Securities and Exchange Commission v. PLCMGMT LLC et al
Filing
70
FINAL JUDGMENT AS YO DEFENDANT ADVID A. ALDRICH by Judge Terry J. Hatter, Jr.: IT IS HEREBY ORDERED, ADJUDGED, AND DECREED that Defendant is permanently restrained and enjoined from violating, directly or indirectly, Section10(b) of the Securities Ex change Act of 1934 (the Exchange Act) [15 U.S.C.§ 78j(b)] and Rule 10b-5 promulgated thereunder [17 C.F.R. § 240.10b-5], by using any means or instrumentality of interstate commerce, or of the mails, or of any facility of any national secur ities exchange, in connection with the purchase or sale of any security: to employ any device, scheme, or artifice to defraud, etc. IT IS HEREBY FURTHER ORDERED, ADJUDGED, AND DECREED thatDefendant is liable for disgorgement of $2,667,945.00, re presenting profits gained as a result of the conduct alleged in the Complaint, together with prejudgment interest thereon in the amount of $17,786.30, and a civil penalty in the amount of $1,000,000.00 pursuant to Section 20(d) of the Secu rities Act, 15 U.S.C. § 77t(d) and Section 21(d)(3) of the Exchange Act, 15 U.S.C. § 78u(d)(3). Defendant shall satisfy this obligation by paying $3,685,731.30 to the Securities and Exchange Commission within 14 days after entry of this Final Judgment. Related to: Stipulation for Judgment 69 . (See order for further details).(shb)
1
2
3
4
5
6
7
AMY JANE LONGO Cal. Bar No. 198304
Email: longoa@sec.gov
DAVID M. ROSEN Cal. Bar No. 150880
Email: rosend@sec.gov
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: (323) 965-3998
Facsimile: (213) 443-1904
8
UNITED STATES DISTRICT COURT
9
CENTRAL DISTRICT OF CALIFORNIA
10
WESTERN DIVISION
11
12
13
SECURITIES AND EXCHANGE
COMMISSION,
14
Plaintiff,
15
16
17
18
Case No. 2:16-cv-02594-TJH-FFM
[69]
[NO JS6]
vs.
PLCMGMT LLC, dba
PROMETHEUS LAW, JAMES A.
CATIPAY, and DAVID A.
ALDRICH,
Defendants.
19
20
21
FINAL JUDGMENT AS TO DEFENDANT DAVID A. ALDRICH
22
23
The Securities and Exchange Commission having filed a Complaint and
24
Defendant David A. Aldrich (“Defendant”) having entered a general appearance;
25
consented to the Court’s jurisdiction over Defendant and the subject matter of this
26
action; consented to entry of this Final Judgment without admitting or denying the
27
allegations of the Complaint (except as to jurisdiction and except as otherwise
28
1
1
provided herein in paragraph VI); waived findings of fact and conclusions of law; and
2
waived any right to appeal from this Final Judgment:
I.
3
4
IT IS HEREBY ORDERED, ADJUDGED, AND DECREED that Defendant is
5
permanently restrained and enjoined from violating, directly or indirectly, Section
6
10(b) of the Securities Exchange Act of 1934 (the “Exchange Act”) [15 U.S.C.
7
§ 78j(b)] and Rule 10b-5 promulgated thereunder [17 C.F.R. § 240.10b-5], by using
8
any means or instrumentality of interstate commerce, or of the mails, or of any
9
facility of any national securities exchange, in connection with the purchase or sale of
10
any security:
11
(a)
to employ any device, scheme, or artifice to defraud;
12
(b)
to make any untrue statement of a material fact or to omit to state a
13
material fact necessary in order to make the statements made, in the light
14
of the circumstances under which they were made, not misleading; or
15
16
(c)
to engage in any act, practice, or course of business which operates or
would operate as a fraud or deceit upon any person.
17
IT IS FURTHER ORDERED, ADJUDGED, AND DECREED that, as
18
provided in Federal Rule of Civil Procedure 65(d)(2), the foregoing paragraph also
19
binds the following who receive actual notice of this Final Judgment by personal
20
service or otherwise: (a) Defendant’s officers, agents, servants, employees, and
21
attorneys; and (b) other persons in active concert or participation with Defendant or
22
with anyone described in (a).
23
24
II.
