIP
____________________

This case involves a multi-million dollar Ponzi scheme that
defrauded hundreds of investors. The ill-gotten gains of that
scheme now reside in Defendants’ estates. Both the Securities
and Exchange Commission and the Mississippi Secretary of
State have requested the appointment of a receiver to control

those estates and protect investor interests.1
District courts have a “well-established” power to appoint a
receiver in a case brought by the Commission when there is a
“showing of fraud and mismanagement, absent insolvency.”2
The architect of this Ponzi scheme has already pleaded guilty
to systematic fraud and mismanagement, and the relevant es-
tates likely contain millions of dollars.3 The motions to ap-
point a receiver are GRANTED.
The next question is whom this Court should appoint as re-
ceiver. A receiver is “a representative of the court” who acts
on “behalf of all parties,” rather than on behalf of a particular
party.4 The discretion to select a qualified receiver therefore
lies with the Court, not the parties.5
After considering the written and oral arguments of counsel,
the Court believes that the fairest method of selecting a re-
ceiver is as follows. On May 31, 2018, the Court will enter a
1 Emergency Motion, Docket No. 11; Emergency Motion, Docket No. 21.
2 Sec. & Exch. Comm'n v. First Fin. Grp. of Texas, 645 F.2d 429, 438 (5th Cir.
1981) (quoting Sec. & Exch. Comm'n v. Keller Corp., 323 F.2d 397, 403 (7th
Cir. 1963)).
3 See Plea Agreement, Docket No. 11 in United States v. Arthur Lamar Adams,
3:18-CR-88-CWR-LRA (S.D. Miss).

4 Booth v. Clark, 58 U.S. 322, 331 (1854).
5 See Adelman v. CGS Sci. Corp., 332 F. Supp. 137, 149 (E.D. Pa. 1971); accord
Securities & Exchange Commission Office of the Inspector General, Over-

sight of Receivers and Distribution Agents, Report. No. 432 (2007) (“While a
judge in a securities case brought by the Commission usually appoints a
receiver recommended by Enforcement staff, the judge may select any
qualified receiver.”).
2
Request For Proposals Order soliciting bids for the receiver-

ship and the receiver’s primary counsel. By close of business
on May 29, therefore, the parties shall submit draft RFP Or-
ders containing the receivership application and schedule
they propose the Court adopt.
The parties have expressed concerns about immediate threats
to investors’ interests. The federal government retains great
power to address many of those threats through its prosecu-
tion of the parallel criminal case. If, however, the parties or
any other potential intervener believes that Defendants could
themselves mitigate immediate harm to investors’ interests
were it not for the existing Consent Order [Docket No. 5], they
may file an appropriate motion and a proposed Agreed Order
amending that Consent Order.
SO ORDERED, this the 25th day of May, 2018.
3
____________________

et al.,
Plaintiffs,
v.
ARTHUR LAMAR ADAMS,

et al.,
Defendants.
____________________
____________________


Cir. 1963)).

