Ap p lic a nt, the United States Securities and Exchange Commission

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UNITED  STATES   DISTRICT  COURT
FOR  THE  DISTRICT  OF  M INNESOTA

UN ITED  STATES  SECURITIES   )
AND  EXCHANGE   COMMISSION, )
 )
 Movant, )
 )
 v.   ) Case No: 17-55
 )
WYNN A. GUSTAFSON, )  Judge
 )
 Respondent. )

U.S. SECURITIES   AND  EXCHANGE   COM M ISSION’S
APPLICATION  FOR AN ORDER COMPELLING
COM PLIANCE   WITH  ADM INISTRATIVE  SUBPOENA

Ap p lic a nt,   the  United   States  Securities   and  Exchange   Commission
(“Commiss io n”), respectfully moves   this  C ourt,  pursuant   to Section  22(b) of the
Securities  Act of 1933, 15 U.S.C § 77v(b),   and Section  21(c) of the Securities  Exchange
Act of 1934, 15 U.S.C. § 78u(c), to enter  an Order compelling  Wynn   A.  Gustafso n  (“ Mr.
Gustafso n”)   to    c o mp ly   with   an administrative subpoena is s   ued   by  the  C ommiss io n
re q uiring  him  to produce documents.
I. INTRODUCTION
This   Ap p lic a t io n  seeks to enforce a   document  production  subpoena  issued  and
served  upon  Wynn   A.  Gustafso n  pursuant   to   an   O rder   Directing   Private   Investigat io n   and
Designating  Officers  to  Take  Testimony  in  the  investigation  captioned  In the Matter of
WAG Trading  and Investments Company LLC (Inte rna l   F ile    N o .   C-08422) (“the  WAG
Trading   Investiga t io n”).       The  staff  of  the  Commission   (the  “Staff”)   issued   a  subpoena  to

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Mr.  Gustafso n  on May  24, 2017 requesting   that  he  produce  certain   documents.   W hile
Mr. Gustafson  did produce some  documents  to the Commission, he  has  withhe ld  many
other documents that  are  responsive  to the subpoena  and material  to the Staff’s
invest igat io n.   The  Staff  has contacted  Mr.  Gustafson  repeatedly  in  attempts  to secure
these   miss ing   documents .      Mr.  Gustafso n   has  neither   produced  the  documents   nor
provided   the  Staff  with   any  reason  why  he  cannot  do so.
The   C o mmis s io n   ha s   ma d e   no   p rio r  a p p lic a t io n   to   a ny  c o urt  fo r  s imila r   re lie f   a nd
now  seeks  the  aid  of  this  Court  by  means  of  a  summary   proceeding.     All   attempts   to
obtain  volunta r y  complia nce  with  the  subpoena  have    fa ile d .    A summary  proceeding  is
necessary  so  that  the  Staff  may  complete  its  investigation  expeditiously.   As  set  forth
b e lo w,   the   C o mmis s io n   ha s   me t  a ll  o f  the   re q uire me nt s    fo r  jud ic ia l   e nfo rc e me n t   o f  its
subpoena  and,  therefore,   respectfully   requests  the  Court  to  enter  an  order  compelling  Mr.
Gustafso n to produce documents.
II. STATEM ENT   OF  FACTS
A. Wynn  A. Gustafson
Respondent  Wynn  A. Gustafso n  is   a   U. S .   c itize n   who   re s id e s   in  Ard e n  M ills ,
Minnesot a.    (Declaration   of  Trevor  Schumac her (“Schumacher  Decl.”)   at ¶ 7.)  Mr.
Gustafso n is      the  President   of  WAG  Company   LLC  f/k/a  WAG  Trading   and  Investment
Company  LLC  (“WAG  Trading”).     (Id. at ¶ 8.) According  to documents  produced to the
C ommiss io n,   WAG  Trading   is  in  the  business   of  conducting  domestic  and  internatio na l
transactio ns   buying,   selling,  and  redeeming  so-called historical  bonds.    (Id.)    It  purports
to  conduct  such  business   in  C hina,  Hong  K ong,  Ghana,  Singapore,   and  Germany.    (Id.)

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B. The Commission’s  Investigation
On May 4, 2017, the Commission  issued  an Order Directing  Private Invest igat io n
and  Designat i ng   O fficers   to  Take  Testimo ny   in  the  WAG  Trading   Investigatio n  (the
“Formal  Order”).
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   (Schumacher   Decl.  ¶  5.)  The  Formal  Order  authorizes  the  Staff  to
invest igate   whether    any  persons  have  engaged,  are  engaging   or  will   engage  in  vio la t io ns
of  Section  17(a)  of  the  Securities   Act  of  1933  (“Securities   Act”)  and  Section  10(b)  of  the
Securities  Exchange  Act of 1934 (“Exchange  Act”)  and Rule  10b-5 thereunde r,  by
various  acts and practices  reported in the Formal  Order or by any  act or practice  of
similar  purport  or object.   (Id.  at  ¶  6.)   The Formal  Order empowers  the Staff  to, among
other  things,   subpoena   witnesses   and  require   parties  to  produce  documents.     (Id.)
In  the  course  of  its  invest igat io n,   the  Staff  learned  that  Mr.  Gustafson,  through
WAG  Trading,   is  in  the  business   of  buying   and  sellin g  financ ia l  instrume nts  that  purport
to  be  bank  notes,  foreign   government   bonds,  railroad   bonds,  and  similar  instrume nts.
(Schumacher   Decl.  ¶  8.)   Such documents  are often  used to perpetuate  fraudule nt
schemes.   (Id.  at  ¶  10, Exh.  1.)
Als o   in  the  course  of  its  investigation,   the  Staff   discovered   a  number   of  suspicious
transactions  in Mr. Gustafson’s  bank accounts.   Often,  large  sums  appear to have  been
deposited  and  then  wired  out  of  Mr.  Gustafson’s  account  in  quick  succession.
(Schumacher  Decl.  ¶ 11.)   At  least  some  of  the  transfers   from   Mr.  Gustafson’s   bank

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 If  the  Court  so  desires,  the   C o mmis s io n  will  provide  the Court  with  a copy of  the
Formal  Order.  The   C o mmis s io n   respectfully  requests  an  in camera review   because  the
invest igat io n   is  non-public   and  ongoing.

