Official Universal Express Complaint Filed

Below is the 43 page Complaint for Compensatory Damages and Declaratory and Injunctive Relief, filed with the United States District Court, Southern District of Florida against the Securities And Exchange Commission.

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UNITED STATES DISTRICT COURT
SOUTHERN DISTRICT OF FLORIDA


CASE NO. 04-_______________


UNIVERSAL EXPRESS, INC., a Nevada
corporation authorized to do
business in the State of Florida,

Plaintiff,

v.
SECURITIES AND EXCHANGE COMMISSION
OF THE UNITED STATES, JOHN DOE #1,
JOHN DOE #2, and diverse other
persons whose identity also is
currently unknown to the Plaintiff,

Defendants.
_____________________________________/

COMPLAINT FOR COMPENSATORY DAMAGES
AND DECLARATORY AND INJUNCTIVE RELIEF

This action is brought to void certain subpoenas
multipliciously issued by the SEC, enjoin that Commission’s
harassment and intimidation of funding sources and persons
and other businesses from entering into business
transactions with the Plaintiff, and for money damages, all
arising from a continuing and integrated scheme contrived
and devised by certain currently unknown officers,
supervisors, managers or attorneys, or any combination of
them, to retaliate and seek retribution against the
Plaintiff for exercising its first amendment rights to free


speech, and for the issuance of injunctions and a final
judgment for money damages from individuals both within and
outside the SEC who operated in a concert of action and in
furtherance of a conspiracy to do the foregoing; and for
other violations of law as is more fully set forth below.
The Plaintiff, UNIVERSAL EXPRESS, INC., a Nevada
corporation authorized to do business in the State of
Florida, (hereinafter “USXP”), by and through its
undersigned attorneys, sues the Defendants, SECURITES AND
EXCHANGE COMMISSION OF THE UNITED STATES (“SEC”), JOHN DOE
#1, JOHN DOE #2, and diverse other persons whose identities
are currently unknown to the Plaintiff, and states and
avers the following:

JURISDICTION

1. This Court has jurisdiction of the Plaintiff’s
claims asserted herein pursuant to Title 28, United States
Code, §§1331, 1337, 1343(a)(4), 1346(a)(2), and 1367.
2. In pertinent part, the jurisdictional predicate
for this action include:
(a) 28 USC §1331 provides:
“The district court shall have
original jurisdiction of all civil
actions arising under the constitution,
laws, or treaties of the
United States.”

(b) 28 USC §1337 provides:

“(a) The district courts shall have
original jurisdiction of any civil
action or proceeding arising under any
Act of Congress regulating commerce or
protecting trade and commence against
restraints and monopolies: ***”

(c) 28 USC §1343 provides:
“(a) The district court shall have
original jurisdiction of any civil
action authorized by law to be commenced
any person:

***

(4) to recover damages or to secure
equitable or other relief under any
Act of Congress providing for the
protection of civil rights, including
the right to vote.”
(d) 28 USC §1346 provides in pertinent part:
“(a) The district courts shall have
original jurisdiction, concurrent with
United States Court of Federal Claims, of:

***

(2) any other civil action or claim
against the United States, not exceeding
$10,000.00 in amount, founded either
upon the Constitution, or any Act of
Congress, or any regulation of an
executive department…***”
(e) 28 USC §1367 provides in pertinent part:
“(a) Except as provided in subsections (b)
and (c) or as expressly provided otherwise
by Federal statute, in any civil action of
which the district courts have original
jurisdiction, the district court shall have
supplement jurisdiction over all other
claims that are so related to claims in the
action within such original jurisdiction
that they form part of the same case or
controversy under Article III of the United


States Constitution. Such supplemental
jurisdiction shall include claims that
involve the joinder or intervention of
additional parties.”

VENUE

3. Venue in the Southern District of Florida is
proper pursuant to 28 USC §§1391(e), and 1402(b). The
Plaintiff corporation maintains an office in the Southern
District of Florida and many of the acts, events or
omissions, as appropriate, occurred or failed to occur, as
appropriate, in the district.
THE PARTIES

4. Plaintiff, USXP, was and is a Nevada corporation,
authorized to do business in the State of Florida and
maintaining offices in Florida within the jurisdiction of
the Southern District of Florida in Boca Raton, Palm Beach
County, Florida.
5. The Defendant, SEC, was and is a duly enacted and
empowered agency of the United States imbued with special
powers by an Act of Congress to make, amend, and rescind
such rules and regulations as may be necessary to carry out
the authorities given to it by Congress; and further imbued
by the Act of Congress creating it to conduct
investigations which, in its opinion, are necessary and
proper for the enforcement of certain laws of the United

States, and was further delegated the power by Congress to
authorize any member of the Commission or any officer or
officers designated by it, to administer oaths and
affirmations, subpoena witnesses, take evidence and require
the production of books, papers and other documents which
it deems relevant or material to one or more inquiries it
determines to conduct. See 15 USC §77s.

6. Defendant, John Doe #1, on information and belief,
is an officer or attorney, or both, with the SEC having
some level of supervisory or management authority over
other employees, officers, or attorneys of the SEC, or any
combination thereof, but whose particular identity is
currently unknown to the Plaintiff.
7. Defendant, John Doe #2, Defendant, on information
and belief, is an officer or attorney, or both, with the
SEC having some level of supervisory or management
authority over other employees, officers, or attorneys of
the SEC, or any combination thereof, but whose particular
identity is currently unknown to the Plaintiff.
8. Defendants, “diverse other persons whose
particular identities are currently unknown to the
Defendant,” are, on information and belief, also officers,
or attorneys of the SEC, among others, or any combination
thereof, and will be more fully identified to the Court as

soon as sufficient pretrial discovery is accomplished to
the degree necessary for the Plaintiff to identify them to
the Court, and will thereafter be joined as parties-
defendant through the process of this Court.

