The $3.87 Trillion Dollar Suit Being Hidden from American People

[Cebu_4_2]

The $3.87 Trillion Dollar Suit Being Hidden from American People

http://ireport.cnn.com/docs/DOC-484171

The largest lawsuit that the American people will never hear about from the mainstream media.

Interesting stuff going on these days, this and the Federal Reserve disclosure deal. Someone is turning the heat up a notch.

[Saul Mine]

I watched a minute and twelve seconds and they still hadn't said what they were going to talk about so I gave up and turned it off. What else ya got?

[Glass]

MOTION TO DISMISS_________ANDRÉ BIROTTE JR.
United States Attorney
LEON W. WEIDMAN
Assistant United States Attorney
Chief, Civil Division
KEITH M. STAUB (State Bar No. 137909)
Assistant United States Attorney
Room 7516 Federal Building
300 North Los Angeles Street
Los Angeles, California 90012
Telephone: (213) 894-7423 (213) 894-7423
Facsimile: (213) 894-7819
Email: Keith. Staub@usdoj.gov
Attorneys for Federal Defendants
UNITED STATES DISTRICT COURT
FOR THE CENTRAL DISTRICT OF CALIFORNIA
SOUTHERN DIVISION
DAVID ANDERSON et al.,
Plaintiffs,
v.
CHRISTOPHER COX et al.,
Defendants.
)))))))))))
No. SACV 10-31 JVS (MLGx)
NOTICE OF MOTION AND
MOTION TO DISMISS;
MEMORANDUM OF POINTS AND
AUTHORITIES
Date: July 19, 2010
Time: 1:30 p.m.
Hon. James V. Selna
PLEASE TAKE NOTICE that Federal Defendants, CHRISTOPHER COX,
MARY L. SCHAPIRO, CYNTHIA A. GLASSMAN, PAUL S. ATKINS, ROEL
C. CAMPOS, ANNETTE L. NAZARETH, TROY A. PAREDES, LUIS A.
AGUILAR, ELISSE B. WALTER, and KATHLEEN L. CASEY (“Defendants”),
by and through their counsel of record, the United States Attorney for the Central
District of California, will bring on for hearing a Motion to Dismiss plaintiffs’
Complaint, pursuant to Federal Rules of Civil Procedure 12(b)(1) and 12(b)(6), on
July 19, 2010 at 1:30 p.m. or as soon thereafter as counsel may be heard, in the
courtroom of the Honorable James V. Selna, at 411 West Fourth Street, Santa Ana,
Case 8:10-cv-00031-JVS-MLG Document 8 Filed 05/28/10 Page 1 of 18

California.
The motion is made pursuant to Federal Rules of Civil Procedure Rules
12(b)(1) and 12(b)(6) on the following grounds:
(1) This Court lacks jurisdiction over the claim for declaratory relief.
(2) Plaintiffs’ complaint fails to state a claim for declaratory relief.
(3) Plaintiffs’ complaint fails to state a claim for constitutional violations
against the Defendants in their individual capacities; and
(4) Defendants are protected by qualified immunity. This motion is based upon this Notice of Motion and Motion to Dismiss, the
attached Memorandum of Points and Authorities, all pleadings, papers filed in this
action, and any oral argument which may be presented at the hearing of this
motion.


link......... (http://investorshub.advfn.com/boards/read_msg.aspx?message_id=50714459)

Don't know current status

[Glass]

Note: Out of respect for Judge Selna and Attorney Hodges, any posting of the recording taken in the courtroom on Monday, Aug 2 will be removed without warning from this board.

Attorney Hodges' note is attached below.

Thank your for your attention,
C-Dub


Aug 4, 2010, 1:50pm, alch11 wrote:TO ALL SHAREHOLDERS

Please be advised as follows:

Case Name: David Anderson et al v. Christopher Cox et al
[8:10-cv-00031-JVS-MLG]

MINUTES IN CHAMBERS ORDER RE SURREPTITIOUS RECORDING OF HEARING held before Judge James V. Selna: It has come to the Court's attention that the 8/2/10 hearing on Government's Motion to Dismiss was surreptitiously recorded, and that the recording was posted to the internet. Tape recording of court sessions is strictly prohibited. (Local Rule 83-6.1.) Counsel are instructed to advise their clients of the Local Rule. In the future, the Court will take additional steps to ensure compliance.re: Order on Motion to Dismiss Case, Motion Hearing[15].(twdb)

PHOTOGHRAPHS AND/OR RECORDINGS OF ANY KIND ARE PROHIBITED – PLEASE COMPLY WITH THE RULES




link..... (http://cmkxunitedforum.proboards.com/index.cgi?board=general&action=display&thread=14559)

[Glass]

It appears according to Pennysylvania Middle District court that transcripts are not available on Pacer until 90 days after the hearing date. (it might be 90 days after being provided by the transcription service to the court).

so no transcript on the Aug 02 hearing as yet. Still looking to see if I can find the audio.

[SQUEXX]

What ISN'T being hidden from the public these days?!?

[Glass]

I still can't quite fathom what this is all about. From the vid in the OP it looks like a naked short attack against this company, which on the face of it looks like it has found an very impressive diamond field. Ignoring the internet fact that diamonds are pretty much worthless and only supply contraints make them valuable... or maybe it might explain the naked short attack.

So digging around a little more I found a forum thread which is mostly in german but sprinkled with english posts.

Basically it seems like there was some kind of trust fund established with quite a lot of money (about 860/880 billion) to compensate the sharelholders of some 12 companies that were affected by some sort of fraud.. perhaps it is the same naked short selling fraud as the court case deals with. I can't read german.

Now it appears that the trust fund has been commandered by the Govt or someone and they (affected shareholders) are battling to get the money from the trust fund.

I started digging around the thread here:
http://www.wallstreet-online.de/diskussion/823941-29391-29400/sehr-gute-news-bei-cmkm


Edit. So you need to get to just under 10 minutes into the Vid for it to become pretty clear what was going on. The new Financial Reform Bill was designed to kill this court case and any future cases on the sale of counterfeit stocks..... naked short selling. The SEC also did a deal with the protagonists for them to pay up and avoid prosecution.

Someone suggested there was a transcipt on there. I haven't found it yet but skipping back and forth through the thread is interesting. The next 5 or 6 pages have bits and pieces in english which make interesting reading. I think a few legal actions have been launched because of what has been said there.

[JohnQPublic]

MOTION TO DISMISS_________ANDRÉ BIROTTE JR. (http://investorshub.advfn.com/boards/read_msg.aspx?message_id=50714459)
United States Attorney
LEON W. WEIDMAN
Assistant United States Attorney
Chief, Civil Division
KEITH M. STAUB (State Bar No. 137909)
Assistant United States Attorney
Room 7516 Federal Building
300 North Los Angeles Street
Los Angeles, California 90012
Telephone: (213) 894-7423 begin_of_the_skype_highlighting (213) 894-7423 end_of_the_skype_highlighting
Facsimile: (213) 894-7819
Email: Keith. Staub@usdoj.gov
Attorneys for Federal Defendants
UNITED STATES DISTRICT COURT
FOR THE CENTRAL DISTRICT OF CALIFORNIA
SOUTHERN DIVISION
DAVID ANDERSON et al.,
Plaintiffs,
v.
CHRISTOPHER COX et al.,
Defendants.
)))))))))))
No. SACV 10-31 JVS (MLGx)
NOTICE OF MOTION AND
MOTION TO DISMISS;
MEMORANDUM OF POINTS AND
AUTHORITIES
Date: July 19, 2010
Time: 1:30 p.m.
Hon. James V. Selna
PLEASE TAKE NOTICE that Federal Defendants, CHRISTOPHER COX,
MARY L. SCHAPIRO, CYNTHIA A. GLASSMAN, PAUL S. ATKINS, ROEL
C. CAMPOS, ANNETTE L. NAZARETH, TROY A. PAREDES, LUIS A.
AGUILAR, ELISSE B. WALTER, and KATHLEEN L. CASEY (“Defendants”),
by and through their counsel of record, the United States Attorney for the Central
District of California, will bring on for hearing a Motion to Dismiss plaintiffs’
Complaint, pursuant to Federal Rules of Civil Procedure 12(b)(1) and 12(b)(6), on
July 19, 2010 at 1:30 p.m. or as soon thereafter as counsel may be heard, in the
courtroom of the Honorable James V. Selna, at 411 West Fourth Street, Santa Ana,
Case 8:10-cv-00031-JVS-MLG Document 8 Filed 05/28/10 Page 1 of 18

