Case 1:13-cv-00367-SOM-BMK Document 5 Filed 08/07/13 Page 1 of 9 PageID #: 30
IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF HAWAII
CIVIL NO. 13-00367 SOM/BMK
ORDER DISMISSING COMPLAINT
AND DENYING PLAINTIFF’S
APPLICATION TO PROCEED
WITHOUT PREPAYING FEES OR
COSTS AS MOOT
TROY ALAN LYNDON,
SECURITIES AND EXCHANGE
COMMISSION, PUBLIC COMPANY
ACCOUNTING OVERSIGHT BOARD,
THE DEPOSITORY TRUST &
CLEARING CORPORATION, AND
FINANCIAL INDUSTRY REGULATORY
ORDER DISMISSING COMPLAINT AND DENYING PLAINTIFF’S
APPLICATION TO PROCEED WITHOUT PREPAYING FEES OR COSTS AS MOOT
On July 24, 2013, Plaintiff Troy Alan Lyndon filed a
Complaint against the Securities and Exchange Commission (“SEC”),
Public Company Accounting Oversight Board, Depository Trust &
Clearing Corporation, and Financial Industry Regulatory
Authority, Inc (“FINRA”). See ECF No. 1, ¶ 1. Lyndon seeks a
writ of mandamus requiring each of these organizations to perform
nondiscretionary duties he says are owed to him pursuant to 28
U.S.C. § 1361. Id. ¶ 40.
Lyndon has also filed an Application to Proceed Without
Prepayment of Fees (“Application”), but has failed to demonstrate
an inability to pay court fees. See ECF No. 4. The court has
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screened the Complaint and determined that it fails to state a
claim on which relief may be granted. Accordingly, the court
dismisses the Complaint and denies the Application. The court
grants Lyndon leave to amend his Complaint.
Lyndon is the “voting control shareholder” of Left
Behind Games Inc. ECF No. 1 ¶ 9. Lyndon first alleges that
FINRA’s Investor Education Foundation’s publications and videos
discriminate against faith- or religious-based ventures. Id.
¶ 10. Lyndon claims that, as a result of FINRA’s allegedly
discriminatory practices, at least one shareholder in his company
has “lost all objectivity - missing more than one opportunity to
recover his investment, despite the fact that he misrepresented
himself to Plaintiff as an accredited investor.” Id. ¶ 11.
Next, Lyndon claims that FINRA, The Depository Trust &
Clearing Corporation, and the SEC have willfully and
intentionally covered up violations by a securities brokerage,
Newbridge Securities (“Newbridge”), thereby causing irreparable
harm to Lyndon and his investors. Id. ¶¶ 28, 32. Lyndon says he
discovered the alleged violations by Newbridge on June 19, 2009.
Id. ¶ 18. Newbridge clears its securities transactions through
Legent Clearing LLC (“Legent”). Id. ¶ 19. Lyndon alleges that
(1) spent 3 years accumulating [Lyndon
company’s stock] with their clients;
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(2)traded in the stock as a market-maker
making plenty of cash; (3)accepted numerous
shareholders from [Lyndon’s] clients; (4)
just 2 days ago, eliminated Gene’s 38 million
share position; and (5) over the past week,
illegally disrupted our shareholder’s ability
to sell their shares into the market, causing
them to lose millions of dollars in the past
See Email from Lyndon to Newbridge and FINRA, attached as Exhibit
“A” to ECF No. 1.
Lyndon alleges that he included FINRA on his email
communications with Newbridge, thus making FINRA aware of
Newbridge’s alleged violations. Id. ¶ 18. Lyndon alleges that
the Depository Trust and Clearing Corporation was made aware of
Newbridge’s violations through Legent and that the Depository
Trust and Clearing Corporation settled the matter with Newbridge,
covered up Newbridge’s violations, and failed to report
Newbridge’s violations to any regulatory agency. Id. ¶ 24.
