PHILADELPHIA – A federal judge has ruled that a lawsuit concerning a dispute over ownership and sale of a valuable coin collection is stayed, while concurrent court matters relating to it are adjudicated in a New York federal court.
“After having received a report on the actions pending in the United States District Court for the Southern District of New York in Securities & Exchange Commission v. Princeton Economics International, Ltd., Et Al. and Commodity Futures Trading Commission v. Princeton Economics International, Ltd., Et Al., it is hereby ordered that in the interests of fairness and judicial economy, this action is stayed pending further order of court,” U.S. District Court Judge Harvey S. Bartle III said on May 31.
Bartle further ordered on June 3 that the Clerk of Court mark this action closed for statistical purposes and place the matter in the Civil Suspense File, while also advising that the Court retain jurisdiction and have the ability to restore the case to the trial docket at the appropriate time so that it may proceed to final disposition.
In March 2018, plaintiffs John Doe, Richard Roe, and ABC Company brought a diversity action against defendant Martin Armstrong, seeking a declaratory judgment. Specifically, the plaintiffs wanted to obtain a declaration that a coin collection belongs to them as bona fide purchasers.
Per the complaint, the plaintiffs are engaged in the business of purchasing and selling coins and precious stones. On March 5, 2014, the plaintiffs entered into a transaction with an unnamed third-party to purchase a group of supposedly-ancient gold and silver coins. The third party in question was said to be in the business of cleaning out old or abandoned properties and as part of his compensation, was entitled to retain ownership of anything he found therein, the suit says.
Afterwards, the plaintiffs entered into a consignment agreement with Heritage Numismatic Auctions, Inc. to sell the coins at an auction in New York City on Jan. 7-8, 2018. Beginning in December 2017, Armstrong’s attorney contacted Heritage and asserted that Armstrong was the true owner of the coin collection. As a result, Heritage removed the coins from the auction, further agreeing to retain and not sell the coins until the dispute regarding ownership is resolved.
“In the complaint, plaintiffs refer to defendant’s Aug. 17, 2006 guilty plea before the United States District Court for the Southern District of New York to one count of conspiracy to commit securities fraud, wire fraud, and commodities fraud. Defendant was thereafter sentenced to 60 months’ imprisonment and was released on or about March 2011,” Bartle said.
“Plaintiffs also refer to a civil contempt sanction imposed on defendant for failure to comply with a court order to produce certain assets, including gold coins. Finally, plaintiffs refer to civil lawsuits involving defendant, including an order entered by the Securities and Exchange Commission barring defendant from associating with any investment advisors.”
Bartle explained that Armstrong asserted these allegations were “immaterial, impertinent, and scandalous, as they are merely designed to vilify Mr. Armstrong’s character and foster prejudice, have no possible relation to the controversy, and serve only to muddy the issues in this case” – but that Armstrong did not, however, contend any of those allegations were untrue.
“Statements made by defendant in connection with the civil contempt order and other lawsuits may be relevant to defendant’s credibility concerning his claim of ownership to the coin collection at issue here. Simply put, we see no reason to employ the ‘drastic remedy’ of striking these allegations from the complaint at this early stage of the action,” Bartle said last year.
U.S. District Court for the Eastern District of Pennsylvania case 2:18-cv-01263
From the Pennsylvania Record: Reach Courts Reporter Nicholas Malfitano at nick.malfitano@therecordinc.com