Securities and Exchange Commission v. PLCMGMT LLC et al

Filing 37

JUDGMENT UPON CONSENT AS TO DEFENDANT JAMES A. CATIPAY 35 by Judge Terry J. Hatter, Jr. Defendant is permanently restrained and enjoined from violating, directly or indirectly, Section 10(b) of the Securities Exchange Act of 1934 etc.Defendant shall pay disgorgement of ill-gotten gains, prejudgment interest thereon, and a civil penalty to be determined. (SEE DOCUMENT FOR OTHER SPECIFICS). (MD JS-6, Case Terminated). (lc)

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AMY JANE LONGO Cal. Bar No. 198304
Email: [e-mail]
DAVID M. ROSEN Cal. Bar No. _150880
Email: [e-mail]
Attorneys for Plaintiff
Securities and Exchange Commission
Michele Wein Layne, Regional Director
Alka N. Patel, Associate Regional Director
John W. Berry, Regional Trial Counsel
444 South Flower Street, Suite 900
Los Angeles, California 90071
Telephone: [phone]
Facsimile: [phone]

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UNITED STATES DISTRICT COURT

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CENTRAL DISTRICT OF CALIFORNIA

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WESTERN DIVISION

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SECURITIES AND EXCHANGE
COMMISSION,

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Plaintiff,

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Case No. 2:16-cv-02594-TJH-FFMx
[JS-6]

vs.
PLCMGMT LLC, dba
PROMETHEUS LAW, JAMES A.
CATIPAY, and DAVID A.
ALDRICH,
Defendants.

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JUDGMENT AS TO DEFENDANT JAMES A. CATIPAY

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The Securities and Exchange Commission having filed a Complaint and

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Defendant James A. Catipay (“Defendant”) having entered a general appearance;

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consented to the Court’s jurisdiction over Defendant and the subject matter of this

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action; consented to entry of this Final Judgment without admitting or denying the

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allegations of the Complaint (except as to jurisdiction and except as otherwise

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provided herein in paragraph VI); waived findings of fact and conclusions of law; and
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waived any right to appeal from this Final Judgment:
I.

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IT IS HEREBY ORDERED, ADJUDGED, AND DECREED that Defendant is

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permanently restrained and enjoined from violating, directly or indirectly, Section

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10(b) of the Securities Exchange Act of 1934 (the “Exchange Act”) [15 U.S.C.

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§ 78j(b)] and Rule 10b-5 promulgated thereunder [17 C.F.R. § 240.10b-5], by using

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any means or instrumentality of interstate commerce, or of the mails, or of any

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facility of any national securities exchange, in connection with the purchase or sale of

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any security:

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(a)

to employ any device, scheme, or artifice to defraud;

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(b)

to make any untrue statement of a material fact or to omit to state a

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material fact necessary in order to make the statements made, in the light

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of the circumstances under which they were made, not misleading; or

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(c)

to engage in any act, practice, or course of business which operates or
would operate as a fraud or deceit upon any person.

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IT IS FURTHER ORDERED, ADJUDGED, AND DECREED that, as

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provided in Federal Rule of Civil Procedure 65(d)(2), the foregoing paragraph also

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binds the following who receive actual notice of this Final Judgment by personal

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service or otherwise: (a) Defendant’s officers, agents, servants, employees, and

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attorneys; and (b) other persons in active concert or participation with Defendant or

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with anyone described in (a).

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II.

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IT IS HEREBY FURTHER ORDERED, ADJUDGED, AND DECREED that

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Defendant is permanently restrained and enjoined from violating Section 17(a) of the

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Securities Act of 1933 (the “Securities Act”) [15 U.S.C. § 77q(a)] in the offer or sale

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of any security by the use of any means or instruments of transportation or

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communication in interstate commerce or by use of the mails, directly or indirectly:
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(a)

to employ any device, scheme, or artifice to defraud;

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(b)

to obtain money or property by means of any untrue statement of a

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material fact or any omission of a material fact necessary in order to

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make the statements made, in light of the circumstances under which

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they were made, not misleading; or

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(c)

to engage in any transaction, practice, or course of business which
operates or would operate as a fraud or deceit upon the purchaser.

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IT IS FURTHER ORDERED, ADJUDGED, AND DECREED that, as

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provided in Federal Rule of Civil Procedure 65(d)(2), the foregoing paragraph also

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binds the following who receive actual notice of this Final Judgment by personal

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service or otherwise: (a) Defendant’s officers, agents, servants, employees, and

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attorneys; and (b) other persons in active concert or participation with Defendant or

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with anyone described in (a).

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III.

