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Securities and Exchange Commission v. Forex Asset Management LLC

To determine whether a nonparty may appeal, the court decides whether the non-party actually participated in the proceedings below, the equities weigh in favor of hearing the appeal, and the non-party has a personal stake in the outcome.

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The full case caption appears at the end of this opinion.

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The Whitbecks learned of a foreign currency investment opportunity with Forex through a radio infomercial given by Kosova,the individual who allegedly controls Forex. Thereafter, the Whitbecks attended a seminar regarding investment opportunitieswith Forex, and wrote a check to Forex for $100,000. Several months later, after receiving statements reflecting a profitablereturn on their $100,000 investment, the Whitbecks attended another seminar. After the seminar, the Whitbecks decided toinvest additional money, and they took out a loan of $800,000 in order to do so. The Whitbecks then wrote a check to Forexfor $800,000, which they gave to Kosova. Kosova informed the Whitbecks that their funds would be placed in a separateaccount in order to invest the money more aggressively.

Kosova deposited the Whitbecks’ $800,000 check in an account held by FAM Preferred Trading Corporation (“FAMPreferred”) at NationsBank. [FOOTNOTE 1] The records documenting the FAM Preferred account’s transactions show only one deposit,specifically the Whitbecks’ $800,000 check. In addition to the account at NationsBank, FAM Preferred also maintained abrokerage account with Rosenthal Collins Group, L.P. (“Rosenthal”). After depositing the $800,000 into the FAM Preferredaccount, Kosova transferred $750,000 into the Rosenthal account. The $750,000 deposited into the Rosenthal account wasthe only deposit made into that account. The Whitbecks assert that the only other withdrawals from the NationsBank accountwere to cover the cost of the wire transfer fees, and an $8,500 check to themselves.

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