FACTS APPLICABLE TO ALL COUNTS

9. In December, 1997 USXP entered into what it
thought at the time was a legitimate investment banking
agreement with Select Capital Advisors, Inc., a then
Florida corporation, whose principals included Ronald G.
Williams and Walter S. Kolker. The investment banking
arrangements included the emplacement of short-term
financing whose terms included the creditors’ right to
convert debt instruments (convertible debentures) to free
trading shares of the company’s common stock in the event
of a default in the loan’s terms. The short-term financing
had been tied to the emplacement of long-term financing
with conventional terms, coupled with the assurances of
Williams, Kolker and others working in collusion with them
that “the long-term financing would be emplaced in
sufficient time to take out the short-term debt, thereby
avoiding the bridge loan’s more onerous terms, especially
the creditors’ right to convert the debt instrument to free
trading shares.
10. By early January, 1998, Select Capital Advisors,

Inc. and its principals, Williams and Kolker, among others,
through their contrivances, failed to put in place the
long-term financing that had been committed and represented
by them to be available to USXP to satisfy the short-term
financing, triggering the bridge loan creditors to demand
conversion to free trading shares of the company’s stock.

11. In January, 1998 USXP’s General Counsel,
Chris Gunderson (hereinafter “Gunderson”) noticed a
substantial increase in the daily stock sale volume of USXP
and deduced that such a volume of sales could only arise
from naked short selling of the company’s common stock.
12. On or about January 16, 1998 Gunderson suspended
all conversions otherwise called for under the terms of the
convertible debentures.
13. On or about January 16 to February 9, 1998 USXP
had authorized, issued and outstanding 3 million shares of
its common stock (the public float), but during this same
brief period of time, 70 million shares, more or less, were
traded in the open market, 25 million of which in a single
day.
14. In late January, 1998, Gunderson contacted the
SEC’s New York office on several occasions, complaining of
the highly unusual volume of USXP’s shares trading in the
open market, and requesting the agency’s assistance.

Representatives of the SEC informed Gunderson that it was
not the SEC’s problem and that Gunderson should voice his
complaints to the market makers.

15. Sometime during 1999 the SEC published and opened
for comment a “comment period” on short selling. It
received more than 2,000 comment letters addressing the
abuses of naked shorting but took no action and initiated
no reforms from the deluge of complaints.
16. On or about September, 2000 the SEC addressed
Congress to discuss the organized crime infiltration into the
securities market, heavily emphasizing the agency’s opinion that
the micro-cap companies were the easiest to infiltrate. (See
http://www.sec.gov/news/testimony/ts142000.htm).
17. Also on or about September, 2000 the National
Association of Security Dealers (“NASD”) testified before
Congress to discuss the infiltration by organization crime into
the American securities market and identified micro-cap
companies as the easiest to infiltrate. (See
http://www.nasdr.com/1420/goldsmith04.asp).
18. On or about 2000-2001 Sedona Corporation
complained to the SEC regarding stock trading abuses and
manipulation effecting their public float of common voting
stock.
19. On or January, 2001, the NASD barred certain stock
8



manipulators from the securities industry and imposed fines on
them totaling $1 million for stock manipulation, illegal shorting
and other activities, but initiated no reforms to naked short
selling. (See http://www.nasdr.com/news/pr2001/nesection01
0003.html).

20. On or about April 10, 1998 USXP commenced a civil
action in the 11th Judicial Circuit Court of Florida in
Miami-Dade County against Select Capital Advisors, Inc. and
Williams and Kolker, among others, for fraud and deceit.
The first phase of the civil action was successfully tried
to a jury in July 2001, final judgment was entered in
USXP’s favor for $389 million, more or less, $275 million
of which was for punitive damages.
21. USXP’s litigation success drew national news
attention to the issue of naked short selling and its
poisonous if not fatal effect on small but growing American
businesses.
22. On or about September and October, 2001, in
response to requests by the SEC’s New York office,
Gunderson delivered background material and copies of the
$389 million judgment, the company’s suspension of
conversions for the company’s free trading stock and copies
of the readily increasing number of articles published on
naked short selling of American companies’ common stock.
9



23. Also on or about September and October 2001 other
micro-cap companies initiated a campaign complaining
against naked short selling abuses, focusing their
complaints to the SEC and the NASD principally over
stockbrokers failing to deliver stock certificates in
physical form and settling short trades.
24. Also on or about October, 2001 the NASD submitted
a proposed reform bill for the SEC to approve a “close a
loophole” in offshore short selling practices by requiring
an affirmative determination. The SEC did not respond to
the reforms requested by the NASD and the loophole and
short selling abuses continued.
25. During 2002 one hundred publicly traded micro-cap
companies, more or less, joined USXP’s campaign against
naked short selling of their publicly traded shares. Many
companies endeavored to emplace a “certificate only”
trading requirement and to cease participating in the
depository trust company (“DTC”) electronic settlement
system (“ESS”).
26. On or about June, 2002, six companies exited the
DTC electronic trade settlement system, substituting in its
place a “certificate only” trading settlement system. The
SEC and NASD fail to take remedial action.
27. On or about August, 2002, a joint Federal Bureau

of Investigation (“FBI”) and Royal Canadian Mounted Police
(“RCMP”) sting operation concluded with the arrest of sixty
offshore bankers and brokers associated with stock
manipulations, including naked short selling.

