Securities & Exchange Commission v. Platinum Management (NY) LLC, et al.

The Court appointed Melanie L. Cyganowski, Esq., as Receiver to marshal the assets of the entities in Receivership and, ultimately, develop a plan for the disposition of these assets. In addition, the Receiver will file periodic reports with the Court regarding her activities. These reports will be posted to this website after they are filed with the Court.

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The Receiver is not your lawyer, and she cannot provide you with legal advice. She is the Court’s agent, and she is charged with effectuating the provisions of the Court’s Orders.

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Pursuant to the previously-approved bar date procedures motion [Dkt. No. 453], the bar date to file a proof of claim asserting a claim arising before the Receivership was March 29, 2019 and the bar date for governmental units to file a proof of claim was April 12, 2019. Parties holding investor claims, claims for unpaid redemptions and unpaid administrative claims were not required to file proofs of claim. In accordance with the Order approving the procedures to reconcile claims and verify interests, entered on December 1, 2020 (the “Claims Procedures and Verification Order”) [Dkt. No. 554], Platinum’s CFO and the Receivership Team engaged in an extensive review of each of the filed claims. The Receiver completed her review and filed a Notice of Receiver’s Claims Analysis Report (the “Claims Report”), which sets forth her determinations with respect to each of the claims. [Dkt. No. 564] Certain claims were allowed as filed or pursuant to previously reached settlements, others disallowed in total and others partially allowed.

Claimants had until April 23, 2021 (unless an extension was mutually agreed upon in writing) to object to the Receiver’s determinations in the Claims Report. Thirteen claimants, asserting multiple claims, objected to the Receiver’s determinations in the Claims Report. Many of the objections were resolved consensually. With respect to certain claim objections for which no resolution was reached, in accordance with the procedures set forth in the Claims Procedures and Verification Order, on November 12, 2021, the Receiver filed an Omnibus Motion to Confirm Receiver’s Determinations [Dkt. Nos. 597] (the “Claims Motion”) and opposition and reply briefs were filed thereafter. All objections to the Receiver’s determinations in the Claims Report have been resolved. Certain of the objections were consensually resolved or the claims withdrawn. Other objections required further litigation, which were ultimately resolved through settlements, approved by the Court and confirmed on appeal.

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In accordance with the Claims Procedures and Verification Order, investors, including unpaid redeemers, received a letter that contains information regarding that investor’s equity interest in one or more Receivership Entities (the “Investor Statement”). The Investor Statement sets forth the amounts invested in one or more Receivership Entities and the amounts previously received as distributions on account of the investor’s equity interest, all as reflected in the books and records of the Receivership Entities. Investors had an opportunity to review the information provided and to refute the information, but solely on the basis that the books and records of the Receivership Entities are inaccurate, which was required to be supported by documentation from the investor.

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For unsecured creditors and investors, you will not receive all of your money back. The Receiver cannot at this time state the exact recovery percentage, but it will be significantly less than the funds invested or the allowed claim amount. Throughout the case, the Receiver has repaid significant secured claims, which were all resolved during the case and claims that had priority status pursuant to court-approved settlements. Distributions to remaining claimants will be set forth in the Receiver’s plan of distribution, which the Receiver expects to file in 2026.

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The exact timing of any distributions is unknown at this time. In advance of filing a proposed distribution plan, the Receiver will file a proposed schedule for approval by the Court that will establish deadlines to object to the proposed plan of distribution. The proposed plan of distribution will set forth the manner and pre-conditions to going effective and making any distributions. Please check back to this website for copies of the plan of distribution and descriptions of the plan process.

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The Receiver has not yet proposed a plan by which funds will be distributed to investors and creditors. The Receiver, however, is mindful that any such plan must be fair and equitable. That plan will ultimately be subject to review and approval by the Court upon proper adequate notice to all investors.

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The Receiver cannot provide investors with tax advice; thus, everyone should consult their own tax advisor on this issue.

