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Judge rejects delay of SEC probe in currency case

By DAN BROWNING, Star Tribune

Last update: October 22, 2009 - 8:01 PM

A federal judge on Thursday rejected Minneapolis money manager Trevor Cook's efforts to stall an investigation by the Securities Exchange Commission (SEC) into a suspect currency investment program he promoted while a federal grand jury pursues a parallel criminal investigation.

After a brief hearing, U.S. District Judge Michael Davis said he lacked jurisdiction to interfere with the investigation of the regulatory body, whose powers were specifically granted by statute.

John Thompson, Cook's attorney, had argued that if both investigations proceed simultaneously, his client would elect to invoke his Fifth Amendment right against self-incrimination and to refuse to testify in the SEC's civil case. Thompson argued that if Cook doesn't testify to the SEC, "he cannot properly insert himself" into the investigation and perhaps alter its course.

Thompson suggested that no harm would come from a short delay while the grand jury investigates. "I can't predict the future but ... it seems to me that from everything that's going on, the grand jury is acting rather quickly in this matter," he said.

Melinda Hardy, an SEC attorney from Washington, D.C., argued that Thompson's motion had no legal support. The SEC is authorized by statute both to investigate and share what it learns with criminal investigators, she said.

Hardy said a delay could make it harder to elicit accurate testimony from witnesses and obtain information that might otherwise be destroyed. She said investment assets might be dissipated.

"Even a three-month delay can cause harm to investors," Hardy said.

Dan Browning • 612-673-4493

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