California.
The motion is made pursuant to Federal Rules of Civil Procedure Rules
12(b)(1) and 12(b)(6) on the following grounds:
(1) This Court lacks jurisdiction over the claim for declaratory relief.
(2) Plaintiffs’ complaint fails to state a claim for declaratory relief.
(3) Plaintiffs’ complaint fails to state a claim for constitutional violations
against the Defendants in their individual capacities; and
(4) Defendants are protected by qualified immunity.
This motion is based upon this Notice of Motion and Motion to Dismiss, the
attached Memorandum of Points and Authorities, all pleadings, papers filed in this
action, and any oral argument which may be presented at the hearing of this
motion.
Statement Re Compliance With Local Rule 7-3
Defendants complied with Local Rule 7-3 on May 13, 2010.
Dated: May 28, 2010 Respectfully submitted,
ANDRÉ BIROTTE JR.
United States Attorney
LEON W. WEIDMAN
Assistant United States Attorney
Chief, Civil Division
/s/
KEITH M. STAUB
Assistant United States Attorney
Attorneys for Defendants
Case 8:10-cv-00031-JVS-MLG Document 8 Filed 05/28/10 Page 2 of 18
i
TABLE OF CONTENTS
I. INTRODUCTION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
II. FACTUAL BACKGROUND . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
III. ARGUMENT . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
A. Plaintiffs’ Claim for Declaratory Relief Should be
Dismissed Because it is Either Barred by Sovereign
Immunity or Brought Against the Wrong Defendants . . . . . . . . . 5
B. Plaintiffs’ Complaint Should Be Dismissed in its Entirety
Because Plaintiffs Have Failed to State a Plausible Claim . . . . . . 6
C. Plaintiffs’ Bivens Claim Should Be Dismissed Because
Plaintiffs Have Not Alleged that Defendants Were
Either Personally Involved in, or Caused Plaintiffs to
Be Subjected to, a Constitutional Deprivation . . . . . . . . . . . . . . . . 9
D. The Complaint Fails to Set Forth Facts Sufficient to
Overcome Defendants’ Qualified Immunity . . . . . . . . . . . . . . . . 10
IV. CONCLUSION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
Case 8:10-cv-00031-JVS-MLG Document 8 Filed 05/28/10 Page 3 of 18
ii
TABLE OF AUTHORITIES
FEDERAL CASES
Ashcroft v. Iqbal,
129 S.Ct. 1937 (2009) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6, 7, 9, 10
Barrens v. Harrington,
152 F.3d 1193 (9th Cir. 1998) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
Bibeau v. Pacific Northwest Research Foundation,
188 F.3d 1105 (9th Cir. 1999) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
Bivens v. Six Unknown Named Agents of Federal Bureau of Narcotics,
403 U.S. 388 (1971) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
Board of Regents v. Roth,
408 U.S. 564 (1972) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
Booth v. Churner,
532 U.S. 731 (2001) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
Butz v. Economou,
438 U.S. 478 (1978) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
Cato v. United States,
70 F.3d 1103 (9th Cir. 1995) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
Committee for Immigrant Rights of Sonoma County v. County of Sonoma,
644 F.Supp.2d 1177 (N.D. Cal. 2009) . . . . . . . . . . . . . . . . . . . . . . . . 5
Erickson v. United States,
67 F.3d 858 (9th Cir. 1995) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
Gilbert v. DaGrossa,
756 F.2d 1455 (9th Cir. 1985) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
Greenwood v. FAA,
28 F.3d 971 (9th Cir. 1994) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
Harlow v. Fitzgerald,
457 U.S. 800 (1981) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
Hodge v. Dalton,
107 F.3d 705 (9th Cir. 1997) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
Ivey v. Bd. of Regents of the University of Alaska,
673 F.2d 266 (9th Cir. 1982) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
Johnson v. Duffy,
588 F.2d 740 (9th Cir. 1978) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
Case 8:10-cv-00031-JVS-MLG Document 8 Filed 05/28/10 Page 4 of 18
28 iii
Lucero v. Hart,
915 F.2d 1367 (1990) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
Marquez v. Gutierrez,
322 F.3d 689 (9th cir. 2003) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
Mitchell v. Forsyth,
472 U.S. 511 (1985) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
Pearson v. Callahan,
129 S.Ct. 808 (2009) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
Pellegrino v. United States,
73 F.3d 934 (9th Cir. 1996) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
Peterson V. United States Dep’t of Interior,
899 F.2d 799 (9th Cir.), cert. denied, 498 U.S. 1003 (1990) . . . . 12, 13
Romero v. Kitsap County,
931 F.2d 624 (9th Cir. 1991) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
Rumbles v. Hill,
182 F.3d 1064 (9th Cir. 1999), cert. denied, 528 U.S. 1074 (200) . . . 9
Saucier v. Katz,
533 U.S. 194 (2001) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
SEC v. CMKM Diamonds, Inc.,
No. CV 08-00437 (D.Nev) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
Swanson v. Babbit,
3 F.3d 1348 (9th Cir. 1993) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
Terrell v. Brewer,
935 F.2d 1015 (9th Cir. 1991) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
Wolfe v. Strankman,
392 F.3d 358 (9th Cir. 2004) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
FEDERAL STATUTES
F.R.C.P. 12(b)(1) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1, 2
F.R.C.P. 12(b)(6) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1, 2, 11
U.S.C. 78d . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
Case 8:10-cv-00031-JVS-MLG Document 8 Filed 05/28/10 Page 5 of 18
2
MEMORANDUM OF POINTS AND AUTHORITIES
I. INTRODUCTION
Plaintiffs David Anderson, Nelson L. Reynolds, Sheila Morris, Patrick
Cluney, Robert Hollenegg, Allan Treffry and Reece Hamilton (Hereinafter referred
to as “Plaintiffs”), all of whom allegedly owned shares of stock in CMKM
Diamonds, Inc. (Complaint, ¶¶ 6-12), filed a complaint for declaratory judgment
and violation of civil rights against Defendants CHRISTOPHER COX, MARY L.
SCHAPIRO, CYNTHIA A. GLASSMAN, PAUL S. ATKINS, ROEL C.
CAMPOS, ANNETTE L. NAZARETH, TROY A. PAREDES, LUIS A.
AGUILAR, ELISSE B. WALTER, and KATHLEEN L. CASEY ( Complaint, ¶
13). Defendants are current and former Chairmen and/or Commissioners of the
Securities and Exchange Commission (“Commission” or “SEC”) who have served
since early 2006. The Chairman and Commissioners together constitute the agency
head who accomplishes the agency’s mission in conjunction with the staff in
Divisions and Offices beneath them. See 15 U.S.C. 78d (Section 4 of the
Securities Exchange Act of 1934).
II. FACTUAL BACKGROUND
Because Defendants are moving to dismiss and must, for purposes of this
motion, accept the allegations of the Complaint as true, the relevant facts are those
alleged in the Complaint. The allegations that appear to relate to Defendants and
the claims against them are as follows.
CMKM was formed in 2004 through a merger of other companies, and
within a few months of its formation, it had amended its Articles of Incorporation
to authorize the issuance of 800,000,000,000 common shares with a par value of
$0.0001. Complaint ¶¶ 15-16. In 2005, the company was reinstated to a public
reporting status, but the SEC imposed a temporary suspension of trading of
CMKM stock based on concerns over the adequacy of publicly available
information, and then brought an administrative proceeding alleging CMKM had
Case 8:10-cv-00031-JVS-MLG Document 8 Filed 05/28/10 Page 6 of 18

