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Case 2:09-cv-01510-GMS Document 81 Filed 11/15/10 Page 1 of 7


DONALD W. SEARLES, California Bar No. 135705
E-mail: [email protected]
C. DABNEY O’RIORDAN, California Bar No. 205158
E-mail: [email protected]


Attorneys for Plaintiff
Securities and Exchange Commission
Rosalind R. Tyson, Regional Director
Michele Wein Layne, Associate Regional Director
John M. McCoy III, Associate Regional Director
5670 Wilshire Boulevard, 11th Floor
Los Angeles, California 90036-3648
Telephone:
Facsimile:



(323) 965-3998
(323) 965-3908

UNITED STATES DISTRICT COURT

DISTRICT OF ARIZONA

Plaintiff,

SECURITIES AND EXCHANGE
COMMISSION,




MAYNARD L. JENKINS,




Defendant.


vs.



Case No. CV-09-01510-PHX-GMS

PLAINTIFF SECURITIES AND
EXCHANGE COMMISSION’S
OPPOSITION TO DEFENDANT
MAYNARD L. JENKINS’ MOTION TO
STRIKE PLAINTIFF’S (1)
SUPPLEMENTAL STATEMENT OF
MATERIAL FACTS; (2) NEW
EVIDENCE SUBMITTED WITH
PLAINTIFF’S REPLY AND (3)
OBJECTIONS TO DEFENDANT’S
RESPONDING SEPARATE
STATEMENT OF MATERIAL FACTS

Date:
Time:
Place:



December 10, 2010
9:00 a.m.
Courtroom 602
(Hon. G. Murray Snow)

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Case 2:09-cv-01510-GMS Document 81 Filed 11/15/10 Page 2 of 7



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Plaintiff Securities and Exchange Commission (“Commission”) hereby opposes

defendant Maynard Jenkins’ motion to strike: (1) the Commission’s supplemental
statement of material facts; (2) “new” evidence submitted with the Commission’s reply;
and (3) the Commission’s objections to defendant’s separate statement of material facts.
1. Defendant’s Attempt To Manufacture A Disputed Issue Of Material Fact

Based On The Declaration of Peter Solomon.

As the Commission set forth in its reply, Jenkins has attempted to manufacture a
disputed issue of material fact based on the declaration of Mr. Solomon, a specialist in
forensic accounting. As the Commission has pointed out, Mr. Solomon conducted a
cursory review of only a portion of the available evidence in this matter. By his own
admission, he reviewed only “portions” of selected witnesses’ testimony before the
Commission provided to him by Jenkins’ counsel. Solomon Decl., Ex. B. It is unclear
from his declaration whether he, or Jenkins’ counsel, selected what “portions” to review.
What is clear, however, is that Mr. Solomon did not conduct a complete review of the
available evidence and it appears that he was carefully insulated from the some of the
most damning evidence in this case, such as Mr. Jenkins’ own testimony (see PSSF 28-
46), the lengthy FBI-302 report summarizing the Company’s disclosures of the results of
its internal investigation to the Department of Justice, the F.B.I., the I.R.S, and the U.S
Postal Service (see Supplemental Declaration of Donald W. Searles In Support of
Plaintiff’s Motion for Partial Summary Judgment (“Supp. Searles Decl.”), Ex. 29); the
thousands of business records, e-mail communications and other documents specifically
identified by CSK’s Audit Committee-led investigation in support of its findings; CSK’s
Wells submission (Searles Decl., Ex. 11); and Opper’s and O’Brien guilty pleas in the
parallel criminal case (Searles Decl., Exs. 12-15).

Furthermore, it appears that the portions of the testimonies provided to Mr.

Solomon for his review were carefully excised to remove the portions of the witnesses’
testimony where they were apprised of the results of CSK’s internal investigation, and the
fact that they believed, as Jenkins believed (see PSSF ¶ 45), that Mr. Watson and other

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Case 2:09-cv-01510-GMS Document 81 Filed 11/15/10 Page 3 of 7



members of senior management had lied to them and had deceived CSK’s Audit
Committee and independent auditors about the nature and extent of their multi-year
accounting fraud. See Supp. Searles Decl., ¶¶ 2-8, Exs. 20-26.