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K-1 statements have been completed and will be mailed to investors in August/September 2026 Pursuant to IRS instructions, the partners’ capital account disclosed in section L of the schedule K-1 is prepared on the tax basis method (not GAAP). The partner tax basis capital amounts do not represent an investor’s adjusted tax basis in the partnership and should be determined in accordance with applicable federal and state provisions. In addition, the amounts listed on the K-1s are not necessarily reflective of what distributions investors may ultimately receive in this case. The Receiver cannot provide any tax advice. Investors are encouraged to consult their own tax advisor on the impact of the K-1 statements on individual tax returns.

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Periodic review of this website is the best way to stay abreast of developments in this Receivership. The website will be updated on a regular basis.

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You can contact the Receiver by emailing platinumreceiver@otterbourg.com.

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Following the criminal trial of Mark Nordlicht, David Levy and Joseph SanFilippo, the jury returned a verdict convicting Nordlicht and Levy of defrauding bondholders in portfolio company Black Elk Offshore Operations LLC, but acquitting each of them on the remaining charges. SanFilippo was acquitted on all counts with which he was charged. The Court thereafter overturned the jury verdict with respect to Levy and ordered a new trial with respect to Nordlicht. The Department of Justice appealed those decisions and on November 5, 2021, the Second Circuit vacated the Court’s order and remanded to the Court for further proceedings consistent with its decision. Following the decision, Nordlicht and Levy requested that the Second Circuit reconsider its decision and/or hear the appeal anew en banc, which requests were denied on December 29, 2021. The Supreme Court subsequently also declined to hear the appeal

Nordlicht and Levy moved for new trials before the District Court and on July 12, 2023, the Court issued a Memorandum Decision & Order [Case No. 16-00640 (BMC), Dkt. No. 1004], denying Nordlicht and Levy’s motion for a new trial with respect to the securities fraud conviction, granting the motion with respect to the wire fraud conviction, and, further, vacating the wire fraud conspiracy convictions. On August 11, 2023, Nordlicht and Levy each filed a Notice of Appeal of the Court’s order.

The jury trial for Daniel Small commenced in July 2022 in the Eastern District of New York. Following a two-week trial, Small was convicted by a jury on charges of securities fraud and securities fraud conspiracy for his role in connection with Black Elk. Small filed a motion seeking to have his conviction overturned by the Court or, in the alternative, requesting a new trial. On July 6, 2023, the Court issued a Memorandum Decision & Order [Case No. 16-00640 (BMC), Dkt. No. 1003], denying Small’s motion.

On July 18, 2023, in advance of the sentencing hearings of Nordlicht, Levy and Small, the Court issued its Order on Loss Calculation [Case No. 16-00640 (BMC), Dkt. No. 1005], finding that the amount of losses that may be attributable to each Defendant as a result of the Defendants’ conduct was zero.

At Small’s sentencing hearing on November 15, 2023, Small was sentenced to less than 1-year probation and no fine. At Levy’s sentencing hearing on January 10, 2024, Levy was sentenced to time served, a $5,000 fine and no probation. At Nordlicht’s sentencing hearing on July 16, 2024, Nordlicht was sentenced to six months home confinement, two years of probation, and a $5,000 fine. Nordlicht, Levy and Small each appealed the conviction portion of the respective judgments and the United States Government appealed the judgments and the loss calculation.

On January 15, 2026, Levy was granted a full and unconditional presidential pardon. Oral argument on the remaining appeals before the Second Circuit occurred in May 2026, but the panel has not yet announced a decision.

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The Receivership was established with Mark Nordlicht’s consent in the civil enforcement case brought by the Securities and Exchange Commission titled SEC v. Platinum Management (NY) LLC, et al., case No. 16-cv-06848 (E.D.N.Y.) (BMC). Unlike the criminal trial, it is a civil action which will, at a certain point, be resolved before Judge Cogan. Our role is to administer the Receivership. We were not involved in either the prosecution of the criminal case by the Department of Justice or the advancement of the civil litigation by the SEC. The Receiver will continue her work as governed by the Court Orders, and will continue to provide updates on her progress.

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