According to Lyndon, the SEC became aware of Newbridge’s
violations when Lyndon filed a Form 8-K on June 24, 2009. Id.
¶ 30. (Companies must file a Form 8-K with the SEC to announce
major events that shareholders should know about.) Additionally,
Lyndon alleges that the SEC ignored his communication attempts
and even tried to mislead him by informing him that FINRA and the
Public Company Accounting Oversight Board were separate
organizations and that no contact information was available for
either organization. Id. ¶ 30.
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Lyndon alleges that the Public Company Accounting
Oversight Board intentionally performed actions that the
organization knew would directly affect Lyndon and his company’s
shareholders by destroying Lyndon’s ability to raise the
necessary capital to operate his company at full capacity. Id.
¶ 36. Lyndon alleges that he was forced to declare Chapter 7
bankruptcy, which was fully discharged in 2012, as a result of
actions by the SEC, Public Company Accounting Oversight Board,
Depository Trust & Clearing Corporation, and FINRA. Id. ¶ 9.
Lyndon Has Not Shown that He is Unable to Prepay
To proceed in forma pauperis, Lyndon must demonstrate
that he is unable to prepay the court fees, and that his
Complaint sufficiently pleads claims. See Lopez v. Smith, 203
F.3d 1122, 1129 (9th Cir. 2000) (applying in forma pauperis
requirements to nonprisoners).
The Application indicates that Lyndon has $100.00 in
cash or in a checking or savings account and owns a van valued at
$11,000.00, with a lien loan of $10,000.00. Lyndon’s expenses
include $675.00 per month for rent and approximately $400.00 per
month for other bills. Lyndon also pays $500.00 per month to his
ex-wife, although he does not indicate whether that is pursuant
to a divorce decree or other court order. Although the
Application indicates that Lyndon is unemployed, it also
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indicates that he works as a part-time business coach. Lyndon
says his gross pay or wages total $1,500.00 per month, which
means he receives about $18,000.00 per year. According to the
2013 Federal Poverty Guidelines, the poverty guideline for a
single individual residing in Hawaii is $13,230.00. Thus,
although Lyndon’s expenses exceed his income, his
yearly income is greater than the Federal Poverty Guideline.
The court concludes that absent information indicating
that no adjustment of the payment to his ex-wife is possible, the
court is unable to determine that Lyndon is a pauper.
Lyndon’s Complaint Fails to State a Claim on Which
Relief May Be Granted.
Even if Lyndon were a pauper, his Application would be
denied because the Complaint does not sufficiently plead claims.
Pursuant to 28 U.S.C. § 1915(e), the court subjects every in
forma pauperis proceeding to mandatory screening and orders the
dismissal of the complaint if it is “frivolous or malicious,”
“fails to state a claim on which relief may be granted,” or
“seeks monetary relief against a defendant who is immune from
such relief.” 28 U.S.C. § 1915(e)(2)(B); Lopez, 203 F.3d at
1126–27 (stating that 28 U.S.C. § 1915(e) “not only permits but
requires” the court to sua sponte dismiss an in forma pauperis
complaint that fails to state a claim).
Lyndon appears to ask the court for a writ of mandamus
to compel Defendants to “perform their nondiscretionary duties,
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[and] adopt policies improving and reducing corruption resulting
from self-regulation.” ECF No. 1, ¶ 1. Rule 81(b) of the
Federal Rules of Civil Procedure abolishes the writ of mandamus
in federal court procedure. See also Finley v. Chandler, 377
F.2d 548 (9th Cir. 1967). However, under 28 U.S.C. § 1651,
courts may issue writs necessary or appropriate in aid of their
respective jurisdictions, including writs in the nature of
mandamus. Id. at 548. Further, under 28 U.S.C. § 1361, district
courts have original jurisdiction over actions in the nature of
mandamus seeking to compel officers or employees of the United
States or any agency thereof to perform duties owed to
Nonetheless, “[m]andamus is an extraordinary remedy
granted in the court's sound discretion.” Cheney v. U.S. Dist.
