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JOHN B. BULGOZDY, Cal Bar No. 219897 E-mail: bulgozdyj@sec.gov DAVID J. VAN HAVERMAAT, Cal. Bar No. 175761 E-mail: vanhavermaatd@sec.gov Attorney for Plaintiff Securities and Exchange Commission Rosalind R. Tyson, Regional Director Michele Wein Layne, Associate Regional Director John W. Berry, Regional Trial Counsel 5670 Wilshire Boulevard, 11th Floor Los Angeles, California 90036 Telephone: (323) 965-3998 Facsimile: (323) 965-3908

UNITED STATES DISTRICT COURT DISTRICT OF NEVADA SECURITIES AND EXCHANGE COMMISSION, Plaintiff, vs. MARCO GLISSON, Defendant Case No. 2:09-cv-00104-LDG-GWF PLAINTIFF SECURITIES AND EXCHANGE COMMISSIONS OPPOSITION TO DEFENDANT GLISSONS MOTION TO PRECLUDE THE INTRODUCTION, BY THE PLAINTIFF, OF ALL EVIDENCE PERTAINING TO GLISSONS POST 2007 ACTIVITIES

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I.

INTRODUCTION Plaintiff Securities and Exchange Commission (Commission) opposes the

motion of defendant Marco Glisson (Glisson) to preclude the introduction of relevant evidence concerning his transactions in CMKM securities in 2010, from which he realized over $1.6 million during the period between May and October 2010. Glisson engaged in transactions in CMKM stock in 2010 in direct contradiction of his sworn assurances to the Court in 2009 that he had no intention to purchase or sell any shares of any public company including without limitation CMKKM at any time in the future. (Declaration of Marco Glisson in Support of his Opposition to SECs Motion for Summary Judgment, filed November 16, 2009 (Docket No. 28), at p. 13, 74.) Glissons 2010 transactions in CMKM stock are highly relevant to the issues of the need for injunctive relief and the credibility of his recent assurances that he will not engage in such conduct in the future. The $1.6 million in proceeds, and the location of those funds, are also relevant to Glissons argument that the Court should not impose any disgorgement order, prejudgment interest, or civil penalty, because Glisson purportedly lacks any financial resources and has an inability to satisfy any judgment. Alternatively, Glisson requests that the Court preclude any inquiry of why Glisson used accounts held in the names of his former wife, and current wife, for his CMKM transactions, on the grounds that where he deposited the proceeds, and why, and the ultimate disposition, are not relevant to the Commissions claim. However, that information is highly relevant to, among other things, Glissons claim that he did not believe he was doing anything wrong, as well as to the calculation of damages. It is highly relevant to Glissons claim of innocence that he sought to hide his involvement and the proceeds by using accounts of his

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various spouses. On the one hand Glisson admits that he used these accounts, but Glisson then objects to admission of the account statements, and alternatively claims that the transactions were actually for the benefit of either his ex-wife or his current wife. Glisson has taken so many contradictory positions about his use of various bank accounts that the Court needs to hear the evidence and assess Glissons credibility concerning his various competing and inconsistent stories. Finally, Glisson requests an in limine determination that he has not waived his Fifth Amendment privilege against self-incrimination with respect to his motivation for depositing proceeds of his CMKM transactions into accounts of his different wives, and that if he should assert his privilege, then no negative inference should follow. As Glisson points out, he must assert the privilege to each question, so that the in limine motion essentially seeks an advisory opinion about questions that have not yet been posed, and for that reason the motion should be denied. It is well established that a Court may draw a negative inference in a civil proceeding when a defendant asserts his Fifth Amendment privilege, and Glisson offers no persuasive rationale for why he should be treated differently than every other litigant, and his request on this point should also be denied. II. FACTS The Commission filed this action against defendant Marco Glisson on January 15, 2009, alleging that Glisson violated the federal securities laws by: (1) acting as an unregistered broker-dealer in violation of Section 15(a) of the Securities Exchange Act of 1934 (Exchange Act), 15 U.S.C. 78o(b), and (2) selling deregistered securities in violation of Sections 5(a) and 5(c) of the Securities Act of 1933 (Securities Act), 15 U.S.C. 77e(a) and 77e(c). The Complaint alleged that between December 2005 and May 2006, and then again between September 2006 and April 2007, Glisson regularly engaged in