28. During other portions of 2002 non-United States
news media published news stories regarding the “naked
short selling” problems of U.S. company shares, but the SEC
initiated no action to remedy the manipulation practices.
29. On or about December, 2002, stock manipulator and
swindler, Paul Lemmon pleaded guilty in the “Operation
Bermuda Shorts” criminal prosecution and agreed to
cooperate with United States and Canadian prosecutors, the
FBI and RCMP. The SEC however, again, failed to initiate
any remedial measures addressing the naked short selling
manipulation practices.
30. On or about January, 2003, the DTC requested the
support of the SEC to stop U.S. companies from exiting the
electronic trading system in favor of a “certificate only”
trading system, especially with respect to the stock sales
settlement process.
31. On or about June, 2003, the SEC supported the
DTC’s request to stop U.S. companies, especially micro-cap
companies, from exiting the DTC’s electronic trading system
in favor of a “certificate only” stock trading system.

(See http://www.dtcc.com/PressRoom/2003/nakedshorts.html
and http://www.sec.gov/rules/sro/34-47978.htm).

32. On or about April 22, 2003 USXP prosecuted phase
two of its fraud allegations against the remaining
conspirators, co-schemers and stock manipulators as a
follow-up to the $389 million judgment obtained in the
first phase of the Florida Circuit Court civil action, and
succeeded in obtaining a second final judgment against the
remaining conspirators of in the amount of $137 million
plus. Like the first trial, the second jury results
produced national news coverage of the successful civil
prosecution of a stock fraud centering on naked short
selling.
33. Between April and June, 2003, additional micro-
cap companies join USXP’s war against short selling, and a
grass roots organization evolved seeking full congressional
investigation into the SEC’s responsibility for allowing
continued stock manipulation. (See www.investigatethesec.com).
34. Commencing or about June 5, 2003 the SEC began a
series of harassing actions designed to preoccupy USXP’s
officers, its General Counsel and other staff in
retaliation for the company’s outspoken criticism of its
failure to remedy the naked short selling stock
manipulations of which USXP was one of many victims. The
12



SEC’s first overt act of unjustified, systematic
retaliation was the issuance of a subpoena dated June 5,
2003 requiring the production of a plethora of documents
not later than June 12, 2003, a period of four work days.

35. On June 20, 2003 USXP responded by delivering
fifty pages of documents, more or less under cover of its
securities’ counsel. Through its securities’ attorney,
USXP noted to the SEC’s attention that further inquiries
with businesses with whom USXP directly dealt may cause
irreparable damage to its on-going business, adding that
the SEC should limit its inquiries to only those
“absolutely necessary” and then only “with extreme
discretion,” and to be advised at least contemporaneously
with any such inquiry that the agency decided to make.
36. Also on June 20, 2003, USXP formally wrote to its
United States Senator complaining of “illegal shorting” of
its publicly traded stock by manipulators using the
facilities of the DTC and the SEC’s approving the DTC’s
failed electronic system that permitted the “short selling”
scheme to continue.
37. On August 27, 2003 the SEC served another subpoena
on USXP returnable in eight (8) work days, on September 10,
2003 at 9:00 a.m.
38. On September 23, 2003 USXP issued its press

release openly and publicly declaring war on “naked short
selling,” urging its shareholders to contact their
Congressional Representatives and Senators to cause the SEC
to put an immediate end to such stock manipulating devices,
and calling the public’s attention to naked short selling
activities reported by over 100 other developing small-cap
public companies adversely effected by the fraudulent
schemes. The press release specifically challenged the SEC
to initiate immediate action to thwart the fraud saying,
“…(i)f normal everyday people acting as a jury can
understand this naked shorting scheme, why can’t the SEC….”

39. Immediately after the USXP press release
aforementioned, the SEC issued another subpoena demanding
that the company prove “naked short-selling” and returnable
at 9:00 a.m. on September 26, 2003 at 9:00 a.m. providing
USXP only two working days to comply.
40. On September 25, 2003 USXP complied with the
September 23, 2003 subpoena, causing the delivery of 400
pages of documents, more or less, and confirming that the
company will require until October 2, 2003 to satisfy all
of the demands of the SEC’s August 27, 2003 subpoena.
41. On September 26, 2003 USXP issued a second press
release following up with declaration of war on “naked
short selling,” publicly criticizing the SEC for its

subpoena demanding that the company prove “naked short
selling” despite it being a matter of national concern for
more than five years and accusing the SEC as retaliating
against the company’s exercise of its First Amendment right
to free speech on that national topic.

42. Also on September 26, 2003 USXP wrote the SEC
Chairman, William H. Donaldson, criticizing the arbitrary
subpoena returnable in two business days, adding the
additional criticism that the subpoena was ludicrous.
43. On September 29, 2003 USXP wrote to four members
of the United States House of Representatives Committee on
Financial Services enclosing a copy of the SEC’s September
23, 2003 subpoena compelling the company to produce its
proof that “naked short selling” exists within two business
days, describing the subpoena as intending to intimidate
and suppress the right to free speech, calling the
attention of the congressional representatives to the fact
that “naked short selling” was and has been a well
publicized national problem threatening the integrity of
American’s capital markets, and referencing the company’s
success in obtaining judgments awarding in excess of $596
million against the conspiratorial market manipulators.
44. On September 30, 2003, USXP also wrote to its own

Congressional representative, referencing and enclosing
copies of its September 29, 2003 letters to the members of
the House Committee on Financial Services.

45. On September 30, 2003, the SEC served another
subpoena on USXP’s litigation counsel demanding the
production of “all documents supporting the collectability”
of the $526 million awarded by the two Florida juries
against the conspirators, all within four work days.
46. On October 1, 2003, USXP’s securities counsel
forwarded to the SEC approximately 300 pages of documents
responsive to its August 27, 2003 subpoena.
47. On October 2, 2003, USXP issued its next press
release as part of its declaration of war on “naked short
selling,” describing the practice of never intending or
failing to cover short sales as a form of counterfeiting
stock and adding that the SEC disclosed in a (then) recent
Dow Jones interview that the agency would consider changing
the short-selling rules “in the next few months,” and
describing the “naked short-selling” scheme as a form of
“economic terrorism” which the SEC has failed to prevent,
and challenging the SEC to implement meaningful changes at
the same time that the company urged shareholders of the
various companies to contact their United States Senators

and congressional representatives about the “short selling”
abuses.