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accounts  were  wires  to  foreign   entit ies   in  C hina,  Hong  K ong,  or  Ghana.    (Id.)   The  total
amount  of  suspicious  transfers  exceeds  $200,000.00.  (Id.)
According  to Mr. Gustafson’s  sworn  te s timo n y,  these  transfers  are  loans  or
investments  from  private  individuals,  which  are  being  pooled  by  third  parties  in  order  to
obtain  a  large  sum  of  money   held  in  Mr.  Gustafso n’s  name  at a foreign  financial
instit ut io n.      (Schumac he r   Decl.   at ¶ 15.)   Mr. Gustafson  was purportedly  contacted  by an
ind iv id ua l  located  in  China  going   by  the  name,  “Mr.  Yuen  Leung”   in  or  around  2013.
(Id.)    Mr.  Yuen  infor med   Mr.   Gustafso n   that   Mr.  Gustafson  had inherited  over $22
millio n   from   an  unknow n   uncle,   and  the  funds   were  being   held  fo r  him  at Unicaja  Bank
in  S p a in.     (Id.)     Mr.  Gustafson   was  told  that,  in  order  to  release  these  funds,   he  would
need  to  pay  a  tax  of  several   hundred   thousand   dollars.     (Id.)     Mr.  Yuen  c la ime d    to   b e
raising   money   from  individuals   to  pay  off  the  supposed  tax,  and  he  claimed   to  be  offering
those  individ ua ls   a  return   on  their   invest me nt   in  exchange   for  the  use  of  their   funds.     (Id.)
At least  some  of the transfers  into  Mr. Gustafson’s  accounts  have  been  wires  from
U.S. citizens  who appear to be victims  of  fraudule nt   schemes,  includ i ng  advance  fee
schemes.   (Schumacher  Decl.  ¶¶ 12-13.)  For example,  one individual  was told that  she
had  to  pay  $210,000  for  a “Drug  Anti-Terro rist  Certificate”   in  order  to  release  a
$10,500,000 inher ita nce .   (Id.  at  ¶  14.).  This  individual  was instructed  to deposit  funds
into   Mr.  Gustafso n’s bank  account.   (Id.)

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C. M r.  Gus tafs on’s   Failure   to  Provide   D ocume nts   as   R e quire d  by  the
SEC’s   Subpoe na

O n May  24, 2017,  pursuant  to  the  Formal  Order,  the  Staff  issued  a  subpoena
requiring  Mr.  Gustafso n to  produce  certain  documents  to  the  Commission  by  June  9,
2017.  (Schumacher  Decl.at    ¶ 17, Exh.  3.)   The  subpoena   called  for  the  production   of,
among  other  things,  communications  between  Mr.  Gustafso n   and  any  persons  or  entitie s
from  which  he  solicited  or  received  funds.    The  subpoena  also  called  for  documents
concerning   any   accounts   held   by  Mr.  Gustafso n   or  by  WAG  Trading,   such   as  bank
statements.  ( Schumac he r   Decl. at  ¶  18, Exh. 4.)
On June  8, 2017, Mr. Gustafson  transmitted  documents  to the Commission,
together  with  a  cover  letter.    (Schumacher  Decl.  at   ¶ 19, Exh.  5.)  However,   he  produced
only  14 documents.   (Id. at  ¶  20.)    These  consisted   of  (a)  articles   of  incorporation  and
renewals   for  WAG  Trading,   (b)  Mr.  Gustafson’s   tax  returns,   and  (c)  documentation   of
two  transactio ns   invo lving  fina nc ia l  instrume nts  that Mr. Gustafson  referred  to as
“His to r ic a l   Do c ume nts . ”       (Id.)      Mr.  Gustafson   did  not  produce  any  bank  records or any
communicat io ns   concernin g   the   suspicio us   transfers   in   and   out   of   his   accounts.   (Id.)
In  response  to  the  Commission’s   requests  that  Mr.  Gustafson   produce  to  the
C o mmis s io n   “[d ]o c ume nt s  sufficient  to  disclose  all  domestic  and  foreign  bank,
brokerage,  or  other  fina nc ia l   accounts  in  your  name  or  for  your  benefit, ”   and
“[d]ocume nts   concerning   all  accounts  held  by  you  and/or  WAG  Trading   and  Invest me nt
Company,  LLC  at all  domestic  or foreign banks,  brokerages,  or  other  financial
instit ut io ns,   includ in g   but   not   limited   to   account   opening   document s   and   periodic   or   other

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statements,”   Mr.  Gustafson   wrote,  “I  ...  only   have  domestic   bank  accounts,   which   I  am
confident   that  you  already  have  access  to.”    (Schumacher  Decl.  at   ¶ 21).
In  response  to  the  Commission’s   requests  that  Mr.  Gustafson   produce  to  the
C ommiss io n   “[a]ll   communica t io ns   in   which   you   and/or   WAG   Trading   and   Invest me nt
Company,  LLC  solicited  or  received  funds  from  any  person  or  entity,”  a nd   “[a ]ll
communicat io n   with   any  person  or  entity   from  whom   you  and/or  WAG  Trading   and
Investme nt   C ompany,   LLC    solic ited   or   received   funds, ”   Mr.   Gustafson   wrote   that   neither
he  nor  WAG  Trading   had  ever  “solicited   or  received   funds  for the sale or trading of any
securities, financial instruments, or bonds.”    (Schumacher  Decl.  at ¶ 22 (e mp ha s is
added).)    He did not produce  any documents  responsive  to these  requests.
O n July  26, 2017, pursuant   to   a   C ommiss io n   subpoena,   Mr.   Gustafso n   gave   sworn
te s timo n y   to   memb e rs    o f  the   C o mmis s io n   s ta ff.      (Schumacher  Decl.  at   ¶ 23, Exh.  3.)
Durin g  his     testimony,  it  became  clear  that  Mr.  Gustafson  had  documents,  responsive  to
the  subpoena  and  relevant  to  the   C o mmis s io n’ s    inve s t ig at io n,  that  he  had  failed   to
produce.   For example, Mr. Gustafson  revealed  that  he had documents  relating  to the
account  purportedly   set  up  in  his  name  at  Unicaja  Bank:
 Q. Did you  ever see an account  balance  with  22 million  or something  like  that?
 A. Just  a screen  shot.
 Q.  You  did  get  a  screen  shot?
A.    That’s  what  I  did.  I  went  in  –   I logged  in  online,  and there  it was. And I made a
copy  of it.   Printed  it.   Saved it  as a PDF.

