United States Securites and Exchange Comm'n v. Nantomah, No. 25-cv-1130-pp (Jan. 30, 2026)

Case details
Full caption
UNITED STATES SECURITES AND EXCHANGE COMMISSION v. JOSEPH NANTOMAH
Country
United States
Jurisdiction
Federal
Decided
Jan. 30, 2026
Disposition
Motion Granted
UNITED STATES SECURITES AND EXCHANGE COMMISSION,..., Slip Copy (2026) © 2026 Thomson Reuters. No claim to original U.S. Government Works.12026 WL 252451Only the Westlaw citation is currently available.United States District Court, E.D. Wisconsin.UNITED STATES SECURITES ANDEXCHANGE COMMISSION, Plaintiff,v.JOSEPH NANTOMAH, INVESTORSCAPITAL LLC, GLOBAL INVESTORSCAPTIAL LLC and HIGH INCOMEPERFORMANCE PARTNERS LLC, Defendants.Case No. 25-cv-1130-pp|Filed 01/30/2026Editor's Note: This decision contains discussion of citationreferences that are incorrect or do not actually exist. Theseinvalid citations appeared in the original court opinion andhave been preserved as written since they are part of theofficial record. Any links to these invalid citations have beenremoved.Attorneys and Law FirmsEric M. Phillips, Belinda I. Mathie, Dee O'Hair, Michael D.Foster, United States Securities and Exchange Commission,Chicago, IL, for Plaintiff United States Securites andExchange Commission.Joseph Nantomah, Orange Park, FL, Pro Se.ORDER GRANTING PLAINTIFF'SMOTION TO STRIKE DEFENDANTNANTOMAH'S ANSWER (DKT. NO. 30)HON. PAMELA PEPPER Chief United States District Judge*1 The plaintiff asks the court to strike individual defendantJoseph Nantomah's response to its complaint. Dkt. No. 30.Because Nantomah's filing does not comply with the FederalRules of Civil Procedure, the court will strike it and orderNantomah to file an amended answer.I. BackgroundOn August 1, 2025, the plaintiff filed a complaint alleging thatNantomah and his three limited liability companies engagedin a fraudulent real estate investment scheme in violationof federal securities law. Dkt. No. 1. The plaintiff allegesthat the defendants solicited individuals to enter investmentcontracts to purchase and flip real estate for profit. Id. at ¶¶2,44, 58. It alleges that Nantomah used at least eighty percentof the investors’ funds on personal purchases and unrelatedbusiness ventures rather than real estate investments. Id.at¶¶2, 8, 55, 65–67. The plaintiff alleges that the defendantsmisled investors and offered and sold unregistered securitiesin violation of federal law. Id. at ¶¶80–98. The plaintiffadvised the court that there are at least seven related cases inthis district, brought by various investors against Nantomahand his businesses. Dkt. No. 2.On August 29, 2025, the court received letters fromNantomah on behalf of himself and the three corporatedefendants, requesting a ninety-day extension to respondto the complaint. Dkt. No. 18. Nantomah stated that hewas “currently in the process of retaining legal counsel”and that his “potential attorneys ha[d] informed [him] thatthey [would] need approximately 90 days to study the case,conduct interviews, and gather the necessary documentationto effectively represent [him].” Id. at 1. The plaintiffresponded that it did not object to a thirty-day extension. Dkt.No. 20.On September 24, 2025, the court granted in part Nantomah'srequest and ordered that the defendants’ time to answer thecomplaint was extended until the end of the day on October24, 2025. Dkt. No. 21. The court advised Nantomah that he“may represent himself, but he cannot represent defendantsInvestors Capital, Global Investors Capital and High IncomePerformance Partners.” Id.On October 22, 2025, the court received from Nantomahanother letter requesting “reconsideration” of his extensionrequest. Dkt. No. 23. Nantomah stated that he had “severalcases going on in the circuit court directly related to” thiscase. Id. at 1. He argued that it was “only fair” that he“be granted sufficient time to prepare [his] response” dueto the “complexity and interconnectedness of these cases.”Id. Nantomah asserted that his “legal team [was] activelyworking to gather necessary information from the circuitcourt's lawyers to build a robust defense.” Id. He requested anadditional thirty to sixty days to respond to the complaint. Id.at 2. The plaintiff responded that it did not object to a furtherthirty-day extension and requested that all other matters in thecase be stayed due to the (at the time) ongoing governmentshutdown. Dkt. No. 24. The court granted Nantomah's request