4 Booth v. Clark, 58 U.S. 322, 331 (1854).

2

3
Case 3:18-cv-00252-CWR-FKB Document 26-1 Filed 06/01/18 Page 1 of 6
1. What professional experience and skills qualify you to be receiver in this case?
C. RECEIVERSHIP STAFFING
1. What steps will you take to guarantee that your hiring pracices are as inclusive as possible, and what – if
any – billable hour targets do you aim to achieve?
2. Describe the law firms or other entities you hire to assist you, their qualifications, proposed rates, and
whether those rates reflect a discount from their standard rates.
3. Describe and justify the hourly rates for yourself and whether your rates reflect any discount from your
standard rate.
2
4. How will you and your staff take steps to minimize the expenses of the receivership?
5. How will you and your staff communicate with investors and keep them informed of proceedings?
D. CONFLICTS OF INTEREST
1. What potential conflicts of interest may arise during your receivership, including those of yourself and
any accounting firms, legal firms, or other support staff that you plan to hire?
2. Before your appointment, what steps will you take to check for (and eliminate) any of the above conflicts?
3
3. After your appointment, how will you guard against (and respond to) any conflicts that arise?
E. ADDITIONAL INFORMATION
Provide any further information you believe relevant to your candidacy for receivership.
F. SIGNATURE
By signing the below, you affirm that you have truthfully answered the above questions as an officer of the
court.
Signature of Applicant
Date
4
CONFLICTS OF INTEREST AND BACKGROUND INFORMATION FORM
Please complete a document that responds to all prompts listed below. Attach that document to this form
and sign the declaration below.
Except where otherwise noted, for purposes of the information request below, “you” means you as an
individual, as well as any spouse or dependents, and separately, any firm, partnership, joint venture, or
other business in which you are an officer or director, or in which you have a substantial financial interest.
Except where otherwise noted, this information is requested for any responsive matters existing during the last five
years. Also, if during the course of your duties you become aware of responsive information concerning a
potential claimant in the matter listed above, you must promptly supplement your response to disclose that
information.
1. List all contracts, consulting engagements, employment, service as an officer or director, or other work of
any kind you have performed for any defendant/respondent in this matter, or any of its parents, subsidiaries, or
other affiliates, or any claimant in this matter. Include any responsive matters existing during the last ten years.
2. List any financial interests in or with the defendant/respondent, its parents, subsidiaries, or other affiliates,
or any claimant in this matter (e.g., stocks, bonds, options, other debt or equity interests, partnerships, retirement
plans).
3. List all other personal or professional relationships or interests in or with the defendant/respondent, its
parents, subsidiaries, or other affiliates, or with any of their officers or directors, or any claimant in this matter, not
listed above.
4. List all matters in which you have been retained as a Receiver, Distribution Fund Administrator,
Distribution Consultant, or as a subcontractor, agent or other service provider, in connection with any civil action
or administrative proceeding by the Commission.
5. List all other prior or existing cases, matters, or proceedings in which the Commission or the Mississippi
Secretary of State has an interest, in which you have been retained or served as a witness, consultant, or other
expert.
6. Identify any disciplinary proceedings, felony criminal indictment or information (or equivalent formal
charge) or a misdemeanor criminal information (or equivalent formal charge), civil proceedings or actions against
you personally by any Federal, state, local, or foreign entities and the results of those proceedings. Include any
responsive matters regardless of when they arose.
7. Identify any actual or potential conflicts of which you are aware, regardless of when they arose, that are not
identified or addressed in paragraphs 1 through 5 above, but that may affect the performance of your duties under
this appointment.
5
DECLARATION
Under penalty of perjury, I declare the following:
I am providing the United States District Court for the Southern District of Mississippi with the following conflict
of interest and background information concerning the receivership created in the civil litigation styled Securities
& Exchange Commission, et al. v. Arthur Lamar Adams, et al., Case Number 3:18-cv-00252-CWR-FKB, in the
U.S. District Court for the Southern District of Mississippi, Northern Division. I agree to supplement this
information if any of the information herein changes, within thirty days of such change. I agree to provide such
other Conflict of Interest information as requested by the Court or its staff.
I have examined the information given in this statement, and attached hereto, and, to the best of my
knowledge and belief, it is true, correct, and complete. I understand that I am submitting this
information to the Court as an officer of the Court.
By: _______________________________________
Signature
Name: _______________________________________
Date: _______________________________________
6
____________________

et al.,
Plaintiffs,
v.
ARTHUR LAMAR ADAMS,

et al.,
Defendants.
____________________
____________________


Cir. 1963)).

4 Booth v. Clark, 58 U.S. 322, 331 (1854).

2

3
UNITED STATES DISTRICT COURT

FOR THE SOUTHERN DISTRICT OF MISSISSIPPI
NORTHERN DIVISION
SECURITIES AND EXCHANGE

COMMISSION,
Plaintiff,
v. Civil Action No.