1 The Complaint does not define or explain naked short selling, and
resolution of this motion does not require definition of that practice. However,
some general information on naked short selling is available at
http://www.sec.gov/spotlight/keyregshoissues.htm.
3
failed to file required reports. Complaint ¶ 18-19. In July 2005, an SEC
administrative law judge found the facts to be as alleged by the SEC, and in
October 2005, CMKM started to wind up its affairs by selling its assets.
Complaint ¶¶ 21-23. Also on October 28, 2005, the SEC entered an order deregistering
CMKM. Complaint ¶ 23. At that time, CMKM had 703,518,875,000
shares of common stock issued and outstanding. Complaint ¶ 23. A “Task Force”
that was involved in liquidating the CMKM assets stated in November 2005 that
“the number of naked short shares is potentially as high as 2 Trillion shares.”
Complaint ¶ 24.1
The Complaint later alleges that from “June 1, 2004 through October 28,
2005 a total of 2.25 Trillion ‘phantom’ shares of CMKM Diamonds Inc, was sold
into the public market . . . . The sales of the majority of such shares were at all
times known to the Securities and Exchange Commission, including Defendants
herein.” Complaint ¶ 31. The Complaint also alleges that the SEC and the United
States Department of Justice (with alleged assistance from the Department of
Homeland Security) used CMKM to “trap[] a number of widely disbursed persons
who were believed to be engaged in naked short selling of CMKM Diamonds Inc.
stock” by taking actions related to the management of the company. Complaint ¶
32. Those actions included facilitating settlement conferences between CMKM
and persons who had engaged in naked short selling. Complaint ¶ 32(d). In the
settlement, which was apparently between CMKM and the short sellers, the short
sellers “promised to pay negotiated amounts to a frozen trust for disbursal at a later
time” in return for a promise that the United States government would not
prosecute them. Complaint ¶ 34.
Plaintiffs also allege that other moneys were “collected for the benefit of the
Case 8:10-cv-00031-JVS-MLG Document 8 Filed 05/28/10 Page 7 of 18

2 As is evident from public filings, the SEC has brought a civil enforcement
action against CMKM and other related persons alleging that CMKM officers
oversaw a complex scheme to issue and sell unregistered CMKM stock and to
manipulate CMKM’s stock price and volume through false statements from
January 2003 through May 2005. SEC v. CMKM Diamonds, Inc., No. 2:08-CV-
00437 (D. Nev.). The SEC did not bring any claims against alleged naked short
sellers. While the SEC has obtained judgments requiring substantial payments of
disgorgement and civil penalties against several defendants, Plaintiffs never
mention this action in the Complaint or otherwise suggest the funds at issue were
obtained through the SEC’s lawsuit.
4
shareholders of CMKM Diamonds, Inc. from the Depository Trust & Clearing
Corporation, from the United States Government, and from the sale of additional
assets” (apparently assets of CMKM). Complaint ¶ 35. These assets allegedly
“have also been placed in a trust or are otherwise now held in trust by the
Depository Trust & Clearing Corporation [“DTCC”] and the United States
Treasury.” Complaint ¶ 35. The Complaint does not allege why the DTCC or the
United States government would have put money in a trust for CMKM
shareholders or why the DTCC or Treasury Department would hold assets from
CMKM in trust.2 It is also not clear whether the Complaint is alleging that these
funds are in the same trust as the alleged funds from naked short sellers.
Without specifying what funds it is discussing, the Complaint continues by
alleging that the SEC “reserved unto itself the sole and absolute discretion to
determine when moneys collected pursuant to the scheme set forth above would
and could be released for distribution.” Complaint ¶ 36. Plaintiffs also allege that
“[d]emand for release of said moneys has been repeatedly presented to the
Securities and Exchange Commission without result.” Complaint ¶ 37. Allegedly,
agents of the SEC and the Department of Justice have said the money would be
released soon, but allegedly the governmental agents knew those statements, made
“at the specific direction of the named Defendants,” were false. Complaint ¶ 37.
The Complaint then concludes that “withholding distribution of said moneys,
without compensation and without due process of law, amount to a taking of the
property of the individual Plaintiffs.” Complaint ¶ 37.
Case 8:10-cv-00031-JVS-MLG Document 8 Filed 05/28/10 Page 8 of 18

[JohnQPublic]

...5
The Complaint purports to state two causes of action, both against all
Defendants. First, the Complaint seeks a declaration that Defendants wrongfully
“cause[d] certain acts and omissions to proceed in such manner” to “prevent the
distribution of moneys held for the benefit of Plaintiffs,” and that their actions
caused Plaintiffs “to be deprived of property without just compensation and
without due process of law.” Complaint ¶ 53. Second, the Complaint alleges that
Defendants violated Plaintiffs’ “Fifth Amendment right to be secure in their
property, free from taking without just compensation and without due process of
law,” and that Defendants’ actions caused Plaintiffs and all persons similarly
situated to suffer damages “in excess of 3.87 Trillion Dollars.” Complaint ¶¶ 56,
58.
III. ARGUMENT
A. Plaintiffs’ Claim for Declaratory Relief Should Be Dismissed Because it
Is Either Barred by Sovereign Immunity or Brought Against the Wrong
Defendants.
Plaintiffs seek declaratory relief from Defendants in both their official and
individual capacities. Complaint ¶¶ 52-54. Plaintiffs seek a declaratory judgment
that “declares the validity of the contentions of the parties set forth in Paragraphs
52 to 54 . . . .” Complaint, Prayer at p. 19. For the reasons stated below, the court
lacks subject matter jurisdiction to the extent the claim is against Defendants in
their official capacities and plaintiffs fail to state a claim for declaratory relief to
the extent the claim is against Defendants in their individual capacities.
Claims against the Defendants in their official capacities are barred by
sovereign immunity. “The doctrine of sovereign immunity applies to federal
agencies and to federal employees acting within their official capacities.” Hodge
v. Dalton, 107 F.3d 705, 707 (9th Cir. 1997); see also Committee for Immigrant
Rights of Sonoma County v. County of Sonoma, 644 F.Supp.2d 1177, 1192-93
(N.D. Cal. 2009). A plaintiff suing the United States bears the burden of showing
Case 8:10-cv-00031-JVS-MLG Document 8 Filed 05/28/10 Page 9 of 18

6
an unequivocal waiver of sovereign immunity. Cato v. United States, 70 F.3d
1103, 1107 (9th Cir. 1995) (citation omitted); Gilbert v. DaGrossa, 756 F.2d 1455,
1458-59 (9th Cir. 1985) (holding that a suit against officers and employees of the
United States in their official capacities is essentially a suit against the United
States and is barred by sovereign immunity). Plaintiffs have failed to identify a
waiver that would allow their claim for declaratory relief to proceed. Thus, this
Court should dismiss that claim because it lacks subject matter jurisdiction over it.
To the extent Plaintiffs’ claims against Defendants in their individual
capacities seek a court order compelling official Commission action, they have
failed to state a claim because they have named the wrong defendants. Defendants
– in their individual capacities – are not parties from whom a declaratory judgment
(or any other equitable relief) can be obtained. There is no basis in the law for a
plaintiff to seek equitable relief from a government official, in his or her individual
capacity, as redress for alleged government violations of constitutional rights
because the Defendants cannot take government action in their individual
capacities. See, e.g., Wolfe v. Strankman, 392 F.3d 358, 360 n.2 (9th Cir. 2004)
(declaratory and injunctive relief only available in official capacity suit; it is not
available in lawsuit against individual government employees in their personal
capacities). Thus, this Court also should dismiss plaintiffs’ declaratory relief claim
for failure to state a claim.
B. Plaintiffs’ Complaint Should be Dismissed In its Entirety Because
Plaintiffs Have Failed to State a Plausible Claim.
The entire Complaint (to the extent it is not dismissed for lack of jurisdiction
or because it names the wrong defendants) should be dismissed because it lacks
“facial plausibility”; that is, it does not, as required by Ashcroft v. Iqbal, 129 S.Ct.
1937, 1949, 1952 (2009), contain factual allegations “sufficient to plausibly
suggest” that Defendants took steps to prevent Plaintiffs from receiving funds in
which Plaintiffs had a property interest.
Case 8:10-cv-00031-JVS-MLG Document 8 Filed 05/28/10 Page 10 of 18

