After Michael Hild successfully requested additional time to respond to civil charges levied against him by the Securities and Exchange Commission (SEC) last month, the federal government has intervened in that civil lawsuit filed against the former Live Well Financial CEO.
This is due to the concurrent criminal case filed against him and his former company for an alleged bond fraud scheme, according to original reporting by RichmondBizSense and court documents obtained from the Southern District Court of New York by RMD.
“On November 25, 2019, the Government submitted a motion seeking to intervene in this action and seeking a partial stay of further proceedings, in light of the pendency of the parallel criminal action United States v. Michael Hild […] in which an indictment has been returned,” one document reads.
The U.S. Attorney for the Southern District of New York filed the initial motion to intervene, and the motion was ordered by the presiding judge in the civil case, District Judge Alison Nathan. The intervention reportedly stems from the government’s perspective that since the core subject matter of both cases are so closely tied together, the criminal case should take precedence over civil proceedings.
The order of intervention will not affect the ongoing Chapter 7 bankruptcy process of Live Well Financial, though the SEC will not pursue its own civil case against the company until the criminal proceeding is resolved. This hold on action in the civil case will most likely persist until the conclusion of Hild’s criminal trial, in which Hild himself has pleaded “not guilty” and which is scheduled to commence in October, 2020.
The criminal and civil counts against Hild and Live Well include one count each of conspiracy to commit securities fraud; of conspiracy to commit wire and bank fraud; of securities fraud; of wire fraud; and of bank fraud. In the criminal case, Hild faces a maximum possible sentence of 115 years in prison, and the charges carry a maximum fine of $5 million, according to the United States Attorney’s Office.
The federal government has also separately charged two other former Live Well executives, CFO Eric Rohr and EVP Darren Stumberger. These charges were unsealed in concert with Hild’s arrest, and both men have pleaded guilty and are cooperating with authorities, according to an August statement.
This is the latest in a series of unfolding events concerning the abrupt closure of Live Well Financial, which RMD learned about in May. After a series of lay-offs and other lawsuits, Hild was arrested by the FBI for the alleged bond fraud scheme and charged by federal authorities, before being released shortly thereafter on an unsecured bond.
He entered his “not guilty” plea a few days later, which was closely followed by the establishment of the criminal trial date for October, 2020.