3:18 –cv-252-CWR-FKB
ARTHUR LAMAR ADAMS AND
MADISON TIMBER PROPERTIES,
LLC
Defendants,
MISSISSIPPI SECRETARY OF STATE’S UNOPPOSED

MOTION TO INTERVENE FOR THE LIMITED PURPOSE
OF OPPOSING THE SEC’S EXPEDITED MOTION
TO APPOINT TEMPORARY RECEIVER
The Mississippi Secretary of State (the “Secretary”) respectfully moves this Court, pursuant to
Fed. R. Civ. P. 24, for an order permitting the Secretary to intervene in the above-captioned action (the
“Madison Timber Action”) for the limited purpose of opposing the Securities and Exchange
Commission’s (“SEC”) Expedited Motion to Appoint Temporary Receiver and making his own
recommendation for the candidate to be chosen as the receiver in the above-styled action. In support of
this motion to intervene, the Secretary states as follows:
1. The Madison Timber Action was filed on April 20, 2018. The SEC filed its
complaint based on information and belief that Defendants committed securities fraud by operating a
Ponzi scheme, and it alleged that Defendants defrauded more than 150 investors out of at least $85
million.
2. The SEC requested injunctive relief that included freezing the assets of Defendants, relief
which requires the appointment of a receiver.
3. Defendant Adams, on April 20, 2018, entered a Consent Order, consenting to the
freezing of Defendants’ assets, to the appointment of a receiver, and to the transfer of all seized assets to
the Court-Appointed Receiver or the Registry of the Court.
4. On May 9, 2018, Defendant Adams pled guilty to a criminal charge of wire fraud.
5. On May 10, 2018, the SEC notified the Secretary of its intention to file its Expedited
Motion to Appoint Temporary Receiver with this Court, and it notified the Secretary that it was proposing
a Miami, Florida-based candidate for the position of receiver.
6. Defendants are Mississippi citizens. Upon information and believe, a large majority of
the investors in Defendants’ Ponzi scheme are Mississippi citizens.
7. Upon information and belief, most of the assets are situated in Mississippi.
8. The securities law violations alleged against Defendants, if proven, also constitute
violations of the Mississippi Security Act, under which the Secretary can assess fines, penalties, and other
sanctions such as restitution on behalf of Mississippi investors.
9. The Secretary has a significant interest in the appointment of receiver in this action, given
the number of Mississippi investors involved, significant assets being located in the State, the Secretary’s
own interest in the assets with respect to fines, penalties, and restitution to Mississippi investors, and the
receiver’s obligations and abilities to administer the recovery and restitution of investors’ funds. The
Secretary does not believe the SEC’s recommended appointment can protect those interests adequately
and effectively.
2
10. The Secretary has an alternative receiver candidate, situated in Mississippi, to
recommend to this Court, as to avoid any undue delay or prejudice. A copy of the Secretary’s alternative
receiver is attached hereto as Exhibit “A”.
11. Because the Secretary is not a party to the Madison Timber action, the Secretary has no
avenue to oppose the SEC’s recommendation for appointment of receiver in this action, or recommend
an alternative candidate. But the Secretary is charged with enforcing the Mississippi Securities Act and
protecting Mississippi investors and has significant interests in the property that is the subject of the action
and therefore seeks to intervene.
12. The Secretary therefore respectfully submits that he is entitled to intervene as of right
pursuant to Fed. R. Civ. P. Rule 24(a)(2) because the Court’s appointment of receiver may impair the
Secretary’s ability to protect the interests of Mississippi investors harmed by this scheme and may impair
the Secretary’s ability to discharge his duties under the Mississippi Securities Act.
13. In accordance with Local Rule 7(b)(10), the Secretary has conferred with counsel for
Defendants and counsel for the SEC. The Motion is unopposed by both counsel for the Defendants and
counsel for the SEC.
THIS the 11th day of May 2018.
Respectfully Submitted,
C. DELBERT HOSEMANN, JR., in his Official
Capacity as MISSISSIPPI SECRETARY OF
STATE
BY: JIM HOOD, ATTORNEY GENERAL FOR THE

STATE OF MISSISSIPPI
BY: /s/ Douglas T. Miracle

DOUGLAS T. MIRACLE, MSB # 9648
SPECIAL ASSISTANT ATTORNEY GENERAL
OFFICE OF THE ATTORNEY GENERAL
CIVIL LITIGATION DIVISION
Post Office Box 220
3
Jackson, Mississippi 39205