7
In Iqbal, the Supreme Court clarified that in all federal court cases, Rule 8
“demands more than an unadorned, the-defendant-unlawfully-harmed-me
accusation. A pleading that offers ‘labels and conclusions’ or ‘a formulaic
recitation of the elements of a cause of action will not do.’ Nor does a complaint
suffice if it tenders ‘naked assertion...’ devoid of ‘further factual enhancement.’”
Iqbal, 129 S. Ct. at 1949 (internal citations omitted). Instead, a “complaint must
contain sufficient factual matter, accepted as true, to ‘state a claim to relief that is
plausible on its face.’” Id.
The allegations that were dismissed in Iqbal for failure to satisfy a
plausibility standard are analogous to the allegations at issue here. In Iqbal, the
plaintiff alleged that the defendants, the former Attorney General and the director
of the Federal Bureau of Investigation “‘knew of, condoned, and willfully and
maliciously agreed to subject [him]’ to harsh conditions of confinement ‘as a
matter of policy, solely on account of [his] religion, race, and/or national origin and
for no legitimate penological interest.’” Id. at 1951. The plaintiff further alleged
that the Attorney General was the “‘principal architect’ of this invidious policy,”
and that the FBI director was “‘instrumental’ in adopting and executing it.” Id.
The Court found that these allegations were nothing more than “a ‘formulaic
recitation of the elements’ of a constitutional discrimination claim.” Id.
Consequently, “the allegations are conclusory and not entitled to be assumed true.”
Id. That is, they do not “contain facts plausibly showing that petitioners
purposefully adopted a policy of classifying post-September 11 detainees as ‘of
high interest’ because of their race, religion, or national origin.” Id. at 1952.
In this case, Plaintiffs’ allegations similarly do not contain any facts that
plausibly show that there is a trust fund containing funds from naked short sellers
and others that was gathered to benefit CMKM shareholders. With respect to the
key allegation that there was “a settlement with the illegitimate brokers, dealers,
market makers, hedge funds, and other persons and entities that had engaged in
Case 8:10-cv-00031-JVS-MLG Document 8 Filed 05/28/10 Page 11 of 18

8
naked short selling,” the complaint does not identify a single party to the settlement
(it does not even say whether the Commission was a party) or provide anything
other than the most general terms – persons who engaged in naked short selling
agreed to pay negotiated amounts in return for a promise of no prosecution.
Complaint ¶ 34.
In addition, Plaintiffs do nothing to identify their purported rights under that
alleged agreement. They say only that “other moneys have been collected for the
benefit of the shareholders of CMKM Diamonds, Inc. from the Depository Trust &
Clearing Corporation, from the United States Government, and from the sale of
additional assets including consent to enter into joint venture agreements with
other companies holding mineral claims in Saskatchewan, Canada.” Id. at ¶ 35.
Plaintiffs do not say why, when, or how the DTCC and the United States collected
money for the CMKM shareholders or explain why they think the money was
collected.
The Complaint also does not identify how or when Plaintiffs were deprived
of any funds. To the contrary, the Complaint alleges that “the Securities and
Exchange Commission reserved unto itself the sole and absolute discretion to
determine when moneys collection pursuant to the scheme set forth above would
and could be released for distribution.” Complaint ¶ 36. The Complaint also
refers to statements that agents of the SEC supposedly made promising to release
money to CMKM shareholders without providing the most basic facts about those
statements such as the context in which they were made, who made them, and
when they were made. Complaint ¶ 37. The Complaint also alleges that the
Defendants directed their agents to make the statements without providing a single
fact to support that contention. Complaint ¶ 37.
The vague and conclusory facts alleged by Plaintiffs do not allow the Court
to draw any reasonable inference that points to any liability of Defendants; the
allegations provide nothing more than “a sheer possibility that a defendant has
Case 8:10-cv-00031-JVS-MLG Document 8 Filed 05/28/10 Page 12 of 18

3 “Actions under § 1983 and those under Bivens are identical save for the
replacement of a state actor under § 1983 by a federal actor under Bivens.”
Rumbles v. Hill, 182 F.3d 1064, 1069 (9th Cir. 1999), cert. denied, 528 U.S. 1074
(2000), abrogated on other grounds, Booth v. Churner, 532 U.S. 731 (2001); Butz
v. Economou, 438 U.S. 478, 500-02 (1978) (liability of federal officials under
Bivens same as liability of state and municipal officials under § 1983).
9
acted unlawfully” (and they may not provide even that). See Iqbal, 129 S.Ct. at
1949. Consequently, the Complaint does not satisfy the pleading requirements of
Rule 8(a)(2) and must be dismissed.
C. Plaintiffs’ Bivens Claim Should Be Dismissed Because Plaintiffs Have
Not Alleged that Defendants Were Either Personally Involved in, or
Caused Plaintiffs to Be Subjected to, a Constitutional Deprivation.
Even if Plaintiffs’ had satisfied the Rule 8 pleading requirements, their
second cause of action would have to be dismissed. In that cause of action,
Plaintiffs seek damages from Defendants on a constitutional tort theory of recovery
under Bivens v. Six Unknown Named Agents of Federal Bureau of Narcotics, 403
U.S. 388 (1971). In a Bivens action, the plaintiff must allege facts, not simply
conclusions, that show that the defendant was personally involved in the
deprivation of his constitutional rights. Barren v. Harrington, 152 F.3d 1193, 1194
(9th Cir. 1998)(emphasis added). Vague and conclusory allegations of official
participation in constitutional violations are not entitled to be assumed to be true,
and thus, not sufficient to withstand a motion to dismiss. See Ashcroft, et al. v.
Iqbal, 129 S.Ct. 1937, 1951 (2009); Ivey v. Bd. of Regents of the University of
Alaska, 673 F.2d 266, 268 (9th Cir. 1982).
A defendant is not liable under Bivens unless the facts establish that the
defendant had a “personal involvement” in the alleged constitutional deprivation,
or that there was a “causal connection” between the defendant and the alleged
constitutional deprivation. See Johnson v. Duffy, 588 F.2d 740, 743-44 (9th Cir.
1978) (claims brought pursuant to 42 U.S.C. § 1983);3 Pellegrino v. United States,
73 F.3d 934, 936 (9th Cir. 1996) (Bivens liability is premised on proof of direct
Case 8:10-cv-00031-JVS-MLG Document 8 Filed 05/28/10 Page 13 of 18

personal responsibility).
Moreover, respondeat superior, or supervisory liability, is not applicable in
an individual capacity suit under Bivens. See Iqbal, 129 S.Ct. at 1949; Terrell v.
Brewer, 935 F.2d 1015, 1018 (9th Cir. 1991). In Iqbal, the Supreme Court rejected
the notion that a supervisor’s mere “knowledge and acquiescence in their
subordinates’ [conduct]” could demonstrate the supervisor’s violation of the
Constitution. See Iqbal, 129 S.Ct. at 1949. Absent vicarious liability, a
government employee’s liability must stem from his or her own misconduct; thus,
“purpose rather than knowledge is required to impose Bivens liability” on both
subordinates and supervisors. Id.; see also Bibeau v. Pacific Northwest Research
Foundation, 188 F.3d 1105, 1114 (9th Cir. 1999).
Notably missing from Plaintiffs’ Complaint are any factual allegations
detailing Defendants’ direct involvement in the general matters asserted against the
SEC. Nowhere do Plaintiffs contend in anything other than the most conclusory
fashion that these high level SEC Chairman and Commissioners said, wrote,
directed or instructed any of the conduct alleged, nor do Plaintiffs allege specific
facts demonstrating that Defendants were aware of, or acquiesced in, the alleged
conduct.
Accordingly, Plaintiffs’ Bivens claim must be dismissed as there are no
factual allegations showing that Defendants were personally involved in any
alleged constitutional violation.
D. The Complaint Fails to Set Forth Facts Sufficient to Overcome
Defendants’ Qualified Immunity.
Even assuming that the Complaint set forth facts sufficient to establish that
Defendants violated Plaintiffs’ constitutional rights, each Defendant is entitled to
///
///
///
18

