In S.E.C. v. MedLink International, Inc., 12 CV 5325 (E.D.N.Y. Nov. 25, 2013), Judge Leonard D. Wexler denied an individual defendant’s motion to vacate a default judgment after he and his counsel apparently played a cat-and-mouse game of engaging with the SEC, only to disappear and fail to respond to communications. The underlying case involved a year-long investigation by the SEC regarding MedLink’s allegedly false and misleading 10-K: the 10-K supposedly included the electronic signature of MedLink’s auditor notwithstanding the fact that the auditor had not completed its audit.
Counsel for Defendant Aurelio Vuono originally appeared on his behalf and interacted with the SEC to discuss settlement issues, but failed to respond to the SEC’s subsequent inquiries. Counsel then reappeared, indicating he would accept service of a complaint on Vuono’s behalf. Vuono never answered the complaint, however, and the SEC moved for default. Vuono himself then surfaced and told the SEC he would defend himself pro se. He then failed to respond to the motion seeking default judgment, which was ultimately entered.
Faced with these facts, the Court denied Vuono’s motion. First, Wexler held that Vuono had been served with the complaint based on his counsel’s representations to the SEC that he would accept service, rejecting his argument that he had not been served. Second, Vuono’s failure to respond to the complaint under the circumstances was willful. Last, Vuono had not established a meritorious defense because his motion “misstate[d] applicable law and raise[d] irrelevant points.”