Telephone No. (601) 359-5654
Facsimile No. (601) 359-2003
dmira@ago.state.ms.us
OF COUNSEL
Jessica Leigh Long
Assistant Secretary of State
MSB #103316
Jeffrey L. Lee
Senior Attorney
MSB # 103180
Office of the Mississippi Secretary of State

Securities Division
125 S. Congress Street
Jackson, MS 39201
Telephone No. (601) 359-1650
Facsimile No. (601) 359-9070
CERTIFICATE OF SERVICE
I, Douglas T. Miracle, Special Assistant Attorney General for the State of Mississippi, do
hereby certify that on this date I electronically filed the foregoing document with the Clerk of
this Court using the ECF system, which sent notification of this filing to all counsel of record.
THIS the 11th day of May, 2018.
/s/ Douglas T. Miracle

DOUGLAS T. MIRACLE
4

SOUTHERN DISTRICT OF MISSISSIPPI
NORTHERN DIVISION

COMMISSION,
Plaintiff,
v. Case No.
ARTHUR LAMAR ADAMS AND 3:18-cv-252-CWR-FKB

MADISON TIMBER PROPERTIES, LLC,
Defendants,
MEMORADUM OF LAW IN SUPPORT OF

EXPEDITED MOTION TO APPOINT TEMPORARY RECEIVER
In this securities fraud action, Plaintiff Securities and Exchange Commission
(“Commission”) respectfully moves the Court to appoint a temporary receiver over
Defendants’ assets to preserve them for the benefit of investors. Due to the continued
risk of dissipation of those assets, the Commission asks that the motion be heard as
expeditiously as the Court’s schedule permits.
I. Introduction and Background
In its Complaint, the Commission claims that, beginning in approximately
2004, Defendant Arthur Lamar Adams (“Adams”), through his wholly-owned