In short, Mr. Solomon’s highly selective and incomplete review of the evidence in
this case is a meaningless exercise that does not create any triable issue of fact. See, e.g,
DeJager Construction, Inc., v. Schleninger, 938 F. Supp. 446, 449 (W.D. Mich. 1996) (an
expert may not simply assemble favorable facts from the record and conclude that
liability does or does not exist); Benhabib v. Hughes Electronics Corp., 2006 U.S. Dist.
LEXIS 97109, *5 (C.D. Cal. Sept. 6, 2006) (precluding expert testimony that are merely
the witness’ own assessment of the facts).

2. The Commission’s Supplemental Facts Are Properly Before the Court As

They Directly Undermine Mr. Solomon’s Expert Opinion.

In support of its position that Jenkins’ counsel presented Mr. Solomon with a

woefully incomplete view of the evidence on which to render his opinion, the
Commission has presented to the Court other excerpts of the same testimonies that Mr.
Solomon purported to rely upon that directly undermine his opinion, and which Mr.
Solomon appears not to have reviewed. See Supp. Searles Decl., ¶¶ 2-8, Exs. 20-26;
Plaintiff’s Supplemental Statement of Material Facts, ¶¶ 1-6. In addition, the
Commission has presented to the Court the lengthy FBI-302 report summarizing the
Company’s disclosures of the results of its internal investigation to the Department of
Justice, the F.B.I., the I.R.S, and the U.S Postal Service. Supp. Searles Decl., Ex. 29.
Inexplicably, although Jenkins’ counsel has long had that FBI-302 report, it was not
provided to Mr. Solomon for his review. Solomon Decl., Ex. B. Had Mr. Solomon
reviewed that document he would not have been able to render the opinion expressed in
his declaration. The Commission is not presenting the FBI-302 report to the Court as
additional affirmative proof of “misconduct,” as Jenkins’ contends. Rather, it did so in
support of its position that Mr. Solomon’s declaration should be ignored and his

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Case 2:09-cv-01510-GMS Document 81 Filed 11/15/10 Page 4 of 7



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conclusions ruled inadmissible, as they are based on an incomplete, and highly selective,
review of the facts.

Nor do the Court’s local rules support Jenkins’ request to strike the Commission’s

objections to Defendant’s Responding Separate Statement of Material Facts. As L.R.
7.2(j) provides:

An objection to the admission of evidence offered in support of or opposition
to a motion must be presented in the objecting party’s responsive or reply
memorandum (or, if the underlying motion is a motion for summary judgment,
in the party’s response to another party’s separate statement of material facts)
and not in a separate motion to strike or other separate pleading.

L.R. 7.2(j) (emphasis added).

Jenkins appears to read this rule as requiring the Commission to make its

objections to his responding separate statement of material facts in the body of its reply.
The italicized portion of the rule, quoted above, however, specifically states that a party’s
response to another party’s statement of material facts may be in a separate pleading,
namely, in the party’s response to another party’s separate statement of material facts.
Clearly, the Commission’s objections to Jenkins’ separate statement of material facts
comply with L.R. 7.2(j).

Furthermore, the Commission’s supplemental statement of material facts must be
read in conjunction with the Commission’s objections to Jenkins’ separate statement of
material facts. In its objections, the Commission challenged Mr. Solomon’s declaration
and the so-called “facts” and opinions presented therein because they were based on an
incomplete and highly selective review of portions of certain testimonies taken by the
Commission. See Plaintiff’s Objections to Jenkins’ Separate Statement of Material
Facts. All that the Commission did in its supplemental statement of material facts was to
set forth counter-designated portions of the same testimonies that Mr. Solomon purported
to rely upon, in which the witnesses were questioned on their reaction to having been
informed of the results of CSK’s Audit Committee-led investigation, and stated that they

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Case 2:09-cv-01510-GMS Document 81 Filed 11/15/10 Page 5 of 7



were “shocked” and “appalled,” or words to that effect, and concluded -- as Jenkins
himself concluded (PSSF ¶¶ 28-46) -- that members of CSK’s finance department,
including but not limited to Don Watson, Martin Fraser, Ed O’Brien and Gary Opper had
lied to them, had concealed relevant and material information from them, had
manufactured documents for presentation to PwC and CSK’s Board of Directors, and
were terminated as result. Curiously, Mr. Solomon never reviewed those portions of
their testimonies.