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(Schumacher   Decl.,  Exh.  3 at 70:5-11.)  Mr. Gustafson  had not previously  produced  any
documents  related  to  the  account  at  Unicaja.   When  the Staff  asked Mr. Gustafson  to
produce  this   document,   he  agreed  that  he  would.    (Id. at 70:11-15.)
 Similarly,  during  Mr.  Gustafson’s  testimony,  he  repeatedly  referenced  written
communications   he  had  had  with  Mr.  Yuen,  wherein  Mr.  Yuen  had discussed  raising
money   from   investors   in  order  to  release   the  $22 millio n   supposedly   being   held   at
Unicaja  bank.  The  Staff  repeatedly  asked Mr. Gustafson  to produce those
communications,  none of which  had previously  been produced  to the Commission.   Each
time,  Mr. Gustafson  agreed that  he would  do so.  For example,  the Staff  and Mr.
Gustafso n   had   the   follo w ing   exchange :
Q. So you  said  you’ve  raised  about  $100,000 fro m  people?
A. Yeah, at least  that.
...
A. Yuen  would   send  me  an  email.   And  he  would  say,  you  know:  Expect  this
deposit  in  your  account  ...  Then  he  would  give  me  wiring   instruct io ns.

Q.    All   right.   I  think   those  sorts  of  emails,   sir,  are  exactly   the  kind  of  documents
that  we  were  looking   for  in  the  subpoena.

A.  O h.
Q .  If  you  can  send  us  those  – e ma ils .
A. I can forward  all  them  to you.
Q.  Please  do,  sir.  I  mean,  those  are  exactly   the  sorts  of  documents   we’re  looking
fo r.

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(Schumac he r   Dec.,  Exh.  3   at 57:24-58:18.)    Similarly,   later  in  the  testimo ny,   the  Staff  and
Mr. Gustafson  had the following  exchanges :
Q .  How  would  you  get  the  bank  account  infor ma t io n   from  Mr.  Yuen  [about  where
to wire  the money]?   Did he send you  an email?

 A.  Yes.

Q.    Could  you  produce  those  emails   to  us,  sir?    And,  once  again,   we  think   those
are  exactly   the  kinds  of  documents  that  were called  for by the subpoena.   We
wo uld    re a lly   lik e    to   s e e   tho s e   e ma ils .

 A.  Yeah, I can forward  them  all  on to you. I believe  I still  have them.

(Id. at 97:15-23.)

Q.  We see eight  payments for  $113,900  [going  out  to  Guangzhou  Gentle  Foreign
Trade].    Does  that  sound  about  right?

 A.  That  could – yeah.    That’s  probably  about  right.

 Q .    How  did  you  learn  about  Guangzho u   Gentle  Foreign   Trade?

...

A. He  had  sent  me  the  e ma il  to  send  the  wire.

Q .  Mr. Yuen?

A.  Yes.

Q.  Once again,  please  send  us  those  emails.   We  would   like  to  see  those.

A.  Okay.

(Id. at   99:20-100:7.)

After  Mr.  Gustafso n’s  sworn  testimo ny,  the  Commissio n  staff  e-ma ile d    M r.
Gus ta fs o n  s e ve ra l  time s   to   re mind   him  to   p roduce  the requested  documents.   Specifically,
on July  28, 2017, a member  of the Commission  staff  asked Mr. Gustafson  to “send  the

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documents  we requested  of you  on Wednesday  as soon as possible.”     (Schumacher  Decl.
at   ¶ 27, Exh.  7.)
On  August  24,  having  not  received  any  additional  documents  from  Mr.  Gustafson,
a   me mb e r   o f  the    C o mmis s io n  Sta ff   wro te ,   “[w]e  still   have  not  received   the  documents
you  promised   us.  As we have discussed,  these documents  are clearly  responsive  to the
subpoena  served  on  you.    Please  send  them   to  us  by  the  close   of  business   on  August   30,
2017.”    (Schumacher  Decl.  at   ¶ 28, Exh.  7.)   In  the  same  e-ma il,    the    Staff  member
advised,  “[w]e  will   seek  a  court  order  compelling   production   of  these  documents   if  you
fa il   to  produce  them  to  us.”     (Id.)
O n August  25, the Staff  specifically  requested  “all  of  your  emails  or  other
communicat io ns   with   Mr.   Yuen,”   and   “all   documents   includ i ng   screenshots   ...   regarding
your  Unicaja   bank  account.”     (Schumacher  Decl.  at ¶ 29, Exh.  7.)   The Sta ff  furthe r
advised,  “if  we do not receive  the documents  responsive  to the subpoena  served  on you
by Friday,  September  8
th
, we will  seek an order of the Court.”    (Id.)
As of October 30, 2017, Mr. Gustafson  has not produced any  documents  to the
C o mmiss io n   other   than   the   documents   included   in   his   init ia l   production   on   June   8,   2017.
(Schumacher  Decl.  at ¶ 30.)
III. ARGUM ENT
A. This Court  May Resolve This Matter Through  a Summary  Proceeding.
The Commission  may  seek an order requiring  compliance  with  a subpoena  upon
application  because  subpoena  enforcement  proceedings  are  generally  summary  in  nature.
See United States v. McDonnell  Douglas  Corp., 751 F.2d 220, 229 (8th Cir.  1984);  see