company, Madison Timber Properties, LLC (“MT Properties”), committed securities
fraud by operating a Ponzi scheme. [Dkt. 3, Compl., ¶ 1]. The Commission alleges
that Adams and MT Properties have raised at least $85 million from over 150
investors in multiple states. [Dkt. 3, Compl., ¶ 2].
Defendant Adams does not contest that he used MT Properties to conduct a
Ponzi scheme. At Adams’ change of plea hearing on May 9, 2018 in United States v.
Adams, No. 3:18-CR-88-CWR-LRA (S.D. Miss.), Adams pled guilty to the Bill of
Information filed against him for bank and wire fraud based on the same conduct.
Defendants and their agents still have control and possession of investor funds
as well as certain assets purchased with investor funds. Counsel for Defendant
Adams has identified interests owned by Adams in at least four real estate ventures.
See Exhibit A (May 8, 2018, Letter from John M. Colette). Upon information and
belief, Adams acquired at least some of these interests while the scheme alleged in
the Complaint was on-going. It is, thus, highly likely that such interests were
acquired, in whole or in part, with investor funds. Counsel for Adams has also
advised that several payments are coming due this month to maintain Adams’
ownership interests in these ventures. Id.
In addition, individual investors recently have filed lawsuits against Adams
and Madison Timber related to this scheme. See, e.g., Exhibit B. Absent a receiver
and the associated stay of third party litigation that would accompany his or her
2
appointment, there will be a “race to the courthouse” and the attendant possibility for
certain investors to obtain preferential treatment with respect to Defendants’ assets.
The Commission’s ability to seek receivership serves as a critical tool in
enforcing the federal securities laws. In light of the estimated size of the fraud –
nearly $100 million – and the number of investors, a receiver is necessary in this case
to preserve and analyze Defendants’ and third parties’ documents and financial
records to determine the full extent of investor losses, to discover if there are viable
claims against third parties, and to establish a claims process to facilitate a fair and
orderly distribution of remaining assets to investors. Moreover, in order to marshal
and preserve Defendants’ assets and identify other possible assets for the benefit of
the defrauded investors, the Commission asks the Court to use its equitable powers to
appoint a receiver to take control of those assets.
The Commission therefore seeks the appointment of a temporary receiver who
will, within 60 days, file a report that includes a preliminary plan for the
administration of the receivership estate, including recommendations as to the most
efficient means for marshalling, liquidating and distributing assets within that estate.
The Court, with input from the Commission, can then better determine whether the
receivership should be continued.
3
II. Equitable Power of District Courts to Order a Receivership
The Fifth Circuit and other courts have repeatedly emphasized the broad
equitable powers of district courts to shape remedies necessary to effectuate the
purposes of the federal securities laws, to preserve a defendant’s assets, and to ensure
that wrongdoers do not profit from their unlawful conduct. SEC v. Wencke, 622 F.2d
1393, 1371 (9th Cir. 1980); SEC v. Safety Fin. Serv., Inc., 674 F.2d 368, 372-73 (5th
Cir.1982) (“the district court has broad powers and wide discretion to determine . . .
relief in an equity receivership”); SEC v. Blatt, 583 F.2d 1325, 1335-1336 (5th Cir.
1978).
Based on long-standing principles of equity, a receiver serves as a disinterested
court officer who collects and possesses all property subject to the receivership,
known as the receivership “estate.” See, e.g., Atlantic Trust Co. v. Chapman, 208
U.S. 360, 370-71 (1908). The court holds custody of the receivership estate and
administers it through the receiver. Id.; see also Chicago Deposit Vault Co. v.
McNulta, 153 U.S. 554 (1894). The receiver’s possession, therefore, is the court’s
possession. Id. When a district court creates a receivership, the receiver’s focus is
“to safeguard the assets, administer the property as suitable, and to assist the district
court in achieving a final, equitable distribution of the assets if necessary.” Liberte
Capital Group, LLC v. Capwill, 462 F.3d 543, 551 (6th Cir. 2006).
4
The decision to create a receivership rests in the Court’s discretion. Bookout v.
First Nat. Mortg. & Discount Co., Inc., 514 F.2d 757, 758 (5th Cir. 1975).
III. Appointment of an SEC Receiver is Well-Established in the Fifth Circuit
The Fifth Circuit has recognized that “[t]he appointment of a receiver is a
well-established equitable remedy available to the SEC in its civil enforcement
proceedings for injunctive relief.” SEC v. First Fin. Group of Texas, 645 F.2d 429,
438 (5th Cir. 1981); see also Netsphere, Inc. v. Baron, 703 F.3d 296, 306 (5th Cir.
2012) (“Thus, in cases of non-compliance with SEC regulations, a receiver may be
appointed to prevent the corporation from dissipating corporate assets and to pay
defrauded investors.”). This discretion derives from the inherent powers of an equity
court to fashion relief. Id.
The Fifth Circuit has also recognized that an evidentiary hearing is not
required on the Commission’s request to appoint a receiver where the record
discloses sufficient facts to warrant such an appointment. Bookout v. Atlas Fin.
Corp., 395 F. Supp. 1338, 1342 (N.D. Ga. 1974), aff’d, 514 F.2d 757 (5th Cir. 1975).
The Court may appoint a receiver on a prima facie showing of fraud and
mismanagement. See First Fin. Group, 645 F.2d at 438. Factors courts have
considered that indicate the need for a receivership include the following: “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
5
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.” Santibanez v. Wier McMahon & Co., 105 F.3d 234, 242 (5th
Cir. 1997), quoting Aviation Supply Corp. v. R.S.B.I. Aerospace, Inc., 999 F.2d 314,
316-17 (8th Cir. 1993).
IV. This Court Should Create a Receivership in this Case
Defendants do not dispute that they operated a Ponzi scheme that involved
hundreds of investors and close to a $100 million dollars. Indeed, Defendant Adams
has pled guilty to criminal charges of wire fraud and bank fraud based on the same
conduct. Thus, there is no dispute that fraudulent conduct occurred. It is in the
interest of justice, and to the benefit to the investors, to have a court-appointed
receiver to oversee the process of returning the remaining funds in as fair and
economical manner as possible. The appointment of a receiver will also prevent
investors from obtaining preferential treatment to Defendants assets by filing
individual lawsuits.
Moreover, in addition to the funds frozen in various accounts, there are a
number of illiquid assets at stake. Mr. Adams has invested in various real estate
projects. See Exhibit A (Letter from John M. Colette). These investments will likely
be included in the receivership estate because, among other things, Adams
presumably purchased or maintained some or all of those real estate projects with
6
investor funds. Indeed, Adams’ counsel has advised that almost $200,000 in
payments to various real estate investments are coming due, and that such payments
must be made to preserve Adams’ interest in those investments. Id. A receiver is
needed to determine whether maintaining those investments is in the best interest of
defrauded investors, particularly because the potential estate has minimal liquid
assets at the moment.
Accordingly, the Court should appoint a receiver over Defendants’ assets to
marshal Defendants’ assets, and preserve and maximize their value for the benefit of
the defrauded investors.
V. The SEC’s Receiver Recommendation
Generally, courts rely on the SEC to recommend a receiver to the court.
Anticipating that the Court may ask the Commission to recommend a potential
receiver here, the Commission sought three proposals from individuals who have
served as receivers in other SEC cases. If the Court prefers to rely on the
Commission’s recommendation rather than select its own receiver, the Commission
respectfully recommends that the Court appoint Kenneth D. Murena, Esq., of
Damian & Valori, LLP, in Miami, Florida, as the receiver in this matter. See Exhibit
C (Murena’s résumé and list of receivership cases). Mr. Murena has extensive
experience serving as a receiver, both in SEC matters and other civil contexts, and in
particular he is very familiar with this sort of fraud and the types of assets that the
7
Commission believes will compose the estate. While Mr. Murena is located in
Miami, he has committed that, if appointed, he will not bill the estate for expenses
incurred while traveling between Miami and Mississippi.
The Commission respectfully requests that this Court enter the proposed order
appointing Kenneth D. Murena as a temporary receiver over the Defendants’ assets.
VI. Conclusion
Based on the foregoing, the Commission respectfully requests that the Court
grant its motion and enter the proposed order appointing Kenneth D. Murena, Esq.,
of Damian & Valori LLP, as a temporary receiver over Defendants’ assets.
Dated this 10th day of May, 2018.
Respectfully submitted,
s/ W. Shawn Murnahan
W. Shawn Murnahan
Senior Trial Counsel
Georgia Bar No. 529940
Tel: (404) 842-7669
Email: murnahanw@sec.gov
M. Graham Loomis
Regional Trial Counsel
Tel: (404) 842-7622
Email: loomism@sec.gov
Justin Delfino
Senior Counsel
Tel: (404) 942-0698
8
Email: delfinoj@sec.gov
COUNSEL FOR PLAINTIFF