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transactions in the deregistered securities of a company named CMKM Diamonds, Inc. (CMKM). At the time, Glisson knew that the registration of CMKMs securities had been revoked by the Commission in October 2005. At the time, Glisson was not registered with the Commission as a broker or a dealer in securities, and was not associated with a registered broker or dealer. A reasonable approximation of Glissons net ill-gotten gains from his transactions in deregistered CMKM securities in 2005-2007 is approximately $2.8 million. After the case was filed in 2009, the parties moved for summary judgment. In opposition to summary judgment and particularly with regard to the likelihood of future violations, Glisson executed a sworn declaration, under penalty of perjury, in which he stated: Since the filing of this action by the SEC and continuing to date, I have not purchased or sold any CMKM stock (or any other shares of any publicly traded company); and I have no intention to purchase or sell any shares of any public company including without limitation CMKM at any time in the future; and I will so testify in person at the trial of this case where I can demonstrate to the satisfaction of the Court that I mean what I say about such future conduct. Declaration of Marco Glisson in Support of his Opposition to SECs Motion for Summary Judgment, filed November 16, 2009, at p. 13, 74 (emphasis added). The declaration remained on file and the Court ultimately denied the Commissions motion for summary judgment in an order issued on September 24, 2010. Around the time that the Court issued its summary judgment ruling, the Commissions staff learned from sources in the community that Deli Dog, the

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Internet moniker that Glisson used, was active again, and petitioned to re-open discovery for the purpose of obtaining evidence if that were the case. The evidence obtained showed that starting around May 2010, Glisson actively resumed his business in CMKM shares. In the period between May and October 2010, Glisson deposited (or caused to be deposited) at least $1,626,399.05 in proceeds from sales of deregistered CMKM securities into an account at Sun Trust Bank in Florida. Glisson did not inform the Court, while the summary judgment motion was pending, that his declaration was no longer true and that he had broken the sworn representation he had made to the Court that he would never sell CMKM securities again. Glisson used different bank accounts at different times for his transactions in CMKM securities, which accounts were held in the names of his ex-wife, Alma Padilla, and his then-girlfriend and now wife, Thidarat Tungwongsathong. In his motion, Glisson takes contradictory positions regarding his use of these bank accounts held in the names of his family members. At one point, Glisson claims that he does not contest that he sold CMKM shares, realized proceeds from the sales, or where the proceeds were deposited. (Motion at page 18, lines 15-18.) However, in contrast to that assertion, Glisson argues that his CMKM stock transactions involved stock sold by his family members and that the proceeds deposited into the accounts of his different wives are the sole, separate property of such sellers (none of who were named as defendants in this action and/or are alleged themselves to have been unregistered broker/dealers). (Id. at page 15, lines 2-7.) In late 2005 and early 2006, Glisson simultaneously used two accounts at Blackhawk Community Credit Union for his purchases: (1) an account in the name of his then wife, Alma Padilla, with the last four digits 3788; and (2) an

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account jointly held by Glisson and Padilla, with the last four digits 8307. Between December 2005 and May 2006, approximately $953,000 was deposited into these two accounts in connection with CMKM transactions by Glisson. In or around May 2006, Glisson decided to divorce Ms. Padilla, and he opened a new account at Blackhawk in his own name, the 7650 Account. Between May 2006 and January 2007, approximately $1.056 million was deposited into that account relating to CMKM transactions. At some point in 2007, after he retired and separated from Ms. Padilla, Glisson decided to move to Las Vegas. Shortly after moving to Las Vegas, Glisson met Thidarat Tungwongsathong at a Starbucks. Around November 2006, Glisson was added to Tungwongsathongs bank account at Bank of America as a POD, or payable on death, and on November 17, 2006, Glisson transferred $105,000 from his Blackhawk 7650 Account in Janesville, Wisconsin, to the Tungwongsathong/Glisson account at Bank of America in Las Vegas which we refer to as the 9145 Account. Between November 2006 and June 2007, approximately $2.332 million in proceeds from CMKM transactions were deposited into the 9145 Account. In 2010, when Glisson resumed his transactions in CMKM securities, he directed all proceeds into an account held at Sun Trust Bank in the name of Tungwongsathong, also POD Glisson. During the period between May and October 2010, over $1.6 million in proceeds from sales of CMKM stock by Glisson were deposited into that account, and then removed. The current whereabouts of those proceeds is unknown.