48. On October 6, 2003 USXP issued its next press
release, tracing the history of its prior efforts to obtain
congressional oversight into the non-action by the SEC with
respect to “naked short selling” abuses and urging the
United States Congress to “get involved” by investigating
the circumstances and encouraging the SEC to focus on the
regulators and perpetrators, not the victims, and finally
accusing the SEC of outright “neglect in overlooking the
activities of broker dealers and market makers…and
permitting corrupt naked short selling practices.”
49. On October 9, 2003 at 8:30 a.m., USXP’s litigation
counsel wrote to the SEC advising that its September 30,
2003 subpoena, served via facsimile transmission was not
received until after the expiration of its return date and
requested additional time to respond.
50. Also on October 9, 2003 the SEC issued another
subpoena to USXP’s securities’ counsel demanding the
production of documents in nine workdays relating to the
$389 million judgment in the company’s favor. The subpoena
should have been addressed to USXP’s litigation counsel who
only one hour previously, more or less, fully informed the
SEC that up to five banker’s boxes filled with documents

was available for the SEC’s examination at counsel’s office
in Miami, Florida.

51. On October 12, 2003 USXP issued a press release
informing the public of its having signed a contract to
purchase a charter airline based at JFK Airport in New York
City.
52. On October 14, 2003 the SEC served its subpoena by
facsimile transmission on the charter airline demanding
delivery within seven work days of all documents and
communications relating to the acquisition of the airline
by USXP and the airline’s financial records covering a two
year period of time.
53. Also on October 14, 2003 USXP’s litigation counsel
forwarded to the SEC copies of two final judgments obtained
against Select Capital Advisors, Inc. and several of the
additional conspirators against whom the $389 million
judgment was entered on July 26, 2001.
54. On October 15, 2003 the SEC served its next
subpoena on USXP by again serving its litigation counsel
with a subpoena superseding its September 30, 2003 subpoena
requiring counsel to deliver within nine workdays
supporting statements by USXP in five press releases and
other information.
55. Also on October 15, 2003 attorneys for the charter

airline identified in the USXP October 12, 2003 press
release delivered their letter to USXP acquisition counsel
advising of the SEC’s October 14, 2003 subpoena, expressing
their concern over the unexpected developments resulting
from the SEC’s subpoena and their concern for the potential
implications of the subpoena on the charter airline and its
employees and the potential for the SEC’s investigation
constituting a default by USXP under one of the acquisition
documents.

56. On October 17, 2003 USXP issued a press release
representing to the public the impending form of
presentation by its CEO to members of the United States
House and Senate and their respective congressional staff
on October 21, 2003 and the point of contact for obtaining
the company’s White Paper to be presented at that time on
travel luggage security as part of Homeland Security.
57. On October 20, 2003 USXP issued an additional
press release relating to its impending presentation of its
White Paper to various members of the senate, the house,
the congressional staff, the Department of Commerce and the
Transportation Security Personnel to be personally
presented by its CEO the next day.
58. Also on October 20, 2003 USXP again wrote to the

SEC Chairman, Wayne H. Donaldson, repeating its complaint
of retaliation based upon the company’s stance against
“naked short selling.”

59. On October 21, 2003 USXP issued another press
release, representing to the public that its CEO was in
Washington, D.C., lobbying members of Congress regarding
the “naked short selling” abuses by suggesting positive
solutions and reiterating its prior attack against the SEC-
condoned practices amounting to counterfeiting stock and
emphasizing that “naked short selling” is separate and
distinct from legitimate short selling. USXP urged that
the proposed Regulation SHO be approved and implemented by
the SEC at its meeting the next day, October 22, 2003. The
company’s press release contained detailed itemizations of
requirements to be included in any regulation promulgated
by the SEC “naked short selling.” (See
http://www.SEC.gov/rules/proposed/34-48709.htm). In the
Comments section of the proposed regulation there appears a
letter from the North American Securities Administrative
Association (NASAA) reporting small companies and investors
having been victimized by the short selling abuses. (See
http://www.NASAA.org/NASAA/file

Uphold/Shorts%20Sales%20Comment.37990-38287.pdf).

60. On October 22, 2003 USXP’s securities counsel

forwarded to the SEC documents responsive to the October 9,
2003 subpoena, delivering an additional fifty pages of
documents, more or less.

61. Also on October 22, 2003 the SEC again served a
subpoena on USXP requiring delivery of documents in nine
work days, inclusive of the company’s White Paper, all
documents and communications relating to the CEO’s “formal
presentation on capitol hill…” and all communications with
any congressional personnel, among other categories of
documents, and all documents and communications relating to
the CEO’s meetings with members of Congress to discuss
“naked short selling.”
62. On October 23, 2003 USXP securities counsel
caused to be delivered to the SEC documents responsive to
the SEC’s September 14, 2003 subpoena, and reiterated its
June 20, 2003 advice that the SEC’s direct inquiries to
various business entities with whom USXP has continuing
relationships may cause irreparable damage to the company’s
on-going businesses and the company’s subsequent complaint
that the SEC’s constant inquiries of its business partners
and funders has, in fact, caused damage to the company. In
addition, though subtly, securities counsel complained of
the SEC’s then latest subpoena whose compulsions are
detailed more fully in the next preceding paragraph, and

accusing the SEC of issuing a subpoena each and every time
the company issues a press release. Less than subtly,
USXP’s counsel accused the SEC of unfairly singling out the
company at substantial cost relating to complying with the
subpoenas in terms of time, effort, expense and client
relations.