Securities and Exchange Commission
Atlanta Regional Office
950 East Paces Ferry Road, N.E., Suite 900
Atlanta, GA 30326-1382
Tel (main): (404) 842-7600
Fax: (703) 813-9364
OF COUNSEL
D. Michael Hurst, Jr.

United States Attorney
s/Kristi H. Johnson
Kristi H. Johnson
Assistant United States Attorney
MS Bar No. 102891
Marc Perez
WA Bar No. 33907
Civil Division
United States Attorney's Office
Southern District of Mississippi
501 East Court Street, Suite 4-430
Jackson, MS 39201
Tel: (601) 973-2887
Fax: (601) 965-4409
9

NORTHERN DIVISION

COMMISSION,
Plaintiff,
v. Case No. 3:18-CV-252-

CWR-FKB

Defendants,
I hereby certify that on this day, I served a true and correct copy of the
Plaintiff’s Memorandum of Law in Support of its Expedited Motion to Appoint
Receiver on John M. Colette, Esq., as counsel for Defendants, via email and by
United Parcel Service.

s/Kristi H. Johnson
Kristi H. Johnson

NORTHERN DIVISION

COMMISSION,
Plaintiff,
v. Case No.
ARTHUR LAMAR ADAMS AND 3:18-cv-252-CWR-FKB

Defendants,
EXPEDITED MOTION TO APPOINT TEMPORARY RECEIVER
Plaintiff Securities and Exchange Commission (“Commission”) files this
Expedited Motion for the Appointment of a Temporary Receiver for Defendants in
this matter. Due to the continued risk of dissipation of those assets, the Commission
asks that the motion be heard as expeditiously as the Court’s schedule permits.
In support of its motion, the SEC contemporaneously files a memorandum
brief and the following supportive exhibits:
Exhibit A: Letter from John M. Colette
Exhibit B: Individual Investor Lawsuit