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also EEOC v. Tempel Steel Co., 814 F.2d 482, 485 (7th  Cir.  1987) (subpoena
enforcement  proceedings  “are  designed  to  be  summary  in  nature”);  SEC v. Sprecher,  594
F.2d 317, 320 (2d Cir.  1979).    “Questions  concerning  agency  subpoenas  should   be
promptly  determined  so  that  subpoenas,  if  valid,  may  be  speedily  enforced.”    SEC v. First
Security Bank, 447 F.2d 166, 168 (10th Cir. 1971) (c itin g  United  States v. Davey, 426
F.2d 842, 845 (2d Cir.  1970)).
F urthe rmo re ,   juris d ic t io n  to   re s o lve   this   ma tte r  p ro p e rly  lie s   with  this   C o urt.
Section  22(b) of the Securities  Act and Section  21(c) of the Exchange  Act authorize  the
Commission  to seek, and any  federal  court  to issue,  an order compelling  compliance  with
Commission  subpoenas  upon  application  by  the  Commission.    See 15 U.S.C. §§ 77v(b),
78u(c).   More specifically,  Section  21(c) of the Exchange  Act provides  that  “the
C ommiss io n   may  invoke   the  aid  of  any  court  of  the  United   States  within   the  jurisd ictio n
of  which   such  invest i gat io n   or  proceeding   is  carried  on,  or  where  such  person  resides  or
carries  on business,  in  requiring  ... the production  of books, papers, correspondence,
memoranda,  and other  records.”   15 U.S.C. § 78u(c).      Because  Mr.  Gustafso n   resides  in
Ard e n  M ills,   Minneso ta,  jurisdict io n  and  venue  properly  lie  within  the  Distric t  of
Minnesot a.    Id.
B. The  SEC  Meets the  R e quire me nts   for  Judicial  Enforce me nt  of  the
Subpoe na.

A district  court is bound  to enforce  an administrative  subpoena  if  the information
sought   “[1]  is  within   the  authorit y   of  the  agency,   [2]  the  demand   is  not  too  indefinit e   and
[3]  the  infor ma t io n   sought   is  reasonably   relevant. ”  United States v. Morton Salt Co., 338

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U.S. 632, 652 (1950); see  also  SEC v. Arthur Young  & Co., 584 F.2d 1018, 1021 (D.C.
Cir.  1978).    “An   a ffid a v it   fro m   a    go ve rn me n t   o ffic ia l   is    s uffic ie n t   to    e s ta b lis h   a    p rima
facie   showing   that  these  requirements   have  been  met.”     In re McVane, 44 F.3d 1127,
1136 (2d Cir.  1995).    Here,  because  the  SEC  has  met  these  criteria,   and  Mr.  Gustafson
cannot  show  unreasonab le ness ,   the  C ourt  should  enforce  the  subpoena.
C ongress   has   authorized   the   SEC    to   conduct   invest igat io ns   in   its   discretio n   to
determine   whether   any  person  has  violated,  is violating,  or is about to violate  the
provisions  of  the  federal  securities  laws.    See 15 U.S.C. §§ 77t(a), 78u(a)(1).    In  order  to
carry  out  this   task,  Congress   endowed  the  Commission   with  broad  investigatory   powers.
See Arthur Young  & Co., 584 F.2d 1018, 1023 (D.C. Cir. 1978); see also Commodity
Futures Trading Commission v. Tokheim, 153 F.3d 474, 477 (7th  Cir.  1998) (quoting
United States v. Morton Salt Co., 338 U.S. 632, 642-43 (1950))  (stating  that  the
Commission   can  “investigate   merely   on  suspicion   that  the  law  is  being   violated,   or  even
just  because  it  wants  assurance  that  is  not”).    Those  investigatory  powers  include  the
ability  to  subpoena  witnesses  and  require  the  production  of  documents  that  the
C o mmis s io n   d e e ms    re le va nt   to    its    inve s t i ga t io n.       See 15 U.S.C. §§ 77s(c), 78u(b).
Pursuant   to  the  statutes  cited  above,  the  Commission   issued   a  Formal   Order  to
conduct  the  WAG  Trading  Investiga tio n.     The  Formal   Order  states  that  the
invest igat io n’ s   purpose  is  to  determine,   among   other  things,   whether  WAG  Trading  and
others  violated   the  anti-fraud   provisions   of  the  federal   securities   laws.    The  subpoena
served  upon  Mr.  Gustafso n   was is s   ued  pursuant  to that Formal  Order and, therefore, is
consistent  with  the  Commission’s  administrative  procedures.

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The   infor mat io n   sought   from   Mr.   Gustafso n is  relevant   and  not  indefinite.   The
C o mmis s io n   is   o nly   re q uire d    to   ma k e   a   minima l   s ho win g   o f  re le vance.   As long  as the
evidence   sought   is   not   plainly   irrele va nt   to   any   lawful   purpose,   the   subpoena   should   be
enforced.    Arthur Young  & Co., 584 F.2d at 1029.  It  is  the  burden  of  the  opposing   party
to  establish   that  the  subpoena  is  unreasonable.     See  SEC v. Blackfoot Bituminous,  Inc.,
622 F.2d 512, 515 (10th  Cir.  1980); SEC v. Brigadoon  Scotch  Distrib. Co., 480 F.2d
1047, 1056 (2d Cir. 1973).  That  burden,  however,   is  “not  easily   met”   when  the  SEC’s
inquir y   is   legally   authorized   and   the   infor mat io n   is   relevant   to   the   inquir y.      Brigadoon
Scotch, 480 F.2d at 1056.
In  this  case,  the  document s   sought  are relevant   to   the   C ommiss io n’ s   invest igat io n.
Mr.  Gustafso n  – a  man  who  is  in  the  business   of  buying   and  selling  types  o f  fina nc ia l
instrume nts that  can be used  in  fraudulent  schemes – has  had  hundreds   of  thousands   of
dollars  flow ing  through   his  bank  accounts  from  private  U.S. c itize n s    to    various foreign
entities.   The   C o mmis s io n    re q uire s   additional evidence  in  order to determine  whether
these transactions  are part of a fraudulent  scheme  or other  violation  of the federal
securities   laws.    Obtaining  Mr.  Gustafso n’s d o c ume nt s    will   he lp    the    S ta ff   c o mp le te   its
inquir y.
The  scope  of  the  Commission’s   production   request  is  not  overly   broad or
otherwise  unreasonable.   Mr. Gustafso n has not objected  to the subpoena.    In  fact,  during
his   testimo ny,   Mr.  Gustafso n  agreed  to  produce  the  requested  documents,   and  did  not
provide  the  Staff  with  any  reasons  why  he  could  not  do  so.    Mr.  Gustafso n   has  now  had
more  than  four   months  to   c o mp ly   with   the   document requests.    The  Staff  has  repeatedly

