By Matthew Perlman

Law360, New York (September 10, 2015, 5:13 PM ET) ­­ The U.S. Securities and Exchange Commission fought a bid to stay part of an injunction from the wife of a fugitive ex-­Oak Investment Partners executive accused of defrauding the venture capital fund’s investors, saying Wednesday she is just trying to stall the case.

The SEC is opposing a motion lodged by Shalini Ahmed, a former Goldman Sachs Group Inc. asset manager and the wife of Iftikar Ahmed. She is named as a relief defendant in the SEC’s Connecticut federal case against her husband. Her motion seeks to stay portions of a preliminary injunction issued last month — but not the $118 million asset freeze it imposed — until her appeal of the injunction can be heard.

The commission said Wednesday that the only requirements set out in the injunction beyond the asset freeze are discovery obligations and an obligation for Shalini Ahmed’s counsel to disclose assets it holds that are subject to the injunction. The SEC said her bid to stay the injunction is actually a bid to stay all proceedings against her.

“Thus, although filed under the guise of a request to modify the preliminary injunction, relief defendants merely seek to improperly stay the proceedings pending appeal,” the SEC’s opposition stated.

Shalini Ahmed’s attorney David Deitch of Harris O’Brien St. Laurent & Chaudhry LLP said the asset freeze should be overturned because it was imposed wholesale on assets held by the Ahmeds and not just on funds thought to be ill-­gotten. But, the motion to stay only seeks to avoid litigation until an appeal on the injunction can be heard, and would not overturn the asset freeze outright.

“We think the judge set a very dangerous precedent by freezing all of the assets,” Deitch told Law360. “We’re not trying to overturn the asset freeze with this motion. We understand the concern for the asset freeze. We’re just saying we shouldn’t have to engage in litigation until our appeal is heard.”

The SEC’s May suit claims that Iftikar Ahmed, a former general partner at Greenwich, Connecticut ­based Oak Investment, advised the firm’s funds to pay inflated prices for two e­-commerce investments then pocketed the $20 million difference. He also advised another Oak Investment fund to pay $7.5 million to a company he controlled, for shares in another e­-commerce company, without disclosing the conflict, the SEC alleges.

Iftikar Ahmed was also hit with civil and criminal insider trading charges on April 2 in Massachusetts federal court for allegedly earning $1.1 million through the purchase of Cooper Tire & Rubber Co. shares after he learned from a friend that the company was in talks to be acquired by Apollo Tyres Ltd.

He fled the country in May, at which point Willkie Farr & Gallagher LLP partner Martin Klotz dumped the man as a client.

Meanwhile, Shalini Ahmed opposed the SEC’s bid for a preliminary injunction, saying an asset freeze would prevent her from hiring proper legal counsel and paying for living expenses, despite the fact that the SEC already agreed to release $300,000 to her. She is appealing the injunction decision to the Second Circuit

In her motion to stay the injunction, she argued that continuing to litigate the case while her appeal is pending would have “prejudicial consequences.” She said she would have trouble paying for legal counsel and doing so would affect the ability of her and her three young children “to pay for groceries, medical care and other necessities to support themselves,” the motion said.

The SEC argued Wednesday that the money released to Shalini Ahmed already should be enough to cover her expenses, and that if it’s not, she could always get a job.

“Rather, the alleged harm is the result of Mrs. Ahmed’s desire to pay her attorneys only with tainted monies that are frozen, instead of using untainted monies that have been released to her or that she earns through employment,” the motion said.

Deitch said the assets released to his client had nothing to do with her husband’s alleged activities and were earned through her employment. He also noted that some of the funds take the form of restricted stock, while the rest consists of her personal retirement account, money she cannot touch without being penalized.

He added that her status as a relief defendant in the case should also have some bearing.

“Relief defendants are not accused of any wrongdoing. They should be treated differently than other defendants,” he said.

The SEC declined to comment.

The SEC is represented in-­house by Nicholas P. Heinke and Mark L. Williams.

Iftikar Ahmed is represented by Dylan P. Kletter, Alex Lipman and Ashley L. Baynham of Brown Rudnick LLP. Shalini Ahmed is represented by Jonathan Harris, Reid Skibell and David B. Deitch of Harris O’Brien St. Laurent & Chaudhry LLP and by Paul E. Knag of Murtha Cullina LLP.

The case is U.S. Securities and Exchange Commission v. Ahmed et al., case number 3:15­ cv­00675, in the U.S. District Court for the District of Connecticut.

–Additional reporting by Carmen Germaine, Max Stendahl, Stephanie Russell­Kraft and Cara Salvatore. Editing by Edrienne Su.