Tag Archives: Russia

Case of the Day: Phoenix Process Equipment v. Capital Equipment & Trading

The case of the day is Phoenix Process Equipment Co. v. Capital Equipment & Trading Corp. (W.D. Ky. 2017). Phoenix was a Kentucky company that designs and manufactures water recycling equipment used to wash coal. Capital Equipment & Technology Corp., a Delaware corporation that used the trade name CETCO, was its distributor in Russia and Ukraine. The distribution contract was signed by its CEO, Alexander Chudnovets. Capital Equipment & Technology Corp. was dissolved in 2011, unbeknownst to Phoenix. Phoenix continued to do business with two other companies that used the CETCO name: Capital Equipment & Trading Corp., a Texas corporation, and Coralina Engineering, LLC, a Russian limited liability company. Chudnovets was the sole member of Coralina and the the CEO of Capital Equipment & Trading.

A dispute arose when Phoenix learned that Coralina was selling products very similar to its own within the distribution territory. Phoenix sued in the Jefferson Circuit Court, and the defendants removed the case to the District Cout. The claims for for breach of contract, unfair competition, violations of the Uniform Trade Secrets Act, civil conspiracy, and fraud. Coralina and Chudnovets moved to dismiss for insufficient service of process.
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Case of the Day: SEC v. Dubovoy

The case of the day is Securities & Exchange Commission v. Dubovoy (D.N.J. 2016). The SEC sued Nikolai Slepenkov and Maxim Zakharchenko, both Russian nationals, alleging violations of § 17(a) of the Securities Act of 1933 and §§ 10(b), 20(b), and 20(e) of the Securities Exchange Act of 1934. The claim was that Ukrainian hackers hacked into wire service computers and stole not-yet-public press releases, which they passed to traders such as Slepenkov and Zakharchenko, who then traded illegally on the information. The traders, including Slepenkov and Zakharchenko, allegedly made $100 million in profit over the life of the scheme. The SEC sought leave to serve process on the two by email.
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