UNITED STATES SECURITES AND EXCHANGE COMMISSION,..., Slip Copy (2026) © 2026 Thomson Reuters. No claim to original U.S. Government Works.2for a thirty-day extension and ordered that he must file aresponsive pleading by the end of the day on November 24,2025. Dkt. No. 25. The court further ordered that all otheraspects of the case were stayed until the government returnedto normal operations. Id. The court reminded Nantomah thathe could represent himself in court but was not permitted torepresent his companies. Id.*2 On November 24, 2025, the court received fromNantomah (not a lawyer) a letter addressed to the “CourtClerk” and titled “Response to Complaint.” Dkt. No. 26.The document states that Nantomah “den[ies] the allegationsin the complaint” and that he has “always conducted [his]business in good faith and in compliance will all applicablelaws and regulations.” Id. at 1. The letter states that Nantomahhas “never engaged in fraudulent activities as alleged” andasserts that the court may lack jurisdiction over “certainclaims or parties involved.” Id. The letter goes on to arguethat the complaint fails to state a claim because the investmentopportunities Nantomah offered to customers were not a“security” under federal law. Id. at 2–3. Nantomah asksthe court to dismiss the complaint “as the allegations areunfounded and unsupported by evidence.” Id. at 3. He alsoasks the court to stay the case “for a reasonable period of timewith the court[’s] discretion while [he] engage[s] a legal teamto go into settlement[ ] negotiation with SEC.” Id.Not quite two weeks later, on December 4, 2025, the courtreceived from the plaintiff a motion to lift the stay, explainingthat the federal government had resumed normal operations.Dkt. No. 27. The court lifted the stay and set a schedulingconference for February 23, 2026. Dkt. No. 28. On December16, 2025, the court received from the plaintiff a request thatthe clerk enter default against the corporate defendants, dkt.no. 29, along with a motion to strike Nantomah's response tothe complaint, dkt. no. 30. That same day, the clerk entereddefault against the corporate defendants.II. Plaintiff's Motion to Strike (Dkt. No. 30)The plaintiff argues that the court should strike Nantomah'sletter “answer” because it does not comply with the FederalRules of Civil Procedure or this court's Local Rules. Dkt.No. 31 at 5. It argues that Fed. R. Civ. P. 8(b) requiresthe defendant to specifically respond to each allegationin the complaint so that the plaintiff has notice of whichallegations are at issue in the case. Id. at 5–6. The plaintiffasserts that Civil Local Rule 10(b) (E.D. Wis.) requires adefendant to answer the complaint in numbered paragraphsthat correspond to the paragraphs of the complaint. Id. at 6n.1. The plaintiff asserts that Nantomah issued a “generaldenial” of all the allegations in the complaint, which ispermitted only when a defendant intends in good faithto deny all the allegations of the complaint. Id. at 6.According to the plaintiff, the complaint “includes numerousallegations that Nantomah cannot in good faith deny,” suchas allegations involving his ownership in the corporatedefendants, statements from his website and social mediaposts and the terms of various investment agreements. Id. at7. The plaintiff argues that the court should require Nantomahto file a new answer that responds to each specific allegationin the complaint. Id. at 8.The plaintiff argues that to the extent the court construesNantomah's letter as a motion to dismiss the complaint, thecourt should deny it. Id. at 8–9. The plaintiff asserts thatNantomah disputes the factual allegations in the complaintand asks the court to accept his version of the facts, which isnot appropriate for the court to do at the motion-to-dismissstage. Id. at 9. The plaintiff further argues that the complaintsufficiently pleads that the defendants offered securities inthe form of investment contracts. Id. at 10–11. The plaintiffasks the court to deny Nantomah's request for another stayto “engage a legal team” because he has not shown specialcircumstances justifying a stay. Id. at 12.In the forty-five days since the plaintiff filed the motion tostrike, Nantomah has not responded.III. AnalysisThe court may “strike from a pleading an insufficient defenseor any redundant, immaterial, impertinent, or scandalousmatter.” Fed. R. Civ. P. 12(f). Generally, motions to strike aredisfavored and courts will deny them “unless the portion ofthe pleading at issue is clearly prejudicial and of no possiblerelevance to the controversy at issue.” Heller v. Fin., Inc.v. Midwhey Powder Co., 883 F.2d 1286, 1294 (7th Cir.1989). “Prejudice results, for instance, where the challengedallegation has the effect of confusing the issues or is solengthy and complex that it places an undue burden on theresponding party.” Am. Econ. Ins. Co. v. Jones, Case No.23-CV-2602, 2024 WL 51243, at *2 (S.D. Ill. Jan. 4, 2024)(citing Cumis Ins. Soc., Inc. v. Peters, 983 F. Supp. 787, 798(N.D. Ill. 1997)).*3 It is unclear whether Nantomah intended his letter tobe a motion to dismiss. The letter is captioned “Response toComplaint.” Dkt. No. 26 at 1. The section titled “Failure toState a Claim” is listed under the heading “3. Legal Defense,”