Exhibit C: Murena’s résumé and list of receivership cases
As set forth in the Complaint, the Commission alleges that Defendants
defrauded numerous investors via a Ponzi scheme. While Defendants have not yet
responded to the Complaint, Defendants’ counsel has indicated that Defendants do
not contest the core allegation that they conducted a Ponzi scheme. Indeed, during
the change of plea hearing on May 9, 2018 in United States v. Adams, No. 3:18-CR-
88-CWR-LRA (S.D.Miss.), Defendant Adams pled guilty to the Bill of Information
filed against him for bank and wire fraud based on the same conduct.
Under these circumstances, a receiver is necessary to take control of the
Defendants’ assets for the benefit of investors in order to marshal and preserve those
assets. The primary purpose of equity receiverships in an SEC action is to promote
orderly and efficient administration of the estate by the district court for the benefit of
investors. SEC v. Hardy, 803 F.2d 1034, 1038 (9th Cir. 1986). “The appointment of
a receiver is a well-established equitable remedy available to the SEC in its civil
enforcement proceedings for injunctive relief.” SEC v. First Fin. Group of Texas,
645 F.2d 429, 438 (5th Cir. 1981). Moreover, because the Commission remains
concerned about the potential for dissipation of investor funds and assets, the
Commission requests that this motion be heard on an expedited basis.
Based on common law principles of equity, a receiver serves as a disinterested
court officer who collects and possesses all property subject to the receivership,
known as the receivership “estate.” See, e.g., Atlantic Trust Co. v. Chapman, 208
2
U.S. 360, 370-71 (1908). The court holds custody of the receivership estate and
administers it through the receiver. Id.; see also Chicago Deposit Vault Co. v.
McNulta, 153 U.S. 554 (1894). The receiver’s possession, therefore, is the court’s
possession. Id. In this case, the Commission anticipates the receiver ultimately
distributing the estate assets back to defrauded investors.
The Commission’s ability to seek receivership serves as a critical tool in
enforcing the federal securities laws. In light of the estimated size of the fraud –
nearly $100 million – and the number of investors, a receiver is necessary in this case
to preserve and analyze Defendants’ and third parties’ documents and financial
records to determine the full extent of investor losses, to discover if there are viable
claims against third parties, and to establish a claims process to facilitate a fair and
orderly distribution of remaining assets to investors.
The Commission seeks the appointment of a temporary receiver who will,
within 60 days, file a report that includes a preliminary plan for the administration of
the receivership estate, including recommendations as to the most efficient means for
marshalling, liquidating and distributing assets within that estate. The Court, with
input from the Commission, can then better determine whether the receivership
should be continued.
The Commission, therefore, respectfully asks that the Court enter an order in
the form filed concurrently herewith appointing a temporary receiver in this case.
3
s/ W. Shawn Murnahan
W. Shawn Murnahan
Senior Trial Counsel
Tel: (404) 842-7669
Email: murnahanw@sec.gov
M. Graham Loomis
Regional Trial Counsel
Tel: (404) 842-7622
Email: loomism@sec.gov
Justin Delfino
Senior Counsel
Tel: (404) 942-0698
Email: delfinoj@sec.gov
COUNSEL FOR PLAINTIFF

Securities and Exchange Commission
Atlanta Regional Office
950 East Paces Ferry Road, N.E., Suite 900
Atlanta, GA 30326-1382
Tel (main): (404) 842-7600
Fax: (703) 813-9364
4
OF COUNSEL
D. Michael Hurst, Jr.