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IT IS HEREBY FURTHER ORDERED, ADJUDGED, AND DECREED that

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Defendant is permanently restrained and enjoined from violating Section 5 of the

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Securities Act [15 U.S.C. § 77e] by, directly or indirectly, in the absence of any

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applicable exemption:

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(a)

Unless a registration statement is in effect as to a security, making use of

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any means or instruments of transportation or communication in

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interstate commerce or of the mails to sell such security through the use

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or medium of any prospectus or otherwise;

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(b)

Unless a registration statement is in effect as to a security, carrying or

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causing to be carried through the mails or in interstate commerce, by any

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means or instruments of transportation, any such security for the purpose

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of sale or for delivery after sale; or

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(c)

Making use of any means or instruments of transportation or
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communication in interstate commerce or of the mails to offer to sell or

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offer to buy through the use or medium of any prospectus or otherwise

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any security, unless a registration statement has been filed with the

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Commission as to such security, or while the registration statement is the

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subject of a refusal order or stop order or (prior to the effective date of

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the registration statement) any public proceeding or examination under

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Section 8 of the Securities Act [15 U.S.C. § 77h].

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IT IS FURTHER ORDERED, ADJUDGED, AND DECREED that, as

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provided in Federal Rule of Civil Procedure 65(d)(2), the foregoing paragraph also

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binds the following who receive actual notice of this Final Judgment by personal

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service or otherwise: (a) Defendant’s officers, agents, servants, employees, and

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attorneys; and (b) other persons in active concert or participation with Defendant or

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with anyone described in (a).

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IV.
IT IS IT IS FURTHER ORDERED, ADJUDGED, AND DECREED that the

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Defendant be and hereby is permanently restrained and enjoined from, directly or

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indirectly, unless the Defendant is registered with the SEC in accordance with

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Section 15(b) of the Securities Exchange Act of 1934 (the “Exchange Act”), 15

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U.S.C. § 78o(b), and in the absence of any applicable exemption, acting as a broker

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and/or a dealer in the United States or otherwise making use of the mails or any

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means or instrumentality of interstate commerce to effect any transactions in, or to

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induce or attempt to induce the purchase or sale of, any security, including “binary

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options” (other than an exempted security or commercial paper, bankers’

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acceptances, or commercial bills), in the United States, in violation of Section 15(a)

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of the Securities Exchange Act, 15 U.S.C. § 78o(a).

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IT IS FURTHER ORDERED, ADJUDGED, AND DECREED that, as

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provided in Federal Rule of Civil Procedure 65(d)(2), the foregoing paragraph also
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binds any of the following who receive actual notice of this Final Judgment by

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personal service or otherwise: (a) Defendant’s officers, agents, servants, employees,

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and attorneys; and (b) other persons in active concert or participation with Defendant

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or with anyone described in (a).
V.

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IT IS HEREBY FURTHER ORDERED, ADJUDGED, AND DECREED that

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Defendant shall pay disgorgement of ill-gotten gains, prejudgment interest thereon,

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and a civil penalty pursuant to Section 20(d) of the Securities Act (15 U.S.C.

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§ 77t(d)) and Section 21(d)(3) of the Exchange Act (15 U.S.C. § 78u(d)(3)). The

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Court shall determine the amounts of the disgorgement and civil penalty upon motion

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of the Commission. Prejudgment interest shall be calculated from

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November 1, 2013, based on the rate of interest used by the Internal Revenue Service

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for the underpayment of federal income tax as set forth in 26 U.S.C. § 6621(a)(2). In

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connection with the Commission’s motion for disgorgement and/or civil penalties,

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and at any hearing held on such a motion: (a) Defendant will be precluded from

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arguing that he did not violate the federal securities laws as alleged in the Complaint;

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(b) Defendant may not challenge the validity of the Consent or this Final Judgment;

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(c) solely for the purposes of such motion, the allegations of the Complaint shall be

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accepted as and deemed true by the Court; and (d) the Court may determine the issues

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raised in the motion on the basis of affidavits, declarations, excerpts of sworn

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deposition or investigative testimony, and documentary evidence, without regard to

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the standards for summary judgment contained in Rule 56(c) of the Federal Rules of

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Civil Procedure. In connection with the Commission’s motion for disgorgement

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and/or civil penalties, the parties may take discovery, including discovery from

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appropriate non-parties.

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VI.

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IT IS FURTHER ORDERED, ADJUDGED, AND DECREED that, solely for

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purposes of exceptions to discharge set forth in Section 523 of the Bankruptcy Code,

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11 U.S.C. §523, the allegations in the complaint are true and admitted by Defendant,

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and further, any debt for disgorgement, prejudgment interest, civil penalty or other

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amounts due by Defendant under this Final Judgment or any other judgment, order,

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consent order, decree or settlement agreement entered in connection with this

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proceeding, is a debt for the violation by Defendant of the federal securities laws or

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any regulation or order issued under such laws, as set forth in Section 523(a)(19) of

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the Bankruptcy Code, 11 U.S.C. §523(a)(19).

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VII.
IT IS FURTHER ORDERED, ADJUDGED, AND DECREED that this Court

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shall retain jurisdiction of this matter for the purposes of enforcing the terms of this

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Final Judgment.

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VIII.

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There being no just reason for delay, pursuant to Rule 54(b) of the Federal

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Rules of Civil Procedure, the Clerk is ordered to enter this Final Judgment forthwith

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and without further notice.

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Dated: May 27, 2016

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____________________________________

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Hon. Terry J. Hatter, Jr.

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UNITED STATES DISTRICT JUDGE

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