63. On October 28, 2003 Gunderson delivered a formal
complaint to the United States Attorney for the Southern
District of Florida concerning the SEC’s retaliatory
harassment emanating from the company’s aggressive public
stance opposing illegal naked short selling and related
manipulations to the public at large and both houses of the
United States Congress, and requested the Department of
Justice open a formal investigation into the misuse of the
SEC’s congressionally imbued authority. On that same date
USXP issued a press release representing to the public at
large its formal complaint lodged with the Department of
Justice.
64. On or about October 2003 Forbes magazine published
an article identifying “naked shorting” as “Wall Street’s
next nightmare.” (See
http://www.Forbes.com/2003/1013/066.html).
65. On November 3, 2003 Gunderson wrote to the New

York State Attorney General providing that office with
background information, the company’s aggressive public
stance opposing illegal naked short selling and related
stock manipulations, and the now apparent pattern of
systematic harassment and retaliation by the SEC, all as a
predicate to requesting that office opening an official
investigation into the subject of “naked short selling.”

66. On November 4, 2003 USXP’s securities counsel
caused to be delivered to the SEC documents responsive to
the first three requested items in its October 22, 2003
subpoena.
67. On November 10, 2003 the SEC again served a
subpoena on USXP demanding delivery within nine work days
of a plethora of documents including, but not limited to,
70 months worth of corporate minutes and actions authorized
or ratified by the company’s board of directors, 70 months
of every communication with any transfer agent, 70 months
of all banking activity, including every cancelled check,
deposit slips, wire transfer requests, and all other
documents relating to all debits and all credits into and
out of all accounts.
68. On November 17, 2003 USXP issued a press release

regarding Homeland Security, particularly travel luggage
security, White Paper recently circulated among
congressional legislators.

69. On November 25, 2003 nationally syndicated
columnist Jack Anderson published in an editorial
criticizing “naked short selling” and the negative effects
of those abuses on smaller companies, especially those that
rely upon their stock prices to raise capital.
70. On or about November, 2003 the SEC approved a
request made by the NASD in 2001 to close certain offshore
“short selling” loopholes.
71. On December 1, 2003 USXP issued a press release
regarding its purchase of a contract-management-services
company providing risk management and administrative
services to over 200 regional courier companies with a
total courier network of approximately 5500 independent
courier drivers in 35 states.
72. Also on December 1, 2003, the SEC served another
subpoena on USXP’s securities counsel demanding the
production of all documents and communications relating to
the acquisition of the contract-management-services company
referenced in the December 1, 2003 press release in nine
work days. The document production demand included a

demand for all documents relating to financing and all
consideration paid by USXP.

73. On December 3, 2003 Gunderson wrote to the
Honorable Sheldon Silver, Speaker of the New York State
Assembly regarding “naked short selling,” enclosing a copy
of his November 3, 2003 letter to New York State Attorney
General Elliott Spitzer.
74. On December 12, 2003 the SEC served its subpoena
on USXP’s CEO to testify on January 9, 2004 at 9:00 a.m.,
which date, was later changed.
75. On December 29, 2003 USXP issued a press release
announcing the acquisition of a diversified logistics
provider operating in South Florida.
76. On January 6, 2004 an article appeared in Wall
Street City reporting Paid, Inc., f/k/a Sales Online
Direct, Inc., was granted authority to exit the DTC
electronic trading system despite prior to the contrary.
Exiting the DTC electronic trading system has been the
battle cry of dozens of small cap companies attempting to
outwit naked short sellers and thereby limit or avoid the
shareholders’ market losses reported to be in the billions
or even trillions of dollars.
77. January 6, 2004 Wall Street City published a

second article reporting that the NASD issued a new
regulation cracking down on the giant “loophole” involving
“naked short selling” emanating from a multi-market-maker
and brokerage company scandal known as “StockGate.” The
amended rule dramatically affected short sales through non-

U.S. brokers, particularly Canadian brokers, and required
U.S. brokers to assure themselves that Canadian brokers
will be able to settle within three days.
78. The new rule, to take effect February 20, 2004,
was implemented 2 • years after the original proposal to
close the loophole.
79. On January 8, 2004 the KonLin letter selects USXP
as stock pick of the year.
80. On January 14, 2004 USXP issued a press release
reporting the commencement of its civil action against
North American Airlines, Inc. and its CEO for fraud and
breach of the acquisition contract more fully referenced in
its press release dated October 12, 2003.
81. On January 15, 2004 the SEC served another
subpoena on USXP’s securities’ counsel compelling the
production in nine work days of all documents relating to
four categories of inquiry including all documents and
communications concerning or relating to its two year
annual audits and quarterly reviews, including all work

papers, memoranda, meeting notes, point sheets, research
and consultations with its accountants.

82. On January 23, 2004 Dow Jones Newswires published
and article on the NASD’s “affirmative determination” rule
more fully referenced in the January 6, 2004 article
aforementioned, reporting that the SEC only “recently
approved” the rule first submitted to the SEC in November,
2001.
83. On January 26, 2004 the SEC served a letter on
USXP’s securities’ counsel demanding delivery of documents
in nine work days to produce all documents in nine work
days which the SEC suggested were not previously delivered
in the company’s responses to the subpoenas previously
served on August 27, 2003, October 14, 2003, October 22,
2003, November 10, 2003 and December 1, 2003.
84. Also on January 26, 2004 the SEC served an
additional subpoena on USXP’s securities’ counsel requiring
delivery of documents in nine work days reflecting “any
communication sent to, received from or concerning any of
the following individuals or entities controlled or
represented in whole or in part by any of…” twelve
identified persons.
85. Also on January 26, 2004 InvesTrend published an

article criticizing the SEC for “sitting on” the proposed
rule change for more than two years, failing to act in the
face of tens of thousands of complaints concerning offshore
naked trading, participating in a congressional hearing in
September 2000 on these issues which could have been cured
by a simple rule change within its rule making authority,
and calling for a congressional investigation into the
actions and inaction of the SEC.