13

warned  him  that,  if  he  did  not  comply   volunta r il y,   the  Staff  would  have  to  bring  a
subpoena  enforcement   action.    It is clear  that  Mr. Gustafson  has chosen  not to comply
with  the  Staff’s  subpoena  and,  as  a  result,  the  Staff  has  no  other  remedy  than  the  judicial
enforcement   of  the  subpoena.
WHEREFORE,     the     United     States     Securities     and     Exchange     Commission
respectfully   requests  that  this  Court  issue  an  Order:
A. Dire c ting  Wynn    A.    Gustafson    to    produce    to    the    C o mmis s io n  S ta ff    a ll
documents  responsive  to  the   C o mmis s io n’ s  subpoena;
B. Granting  the  C ommission  such  other  and  further  relief  as  may  be  necessary  and
appropriate  to  achieve  compliance  with  the  subpoena  and  with  any  Order
the  C ourt  issues   in  its  enforceme nt   thereof;   and
C. Permitting  service  of  all  O rders  on  Mr.  Gustafson  by  overnight  express  mail  or
electronic  mail.

Dated: October  31, 2017  Respectfully  submitted,

___/s/  Ariella  O. Guardi___________
Charles  J. Kerstetter  (PA  No. 67088)
Ariella  Omholt  Guardi  (IL  No.  6297336)
United   States  Securities   and  Exchange  C o mmis s io n
    175  West  Jackson  Boulevard, S uite   1450
    Chicago,  Illinois  60604
 Telephone:  (312) 353-7390
 guardia@ sec . go v
 Attorneys for Plaintiff

     C raig  Baune  (331727)

14

Assistant   United   States  Attorney
Dis tric t   o f  M inne s o ta
600 U.S. Courthouse
300 South  Fourth  Street
Minneapolis,  MN 55414
Telephone:  (612) 664-5600
Craig.baune@ usdoj.gov
Local Counsel

1 
 

UNITED STATES DISTRICT COURT 
FOR THE DISTRICT OF MINNESOTA 

 
UNITED STATES SECURITIES  ) 
AND EXCHANGE COMMISSION, ) 
 ) 
 Movant, ) 
 ) 
 v. ) Case No: 17-55 
 ) 
WYNN A. GUSTAFSON, )  Judge  
 )  
 Respondent. ) 
 
 

U.S. SECURITIES AND EXCHANGE COMMISSION’S  
APPLICATION FOR AN ORDER COMPELLING  

COMPLIANCE WITH ADMINISTRATIVE SUBPOENA 
 

Applicant, the United States Securities and Exchange Commission 

(“Commission”), respectfully moves this Court, pursuant to Section 22(b) of the 

Securities Act of 1933, 15 U.S.C § 77v(b), and Section 21(c) of the Securities Exchange 

Act of 1934, 15 U.S.C. § 78u(c), to enter an Order compelling Wynn A. Gustafson (“Mr. 

Gustafson”) to comply with an administrative subpoena issued by the Commission 

requiring him to produce documents.  

I. INTRODUCTION 

This Application seeks to enforce a document production subpoena issued and 

served upon Wynn A. Gustafson pursuant to an Order Directing Private Investigation and 

Designating Officers to Take Testimony in the investigation captioned In the Matter of 

WAG Trading and Investments Company LLC (Internal File No. C-08422) (“the WAG 

Trading Investigation”).   The staff of the Commission (the “Staff”) issued a subpoena to 

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2 
 

Mr. Gustafson on May 24, 2017 requesting that he produce certain documents.  While 

Mr. Gustafson did produce some documents to the Commission, he has withheld many 

other documents that are responsive to the subpoena and material to the Staff’s 

investigation.  The Staff has contacted Mr. Gustafson repeatedly in attempts to secure 

these missing documents.  Mr. Gustafson has neither produced the documents nor 

provided the Staff with any reason why he cannot do so.  

The Commission has made no prior application to any court for similar relief and 

now seeks the aid of this Court by means of a summary proceeding.  All attempts to 

obtain voluntary compliance with the subpoena have failed.  A summary proceeding is 

necessary so that the Staff may complete its investigation expeditiously.  As set forth 

below, the Commission has met all of the requirements for judicial enforcement of its 

subpoena and, therefore, respectfully requests the Court to enter an order compelling Mr. 

Gustafson to produce documents.   

II. STATEMENT OF FACTS 

A. Wynn A. Gustafson 

Respondent Wynn A. Gustafson is a U.S. citizen who resides in Arden Mills, 

Minnesota.  (Declaration of Trevor Schumacher (“Schumacher Decl.”) at ¶ 7.)  Mr. 

Gustafson is the President of WAG Company LLC f/k/a WAG Trading and Investment 

Company LLC (“WAG Trading”).   (Id. at ¶ 8.) According to documents produced to the 

Commission, WAG Trading is in the business of conducting domestic and international 

transactions buying, selling, and redeeming so-called historical bonds.  (Id.)  It purports 

to conduct such business in China, Hong Kong, Ghana, Singapore, and Germany.  (Id.) 