The Commission could have included its supplemental statement of material facts
in its objections to Jenkins’ separate statement of material facts, in further explanation for
the bases of its objections. The fact that it chose to present them in a short, separate
pleading, consisting of six separately numbered paragraphs, should not prevent the Court
from having a complete picture on which to rule on the admissibility of Mr. Solomon’s
declaration.

3. Conclusion
For the foregoing reasons, Jenkins’ motion to strike should be denied.


DATED: November 15, 2010




















Respectfully submitted,

/s/ Donald W. Searles
DONALD W. SEARLES
Attorneys for Plaintiff
Securities and Exchange Commission

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Case 2:09-cv-01510-GMS Document 81 Filed 11/15/10 Page 6 of 7



PROOF OF SERVICE



I am over the age of 18 years and not a party to this action. My business address is:

[X] U.S. SECURITIES AND EXCHANGE COMMISSION, 5670 Wilshire




Boulevard, 11th Floor, Los Angeles, California 90036-3648
Telephone No. (323) 965-3998; Facsimile No. (323) 965-3908.

On November 15, 2010, I caused to be served the document entitled PLAINTIFF
SECURITIES AND EXCHANGE COMMISSION’S OPPOSITION TO
DEFENDANT MAYNARD L. JENKINS’ MOTION TO STRIKE PLAINTIFF’S
(1) SUPPLEMENTAL STATEMENT OF MATERIAL FACTS; (2) NEW
EVIDENCE SUBMITTED WITH PLAINTIFF’S REPLY AND (3) OBJECTIONS
TO DEFENDANT’S RESPONDING SEPARATE STATEMENT OF MATERIAL
FACTS
on all the parties to this action addressed as stated on the attached service list:

[ ] OFFICE MAIL: By placing in sealed envelope(s), which I placed for collection

and mailing today following ordinary business practices. I am readily familiar
with this agency’s practice for collection and processing of correspondence for
mailing; such correspondence would be deposited with the U.S. Postal Service on
the same day in the ordinary course of business.
[ ]

PERSONAL DEPOSIT IN MAIL: By placing in sealed envelope(s),
which I personally deposited with the U.S. Postal Service. Each such
envelope was deposited with the U.S. Postal Service at Los Angeles,
California, with first class postage thereon fully prepaid.

[ ] EXPRESS U.S. MAIL: Each such envelope was deposited in a facility

regularly maintained at the U.S. Postal Service for receipt of Express Mail
at Los Angeles, California, with Express Mail postage paid.

office of the addressee as stated on the attached service list.


[ ] HAND DELIVERY: I caused to be hand delivered each such envelope to the

[ ] UNITED PARCEL SERVICE: By placing in sealed envelope(s) designated by
United Parcel Service (“UPS”) with delivery fees paid or provided for, which I
deposited in a facility regularly maintained by UPS or delivered to a UPS courier,
at Los Angeles, California.

electronic mail address as stated on the attached service list.


[ ] ELECTRONIC MAIL: By transmitting the document by electronic mail to the

[X] E-FILING: By causing the document to be electronically filed via the Court’s
CM/ECF system, which effects electronic service on counsel who are registered
with the CM/ECF system.
FAX: By transmitting the document by facsimile transmission. The transmission
was reported as complete and without error.
I declare under penalty of perjury that the foregoing is true and correct.


[ ]




Date: November 15, 2010









/s/ Donald W. Searles


Donald W. Searles





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Case 2:09-cv-01510-GMS Document 81 Filed 11/15/10 Page 7 of 7









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United States District Court - District of Arizona

SEC v. Maynard L. Jenkins
Case No. 2:09-cv-01510-JWS

(LA-3305)

SERVICE LIST





John W. Spiegel, Esq. (served via CM/ECF only)
Jenny M. Jiang, Esq. (served via CM/ECF only)
Munger, Tolles & Olson LLP
355 South Grand Avenue, 35th Floor
Los Angeles, CA 90071-1560
Email: [email protected]
Email: [email protected]
Attorneys to Defendant Maynard L. Jenkins


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