86. On January 27, 2004 the SEC served an additional
subpoena on USXP’s CEO to provide two days of testimony in
Miami, Florida on February 25 and 26, 2004.
87. Also on January 27, 2004 the SEC served an
additional subpoena on USXP’s General Counsel, Gunderson,
to give testimony in Miami, Florida on February 23 and 24,
2004.
88. On February 2, 2004 Wall Street City published
criticizing the SEC for leaving the investment community
“aghast and outraged” as a result of the then recent
revelation that it had “sat” on a request by the NASD to
close the “naked short selling” loophole for 2 • years, and
quoting an identified source in the article of accusing the
SEC as laboring under a conflict of interest since it is
“partially self-funded,” receiving a fee charged to the

customer for every trade, and closing the short selling
loopholes would adversely impact on the SEC’s revenue.

89. On January 18, 2004 the SEC approved extending the
effective date of Regulation SHO to April 1, 2004.
90. The SEC is informed, has been informed or should
know based upon its own resources and audits of brokerage
firms nationwide, that a large number of brokerage firms
are “upside down” on their books with respect to micro-cap
companies’ positions that are held by the brokerage firms
as a result of naked short selling schemes that resulted in
hundreds of micro-cap companies publicly issued stock
having been oversold by multiples of the registered shares,
and the SEC is endeavoring to protect these wealthy
brokerage firms from the enormous liabilities they would be
responsible to satisfy if the firm’s cannot back bill the
original seller in the naked short selling transactions
they then would be responsible to buy-in the unfulfilled
naked short sell positions.
COUNT I
(Against All Defendants)
Money Damages and Injunctive Relief


From a Constitutional Tort


91. The Plaintiff incorporates by reference ¶¶1-90 as
though each were set forth hac verba.

92. Since on or about April, 1998 the Plaintiff
increasingly vocal and in writing adversely criticized the
conduct of and actions of the SEC, namely its failure to
act, against a highly organized and sophisticated network
of fraudulent schemers who utilized certain loopholes in
the rules and regulations promulgated by the SEC as part of
its congressional delegated authority to regulate commerce
through the securities industry of the United States. The
loophole which was the subject of the Plaintiff’s
increasingly negative criticism of the SEC involved
allowing “naked short-selling” of publicly traded common
stock of small-cap companies. The naked short-selling of
stock criticized by the Plaintiff, as distinguished from
short-selling of stock, is a process where non-existing
shares are floated into the market on a short-sale, the
short-sale is never settled as the seller has no way or
intention of finding the shares for settlement.

93. As a result of the SEC’s failure to act on the
Plaintiff’s complaints, and the complaints of literally
hundreds of other small-cap businesses throughout the
United States and other critics, the Plaintiff decided to
continue to vigorously prosecute a civil action against the
co-schemers and co-conspirators perpetrating a particular
scheme against it, and succeeded in obtaining the $389

million jury verdict and final judgment more fully
referenced in ¶22 above. During the course of the
Plaintiff’s civil prosecution, in September 2000 the SEC
addressed the United States Congress
(http://www.sec.gov/news/testimony/ts142000.htm) but took
no action, promulgated no regulations and otherwise failed
to enforce the laws of the United States so as to protect
the Plaintiff and other small-cap companies similarly
situated through victimization engineered against them
utilizing the “naked short-selling” and “poison down
spiral” scheme.

94. As a result of the SEC’s continued failure to
initiate action and promulgate appropriate regulations
within its congressionally delegated authority to close the
loophole and outlaw naked short-selling, the Plaintiff
continued to focus its attention and utilize its limited
resources to continue the civil prosecution against the
remaining defendants in the aforementioned naked short-
selling scheme and in April, 2003, obtained a jury verdict
and final court judgment against the last of the coschemers
and co-conspirators for an additional $137
million. Both of the Plaintiff’s court successes,
including the jury determinations, made national news,
prompting the Plaintiff publicly to declare war against the

continued allowance of the stock of small-cap, publicly
traded companies.

95. The SEC and other defendants thereafter engaged in
acts of retaliation and retribution designed and intended
to violate and in fact in violation of the Plaintiff’s
first amendments rights to free speech, including speech
adversely critical, the conduct, especially the failure to
act, of the SEC. The Defendants’ conduct also was intended
to designed to assist dozens of super wealthy, highly
influential brokerage and security houses who stand to lose
upwards to billions of dollars in the event they must make
good on the shares nakedly traded by being compelled to
“deliver” at settlement the shares of stock represented in
the naked short-sales.
96. Notwithstanding repeated requests for action by
literally thousands of complainants nationwide, and not
withstanding the receipt of literally thousands of comments
urging the closure of the naked short-selling loopholes,
rather than exercise its authority and duly regulate the
national securities industry pursuant to it congressionally
delegated authority, the SEC and other defendants seek to
stifle the voices of criticism through retaliation and
retribution, all in violation of the Plaintiff’s rights to

free speech as guaranteed by the First Amendment to the
United States Constitution.