Court for Dist. of Columbia, 542 U.S. 367, 380 (2004); Johnson v.
Reilly, 349 F.3d 1149, 1154 (9th Cir. 2003) (citing Miller v.
French, 530 U.S. 327, 339 (2000)). Mandamus is only available to
compel an officer of the United States to perform a duty if
(1) the claim is clear and certain; (2) the duty of the officer
is ministerial and so plainly prescribed as to be free from
doubt; and (3) no other adequate remedy is available. Id.; R.T.
Vanderbilt Co. v. Babbitt, 113 F.3d 1061, 1065 n.5 (9th Cir.
1997); Fallini v. Hodel, 783 F.2d 1343, 1345 (9th Cir. 1986).
Even if these factors are satisfied, the district court may
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exercise its discretion not to grant mandamus. Or. Natural Res.
Council v. Harrell, 52 F.3d 1499, 1508 (9th Cir. 1995). Lyndon
does not show that a writ of mandamus is appropriate for this
action because he does not establish any of the factors required
for a writ of mandamus.
Lyndon’s pleadings also fall short of stating a valid
claim. Lyndon alleges discriminatory practices by FINRA and
violations by the SEC, Public Company Accounting Oversight Board,
Depository Trust & Clearing Corporation, and FINRA, but fails to
provide sufficient factual bases for his claims. For example,
the allegations fail to clearly indicate how any specific
Defendant’s particular actions caused Lyndon harm. Although Rule
8 of the Federal Rules of Civil Procedure
does not require
detailed factual allegations, “a plaintiff’s obligation to
provide the ‘grounds’ of his ‘entitlement to relief’ requires
more than labels and conclusions, and a formulaic recitation of
the elements of a cause of action will not do.” Bell Atl. Corp.
v. Twombly, 550 U.S. 544, 555 (2007). The complaint must “state
a claim to relief that is plausible on its face.” Id. at 570.
“A claim has facial plausibility when the plaintiff pleads
factual content that allows the court to draw the reasonable
inference that the defendant is liable for the misconduct
alleged.” Ashcroft v. Iqbal, 556 U.S. 662, 677 (2009). “Naked
assertions devoid of further factual enhancement” that suggest
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only a “mere possibility of misconduct” are not enough to state a
claim for relief. Id. at 698.
Although Lyndon’s Complaint contains many allegations,
most are conclusory and lack adequate factual support. For
example, Lyndon merely asserts that FINRA’s publications and
videos are discriminatory. Lyndon does not provide sufficient
factual support or description regarding the content of FINRA’s
publications and videos.
Nor is it enough to simply assert that Defendants
failed to perform duties owed to Lyndon. Lyndon states that they
owed duties but is vague about the nature and scope of the
alleged duties and silent as to the source of the duties. It is,
for example, difficult for the court to see what about
Defendants’ alleged actions was nondiscretionary. This court
dismisses Lyndon’s Complaint for failing to state a cognizable
claim upon which relief can be granted.
The court dismisses the Complaint and denies the
Application but grants Lyndon leave to amend his Complaint no
later than August 30, 2013. If Lyndon amends the Complaint, he
must pay the applicable filing fee. Failure to file an Amended
Complaint and either submit a new Application making his pauper
status clear or pay the applicable filing fee by August 30, 2013,
will result in the automatic dismissal of this action.
Case 1:13-cv-00367-SOM-BMK Document 5 Filed 08/07/13 Page 9 of 9 PageID #: 38
IT IS SO ORDERED.
DATED: Honolulu, Hawaii, August 7, 2013.
/s/ Susan Oki Mollway
Susan Oki Mollway
United States District Judge
Lyndon v. Securities and Exchange Commission, et al.; Civil No. 13-00367 SOM/BMK;
ORDER DISMISSING COMPLAINT AND DENYING PLAINTIFF’S APPLICATION TO PROCEED WITHOUT
PREPAYING FEES OR COSTS AS MOOT