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3 
 

B. The Commission’s Investigation  

On May 4, 2017, the Commission issued an Order Directing Private Investigation 

and Designating Officers to Take Testimony in the WAG Trading Investigation (the 

“Formal Order”).1  (Schumacher Decl. ¶ 5.)  The Formal Order authorizes the Staff to 

investigate whether any persons have engaged, are engaging or will engage in violations 

of Section 17(a) of the Securities Act of 1933 (“Securities Act”) and Section 10(b) of the 

Securities Exchange Act of 1934 (“Exchange Act”) and Rule 10b-5 thereunder, by 

various acts and practices reported in the Formal Order or by any act or practice of 

similar purport or object.   (Id. at ¶ 6.)  The Formal Order empowers the Staff to, among 

other things, subpoena witnesses and require parties to produce documents.  (Id.) 

In the course of its investigation, the Staff learned that Mr. Gustafson, through 

WAG Trading, is in the business of buying and selling financial instruments that purport 

to be bank notes, foreign government bonds, railroad bonds, and similar instruments.  

(Schumacher Decl. ¶ 8.)  Such documents are often used to perpetuate fraudulent 

schemes.  (Id. at ¶ 10, Exh. 1.)   

Also in the course of its investigation, the Staff discovered a number of suspicious 

transactions in Mr. Gustafson’s bank accounts.  Often, large sums appear to have been 

deposited and then wired out of Mr. Gustafson’s account in quick succession.  

(Schumacher Decl. ¶ 11.)   At least some of the transfers from Mr. Gustafson’s bank 

                                                             
1 If the Court so desires, the Commission will provide the Court with a copy of the 
Formal Order.  The Commission respectfully requests an in camera review because the 
investigation is non-public and ongoing. 

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4 
 

accounts were wires to foreign entities in China, Hong Kong, or Ghana.  (Id.)  The total 

amount of suspicious transfers exceeds $200,000.00.  (Id.)   

According to Mr. Gustafson’s sworn testimony, these transfers are loans or 

investments from private individuals, which are being pooled by third parties in order to 

obtain a large sum of money held in Mr. Gustafson’s name at a foreign financial 

institution.  (Schumacher Decl. at ¶ 15.)  Mr. Gustafson was purportedly contacted by an 

individual located in China going by the name, “Mr. Yuen Leung” in or around 2013.  

(Id.)  Mr. Yuen informed Mr. Gustafson that Mr. Gustafson had inherited over $22 

million from an unknown uncle, and the funds were being held for him at Unicaja Bank 

in Spain.  (Id.)  Mr. Gustafson was told that, in order to release these funds, he would 

need to pay a tax of several hundred thousand dollars.  (Id.)  Mr. Yuen claimed to be 

raising money from individuals to pay off the supposed tax, and he claimed to be offering 

those individuals a return on their investment in exchange for the use of their funds.  (Id.) 

At least some of the transfers into Mr. Gustafson’s accounts have been wires from 

U.S. citizens who appear to be victims of fraudulent schemes, including advance fee 

schemes.  (Schumacher Decl. ¶¶ 12-13.)  For example, one individual was told that she 

had to pay $210,000 for a “Drug Anti-Terrorist Certificate” in order to release a 

$10,500,000 inheritance.  (Id. at ¶ 14.).  This individual was instructed to deposit funds 

into Mr. Gustafson’s bank account.  (Id.)   

 

 

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5 
 

C. Mr. Gustafson’s Failure to Provide Documents as Required by the 
SEC’s Subpoena 

 
On May 24, 2017, pursuant to the Formal Order, the Staff issued a subpoena 

requiring Mr. Gustafson to produce certain documents to the Commission by June 9, 

2017.  (Schumacher Decl.at ¶ 17, Exh. 3.)  The subpoena called for the production of, 

among other things, communications between Mr. Gustafson and any persons or entities 

from which he solicited or received funds.  The subpoena also called for documents 

concerning any accounts held by Mr. Gustafson or by WAG Trading, such as bank 

statements.  (Schumacher Decl. at ¶ 18, Exh. 4.) 

On June 8, 2017, Mr. Gustafson transmitted documents to the Commission, 

together with a cover letter.  (Schumacher Decl. at ¶ 19, Exh. 5.)  However, he produced 

only 14 documents.  (Id. at ¶ 20.)  These consisted of (a) articles of incorporation and 

renewals for WAG Trading, (b) Mr. Gustafson’s tax returns, and (c) documentation of 

two transactions involving financial instruments that Mr. Gustafson referred to as 

“Historical Documents.”  (Id.)  Mr. Gustafson did not produce any bank records or any 

communications concerning the suspicious transfers in and out of his accounts.  (Id.)   

In response to the Commission’s requests that Mr. Gustafson produce to the 

Commission “[d]ocuments sufficient to disclose all domestic and foreign bank, 

brokerage, or other financial accounts in your name or for your benefit,” and 

“[d]ocuments concerning all accounts held by you and/or WAG Trading and Investment 

Company, LLC at all domestic or foreign banks, brokerages, or other financial 

institutions, including but not limited to account opening documents and periodic or other 

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6 
 

statements,” Mr. Gustafson wrote, “I … only have domestic bank accounts, which I am 

confident that you already have access to.”  (Schumacher Decl. at ¶ 21).   

In response to the Commission’s requests that Mr. Gustafson produce to the 

Commission “[a]ll communications in which you and/or WAG Trading and Investment 

Company, LLC solicited or received funds from any person or entity,” and “[a]ll 

communication with any person or entity from whom you and/or WAG Trading and 

Investment Company, LLC solicited or received funds,” Mr. Gustafson wrote that neither 

he nor WAG Trading had ever “solicited or received funds for the sale or trading of any 

securities, financial instruments, or bonds.”  (Schumacher Decl. at ¶ 22 (emphasis 

added).)  He did not produce any documents responsive to these requests. 

On July 26, 2017, pursuant to a Commission subpoena, Mr. Gustafson gave sworn 

testimony to members of the Commission staff.  (Schumacher Decl. at ¶ 23, Exh. 3.)  