United States Attorney
s/Kristi H. Johnson
Kristi H. Johnson
MS Bar No. 102891
Marc Perez
WA Bar No. 33907
Civil Division
United States Attorney's Office
Southern District of Mississippi
501 East Court Street, Suite 4-430
Jackson, MS 39201
Tel: (601) 973-2887
Fax: (601) 965-4409
5

NORTHERN DIVISION

COMMISSION,
Plaintiff,
v. Case No. 3:18-CV-252-

CWR-FKB

Defendants,
I hereby certify that on this day, I served a true and correct copy of the
Plaintiff’s Expedited Motion to Appoint Temporary Receiver on John M. Colette,
Esq., as counsel for Defendants, via email and by United Parcel Service.
s/Kristi H. Johnson
Kristi H. Johnson
EXHIBIT
A

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Case 3:18-cv-00252-CWR-FKB Document 33 Filed 06/22/18 Page 1 of 15

SECURITIES & EXCHANGE COMMISSION,

ARTHUR LAMAR ADAMS,

ORDER APPOINTING RECEIVER

Before CARLTON W. REEVES, District Judge.

(ranging from solo practitioners to partners in law firms

rather than tokenism masquerading as such. Nevertheless, in

1 This should come as no surprise to the parties, given their discussion of

Haygood, LLP, is best suited to be Receiver. Mills is a gradu-

The Receivership Defendants shall indemnify, defend, and

(2) to use reasonable efforts to determine the nature

advisable in the ordinary course of business in dis-

(14) to obtain, by presentation of this Order, docu-

(2) a list of secured creditors and other financial insti-

executed by any Receivership Defendant or which oth-

legal proceedings of any nature, including but not limited to

IN THE UNITED STATES DISTRICT COURT

SECURITIES & EXCHANGE PLAINTIFFS

V. CAUSE NO. 3:18-CV-252-CWR-FKB

ARTHUR LAMAR ADAMS, DEFENDANTS

ORDER FOR INTERIM RELIEF PENDING

1. Interfere with the Temporary Receiver’s eventual efforts to take control,

2. Dissipate or otherwise diminish the value of any Receivership Property;

4. Nothing in paragraph A herein shall prohibit any business in which either

a. To continue to operate and manage DFLI, including temporarily replacing

either of the Defendants in bankruptcy proceedings.

SO ORDERED, this the 5th day of June, 2018.

SECURITIES & EXCHANGE COMMISSION,

ARTHUR LAMAR ADAMS,

Before CARLTON W. REEVES, District Judge.

State have requested the appointment of a receiver to control

3:18-CR-88-CWR-LRA (S.D. Miss).

Securities & Exchange Commission Office of the Inspector General, Over-

Request For Proposals Order soliciting bids for the receiver-

SECURITIES & EXCHANGE COMMISSION,

ARTHUR LAMAR ADAMS,

Before CARLTON W. REEVES, District Judge.

State have requested the appointment of a receiver to control

3:18-CR-88-CWR-LRA (S.D. Miss).

Securities & Exchange Commission Office of the Inspector General, Over-

Request For Proposals Order soliciting bids for the receiver-

CONFLICTS OF INTEREST AND BACKGROUND INFORMATION FORM

Under penalty of perjury, I declare the following:

SECURITIES & EXCHANGE COMMISSION,

ARTHUR LAMAR ADAMS,

Before CARLTON W. REEVES, District Judge.

State have requested the appointment of a receiver to control

3:18-CR-88-CWR-LRA (S.D. Miss).

Securities & Exchange Commission Office of the Inspector General, Over-

Request For Proposals Order soliciting bids for the receiver-

UNITED STATES DISTRICT COURT

SECURITIES AND EXCHANGE

v. Civil Action No.

MISSISSIPPI SECRETARY OF STATE’S UNOPPOSED

this motion to intervene, the Secretary states as follows:

which requires the appointment of a receiver.

the Court-Appointed Receiver or the Registry of the Court.

a Miami, Florida-based candidate for the position of receiver.

the investors in Defendants’ Ponzi scheme are Mississippi citizens.

sanctions such as restitution on behalf of Mississippi investors.

10. The Secretary has an alternative receiver candidate, situated in Mississippi, to

receiver is attached hereto as Exhibit “A”.

and therefore seeks to intervene.

counsel for the SEC.