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IN THE UNITED STATES DISTRICT COURT FOR THE DISTRICT OF MARYLAND SECURITIES AND EXCHANGE COMMISSION : : : v. : : MICHAEL RESNICK and MARK KAISER : : ...o0o... MEMORANDUM Now pending before the court is a motion for summary judgment as to defendant Mark P. Kaiser, filed by plaintiff Securities and Exchange Commission ("the SEC"). The SEC is seeking summary judgment as to Mr. Kaiser on the ground that his conviction on all counts in a prior criminal case collaterally estops him from litigating the current civil charges against him. The issues in this case have been fully briefed and a hearing was held on January 30, 2009. For the reasons stated below, the SEC's motion will be granted as to a substantial part of the relief sought.

Civil Action No. CCB-05-1254

BACKGROUND The relevant underlying facts in this case are set forth in my June 3, 2008 Memorandum and Order ("June Order"). SEC v. Resnick, 2008 WL 2346021 (D. Md. June 3, 2008). In brief terms, Mr. Kaiser, along with Michael Resnick, is alleged to have participated in a fraudulent scheme to inflate and overstate the financial results of U.S. Foodservices ("USF") and its parent company, Royal Ahold, N.V. ("Ahold") by over $700 million, for at least fiscal years 2001 and 2002, while he was USF's Chief Marketing Officer and member of its executive committee.

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This fraudulent accounting for promotional allowances was responsible for an approximately $500 million restatement of earnings by Ahold on February 24, 2003, which caused Ahold's stock price to plummet approximately 60%, thereby causing great economic injury to Ahold's many shareholders.1 On July 27, 2004, the U.S. Attorney's Office for the Southern District of New York indicted Mr. Kaiser on six counts of criminal conspiracy and securities law violations arising out of this scheme.2 That same day, the SEC filed a civil complaint, also in the Southern District of New York, charging Mr. Kaiser and Mr. Resnick with four equivalent civil counts of securities law violations. The second amended complaint in that case, filed on February 16, 2005, alleged three counts of fraud and other securities law violations, all brought under the same statutory provisions that formed the legal basis for Mr. Kaiser's corresponding criminal charges.3 The civil complaint was transferred from the Southern District of New York to this court on May 9, 2005, in connection with related cases referred by the Judicial Panel on Multidistrict Litigation. See In re Royal Ahold N.V. Sec., "ERISA" Litigation, 269 F. Supp. 2d 1362 (Jud. Pan. Mult. Lit.

The restatement later increased to $1.1 billion based on the fraud at USF and improper accounting for joint ventures by Ahold. For a fuller discussion, see Pub. Employees' Ret. Ass'n of Colo. v. Deloitte & Touche LLP, 551 F.3d 305 (4th Cir. 2009); In re Royal Ahold N.V. Sec. & ERISA Litigation, 351 F. Supp. 2d 334 (D. Md. 2004). Specifically, these were conspiracy under 18 U.S.C.

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