During his testimony, it became clear that Mr. Gustafson had documents, responsive to 

the subpoena and relevant to the Commission’s investigation, that he had failed to 

produce.  For example, Mr. Gustafson revealed that he had documents relating to the 

account purportedly set up in his name at Unicaja Bank: 

 Q. Did you ever see an account balance with 22 million or something like that? 

 A. Just a screen shot. 

 Q. You did get a screen shot? 

A.  That’s what I did. I went in – I logged in online, and there it was. And I made a 
copy of it.  Printed it.  Saved it as a PDF. 

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(Schumacher Decl., Exh. 3 at 70:5-11.)  Mr. Gustafson had not previously produced any 

documents related to the account at Unicaja.  When the Staff asked Mr. Gustafson to 

produce this document, he agreed that he would.  (Id. at 70:11-15.)   

 Similarly, during Mr. Gustafson’s testimony, he repeatedly referenced written 

communications he had had with Mr. Yuen, wherein Mr. Yuen had discussed raising 

money from investors in order to release the $22 million supposedly being held at 

Unicaja bank.  The Staff repeatedly asked Mr. Gustafson to produce those 

communications, none of which had previously been produced to the Commission.  Each 

time, Mr. Gustafson agreed that he would do so.  For example, the Staff and Mr. 

Gustafson had the following exchange: 

Q. So you said you’ve raised about $100,000 from people? 

A. Yeah, at least that. 

… 

A. Yuen would send me an email. And he would say, you know: Expect this 
deposit in your account … Then he would give me wiring instructions. 
 

Q.  All right. I think those sorts of emails, sir, are exactly the kind of documents 
that we were looking for in the subpoena. 
 
A. Oh. 

Q. If you can send us those – emails. 

A. I can forward all them to you. 

Q. Please do, sir. I mean, those are exactly the sorts of documents we’re looking 
for. 

 

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(Schumacher Dec., Exh. 3 at 57:24-58:18.)  Similarly, later in the testimony, the Staff and 

Mr. Gustafson had the following exchanges:   

Q. How would you get the bank account information from Mr. Yuen [about where 
to wire the money]?  Did he send you an email? 

 
 A.  Yes. 
 

Q.  Could you produce those emails to us, sir?  And, once again, we think those 
are exactly the kinds of documents that were called for by the subpoena.  We 
would really like to see those emails. 
 

 A.  Yeah, I can forward them all on to you. I believe I still have them. 
 
(Id. at 97:15-23.) 
 

Q.  We see eight payments for $113,900 [going out to Guangzhou Gentle Foreign 
Trade].  Does that sound about right?  
 

 A.  That could – yeah.  That’s probably about right. 
 
 Q.  How did you learn about Guangzhou Gentle Foreign Trade? 
 

… 
 
A. He had sent me the email to send the wire. 

 
Q.  Mr. Yuen? 
 
A.  Yes. 
 
Q.  Once again, please send us those emails. We would like to see those. 
 
A.  Okay. 
 

(Id. at 99:20-100:7.) 
   

After Mr. Gustafson’s sworn testimony, the Commission staff e-mailed Mr. 

Gustafson several times to remind him to produce the requested documents.  Specifically, 

on July 28, 2017, a member of the Commission staff asked Mr. Gustafson to “send the 

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9 
 

documents we requested of you on Wednesday as soon as possible.”  (Schumacher Decl. 

at ¶ 27, Exh. 7.)   

On August 24, having not received any additional documents from Mr. Gustafson, 

a member of the Commission Staff wrote, “[w]e still have not received the documents 

you promised us.  As we have discussed, these documents are clearly responsive to the 

subpoena served on you.   Please send them to us by the close of business on August 30, 

2017.”  (Schumacher Decl. at ¶ 28, Exh. 7.)  In the same e-mail, the Staff member 

advised, “[w]e will seek a court order compelling production of these documents if you 

fail to produce them to us.”  (Id.)   

On August 25, the Staff specifically requested “all of your emails or other 

communications with Mr. Yuen,” and “all documents including screenshots … regarding 

your Unicaja bank account.”  (Schumacher Decl. at ¶ 29, Exh. 7.)  The Staff further 

advised, “if we do not receive the documents responsive to the subpoena served on you 

by Friday, September 8th, we will seek an order of the Court.”  (Id.) 

As of October 30, 2017, Mr. Gustafson has not produced any documents to the 

Commission other than the documents included in his initial production on June 8, 2017. 

(Schumacher Decl. at ¶ 30.)   

III. ARGUMENT 

A. This Court May Resolve This Matter Through a Summary Proceeding. 

The Commission may seek an order requiring compliance with a subpoena upon 

application because subpoena enforcement proceedings are generally summary in nature.  

See United States v. McDonnell Douglas Corp., 751 F.2d 220, 229 (8th Cir. 1984); see 

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10 
 

also EEOC v. Tempel Steel Co., 814 F.2d 482, 485 (7th Cir. 1987) (subpoena 

enforcement proceedings “are designed to be summary in nature”); SEC v. Sprecher, 594 

F.2d 317, 320 (2d Cir. 1979).  “Questions concerning agency subpoenas should be 

promptly determined so that subpoenas, if valid, may be speedily enforced.”  SEC v. First 

Security Bank, 447 F.2d 166, 168 (10th Cir. 1971) (citing United States v. Davey, 426 

F.2d 842, 845 (2d Cir. 1970)).   

Furthermore, jurisdiction to resolve this matter properly lies with this Court.  

Section 22(b) of the Securities Act and Section 21(c) of the Exchange Act authorize the 

Commission to seek, and any federal court to issue, an order compelling compliance with 

Commission subpoenas upon application by the Commission.  See 15 U.S.C. §§ 77v(b), 

78u(c).  More specifically, Section 21(c) of the Exchange Act provides that “the 

Commission may invoke the aid of any court of the United States within the jurisdiction 

of which such investigation or proceeding is carried on, or where such person resides or 

carries on business, in requiring … the production of books, papers, correspondence, 

memoranda, and other records.”  15 U.S.C. § 78u(c).  Because Mr. Gustafson resides in 

Arden Mills, Minnesota, jurisdiction and venue properly lie within the District of 

Minnesota.  Id. 