97. Upon information and belief, the Plaintiff
believes that the retaliatory and retributive actions
perpetrated against it are designed to intimidate the
Plaintiff from continuing to exercise its First Amendment
rights to free speech. At no time has the SEC refrained
from contacting contracting parties dealing with the
Plaintiff and lending sources and potential lending sources
for the Plaintiff despite repeated requests by Plaintiff’s
securities’ counsel. Indeed, there is now an apparent
pattern of the SEC serving subpoenas on all prospective
business deal parties within a day or two of the
Plaintiff’s press release reporting to the public what the
company believes to be a significant event worthy of
widespread disclosure.
98. The Plaintiff has no adequate remedy of law
against the SEC itself, as a governmental entity, and,
therefore, as to that Defendant, especially seeks the
injunctive relief requested more fully below.
WHEREFORE, the Plaintiff prays for the judgment of
this Court and such preliminary injunctive relief, as
appropriate, as follows:


a. Compensatory damages as may be determined by the
trier of fact.
b. Punitive damages as may be determined by the trier
of fact.
c. The costs of this action.
d. Attorney’s fees as are authorized by law,
including, but not limited to, the Equal Access to Justice
Act, Title 28, United States Code, §2412 et seq.
e. Permanent injunction upon the final judgment of
this Court.
f. Temporary injunction pendente lite upon separate
motion to be filed after service of process has been
effected the Defendant, SEC.
g. Such other and further relief as is just in this
cause.
COUNT II
(Against All Defendants)
Constitutional Tort Involving
Violations of Due Process Clause
Of the Fifth Amendment of the
United States Constitution
99. The Plaintiff incorporates by reference ¶¶1-98

as though each were set forth hac verba.

100. The Defendant, SEC, has refused and declined,

continuing to the date of this complaint, to discuss with
the Plaintiff the basis upon which the repetitive service
of subpoenas and the repetity of the service of them
immediately following the issuance of press releases
concerning prospective or impending business deals, or
both.

101. The Plaintiff has exhausted all its
administrative remedies or no administrative remedies exist
vis-à-vis the Defendant, SEC based upon the statutory
scheme enacted by the Congress which created the SEC and
enabled the power to investigate, subpoena witnesses,
compel the production of documents, etc.
102. If the SEC’s use of its repetitive subpoenas and
document production compulsions constitute the taking of
the Plaintiff’s property without the opportunity for
judicial determination, then the Defendants, and each of
them, have perpetrated a constitutional tort in violation
of the Due Process Clause of the Fifth Amendment, and are
liable to the Plaintiff for the damages and injunctive
relief requested below.
WHEREFORE, the Plaintiff prays for the final judgment
of this Court as follows:

a. Compensatory damages as may be determined by the
trier of fact.

b. Punitive damages as may be determined by the trier
of fact.
c. The costs of this action.
d. Attorney’s fees as are authorized by law,
including, but not limited to, the Equal Access to Justice
Act, Title 28, United States Code, §2412 et seq.
e. Permanent injunction upon the final judgment of
this Court.
f. Temporary injunction pendente lite upon separate
motion to be filed after service of process has been
effected the Defendant, SEC.
g. Such other and further relief as is just in this
cause.
COUNT III
(Against the SEC)
Declaratory Relief Against The SEC

103. The Plaintiff incorporates by reference
¶¶1-98 and 100-102 as though each were set forth hac verba.
104. On information and belief, the Plaintiff alleges
that the purpose of the Defendant, SEC’s action in this
case through its repetitive service of subpoenas and
demands for document production, was part of a continuing
and integrated scheme to deprive the Plaintiff of its
rights under the constitution of the United States in

violation of rights to free speech guaranteed by the First
Amendment and the rights to due process of law guaranteed
by the Fifth Amendment, all in retaliation and retribution
as aforesaid.

105. If the repetitive service of subpoenas and
demand for document production are found to be part of a
continuing and integrated scheme of retaliation and
retribution against the Plaintiff for exercising its First
Amendment rights to free speech and if the immediate, or
frequent, or both, contacts with business associates and
impending business associates, funding sources and
impending funding sources, are found by this Court to
constitute a taking or distraint of the Plaintiff’s
property without the opportunity for judicial
determination, than the SEC’s conduct is in violation of
the Due Process Clause of the Fifth Amendment and thus
unconstitutional.
WHEREFORE, the Plaintiff prays for the final judgment
of this Court as follows:

a. The costs of this action.
b. Attorney’s fees as are authorized by law,
including, but not limited to, the Equal Access to Justice
Act, Title 28, United States Code, §2412 et seq.

c. Finding and declaring the conduct of the SEC to be
an unconstitutional violation of the First Amendment of the
United States Constitution.
d. Finding and declaring the conduct of the SEC to be
an unconstitutional violation of the Due Process Clause of
the Fifth Amendment of the United States Constitution.
e. That is be ordered, adjudged and decreed that the
repetitive service of subpoenas and demands for document
production by the Defendant, SEC be adjudged illegal and
invalid as retaliatory and retributive exercise of its
congressionally delegated authority.
f. That the Defendant, SEC, its chairman, officers,
managers, supervisory and management personnel, attorneys,
agents, other officers, employees and deputies, and all
persons acting by, through or under their order, authority
or direction, be permanently enjoined from further serving
subpoenas and demands for the production of documents from
the Plaintiff and further enjoined permanently from
attempting to serve additional subpoenas and demands for
the production of documents under the authority or
pretended authority of Title 15, United States Code, §77s.
j. That it be ordered, adjudged and decreed that all
pending subpoenas and demands for document production be
cancelled, removed and set aside.