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4 Because the qualified immunity determination requires consideration of
whether the facts alleged state a constitutional violation, raising qualified immunity
is entirely consistent with a motion to dismiss under Rule 12(b)(6) for failure to
state a claim on which relief can be based. As the Supreme Court has recently
stated, “whether a particular complaint sufficiently alleges a clearly established
violation of law cannot be decided in isolation from the facts pleaded. In that sense
the sufficiency of respondent’s pleadings is both ‘inextricably intertwined with,’ . .
. and ‘directly implicated by,’ . . . the qualified immunity defense.” Iqbal, 129 S.
Ct. 1946-47 (citations omitted).
11
qualified immunity.4 Government officials are shielded from civil damage liability
if their conduct does not violate clearly established constitutional or statutory rights
of which a reasonable person would have known. See Harlow v. Fitzgerald, 457
U.S. 800, 818 (1981); Romero v. Kitsap County, 931 F.2d 624, 627 (9th Cir.
1991). The Supreme Court has repeatedly underscored the importance of resolving
qualified immunity questions at the earliest possible stage in litigation so that the
costs and expenses of trial are avoided where the defense is dispositive. Saucier v.
Katz, 533 U.S. 194, 200 (2001). Indeed, the defense of qualified immunity is an
entitlement not to stand trial or face the other burdens of litigation. Id. (citing
Mitchell v. Forsyth, 472 U.S. 511 (1985)).
In Saucier, the Court established a two-part inquiry in determining whether
qualified immunity applies: (1) whether taken in the light most favorable to the
plaintiff, the facts as alleged show the officer’s conduct violated a constitutional
right; and (2) whether the constitutional right in question was clearly established
such that it would be clear to a reasonable officer that his conduct was unlawful in
the situation he/she confronted. Saucier, 533 U.S. at 201; Marquez v. Gutierrez,
322 F.3d 689, 692 (9th Cir. 2003). The Supreme Court recently held that while the
sequence of the two-part inquiry set forth above in Saucier is often appropriate, it
is no longer mandatory; thus, the Court may grant qualified immunity if either of
the two prongs of the Saucier test are not met. See Pearson v. Callahan, 129 S.Ct.
808, 818 (2009).
This case is one in which Defendants can easily establish that the first part of
Case 8:10-cv-00031-JVS-MLG Document 8 Filed 05/28/10 Page 15 of 18

the test is not satisfied, so the Saucier order can be followed. The Complaint
alleges that Defendants denied Plaintiffs “their Fifth Amendment right to be secure
in their property, free from taking without just compensation and without due
process of law” by withholding distribution of money. Complaint ¶¶ 38-39. But
Plaintiffs have not shown that Defendants violated a constitutional right because
Plaintiffs have not alleged facts sufficient to show that they have a protected
property interest in that alleged money.
In addressing property interests, the Supreme Court has stated:
To have a property interest in a benefit, a person clearly must have
more than an abstract need or desire for it. He must have more than a
unilateral expectation of it. He must, instead, have a legitimate claim
of entitlement to it.
Board of Regents v. Roth, 408 U.S. 564, 577 (1972). Property rights are not
created by the Constitution, but are defined by independent sources such as state
law, statutes, ordinances, regulations or express and implied contracts. Id.; Lucero
v. Hart, 915 F.2d 1367, 1370 (1990). Further, if a right has not vested, it is not a
cognizable property interest. Peterson v. United States Dep’t of Interior, 899 F.2d
799, 807 (9th Cir.), cert. denied, 498 U.S. 1003 (1990).
Peterson is instructive because it shows that a claim based on an expectation
– even an eminently reasonable expectation – that a person will obtain funds from
the government is not a property interest. In Peterson, several California public
water agencies asked the federal court to declare unconstitutional a provision in the
Reclamation Reform Act of 1982, which they claimed interfered with their rights
to receive subsidized water from federal reclamation projects for certain lands.
Plaintiffs made two arguments to establish a constitutionally-protected property
right. First, they argued that such a right was implicit in contracts they had with
the federal government. Second, they contended that they had a “reasonable
investment-backed expectation to receive water at subsidized rates” even if the
Case 8:10-cv-00031-JVS-MLG Document 8 Filed 05/28/10 Page 16 of 18

right was not included within the contract. Peterson, 899 F.2d at 812. The
Ninth Circuit found that the contract between the plaintiffs and the federal
government was insufficient to establish a property right, so it turned to the second
argument. Id. at 811. The court rejected the plaintiffs’ second argument, noting
that the plaintiffs did not have a property interest just because they expected to
receive certain funds from the government and made investments based on that
expectation. Id. at 813.
Moreover, numerous cases illustrate the proposition that an individual has no
property interest in a particular benefit where a government agency retains
discretion to grant or deny the benefit. See, e.g., Erickson v. United States, 67 F.3d
858, 862 (9th Cir. 1995) (under due process clause, doctors had no property interest
in continued participation in Medicare or Medicaid); Greenwood v. FAA, 28 F.3d
971, 976 (9th Cir. 1994) (where annual renewal of pilot examiner designation was
left to the discretion of the FAA, plaintiff had no entitlement); Swanson v. Babbit,
3 F.3d 1348, 1353-54 (9th Cir. 1993) (undertakings clause, no vested right to obtain
patent to mining claim upon filing of claim where agency had discretion to review
claim).
Here, Plaintiffs fail to establish a constitutionally-protected property interest
and thus their Fifth Amendment claim (under either the Due Process Clause or the
Takings Clause) is not cognizable. Plaintiffs attempt to base their property interest
on a purported promise from unidentified entities engaged in naked short selling
who allegedly “promised to pay negotiated amounts to a frozen trust for disbursal
at a later time” in exchange for “a U.S. Government promise of no prosecution” for
naked short selling. Complaint ¶ 34. This allegation illustrates that Plaintiffs
themselves have not entered into a contract and have not obtained any enforceable
rights. Indeed, Plaintiffs allege that the Commission has “the sole and absolute
discretion” to determine when to disburse the purported pool of money. Complaint
¶ 36. As discussed above, individuals have no vested property interest in a
Case 8:10-cv-00031-JVS-MLG Document 8 Filed 05/28/10 Page 17 of 18

particular benefit where a government agency retains discretion to grant or deny
the benefit.
Because Plaintiffs have not alleged that they have a vested property interest
in the alleged trust fund at issue, they have not made allegations sufficient to show
that Plaintiffs violated a constitutional right.
IV. CONCLUSION
For the reasons set forth above, Plaintiffs’ action must be dismissed in its
entirety.
Dated: May 28, 2010
Respectfully submitted,
ANDRÉ BIROTTE JR.
United States Attorney
LEON W. WEIDMAN
Assistant United States Attorney
Chief, Civil Division
/s/
KEITH M. STAUB
Assistant United States Attorney
Attorneys for Defendants
Case 8:10-cv-00031-JVS-MLG Document 8 Filed 05/28/10 Page 18 of

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http://tfant53.proboards.com/index.cgi?board=general&action=print&thread=4405

[JohnQPublic]

TEXT OF THE CMKM/CMKX LAWSUIT AGAINST THE S.E.C. (http://camrhon.proboards.com/index.cgi?board=safe&action=display&thread=6151)
CASE NUMBER CV10-00031-JVS (MLGX): SEE REPORT DATED 7TH JANUARY 2010
Saturday 9 January 2010 03:15
THE SUMMONS CIVIL COVER SHEET DISPLAYS:
'MONEY DEMANDED IN COMPLAINT: $3.87 TRILLION'

A. CLIFTON HODGES, State Bar No. 046803
HODGES AND ASSOCIATES
4 East Holly Street, Suite 202
Pasadena, California 91103
Telephone: (626) 564-9797 begin_of_the_skype_highlighting (626) 564-9797 end_of_the_skype_highlighting
Facsimile: (626) 564-9111


Attorneys for Plaintiffs

UNITED STATES DISTRICT COURT
CENTRAL DISTRICT OF CALIFORNIA

DAVID ANDERSON, LT. COL.; NELSON L. REYNOLDS, LT. COL.; SHEILA MORRIS; PATRICK CLUNEY; ROBERT HOLLENEGG; ALLAN TREFFRY; and REECE HAMILTON, Individually and on behalf of all similarly situated,

Plaintiffs,

vs.:

CHRISTOPHER COX, an individual; MARY L. SCHAPIRO, an individual; CYNTHIA A. GLASSMAN,
an individual; PAUL S. ATKINS, an individual; ROEL C. CAMPOS, an individual; ANNETTE L. NAZARETH, an individual; TROY A. PAREDES, an individual; LUIS A. AGUILAR, an individual; ELISSE B. WALTER, an individual; KATHLEEN L. CASEY, an individual;

and DOES 1 through 10, inclusive,

Defendants. Case No.: CV10-00031-JVS (MLGx)

COMPLAINT FOR DECLARATORY JUDGMENT,
AND FOR DAMAGES FOR VIOLATION OF CIVIL RIGHTS

(JURY TRIAL DEMANDED)

COME NOW Plaintiffs DAVID ANDERSON, LT. COL.; NELSON L. REYNOLDS, LT. COL.; SHEILA MORRIS; PATRICK CLUNEY; ROBERT HOLLENEGG; ALLAN TREFFRY; and REECE HAMILTON, individually and on behalf of all others similarly situated, who, for causes of action herein allege:

INTRODUCTION:

1. This action for declaratory judgment and for damages for violations of the Plaintiffs’ civil rights under Bivens v. Six Unknown Agents of the F.B.I., 403 U.S. 388 (1971), against Commissioners of the Securities and Exchange Commission, arises out of actions and failures to act occurring over the period from January 1, 2006 to date by Defendants CHRISTOPHER COX, an individual; MARY L. SCHAPIRO, an individual; CYNTHIA A. GLASSMAN, an individual; PAUL S. ATKINS, an individual; ROEL C. CAMPOS, an individual; ANNETTE L. NAZARETH, an individual; TROY A. PAREDES, an individual; LUIS A. AGUILAR, an individual; ELISSE B. WALTER, an individual; KATHLEEN L. CASEY, an individual; and other government agents whose names are not now known to the Plaintiffs.