UNITED STATES SECURITES AND EXCHANGE COMMISSION,..., Slip Copy (2026) © 2026 Thomson Reuters. No claim to original U.S. Government Works.3along with “Lack of Jurisdiction” and “Good Faith and Lackof Intent.” Id. at 2. These all could be considered affirmativedefenses, which a defendant may appropriately assert in ananswer. See Fed. R. Civ. P. 12(b) (“Every defense to a claimfor relief in any pleading must be asserted in the responsivepleading if one is required.”) Although Section 4 of the letteris titled “Request for Dismissal,” that section does not identifya rule under which Nantomah moves to dismiss the complaintand he did not file a supporting memorandum as required bythis court's Local Rules. See Civil L.R. 7(a). Construing thedocument liberally, the court concludes that it is likely thatNantomah intended the letter to be an answer to the complaint.Even if the court were to construe the document as a motion todismiss, the court would be required to deny it because at leasttwo of the cases Nantomah cites in support of his argument fordismissal do not exist. Nantomah cites Goldberg v. 401 NorthWashakie Venture LLC, 155 F.3d 465, 466 (7th Cir. 2014), forthe proposition that the plaintiff “cannot have a jurisdictionover” the investment agreements in this case because theyare not “securities” under the Securities Act of 1933. Dkt.No. 26 at 3. The case citation he provided—155 F.3d 465—corresponds to a portion of Condon v. Reno, 155 F.3d 453 (4thCir. 1998), an overturned Fourth Circuit case regarding theconstitutionality of the Driver's Privacy Protection Act. Thecourt located a Seventh Circuit case with a slightly differentreporter number titled Goldberg v. 401 N. Wabash VentureLLC, 755 F.3d 456 (7th Cir. 2014), which deals with thedefinition of a “security” under Illinois law. Nantomah alsoclaims that a case with the citation “Johnson v. 2003 App. 242,117, 652 N.W.2d 48 at 647” states that “proof of horizontalcommonality is not required to derive the solicitation to loanmoney involve a security within the meaning of § 551.” Dkt.No. 26 at 2. Both the citation and the purported “direct quote”are unintelligible. The reporter citation “652 N.W.2d 48”corresponds to a Minnesota Court of Appeals case regardinginsurance coverage for a silicone breast implant manufacturer.In re Silicone Implant Ins. Coverage Litig., 652 N.W.2d 46(Minn. Ct. App. 2002). Most of the remaining cases containstrange typos in their names or citations: Stenger v. R.H. LoveGalleries, Inc., 741 F.2d 144 (7th Cir. 1984), which Nantomahcites as “Sengry v. R.H. Love Galleries, Inc.”; Hirk v. Agri-Research Council, Inc., 561 F.2d 96 (7th Cir. 1972), whichNantomah cites as “Hirk v. R-Arch-Roch. Council, Inc., 561F.2d 619 (7th Cir. 1977); and Milnarik v. M–S Commodities,Inc., 457 F.2d 274 (7th Cir. 1972), which Nantomah citesas “Miriam M.S. Commodities Inc., 15 E.2d 724 (7th Cir.1972).” Dkt. No. 26 at 2.Nantomah's citations bear the hallmarks of generativeartificial intelligence. In recent years, courts and the legalcommunity have learned that generative artificial intelligenceprograms like ChatGPT regularly produce inaccurate or falsecase citations (often referred to as “hallucinated” cases) andthat they misstate or misrepresent the law. See In re Martin,670 B.R. 636, 646–49 (Bankr. N.D. Ill. 2025) (collectingcases discussing the proliferation of AI hallucinated casesand the risks of AI-assisted legal research). Courts acrossthe country have imposed sanctions (both monetary andnon-monetary) on attorneys and self-represented litigants forfiling AI-generated documents that cite to nonexistent casesor that misrepresent the law. See id.; Glass v. Foley & LardnerLLP, Case No. 24-CV-769, 2025 WL 3079280, at *1 (W.D.Wis. Nov. 4, 2025) (“The pitfalls of submitting court filingsthat contain hallucinated citations are obvious, and courtshave sanctioned licensed attorneys and self-representedlitigants alike for their failure to exercise diligence.”); Davisv. Marion Cnty. Superior Ct. Juv. Det. Ctr., Case No. 24-CV-01918, 2025 WL 2502308, at *4 (S.D. Ind. Sept. 2, 2025)(reviewing monetary sanctions imposed on parties citing tononexistent cases); Attaway v. Illinois Dep't of Corr., CaseNo. 23-CV-2091, 2025 WL 1101398, at *3 (S.D. Ill. Apr. 14,2025) (warning self-represented plaintiff that future use ofhallucinated citations may result in monetary sanctions).