Meet Our Clients
Direct litigation efforts are a crucial piece of ICAN’s strategic approach to defending investors and entrepreneurs from the predatory practices of today's SEC.

A Due Process Tax?
While headlines about the SEC often focus on high-profile crypto cases and major rule changes, it's often in the seemingly minor cases—the ones that fly under the radar—where the agency quietly attempts to expand its powers beyond statutory limits.
Ms. Quick's case represents exactly this kind of stealthy attempt by the SEC to erode a crucial Supreme Court precedent while also punishing someone for asking for her day in court. As ICAN's newest pro bono client, Ms. Quick's fight illustrates how the SEC targets vulnerable everyday Americans with no resources to resist, testing legal boundaries it would never dare challenge in cases against well-funded defendants.
Seeking Justice, Charged Interest
What do you call it when two SEC Enforcement attorneys and three SEC economists file dozens of pages in federal district court seeking $8,826 in prejudgment interest from a divorcee relief defendant not accused of violating any law whatsoever?
-
A "due process tax" whereby the SEC seeks to penalize someone merely for exercising her right to have her day in court
-
Evidence that the SEC continues to mis-allocate resources even as the agency’s staff is being scaled back
-
An opportunity for ICAN to provide pro bono services to a client facing financial ruin through no wrongdoing of her own
-
All of the above
Unfortunately, the answer is 4, all of the above. The SEC's pursuit of prejudgment interest against Ms. Quick could allow the agency to set a troubling pattern, effectively punishing individuals for simply exercising their constitutional right to due process.
Case Background
Ms. Quick was named a "relief defendant" in SEC v. Padilla et al.. A relief defendant is someone who isn't accused of wrongdoing but is alleged to have received funds connected to a securities violation. In this case, the SEC claims Ms. Quick received money in her brokerage account connected to Joseph Padilla's alleged scheme.
Critically, Ms. Quick was "at least two layers removed from the admitted wrongdoing of Joseph Padilla." The connection was through her ex-husband, Carlos Hernandez, who traded in her account. Ms. Quick had no direct communication with Padilla except on limited social occasions, and Padilla gave nothing directly to Ms. Quick.
Ms. Quick was never accused of fraud or securities law violations. She had no knowledge that funds in her account might be problematic, and the funds had already been spent by the time the SEC took action.
Despite her innocence, the Court ordered Ms. Quick to return (or "disgorge") $44,159. Now, in what our filing describes as "little more than an accretive punitive money-grab," the SEC is pursuing an additional $8,826 in prejudgment interest that covers the time period during which Ms. Quick was defending herself. That’s 20% on top of what she was ordered to return, a much higher interest rate than on any loan offered by a bank.
The "Due Process Tax"
The SEC's pursuit of prejudgment interest against our client effectively imposes a due process tax—a penalty levied simply because she exercised her right to have her day in court.
As we argue in our opposition brief:
"The SEC's claim that prejudgment interest is necessary to prevent Ms. Quick from benefiting from an 'interest-free loan' ignores altogether the reality that she never knowingly received ill-gotten gains. To require Ms. Quick to pay prejudgment interest on funds in her account during the pendency of this litigation is tantamount to penalizing her for seeking due process from this Court."
By demanding prejudgment interest that covers the time period during which Ms. Quick was defending herself, the SEC creates a perverse incentive for innocent parties to simply capitulate rather than face additional financial penalties for asserting their rights.
Contradicting Supreme Court Precedent
The SEC's pursuit of prejudgment interest against Ms. Quick directly contradicts the Supreme Court's ruling in Liu v. SEC (2020), which limited the SEC's authority to seek disgorgement.
As our brief notes:
"Under 15 U.S.C. § 78u(d)(5), the SEC's authority to seek relief is limited to remedies 'typically available in equity,' which must not be punitive in nature."
By pursuing prejudgment interest against a non-wrongdoer, the SEC is effectively transforming what should be an equitable remedy into a punitive measure, exceeding its statutory authority and contradicting the Supreme Court's clear guidance.
Why This Case Matters
A Pattern of Overreach Threatening Innocent Parties
Ms. Quick's case highlights how the SEC sometimes operates behind the scenes, using aggressive tactics against individuals who lack the resources to defend themselves. This is part of a concerning pattern where the SEC continues to try to chip away at the limitations placed on its enforcement powers by the Supreme Court in Liu.
ICAN has observed similar tactics in other cases, where the SEC seeks to impose punitive measures against individuals who committed no fraud and caused no investor harm. In our landmark victory in SEC v. Punch TV, we successfully defeated the SEC's attempt to extract $1.35 million in disgorgement from an entrepreneur who self-reported a technical violation. There, as in Ms. Quick's case, the SEC attempted to circumvent the limitations established in Liu, seeking disgorgement without evidence of investor harm or fraudulent intent.