2. These Defendants, acting in the course and scope of their employment by the United States of America as duly authorized Commissioners of the Securities and Exchange Commission, a federal agency, through their acts and omissions knowingly, consciously, wrongly, without compensation and without due process of law have effected a taking of property from each of the named Plaintiffs and all who are similarly situated.

JURISDICTION AND VENUE:

3. This action for declaratory relief and damages is predicated on the provisions of the Constitution and Statutes of the United States, the legal and equitable jurisdiction of this Court, the principles of common law, and this Court’s concurrent and pendant jurisdiction.

4. This Court has jurisdiction over the Plaintiffs’ claims under Article III of the United States Constitution and the Fifth Amendment thereto. This Court has jurisdiction over Plaintiffs’ property rights under the foregoing citations and, in addition, pursuant to Title 28 U.S.C., Section 1331 and the case law precedent of Bivens v. Six Unknown Agents of the F.B.I., 403 U.S. 388 (1971).

5. Venue is proper in this Court under Title 28 U.S.C., Section 1391(e)(1)/(2). Defendants are all past or current Commissioners of the Securities and Exchange Commission and therefore agents of the United States Government, and a substantial part of the property, and the acts related to such property subject to Plaintiffs’ claims, occurred or was situated in this Central District of California at all times relevant.

THE PARTIES:

6. Plaintiff DAVID ANDERSON, LT. COL., U.S. Air Force pilot, resides in the State of Missouri, owns more than 280,000,000 shares of stock in CMKM Diamonds, Inc., and at all times relevant to the allegations set forth herein, was a citizen of the United States.

7. Plaintiff NELSON L. REYNOLDS, LT. COL., U.S. Air Force pilot, resides in the State of Texas, owns more than 15,000,000 shares of stock in CMKM Diamonds, Inc., and at all times relevant to the allegations set forth herein, was a citizen of the United States.

8. Plaintiff SHEILA MORRIS, a company owner/CEO resides in the State of North Carolina, owns
more than 400,000,000 shares of stock in CMKM Diamonds, Inc., and at all times relevant to the allegations set forth herein, was a citizen of the United States.

9. Plaintiff PATRICK CLUNEY, a retired professional athlete resides in the State of Florida, owns more than 680,000,000 shares of stock in CMKM Diamonds, Inc., and at all times relevant to the allegations set forth herein, was a citizen of the United States.

10. Plaintiff ROBERT HOLLENEGG resides in the State of North Carolina, owns more than 85,000,000 shares of stock in CMKM Diamonds, Inc., and at all times relevant to the allegations set forth herein, was a citizen of the United States.

11. Plaintiff ALLAN TREFFRY, a licensed State of California Attorney, resides in the County of Los Angeles, State of California, owns more than One Billion shares of stock in CMKM Diamonds, Inc., and at all times relevant to the allegations set forth herein, was a citizen of the United States.

12. Plaintiff REECE HAMILTON, a business owner/partner resides in the County of Los Angeles, State of California, owns more than One Billion shares of stock in CMKM Diamonds, Inc., and at all times relevant to the allegations set forth herein, was a citizen of the United States.

13. Defendants CHRISTOPHER COX, Chairman 2005-2009, MARY L. SCHAPIRO, Chairman 2009-2010, CYNTHIA A. GLASSMAN Commissioner 2002-2006, PAUL S. ATKINS, Commissioner 2002-2008, ROEL C. CAMPOS, Commissioner 2002-2007, ANNETTE L. NAZARETH, Commissioner 2005-2008, TROY A. PAREDES, Commissioner 2008-2010, LUIS A. AGUILAR Commissioner 2008-2010, ELISSE B. WALTER Commissioner 2008-2010 and KATHLEEN L. CASEY, Commissioner 2008-2010: are and, at all referenced times mentioned herein were, acting as individuals and as Commissioners of the Securities and Exchange Commission, an agency of the UNITED STATES OF AMERICA, and acting within the course and scope of their employment. These Defendants are the real parties in interest in the claims set forth herein.

14. Other employees and servants of the Securities and Exchange Commission are also liable for damages under the causes of action set out in this Complaint. However, the names of these employees and servants are not now known to Plaintiffs, who thereby names them herein as DOES 1 through 10. When the names of these employees and servants become known, Plaintiffs reserve the right to amend this Complaint to add the names of these DOE Defendants.

FACTUAL CONTENTIONS APPLICABLE TO ALL CAUSES OF ACTION:

15. In November and December, 2002, CYBER MARK INTERNATIONAL INC., a public company domiciled in Nevada, reverse-merged with Casavant Mineral Claims, which then held mineral claims to more than 600,000 acres within Saskatchewan, Canada, increased authorized capital from 500,000,000 to 10,000,000,000 common shares, cancelled all preferred shares, and changed its name to CASAVANT MINING KIMBERLITE INTERNATIONAL, INC. (CMKI); as of February 3, 2003, 7,241,653,404 shares were issued and outstanding.

16. During the succeeding months CMKI declared a 2 for 1 stock split and filed with the Securities and Exchange Commission: Form 15 exemption claim, July, 2003; Certificate of Amendment to Articles of Incorporation changing its name to CMKM DIAMONDS, INC. (CMKM), February 5, 2004; Certificate of Amendment to Articles of Incorporation raising its authorized capital to 500,000,000,000 common shares @ $0.001 par value, March 1, 2004; Certificate of Amendment to Articles of Incorporation correcting the par value of common shares as of December 26, 2002 to $0.0001 par value, July 13, 2004; Certificate of Amendment to Articles of Incorporation raising its authorized capital to 800,000,000,000 common shares @ $0.0001 par value, July 13, 2004.

17. During the summer and fall of 2004: New York Attorney Roger Glenn was retained by the company; the number of acres upon which CMKM held claims increased to over 1.2 Million acres; claims development activity was pursued by the company; and a shareholders appreciation party was planned to be celebrated in Las Vegas, Nevada to thank the shareholders, to give them an opportunity to meet company personnel, and to announce an agreed upon merger with another public company, U.S. CANADIAN MINERALS INC. On the eve of the party celebration, the Securities and Exchange Commission placed an order on CMKM preventing any public disclosure of anticipated mergers or other development information.

18. In early 2005, CMKM announced the addition of Robert A. Maheu to the Board of Directors who shortly thereafter became the co-chairman of the Board; CMKM announced a new “corporate strategy plan to dramatically and comprehensively transform” the company for generation of consistent, long-term growth and profitability for the shareholders; CMKM filed an amended Form 15 on February 17, 2005 reinstating the company to a public reporting status; and on March 3, 2005 was notified by the Securities and Exchange Commission of a temporary suspension of trading of the company’s stock (Pink Sheets-CMKX) based upon, inter alia, concerns over the “adequacy” of publicly available information.

19. On March 16, 2005 the Securities and Exchange Commission instituted a public administrative proceeding pursuant to Section 12 (j) of the Securities Exchange Act of 1934 against CMKM to determine whether the company was required to file periodic reports under Section 12(g) and whether CMKM failed to comply with Section 13(a), and rules there-under, by failing to so file. CMKM responded on April 11, 2005 admitting that CMKM had a duty to file public reports and alleging various grounds of mistake, malpractice and other affirmative defenses to the factual allegations.