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III.

LEGAL ARGUMENT A. Evidence of Glissons 2010 Transactions in CMKM Stock is Relevant Evidence on Several Issues and Should Not Be Excluded The substance of Glissons argument is that since his 2010 transactions in

CMKM stock were not alleged in the Complaint which was filed in 2009, evidence of those transactions is irrelevant and inadmissible. Glisson also argues that the Commission was required to seek leave to amend its Complaint in 2011 after summary judgment had been decided and the case was being set for trial, in order for the Court to hear evidence about the 2010 conduct. Glissons arguments lack merit and should be denied, because his 2010 activities are relevant to several issues in this case, including the appropriateness and need for injunctive relief, his ability to satisfy any money judgment, and Glissons credibility because his 2010 activities establish that Glisson provided false assurances to this Court in a sworn declaration filed in 2009. Credibility is always relevant, and for this last reason alone, Glissons motion should be denied. Relevant evidence is defined by Federal Rule of Evidence 401 as evidence having any tendency to make the existence of any fact that is of consequence to the determination of the action more probable or less probable than it would be without the evidence. Federal Rule of Evidence 402 provides that [a]ll relevant evidence is admissible, except as otherwise provided. Relevant evidence need not relate directly to an element of a claim or defense asserted in the case to be relevant. If it would tend to assist the trier of fact in determining facts necessary to its decision resolving the claim or defense, it is relevant. Thus, evidence relating to the credibility of witnesses is relevant because it will assist the trier of fact in determining the weight to give to the witnesss testimony. See, e.g., United States v. Abel, 469 U.S. 45, 48-49 (1984) (admitting evidence that defendant and witness

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were members of secret prison organization because relevant to witnesss credibility); United States v. Taylor, 239 F.3d 994, 997 (9th Cir. 2001) (admitting expert testimony concerning relationship between pimp and prostitute to explain inconsistent testimony relevant to witnesss credibility). See generally Cotchett, J., Federal Courtroom Evidence, Fifth Edition, 401.2 (2003). Glissons 2010 conduct is directly related to his credibility, since it flies in the face of his sworn assurances to this Court in 2009 that he has no intention to purchase or sell any shares of any public company including without limitation CMKM at any time in the future, and I will so testify in person at the trial of this case where I can demonstrate to the satisfaction of the Court that I mean what I say about future conduct. Declaration of Marco Glisson in Support of his Opposition to SECs Motion for Summary Judgment, filed November 16, 2009, at p. 13, 74. Glissons 2010 transactions in CMKM stock directly impeach that statement, and are therefore highly relevant to Glissons credibility. For that reason alone, Glissons motion should be denied. Moreover, Glissons 2010 conduct is put into issue by his claim that he has not bought or sold a single share of CMKM stock since 2007. In his motion, Glisson states: [T]he factual predicate for the Plaintiffs unregistered dealer (market maker) does not exist after April 2007 period because, after an intervening period of three years when Glisson did not buy or sell a single share of CMKM stock, he never again (in 2010 or thereafter) both bought and sold any CMKM stock and never engaged in any activity that the Plaintiff could possibly allege constitute broker activity.

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(Motion at page 17 lines 18-21 (emphasis added).) In fact, this statement is contradicted by Glissons 2010 transactions in CMKM securities. Factual assertions by Glisson like this -- which ignore Glissons 2010 transactions and the over $1.6 million in proceeds he realized -- make Glissons 2010 transactions in CMKM relevant. The sincerity of Glissons assurances that he will not engage in future CMKM transactions is directly at issue concerning injunctive relief. Among the factors to be considered in awarding injunctive relief is the sincerity of [a defendants] assurances against future violations. See, e.g., SEC v. Fehn, 97 F.3d 1276, 1295 (9th Cir. 1996). Here, defendant Glisson proposes to prove, as stated in the Joint Pretrial Order, that: Glisson has no intention of buying or selling CMKM stock in the future. (Joint Pretrial Order at page 42, 131.) Glisson made that same promise to the Court in 2009, and his 2010 conduct shows that such assurances have no value. Glisson realized over $1.6 million from his 2010 transactions in CMKM stock, yet Glisson proposes to prove, as stated in the Joint Pretrial Order: Glisson does not have the financial wherewithal to pay the substantial money damages the Plaintiff is seeking in this case. (Joint Pretrial Order at page 42, 130.) The fact that Glisson realized proceeds of $1.6 million from CMKM transactions in 2010 is relevant to Glissons claim that he does not have the wherewithal to pay disgorgement. Thus, Glissons 2010 conduct involving CMKM stock is relevant to several issues in this case, and therefore the motion should be denied.