*4 When an attorney or self-represented party filesa document in federal court, that attorney or party iscertifying to the court that the legal contentions containedin it “are warranted by existing law.” Fed. R. Civ. P.11(b). “Carelessness, good faith, or ignorance are not anexcuse for submitting materials that do not comply withRule 11.” Attaway, 2025 WL 1101398, at *2. Nantomahhas an obligation to ensure that case citations and legalrepresentations he presents to the court are accurate and aresupported by valid precedent; the fact that he is representinghimself at this stage does not relieve him of that obligation.Filing a document that contains citations to nonexistent casesor that quotes language that does not appear in a cited caseviolates Rule 11 because it demonstrates that the filing partyhas not made a reasonable inquiry into the supporting law.If, in future, Nantomah files more documents that containcitations to nonexistent cases or that quote language that doesnot appear in a cited case—whether the document is AI-generated or not—the court may impose sanctions on him forviolating Rule 11.Nor is Nantomah's letter a valid answer to the complaint.Federal Rule of Civil Procedure 8 requires a defendant
UNITED STATES SECURITES AND EXCHANGE COMMISSION,..., Slip Copy (2026) © 2026 Thomson Reuters. No claim to original U.S. Government Works.4responding to a complaint to “admit or deny the allegationsasserted against it by an opposing party.” Fed. R. Civ. P. 8(b)(1)(B). Nantomah's letter states only that he “den[ies] theallegations in the complaint.” Dkt. No. 26 at 1. Although Rule8 permits a “general denial,” that is only appropriate if thedefendant “intends in good faith to deny all the allegationsof a pleading—including the jurisdictional grounds.” Fed.R. Civ. P. 8(b)(3). “A party that does not intend to denyall the allegations must either specifically deny designatedallegations or generally deny all except those specificallyadmitted.” Id.It is not possible for Nantomah to have made his generaldenial in good faith. Portions of the complaint contain factsthat Nantomah does not dispute. In his answer, Nantomahrefers to the corporate defendants as his companies; thecomplaint contains the same allegations. That alone showsthat Nantomah's general denial was not made in good faith.See Am. Econ. Ins. Co., 2024 WL 51243, at *2 (grantingmotion to strike answer where it contained a general denialof facts the defendant admitted); see also IOU Cent., Inc. v.Admiral Prop. Restoration Inc., Case No. 20-cv-265, 2020WL 12189178, at *2 (N.D. Fla. Nov. 10, 2020) (generaldenial was improper because it included “the denial ofeasily verifiable facts in the complaint, such as the locationof the Parties and information relating to the Defendants’companies”). Denying all the allegations in the complaint—even allegations that the defendant admits are true—does notgive the plaintiff fair notice of the issues in dispute and thusunduly prejudices it.The court will grant the plaintiff's motion to strike Nantomah'sanswer and will require him to file an amended answerby the date the court sets below. Nantomah's answer mustspecifically respond to each numbered paragraph in thecomplaint with either an admission of the fact alleged in thatparagraph, a denial of the fact alleged in that paragraph or astatement that he lacks knowledge or information sufficient toform a belief about the truth of the allegation contained in thatparagraph. Any factual denials must be supported by evidence(though Nantomah does not need to identify that evidencein the answer). See Fed. R. Civ. P. 11(b)(4). If Nantomahbelieves that only part of an allegation in a paragraph istrue, he may specifically state which part of the allegation headmits and he may deny the remainder of the allegation in thatparagraph. Nantomah must organize his answer in numberedparagraphs that correspond with the numbered paragraphs inthe complaint. See Civil L.R. 10(b). If Nantomah submits ananswer that does not comply with the Federal Rules of CivilProcedure and this order, the court may strike it, find thatNantomah is in default or impose other sanctions.IV. Conclusion*5 The court GRANTS the plaintiff's motion to strikedefendant Nantomah's answer. Dkt. No. 30. The courtORDERS that the answer at Dkt. No. 26 is STRICKEN.The court ORDERS that Nantomah must file an amendedanswer or responsive pleading that complies with the FederalRules of Civil Procedure and this court's order in time for thecourt to receive it by the end of the day on February 28, 2026.The court will not further extend this deadline.Dated in Milwaukee, Wisconsin this 30th day of January,2026.All CitationsSlip Copy, 2026 WL 252451End of Document© 2026 Thomson Reuters. No claim to original U.S. Government Works.
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