B. The SEC Meets the Requirements for Judicial Enforcement of the 
Subpoena. 
 

A district court is bound to enforce an administrative subpoena if the information 

sought “[1] is within the authority of the agency, [2] the demand is not too indefinite and 

[3] the information sought is reasonably relevant.” United States v. Morton Salt Co., 338 

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11 
 

U.S. 632, 652 (1950); see also SEC v. Arthur Young & Co., 584 F.2d 1018, 1021 (D.C. 

Cir. 1978).  “An affidavit from a government official is sufficient to establish a prima 

facie showing that these requirements have been met.”  In re McVane, 44 F.3d 1127, 

1136 (2d Cir. 1995).  Here, because the SEC has met these criteria, and Mr. Gustafson 

cannot show unreasonableness, the Court should enforce the subpoena. 

Congress has authorized the SEC to conduct investigations in its discretion to 

determine whether any person has violated, is violating, or is about to violate the 

provisions of the federal securities laws.  See 15 U.S.C. §§ 77t(a), 78u(a)(1).  In order to 

carry out this task, Congress endowed the Commission with broad investigatory powers.  

See Arthur Young & Co., 584 F.2d 1018, 1023 (D.C. Cir. 1978); see also Commodity 

Futures Trading Commission v. Tokheim, 153 F.3d 474, 477 (7th Cir. 1998) (quoting 

United States v. Morton Salt Co., 338 U.S. 632, 642-43 (1950)) (stating that the 

Commission can “investigate merely on suspicion that the law is being violated, or even 

just because it wants assurance that is not”).  Those investigatory powers include the 

ability to subpoena witnesses and require the production of documents that the 

Commission deems relevant to its investigation.  See 15 U.S.C. §§ 77s(c), 78u(b).   

Pursuant to the statutes cited above, the Commission issued a Formal Order to 

conduct the WAG Trading Investigation.  The Formal Order states that the 

investigation’s purpose is to determine, among other things, whether WAG Trading and 

others violated the anti-fraud provisions of the federal securities laws.  The subpoena 

served upon Mr. Gustafson was issued pursuant to that Formal Order and, therefore, is 

consistent with the Commission’s administrative procedures.   

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12 
 

The information sought from Mr. Gustafson is relevant and not indefinite.  The 

Commission is only required to make a minimal showing of relevance.  As long as the 

evidence sought is not plainly irrelevant to any lawful purpose, the subpoena should be 

enforced.  Arthur Young & Co., 584 F.2d at 1029.  It is the burden of the opposing party 

to establish that the subpoena is unreasonable.  See SEC v. Blackfoot Bituminous, Inc., 

622 F.2d 512, 515 (10th Cir. 1980); SEC v. Brigadoon Scotch Distrib. Co., 480 F.2d 

1047, 1056 (2d Cir. 1973).  That burden, however, is “not easily met” when the SEC’s 

inquiry is legally authorized and the information is relevant to the inquiry.  Brigadoon 

Scotch, 480 F.2d at 1056.   

In this case, the documents sought are relevant to the Commission’s investigation.  

Mr. Gustafson – a man who is in the business of buying and selling types of financial 

instruments that can be used in fraudulent schemes – has had hundreds of thousands of 

dollars flowing through his bank accounts from private U.S. citizens to various foreign 

entities.  The Commission requires additional evidence in order to determine whether 

these transactions are part of a fraudulent scheme or other violation of the federal 

securities laws.  Obtaining Mr. Gustafson’s documents will help the Staff complete its 

inquiry.   

The scope of the Commission’s production request is not overly broad or 

otherwise unreasonable.  Mr. Gustafson has not objected to the subpoena.  In fact, during 

his testimony, Mr. Gustafson agreed to produce the requested documents, and did not 

provide the Staff with any reasons why he could not do so.  Mr. Gustafson has now had 

more than four months to comply with the document requests.  The Staff has repeatedly 

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13 
 

warned him that, if he did not comply voluntarily, the Staff would have to bring a 

subpoena enforcement action.  It is clear that Mr. Gustafson has chosen not to comply 

with the Staff’s subpoena and, as a result, the Staff has no other remedy than the judicial 

enforcement of the subpoena.    

WHEREFORE, the United States Securities and Exchange Commission 

respectfully requests that this Court issue an Order: 

A. Directing Wynn A. Gustafson to produce to the Commission Staff all 

documents responsive to the Commission’s subpoena;  

B. Granting the Commission such other and further relief as may be necessary and 

appropriate to achieve compliance with the subpoena and with any Order 

the Court issues in its enforcement thereof; and  

C. Permitting service of all Orders on Mr. Gustafson by overnight express mail or 

electronic mail. 

 

Dated: October 31, 2017  Respectfully submitted, 

 

___/s/ Ariella O. Guardi___________ 
Charles J. Kerstetter (PA No. 67088) 
Ariella Omholt Guardi (IL No. 6297336)  
United States Securities and Exchange Commission 

    175 West Jackson Boulevard, Suite 1450  
    Chicago, Illinois 60604 
 Telephone: (312) 353-7390 
 [email protected] 
 Attorneys for Plaintiff 
 

     Craig Baune (331727) 

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14 
 

Assistant United States Attorney  
District of Minnesota 
600 U.S. Courthouse  
300 South Fourth Street 
Minneapolis, MN 55414 
Telephone: (612) 664-5600 
[email protected] 
Local Counsel 

  

 

 

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	I. INTRODUCTION
	II. STATEMENT OF FACTS
	A. Wynn A. Gustafson
	B. The Commission’s Investigation
	C. Mr. Gustafson’s Failure to Provide Documents as Required by the SEC’s Subpoena

	III. ARGUMENT
	A. This Court May Resolve This Matter Through a Summary Proceeding.
	B. The SEC Meets the Requirements for Judicial Enforcement of the Subpoena.