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B.

Glissons Motivation for Using Others Bank Accounts for His CMKM Transactions is Relevant

Glisson posits that since he is not contesting that the proceeds of his transactions in CMKM were deposited into accounts of his former wife, Padilla, and current wife, Tungwongsathong, then his motivation for hiding his profits in those accounts is irrelevant. Glisson fails to rationalize this position with his other positions, that he had nothing to do with the transactions in the bank accounts of his former and current wife; that the money is those accounts is the sole and separate property of other people; and that he had no authority or interest in those accounts. If for no other reason than to resolve Glissons competing claims about the accounts by hearing his various explanations in Court and assessing Glissons credibility, the Court should deny Glissons motion. Glissons motivation for using other bank accounts is relevant. Glisson contends that his conduct was innocent, and that he was not attempting to circumvent the broker-dealer registration requirements, or the securities registration requirements, of the federal securities laws. However, the fact that Glisson instructed his customers to send money to accounts not in his name may be viewed as evidence of an effort to hide his involvement in the transactions because of his knowledge that he was violating federal securities laws. Glisson contends that he was, in fact, attempting to hide assets to evade taxes or to evade collection of unpaid taxes. However, Glisson was not advised of an investigation into his tax evasion until 20111 long after his conduct in 2005 to 2007, and in 2010, where he

Glissons attorney stated under oath that he learned in 2011 that the U.S. Attorneys office was conducting an investigation to determine if Glisson was attempting to conceal assets that might otherwise be available to satisfy existing federal tax obligations owed by Glisson. (Bretz Declaration in Support of Motion at 7-8.)
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used accounts held in the name of family members to hide his CMKM transactions. The Court as fact finder has the unique opportunity to assess Glissons credibility to determine whether Glisson was using bank accounts of family members to hide his violations of the federal securities laws, or to evade his obligations under the federal tax laws. Glisson offers no authority for the proposition that his motivation for hiding his transactions by using the bank accounts of others is not relevant in this case. Given the positions that Glisson advances in the Joint Pretrial Motion, as well as in his motions in limine, Glissons motivation for concealing his CMKM transactions using the bank accounts of others is relevant and therefore his motion in limine should be denied. C. Glissons Requests Regarding the Fifth Amendment Should be Denied Glisson requests an advisory ruling concerning his ability to assert his Fifth Amendment privilege in response to questions that have not been posed, and because such a ruling is premature, it should be denied. As Glisson acknowledges, the Fifth Amendment privilege must be asserted on a question by question basis. Moreover, the question of whether Glisson has waived, by virtue of his answers to questions under oath, or positions taken in this litigation, must also be addressed on a question by question basis. At this stage of the proceedings, without knowing what questions might be asked, it would be difficult for the Court to craft an order responsive to Glissons motion. Glisson has put at issue his motivation for using his former wifes account, and his girlfriends and current wifes bank account, for his CMKM transactions. In the Joint Pretrial Order, Glisson identifies as an issue whether disgorgement is appropriate with respect of sales by Glisson and his former girlfriend, now wife, for their individual accounts (Joint Pretrial Order at page 47, lines 10-12), and