A Misallocation of Resources
The SEC's pursuit of this relatively small sum from a non-wrongdoer is also a troubling misallocation of resources:
-
Two SEC Enforcement attorneys and three SEC economists were deployed to produce approximately 50 pages of filings
-
The agency conducted elaborate financial analyses and prepared extensive legal arguments
-
All this effort was expended to pursue just $8,826 from someone who committed no wrongdoing
At a time when many are concerned about whether the SEC has sufficient resources to combat actual fraud, this case demonstrates how the agency sometimes diverts significant personnel and time to pursue innocent individuals instead of focusing on its core mission of protecting investors from genuine securities fraud.
The SEC’s “Ghost Victims”- Questionable Representations to the Court
While ICAN's involvement in this case focuses on fighting the prejudgment interest issue, it's worth noting that even the original disgorgement award rests on troublingly shaky ground. The Court initially stated it would "accept the representation of the lawyers at the SEC, as officers of the court, that the agency has identified 34 specific victims." However, our opposition brief reveals that the SEC's subsequent filings made clear that the Commission had not identified these supposed victims when these representations were made to the Court.
When directed to provide "clarification" of "the identity of the alleged victims and the amount of each victim's loss attributable to these relief defendants," the SEC substituted inadmissible hearsay and flawed declarations from its employees, relying on an unspecified "spreadsheet" from an unidentified person at the U.S. Attorney's Office related to a separate criminal case.
This pattern of potentially misleading representations to the court is, unfortunately, not unprecedented. Viewers of our SEC Roundup series will recall our coverage of the Debt Box case, where a federal judge sanctioned the SEC after finding the agency had intentionally misled the court to obtain a temporary restraining order and asset freeze. As the judge in that case noted, the SEC's conduct "demonstrated it knew its representations were false and it was deliberately perpetuating those falsehoods." Ms. Quick’s case, while smaller in scale, raises similar concerns about the SEC's candor in proceedings against those with limited resources to defend themselves.
Standing Firm Against SEC Overreach
While Ms. Quick's case may not grab national headlines, it represents a crucial battle in ICAN's ongoing mission to protect everyday Americans from regulatory overreach. By mounting a full-court press against the SEC's attempt to erode the Liu precedent in this "small" case, we're preventing the agency from establishing dangerous precedents through the path of least resistance.
This case exposes the SEC's playbook: target those least able to defend themselves, extract ruinous settlements or judgments, and then leverage those "wins" to gradually expand enforcement power beyond statutory limits. ICAN is committed to building legal guardrails through strategic litigation that will protect all market participants—from individual investors to entrepreneurs—ensuring that regulatory power remains properly constrained by law, fairness, and constitutional principles.
Victory for Our Client in 2 Business Days
We're thrilled to report that ICAN has secured a victory for Ms. Quick in an unbelievably quick timeframe. This demonstrates the strength of our arguments and the strategic decision to take on this case.
Our legal team filed our opposition brief on Friday, April 11, 2025, and by Monday, April 14, 2025, the judge had ruled in our favor, denying the SEC's request for prejudgment interest against Ms. Quick.
In his order, Judge Richard G. Stearns wrote:
"Those same considerations of equity and fairness counsel against awarding prejudgment interest against Quick. The record indicates that Quick's then-husband, Hernandez -- i.e., not Quick herself -- directed the relevant trading in Quick's account, and the SEC has failed to identify any specific victim(s) of that trading such that fairness requires prejudgment interest to make investors whole."
In addition to relieving our client of the burden of paying $8,826 in interest, the judge’s ruling, which notes the SEC’s failure to identify any specific victims of the trades in question, opens the door for ICAN to potentially challenge the earlier $44,159 ruling.
This swift victory demonstrates the importance of vigorous legal defense against SEC overreach, even in seemingly small cases. ICAN sees these cases for what they are: real Americans being steamrolled in the name of regulatory overreach - and in this case, overreach on shaky ground at best.
Without ICAN's intervention, Ms. Quick would have faced an additional financial burden on top of the already questionable disgorgement order. More broadly, this win establishes another important precedent limiting the SEC's ability to extract punitive measures from innocent parties who exercise their due process rights.
We congratulate our legal team for their excellent work and thank our fantastic co-counsel, Jacob Frenkel and his firm, Dickinson Wright, for alerting us to this case and asking us to assist. This is another testament to the enormous talent and expertise in the growing ICAN Legal Network.
Case Updates
One of the challenges of fighting back in cases like Ms. Quick's is the intensive amount of time and resources it takes. Often, clients come to us after years of litigation activity and have exhausted their finances. ICAN recognizes the importance of helping these defendants avoid the government steamroller in precedent-setting cases.
Follow along below for the latest on this case.
Updates & Press
April 14th, 2025
Case Won
The Judge rejected the U.S. Securities and Exchange Commission's demand for prejudgment interest against our client.
April 11th, 2025
ICAN Files Opposition Brief to the SEC's Motion for Prejudgment Interest
Support Our Work
Payments by check may be mailed to:
Investor Choice Advocates Network
453 S Spring St Ste 400
Los Angeles, CA 90013
Please contact us for details on payment by ACH/Wire