20. From March 17, 2005 through April 29, 2005 CMKM traded publicly in the US under the trading symbol “CMKX,” a total of 551,756,751,833 shares, an average share volume of more than 17 billion shares per day, reaching a maximum on April 21, 2005 of 94,654,588,201 shares. These figures do not include foreign trades nor trades made on an ex-clearing basis such as those disclosed by Jefferies & Company , Inc. on May 6, 2005: between March 25, 2004 and September 21, 2004 Jefferies traded 111,780,681,204 shares of CMKX stock on an ex-clearing basis.

21. On May 10, 2005 the Section 12 (j) administrative proceeding was conducted in a United States Central District of California courtroom; the Administrative Law Judge, Honorable Brenda P. Murray entered her decision on July 12, 2005 finding the facts to be as alleged by the Securities and Exchange Commission. CMKM then filed a Petition for Review which was granted, and a briefing schedule set.

22. On October 20, 2005: Robert A. Maheu resigned as a member and co-chairman of the CMKM Board of Directors; Urban Casavant agreed to remain as the sole officer and Director of CMKM until the affairs of CMKM were wound up to ensure all shares and other assets of CMKM were properly distributed to its stockholders; CMKM entered into an agreement with Entourage Mining Ltd. pursuant to which CMKM assigned its 50% interest in United Carina Resources Corp. to Entourage for 15,000,000 shares of stock, sold its 36% interest in Nevada Minerals, Inc. claims to Entourage for 5,000,000 shares of stock, and made a joint agreement with 101047025 Saskatchewan Inc. and Entourage whereby certain claims were transferred and CMKM became entitled to receive 30,000,000 shares of stock; CMKM’s other agreements with United Carina Resources Corp. and Nevada Minerals Inc. were terminated.

23. On October 21, 2005 CMKM approved formation of a Task Force consisting of Robert A.
Maheu, Donald J. Stoecklein and Bill Frizzell for the purpose of assisting CMKM and Mr. Maheu, as “designated Trustee, to conduct an orderly and verifiable pro rata liquidating distribution of any Entourage Mining Ltd. shares…and any other available assets of CMKM;” the SEC Petition for Review was withdrawn by CMKM on October 21, 2005 and a Securities and Exchange Commission Order de-registering CMKM subsequently was formally entered on October 28, 2005. CMKM had 703,518,875,000 shares of common stock issued and outstanding on that date.

24. On November 4, 2005 CMKM established a web site (CMKMTaskForce.com) for the purpose, inter alia, of advising all shareholders to request physical share certificates evidencing their ownership interest in CMKM as one means of establishing that they were bona fide shareholders of the company. The company intended at that time to wind up its affairs and distribute the 50 million shares of Entourage Mining Ltd. stock and any other assets, including previously unpaid dividends, to the bona fide shareholders. The web site set forth procedures to be followed and established a means of registering all bona fide shareholder certificates prior to December 31, 2005; certificates evidencing 43,309,298,585, shares had been registered at that time.

25. A frequently asked question (FAQ) page was added to the web site on the evening of November 4, 2005 and in response to a question about the degree of naked shorting of CMKM stock, the Task Force indicated that “Credible information indicates the number of naked short shares is potentially as high as 2 Trillion shares”.

26. The Task Force issued a press release on January 19, 2006 discussing a reduction in total shares of Entourage Mining Ltd. stock to be distributed to CMKM shareholders from 50 Million shares to 45 Million shares as a result of a reduction in mining claims involved.

The Task Force also discussed issues involving difficulties obtaining physical share certificates being experienced by shareholders; accordingly the deadline date for registration of shares was extended to March 15, 2006.

The Task Force was provided a new “cert list” by First Global Stock Transfer showing certs issued “and active” on January 13, 2006; ADP Services also provided information to the Task Force. This data reflected a sample of 25,021 certificates representing 350,000,000,000 plus shares of stock and a total of more than 67,000 additional certificates to be counted.

[JohnQPublic]

27. On March 16, 2006 the Task Force issued a public release that “…we received a visit in our office [in Tyler, Texas] by an E-Trade rep today. This rep personally hand delivered copies of approximately 4000” certificates. Further information regarding on-going discussions with the DTCC and other brokerage houses was also provided.

28. The Task Force provided additional information on March 20, 2006, extending the time for registration of certificates to May 15, 2006, advising the shareholders that Urban Casavant and his immediate family would not participate in the share distribution, and advising that a printed notice to stock holders would be published in at least one nationally circulated United States newspaper.

29. On May 25, 2006 the Task Force received a second batch of 1,200 share certificates from AmeriTrade, having received some 1,000 share certificates a week earlier. AmeriTrade’s cover letter indicated that several hundred more certificates would be delivered within “the next few days.” The deadline for registering certificates of May 15, 2006 had not been extended, although the Task Force continued to advise shareholders that they should obtain their certificates and that the Task Force would honor any bona fide shareholder at the time of asset distribution. By late Fall, 2006, the Task Force had received and counted copies of certificates from more than 39,000 shareholders, evidencing more than 635 Billion shares.

30. Kevin West was hired pursuant to a written agreement by CMKM during the summer of 2006
to assist in winding up the affairs of the company and, more specifically, coordinating the share certificate pull. After serving nearly a year as Interim CEO, Kevin West was appointed Chairman of the Board on March 29, 2007 after which Urban Casavant stepped down as sole director, president, secretary and treasurer of CMKM Diamonds, Inc. Mr. West soon thereafter appointed Bill Frizzell as CMKM General Counsel and provided instructions for the filing of a number of lawsuits to attempt to recover moneys and other assets which had been wrongfully taken from the company.

31. During the period of June 1, 2004 through October 28, 2005 a total of 2.25 Trillion “phantom” shares of CMKM Diamonds Inc, was sold into the public market through legitimate brokers, illegitimate brokers and dealers, market makers, hedge funds, ex-clearing transactions and private transactions. The sales of the majority of such shares were at all times known to the Securities and Exchange Commission, including Defendants herein.

32. At some date prior to June 1, 2004 the Securities and Exchange Commission in concert with the Department of Justice of the United States, together combined with Robert A. Maheu and others to utilize CMKM Diamonds, Inc. for the purpose of trapping a number of widely disbursed entities and persons who were believed to be engaged in naked short selling of CMKM Diamonds Inc. stock and cellar boxing the company.

The Securities and Exchange Commission and the Department of Justice, with assistance from the Department of Homeland Security, believed and developed evidence that said short sellers were utilizing their activities to illegally launder moneys, wrongfully export moneys, avoid payment of taxes, and to support foreign terrorist operations. To fulfill the plan to criminally trap such wrongdoers, the Securities and Exchange Commission, with assistance from the Departments of Justice and Homeland Security:

(a) Assisted in and approved the retention of Roger Glenn, an ex-SEC trial attorney and drafter of Sarbanes-Oxley, to join CMKM Diamonds Inc. for the purpose of verifying claims value, increasing authorized shares of stock to 800,000,000,000, and supervising from the inside of the company;

(b) Encouraged the company to expand its promotional activities, assisted in the set up of the “racing activities” of the company, and underwrote a substantial portion of the cost of such activities;

(c) Consented to, facilitated, and supported the sale of certain company claims to several foreign corporations;

(d) Consented to, facilitated, and supported the conferences between Robert A. Maheu and his associates on the one hand, and the wrongdoing short sellers on the other, all for the purpose of settling the potential liability of said wrongdoers with consent of the U. S. Government and a representation of no criminal prosecution for such illegal sales;

(e) Consented to, facilitated, and supported the declaration of dividends payable by the company to each common shareholder of CMKM Diamonds, Inc.

(f) Consented to, facilitated, and supported the distribution of shares of CIM, a private company owned by Urban Casavant, as a stock dividend, including consent and approval of distribution of said shares to holders of more than 1.4 Trillion shares of CMKM Diamonds, Inc. common stock.

33. During the period from November, 2004 through April, 2005, CMKM Diamonds, Inc. negotiated the sale of some of its Saskatchewan, Canada, mineral claims to three Chinese domiciled corporations with the advice and consent, inter alia, of the Securities and Exchange Commission. Proceeds from the consummation of such sales were placed into a frozen trust for disbursal at a later time.

34. During the period from March, 2004 through August, 2006, on behalf of CMKM Diamonds, Inc. Robert A. Maheu, with assistance from others, negotiated a settlement with the illegitimate brokers, dealers, market makers, hedge funds, and other persons and entities that had engaged in naked short selling of CMKM Diamonds Inc. stock and cellar boxing the company. In exchange for a U. S. Government promise of no prosecution for such sales, the wrongdoers each promised to pay negotiated amounts to a frozen trust for disbursal at a later time.