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where Glisson never received any of the proceeds realized from the sale of CMKM stock his wife bought or otherwise acquired before they were married or afterward. (Id. at page 47, lines 22-23.) Yet, in the motions in limine, Glisson states that he does not contest that he sold the shares and realized the proceeds from the sales or where the proceeds were deposited, (Motion at page 18, lines 16-17), and Glissons motivation for commingling funds into his wifes bank account is not germane to the SECs [case]. (Id. at page 19, lines 7-8.) Glisson has taken wildly inconsistent positions concerning his use of the bank accounts of his family members. Glisson should not be allowed to use the Fifth Amendment privilege as a sword and a shield, to make arguments to the Court about ownership of accounts, but then to preclude his own testimony about why he was using various accounts. Glissons motion in limine seeks an advisory opinion that is inappropriate, and the Court should require Glisson to assert his privilege on a question by question basis, at which time the Court can determine if Glisson has, in fact, waived his privilege. Finally, Glisson provides no legal justification for his request that the Court agree in advance not to put a negative inference on Glissons invocation of the Fifth Amendment privilege. It is well-established that a Court may draw a negative inference when a defendant in a civil action invokes the Fifth Amendment and refuses to answer questions in a civil proceeding. See Baxter v. Palmigiano, 425 U.S. 308, 320 (1976) (permitting adverse inference to be drawn from defendants silence in civil proceedings); Securities and Exchange Commission v. Hughes Capital Corp., 917 F. Supp. 1080, 1087 (D.N.J. 1996) (holding that defendants invocation of his Fifth Amendment privilege allowed finding that defendant was not disputing evidence of receipt of fraud proceeds); SEC v. Colello,

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139 F.3d 674 (9th Cir. 1998). Glissons request to be treated as a special case, in advance of his invocation of any privilege, lacks merit and should be denied. IV. CONCLUSION For the foregoing reasons, the Court should deny in its entirety defendants motion to preclude the introduction, by the plaintiff, of any and all evidence pertaining to Glissons post 2007 activities.

Date: November 30, 2011

Respectfully submitted,

/s/ John B. Bulgozdy John B. Bulgozdy David J. VanHavermaat Attorneys for Plaintiff Securities and Exchange Commission

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1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 [ ] [X] [ ] [ ] [ ] [ ] [X]

PROOF OF SERVICE I am over the age of 18 years and not a party to this action. My business address is: U.S. SECURITIES AND EXCHANGE COMMISSION, 5670 Wilshire Boulevard, 11th Floor, Los Angeles, California 90036-3648 Telephone No. (323) 965-3998; Facsimile No. (323) 965-3908.

On November 30, 2011, I caused to be served the document entitled PLAINTIFF SECURITIES AND EXCHANGE COMMISSIONS OPPOSITION TO DEFENDANT GLISSONS MOTION TO PRECLUDE THE INTRODUCTION, BY THE PLAINTIFF, OF ALL EVIDENCE PERTAINING TO GLISSONS POST 2007 ACTIVITIES on all the parties to this action addressed as stated on the attached service list: [ ] OFFICE MAIL: By placing in sealed envelope(s), which I placed for collection and mailing today following ordinary business practices. I am readily familiar with this agencys practice for collection and processing of correspondence for mailing; such correspondence would be deposited with the U.S. Postal Service on the same day in the ordinary course of business. [ ] PERSONAL DEPOSIT IN MAIL: By placing in sealed envelope(s), which I personally deposited with the U.S. Postal Service. Each such envelope was deposited with the U.S. Postal Service at Los Angeles, California, with first class postage thereon fully prepaid. EXPRESS U.S. MAIL: Each such envelope was deposited in a facility regularly maintained at the U.S. Postal Service for receipt of Express Mail at Los Angeles, California, with Express Mail postage paid.

HAND DELIVERY: I caused to be hand delivered each such envelope to the office of the addressee as stated on the attached service list. UNITED PARCEL SERVICE: By placing in sealed envelope(s) designated by United Parcel Service (UPS) with delivery fees paid or provided for, which I deposited in a facility regularly maintained by UPS or delivered to a UPS courier, at Los Angeles, California. ELECTRONIC MAIL: By transmitting the document by electronic mail to the electronic mail address as stated on the attached service list. E-FILING: By causing the document to be electronically filed via the Courts CM/ECF system, which effects electronic service on counsel who are registered with the CM/ECF system. FAX: By transmitting the document by facsimile transmission. The transmission was reported as complete and without error. I declare under penalty of perjury that the foregoing is true and correct.

Date: November 30, 2011

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/s/ John B. Bulgozdy John B. Bulgozdy

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SEC v. MARCO GLISSON United States District Court - District of Nevada Case No. 2:09-cv-00104-LDG-GWF (LA-3028) SERVICE LIST Frederick A. Santacroce, Esq. 706 South Eighth Street Las Vegas, NV 89101 Email: fasatty@yahoo.com Attorney for Marco Glisson Robert H. Bretz, Esq. 578 Washington Boulevard, Suite 843 Marina del Rey, CA 90292 Email: Rhbretzpc@aol.com Attorney for Marco Glisson

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