k. That this Court grant the Plaintiff a preliminary
injunction order pursuant to Rule 65, Federal Rules of
Civil Procedure restraining the Defendant, SEC, and its
attorneys, agents, officers, employees and deputies, and
all persons acting by, through or under their order,
authority or direction from serving additional subpoenas
and demands for document production, and contacting
business associates and impending business associates,
funding sources and impending funding sources following
their disclosure in press releases issued by the Plaintiff
pending a final determination of the issues raised herein.
l. Such other and further relief as is just in this
cause.
COUNT IV
(Against Defendants, John Doe #1,
John Doe #2 and Diverse Other Persons
Currently Unknown)
Scheme To And Aiding And Abetting

Intentional Interference with Business Relations

106. The Plaintiff incorporates by reference
¶¶1-98 as though each were set forth hac verba.
107. The Defendants and each of them, while acting in
concert and association with each other as members of the
common plan and scheme, and to carry out its objectives,
and to aid and abet effecting the scheme and carrying out

its objectives knowingly did or attempted to interfere with
the Plaintiff’s business relationships with various
businesses, impending business acquisitions, funding
sources and impending funding sources, causing such to fail
or contributing to their failure.

108. As direct and proximate result of the
Defendants’ conduct, the Plaintiff has suffered the
following damages for which the Defendants, and each of
them, jointly and severally, are liable:
a) The loss of business opportunities involving
the acquisition of not less than two operating businesses.

b) The loss of markets that would have been
gained from each of the respective business whose deals did
not, in fact, close.

c) The loss of revenues or profits, or both,
regularly experienced by each of the prospective business
opportunities.

d) The loss of one or more funding sources.

e) The substantial accounting and attorney’s
fees, and due diligence costs and expenses incurred by the
Plaintiff while pursuing the prospective business
opportunities that failed to close as a result of the
Defendants’ conduct.

f) Incurring additional expenses, including


attorney’s fees, investigating the Defendants and
attempting hereto recover the damages the Plaintiff has
suffered that were proximately caused by the Defendants’
common and continuing and plan, scheme and concert of
action as more fully alleged above.

WHEREFORE, the Plaintiff prays for the final judgment
of this Court as follows:

a. Compensatory damages as may be determined by the
trier of fact.
b. Punitive damages as may be determined by the trier
of fact.
c. The costs of this action.
d. Attorney’s fees as are authorized by law,
including, but not limited to, the Equal Access to Justice
Act, Title 28, United States Code, §2412 et seq.
e. Permanent injunction upon the final judgment of
this Court.
f. Temporary injunction pendente lite upon separate
motion to be filed after service of process has been
effected the Defendant, SEC.
g. Such other and further relief as is just in this
cause.

COUNT V
(Against All Defendants)
Civil Conspiracy


109. The Plaintiff incorporates by reference
¶¶1-98 as though each were set forth hac verba.
110. The Defendants, and each of them, commencing on
a date unknown to the Plaintiff but on information and
belief believed to be sometime in approximately May 2003,
and continuing thereafter up to and including the filing of
this complaint, combined, confederated, agreed and
conspired with each other to devise a scheme and thereafter
devised the scheme as more fully alleged above, and
thereafter any one or more of the Defendants, singularly or
in combination, perpetrated one or more overt acts within
the Southern District of Florida in furtherance of the
conspiracy in order to carry out its scheme and obtain one
or more of its objectives.
111. As a direct and proximate result of the
Defendants’ conspiracy against the Plaintiff, the Plaintiff
has been damaged to its detriment. The allegations of ¶107
are incorporated herein by reference for all of which the
Defendants, and each of them, jointly and severally, should
be held liable to the Plaintiff.

WHEREFORE, the Plaintiff prays for the judgment of
this Court against the Defendants, and each of them,
jointly and severally, as follows:

a. Compensatory damages as may be determined by the
trier of fact.
b. Punitive damages as may be determined by the trier
of fact.
c. The costs of this action.
d. Attorney’s fees as are authorized by law,
including, but not limited to, the Equal Access to Justice
Act, Title 28, United States Code, §2412 et seq.
e. Permanent injunction upon the final judgment of
this Court.
f. Temporary injunction pendente lite upon separate
motion to be filed after service of process has been
effected the Defendant, SEC.
g. Such other and further relief as is just in this
cause.
Demand for Trial By Jury

The Plaintiff demands trial by jury against all
Defendants subject to trial by jury on all issues so
triable as of right.

Dated: March 2, 2004


Respectfully submitted,

ARTHUR W. TIFFORD, ESQ.
ARTHUR W. TIFFORD, P.A.
Counsel for Plaintiff
1385 NW 15 Street
Miami FL 33125

(305) 545-7822 Telephone
(305) 325-1825 Facsimile
BY________________________________

ARTHUR W. TIFFORD

(Fla. Bar 106250)


Click Links Below For Easy Navigation:

1. Supreme Court Case
2. 150 Articles: SEC finally admits Naked Short Selling is a HUGE problem and a cause for financial crisis (July 15th, 2008 et. seq-September 15th, 2008 et. seq)
3. Richard Altomare's "Prison Inc." Book Excerpts
4. Universal Express Statement
5. Universal Express Recitation of Facts by General Counsel
6. Brief in Support of USXP Entitlement to Trial by Jury
7. Universal Express Complaint filed against SEC- March 3, 2004
8. USXP Full Page Ad in New York Times
9. Office of Inspector General Semi Annual Report to Congress- March 31, 2008
10. Richard Altomare's Speech on Naked Short Selling
11. USXP Quarterly and Annual Reports
12. Exhibit A and B: Universal Express Press Releases and Published Articles on Naked Short Selling 1998-2007
13. Universal Express Motion for Partial Summary Judgment
14. Supplemental Declaration of Chris G. Gunderson- Nov 13, 2006
15. Universal Express et al Motion for Reconsideration- March 8th, 2007
16. USXP Memo of Law in Support of Motion for Reconsideration
17. Universal's Declaration of General Counsel in Response to SEC's Request for a Receiver