35. Plaintiffs herein are informed and believe, and based thereon allege, that other moneys have been collected for the benefit of the shareholders of CMKM Diamonds, Inc. from the Depository Trust & Clearing Corporation, from the United States Government, and from the sale of additional assets including consent to enter into joint venture agreements with other companies holding mineral claims in Saskatchewan, Canada. Plaintiffs herein are further informed and believe, and based thereon allege, that said moneys, collected for the benefit of shareholders have also been placed in a trust or are otherwise now held in trust by the Depository Trust & Clearing Corporation and the United States Treasury.

36. Plaintiffs herein are informed and believe, and based thereon allege, that at all times mentioned, the Securities and Exchange Commission reserved unto itself the sole and absolute discretion to determine when moneys collected pursuant to the scheme set forth above would and could be released for distribution.

37. Demand for release of said moneys has been repeatedly presented to the Securities and Exchange Commission without result. Agents and employees of the Securities and Exchange Commission and the Department of Justice have represented repeatedly that the release of moneys for distribution was imminent, and/or would occur within several weeks, and/or would occur within less than a month. Each of said representations have been made knowing them
to be false, and at the specific direction of the named Defendants. These actions of withholding distribution of said moneys, without compensation and without due process of law, amount to a taking of the property of the individual Plaintiffs and of all similarly situated.

38. At all times mentioned herein, the Defendants acted with deliberate indifference or reckless disregard for the Constitutional and other rights of all Plaintiffs, or with the intention and knowledge that they were violating Plaintiffs’ Constitutional or other rights or to cause them other injuries, losses and damage.

39. As a result of the Defendants’ misconduct, each of the named Plaintiffs and all of those similarly situated, have been denied their Constitutional rights, including, but not limited to, their Fifth Amendment right to be secure in their property, free from taking without just compensation and without due process of law, and have suffered injuries and property loss in excess of Three Trillion Dollars.

CLASS ACTION ALLEGATIONS:

40. Plaintiffs bring this action individually, and on behalf of all others similarly situated, and in the public interest.

41. Plaintiffs bring this action on behalf of a class of persons who were and are bona fide shareholders in CMKM Diamonds, Inc., a public company directly supervised by the Securities and Exchange Commission.

42. Plaintiffs are members of said class, have a claim typical of the claims of all members of said class, and will fairly and adequately represent the interests of the members of said class.

43. The members of said class are so numerous that joinder of all members is impracticable.

44. All of the class members are wholly identifiable from documents known to be in the possession of Defendants and of the Securities and Exchange Commission.

45. The claims of the members of said class present common issues of fact and law which predominate over any questions affecting only individual members of the class.

46. The defenses available to defendants to the claims of the members of the class present common issues of fact and law which predominate over any questions affecting only individual members of the class.

47. The prosecution of separate actions by the individual members of the class would create a risk of inconsistent or varying adjudications which would establish incompatible standards of conduct for defendants.

48. Adjudications with respect to individual members of said class would, as a practical matter be dispositive of the interest of other members not parties to the individual adjudications or would substantially impair or impede the right and/or ability to protect their interest.

49. Defendants have acted or refused to act on grounds generally applicable to said class thereby making appropriate final injunctive relief with respect to the class as a whole.

50. Unless ordered by this court, Defendants will continue their illegal and wrongful conduct, and repeated actions by individual class members will be required to obtain relief; and thereby the remedies available at law are inadequate.

51. For all of the above reasons, a class action is superior to other available methods for the fair and efficient adjudication of the claims alleged herein.

FIRST CAUSE OF ACTION
(FOR DECLARATORY RELIEF AGAINST ALL DEFENDANTS):

52. Plaintiffs incorporate as though fully set forth herein, all of the allegations contained in Paragraphs 1 through 39 above.

53. Plaintiffs allege that an actual controversy exists in this jurisdiction, in that it is the Plaintiffs’ contention that:

(a) The Defendants are, or in the past were, Commissioners of the SECURITIES AND EXCHANGE COMMISSION, an agency of the UNITED STATES OF AMERICA. At all relevant times herein, said Defendants were acting as individuals and in their official capacity as agents of the SECURITIES AND EXCHANGE COMMISSION.

(b) On and after January 1, 2006, the Defendants, acting alone and acting in concert with each other, and acting without just cause, did consciously, knowingly, intentionally and wrongfully cause certain acts and omissions to proceed in such manner as to hinder, delay, and ultimately prevent the distribution of moneys held for the benefit of Plaintiffs, and all similarly situated, said moneys being payable to each said person on a per share basis.

(c) The Defendants, and each of them, acted in their individual and their official capacities with deliberate or reckless disregard for the Constitutional and other rights of Plaintiffs and all similarly situated or with malicious intent and with the knowledge that their acts and omissions violated and denied the Constitutional and other rights of Plaintiffs and all similarly situated, or that their acts would cause said Plaintiffs and all similarly situated other injuries.

(d) The Defendants, and each of them, did unlawfully and wrongfully cause certain acts and omissions to proceed in such manner as to hinder, delay, and ultimately prevent the distribution of moneys held for the benefit of Plaintiffs and all similarly situated, even though the Defendants knew that said persons had a vested interest and Constitutional right to receive said moneys in a timely, unfettered and unconstrained manner.

(e) The Defendants, and each of them, knew that Plaintiffs and all similarly situated had a vested interest and Constitutional right to receive said moneys in a timely, unfettered and unconstrained manner when they committed the acts and omissions set forth above, causing each said person to be deprived of property without just compensation and without due process of law.

54. The Defendants, and each of them, contend to the contrary. Therefore, it is necessary and proper for this Court at this time to determine and declare the validity of the contentions of the parties as set forth above.

SECOND CAUSE OF ACTION
(FOR VIOLATION OF THE PLAINTIFFS’ CONSTITUTIONAL RIGHTS AGAINST DEFENDANTS COX, SHAPIRO, GLASSMAN, ATKINS, CAMPOS, NAZARETH, PAREDES,AGUILAR, WALTER, and CASEY):

55. Plaintiffs incorporate as though fully set forth herein all of the allegations contained in Paragraphs 1 through 51, above.

56. Defendants, by committing the above-mentioned acts and omissions, violated and denied the Plaintiffs’ Constitutional rights, and those of all similarly situated, including, but not limited to, their Fifth Amendment right to be secure in their property, free from taking without just compensation and without due process of law.

57. Defendants, and each of them, acted and failed to act with the intent to deny the Constitutional rights of Plaintiffs and of all those similarly situated, or with the intentional or callous disregard or deliberate indifference to those rights. The above described acts of the Defendants, all charged with securities law enforcement as Commissioners of the Securities and Exchange Commission, in violation of the Constitutional rights of Plaintiffs and of all those similarly situated, were not intended to be exempt from liability.

58. As a result of the Defendants’ acts, Plaintiffs and all those similarly situated have suffered injuries and property loss in excess of 3.87 Trillion Dollars in an exact amount to be determined at the time of Trial. Because Defendants’ actions were intentional or done with callous disregard or deliberate indifference to the Constitutional and other rights of all Plaintiffs, this Court should award punitive damages against each individually named Defendant.

WHEREFORE, Plaintiffs seek judgment as follows:

1. For a declaratory judgment, pursuant to Title 28 U.S.C., Sections 2201 and 2202, which determines and declares the validity of the contentions of the parties set forth in Paragraphs 52 to 54, above;

2. For a judgment for compensatory, general and special damages in the amounts prayed for in the Second Cause of action set forth above;

3. For a judgment for punitive damages in an amount sufficient to punish and to make examples of these Defendants, and to deter these Defendants and others from engaging in similar conduct;

4. For an award of reasonable attorney’s fees, expenses and costs of suit incurred herein; and:

5. For such other and further relief as this Court deems just and proper.

Dated: January 10, 2010.

HODGES AND ASSOCIATE

By: [Signed]

A. CLIFTON HODGES
Attorneys for Plaintiffs

DEMAND FOR JURY TRIAL


• EDITOR'S NOTE:
This document should be read in conjunction with our reports dated 7th and 9th January 2010.
These can be accessed instantly by pressing ARCHIVE.

http://www.worldreports.org/news/259_tex....ainst_the_s.e.c