Chui
Tradex Global Master Fund SPC Ltd. v. Chui
Opinion
Lead Opinion
Alsup, J.
ORDER AFFIRMING DECISION OF BANKRUPTCY COURT
INTRODUCTION
In this appeal of an adversary proceed-ing relating to appellee’s bankruptcy pro-ceedings, appellants contend that the bankruptcy court should have given pre-clusive effect to a cease and desist order from the Securities and Exchange Com-mission. For the reasons stated below, the decision of the bankruptcy court is Af-FIRMED.
STATEMENT
Appellee Benjamin Pui-Yun Chui was an investment advisor registered with the Se-curities and Exchange Commission who managed (via an investment management company) several segregated portfolio funds. Among the funds that Chui man-aged was the American Pegasus Auto Loan Fund.
Appellant Tradex Global Master Fund SPC, Ltd., operated as a segregated port-folio company, and appellant Tradex Global Advisors LLC was the investor for the segregated portfolio company (collectively, *522 “Tradex”). In 2006, Tradex began evaluat-ing whether to invest in APALF. Throughout 2006 and 2007, Chui and his colleagues made several presentations to Tradex encouraging it to invest in APALF and issued an offering memorandum. The presentations and offering memorandum promoted APALF as a niche hedge fund…