Avi Eisenberg Detained
Unlike SBF As Mango Labs Is Denied Injunction
But TRO to March 15
By Matthew
Russell Lee, Patreon Maxwell
Book
SDNY COURTROOM,
March 10 - In the U.S.
District Court for the
Southern District of New York
on December 27, 2022 a
complaint was ordered unsealed
charging Avraham Eisenberg
with commodities fraud. He was
arrested in Puerto Rico.
Inner City Press
is covering the case(s), often
as the only media in the Mag
Court. Related
Mag Court live-tweeted
thread (more on Patreon
here)
vlog here
On January 9,
Inner City Press came across
the CFTC case against
Eisenberg, just filed (still
with no title in PACER) and
put it out on Patreon here.
The 21-page civil complaint
is, as is often the case, more
detailed...
The same
day the criminal complaint was
unsealed, Inner City Press
repeatedly checked the SDNY
Magistrates Court but it was
locked. But the complaint in
this case charges that
Eisenberg "engaged in a scheme
involving the intentional and
artificial manipulation of the
price of perpetual futures
contracts on a cryptocurrency
exchange called Mango
Markets... which has its own
native crypto token called
MNGO."
The unsealed
complaint is now on Patreon here
On January 30,
2023, District Judge Liman
held a hearing on Mango Labs
LLC's order to show cause -
but no one was there for
Eisenberg. In fat, Inner City
Press was the only person in
the courtroom gallery. Here's
some tweets
here.
On February 3,
Eisenberg in a yellow jump
suit and feet shackled was
brought into Magistrates Court
at SDNY. He had, at least for
the proceeding, the same
lawyer Ethereum developer
Virgil Griffith had in the
North Korea sanctions case he
pled guilty in: Brian Klein.
His
parents were in the gallery
and he looked at them, from
two rows away. The prosecutor
said that (unlike on Sam
Bankman-Fried) they were
seeking detention, and that he
was consenting at least for
now. Here is Inner City
Press' thread.
There's more
detail on Patreon here.
On February 14,
there was a very brief
arraignment, thread here:
OK- now at
arraignment of Avi Eisenberg,
who unlike Sam Bankman-Fried
is in detention, brought in by
Marshals in a yellow prison
jumpsuit.
Judge Berman: How
do you plead?
EISENBERG: Not
guilty.
Klein (who repped
Virgil Griffith): We are being
retained. Judge: March 14 at 1
pm. That's it.
This next
session, now described as a
bond hearing, came up on
February 24 during an hour and
a half argument in Mango Labs
v. Eisenberg before Judge
Lewis J. Liman. Inner City
Press live tweeted, thread
here:
OK- now in Mango
Labs v Avi Eisenberg,
preliminary injunction
argument. Mango Labs accuses
EIsenberg of "unlawful
threat."
Judge
Liman: This is about tokens,
but could just as easily be
about securities. Couldn't the
individual tokenholders have
sued?
Mango Labs'
Morrison (MoFo) counsel: it
was duress. They were skitish
he would just run off
MoFo: He used the
passport of a Ukrainian woman
to open an account on a third
party exchange to pump the
price of Mango. He is a
criminal - Judge: He is
presumed innocent
Eisenberg's
lawyer: At first we didn't
know much about Mango
Labs...We still question their
standing.
MoFo: Eisenberg
is a bot trader, the assets
can move even though he's
locked up in Essex
[Eisenberg's civil counsel
says bond hearing March 14]
Ultimately
Judge Liman extended the TRO
for two weeks, after for two
letters by Tuesday, and said
he will rule on March 10.
On March 10,
Inner City Press was there,
thread here:
OK - now in court
for ruling in Mango Labs v Avi
Eisenberg, empty gallery
unlike for #SBF in an hour.
All rise!
Judge Liman: I
will give you my decision on
the requested injunction,
orally. Of $114 million, he
returned $67 million. There
are 4 causes of action: fraud,
duress. There is a criminal
case and defendant is
detained. The US seeks
forfeiture.
Judge
Liman: The Court ordered
service on defendant Eisenberg
upon his arrival in NY [from
detention in Puerto Rico]. DOJ
has also been notified by
Mango Labs, but has not
intervened. I find Mango Labs
has standing...
Judge Liman: The
settlement agreement with
Mango DAO does not preclude
Mango Labs' standing. NY law
applies here. On the
preliminary injuction factors,
I find plaintiff has NOT shown
a likelihood of success on the
merits. [NOT- Mango Labs
failed on factor 1]
Judge
Liman: Can the settlement be
voided as the product of
duress? No - the token holders
rejected an initial proposal.
They exercised their free
will. And it was later
ratified, constructively.
Judge Liman:
Eisenberg's alleged use of a
Ukrainian woman's identity
does not change the duress or
fraud analysis. [But may be
used in criminal prosecution]
Judge Liman: Nor
has there been a showing of
irreparable harm. [Mango Labs'
"Big Law" counsel has chin in
hands. On the courtroom coat
rack, a red scarf emblazoned
LFC - Liverpool Football Club.
Come on, you reds]
Judge
Liman: All three factors fail.
Preliminary injunction is
denied. Mango Labs' lawyer:
Continue TRO 7 days, to tell
DOJ? We may appeal
Judge: OK- until
March 15. And next conference
April 17.
More with
analysis on Substack here
Watch this site.
Inner City Press
will have more on these cases.
The criminal case
is US v. Eisenberg, 23-cr-10
(Berman)
The CFTC case is
Communities Futures Trading
Commission v. Eisenberg,
23-cv-173 (Schofield)
The Mango Labbs
civil case is Mango Labs, LLC
v. Eisenberg, 23-cv-665
(Liman)
***
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