25
IT IS HEREBY FURTHER ORDERED, ADJUDGED, AND DECREED that
26
Defendant is permanently restrained and enjoined from violating Section 17(a) of the
27
Securities Act of 1933 (the “Securities Act”) [15 U.S.C. § 77q(a)] in the offer or sale
28
of any security by the use of any means or instruments of transportation or
2
1
communication in interstate commerce or by use of the mails, directly or indirectly:
2
(a)
to employ any device, scheme, or artifice to defraud;
3
(b)
to obtain money or property by means of any untrue statement of a
4
material fact or any omission of a material fact necessary in order to
5
make the statements made, in light of the circumstances under which
6
they were made, not misleading; or
7
(c)
to engage in any transaction, practice, or course of business which
operates or would operate as a fraud or deceit upon the purchaser.
8
9
IT IS FURTHER ORDERED, ADJUDGED, AND DECREED that, as
10
provided in Federal Rule of Civil Procedure 65(d)(2), the foregoing paragraph also
11
binds the following who receive actual notice of this Final Judgment by personal
12
service or otherwise: (a) Defendant’s officers, agents, servants, employees, and
13
attorneys; and (b) other persons in active concert or participation with Defendant or
14
with anyone described in (a).
15
III.
16
17
IT IS HEREBY FURTHER ORDERED, ADJUDGED, AND DECREED that
18
Defendant is permanently restrained and enjoined from violating Section 5 of the
19
Securities Act [15 U.S.C. § 77e] by, directly or indirectly, in the absence of any
20
applicable exemption:
21
(a)
Unless a registration statement is in effect as to a security, making use of
22
any means or instruments of transportation or communication in
23
interstate commerce or of the mails to sell such security through the use
24
or medium of any prospectus or otherwise;
25
(b)
Unless a registration statement is in effect as to a security, carrying or
26
causing to be carried through the mails or in interstate commerce, by any
27
means or instruments of transportation, any such security for the purpose
28
of sale or for delivery after sale; or
3
1
(c)
Making use of any means or instruments of transportation or
2
communication in interstate commerce or of the mails to offer to sell or
3
offer to buy through the use or medium of any prospectus or otherwise
4
any security, unless a registration statement has been filed with the
5
Commission as to such security, or while the registration statement is the
6
subject of a refusal order or stop order or (prior to the effective date of
7
the registration statement) any public proceeding or examination under
8
Section 8 of the Securities Act [15 U.S.C. § 77h].
9
IT IS FURTHER ORDERED, ADJUDGED, AND DECREED that, as
10
provided in Federal Rule of Civil Procedure 65(d)(2), the foregoing paragraph also
11
binds the following who receive actual notice of this Final Judgment by personal
12
service or otherwise: (a) Defendant’s officers, agents, servants, employees, and
13
attorneys; and (b) other persons in active concert or participation with Defendant or
14
with anyone described in (a).
15
16
17
IV.
IT IS HEREBY FURTHER ORDERED, ADJUDGED, AND DECREED that
18
Defendant is liable for disgorgement of $ 2,667,945.00, representing profits gained as
19
a result of the conduct alleged in the Complaint, together with prejudgment interest
20
thereon in the amount of $17,786.30, and a civil penalty in the amount of
21
$1,000,000.00 pursuant to Section 20(d) of the Securities Act, 15 U.S.C. § 77t(d) and
22
Section 21(d)(3) of the Exchange Act, 15 U.S.C. § 78u(d)(3). Defendant shall satisfy
23
this obligation by paying $3,685,731.30 to the Securities and Exchange Commission
24
within 14 days after entry of this Final Judgment.
25
Defendant may transmit payment electronically to the Commission, which will
26
provide detailed ACH transfer/Fedwire instructions upon request. Payment may also
27
be made directly from a bank account via Pay.gov through the SEC website at
28
http://www.sec.gov/about/offices/ofm.htm. Defendant may also pay by certified
4
1
check, bank cashier’s check, or United States postal money order payable to the
2
Securities and Exchange Commission, which shall be delivered or mailed to
3
Enterprise Services Center
4
Accounts Receivable Branch
5
6500 South MacArthur Boulevard
6
Oklahoma City, OK 73169
7
8
and shall be accompanied by a letter identifying the case title, civil action number,
9
and name of this Court; David A. Aldrich as a defendant in this action; and specifying
10
11
that payment is made pursuant to this Final Judgment.
Defendant shall simultaneously transmit photocopies of evidence of payment
12
and case identifying information to the Commission’s counsel in this action. By
13
making this payment, Defendant relinquishes all legal and equitable right, title, and
14
interest in such funds and no part of the funds shall be returned to Defendant.
15
The Commission may enforce the Court’s judgment for disgorgement and
16
prejudgment interest by moving for civil contempt (and/or through other collection
17
procedures authorized by law) at any time after 14 days following entry of this Final
18
Judgment. Defendant shall pay post judgment interest on any delinquent amounts
19
pursuant to 28 U.S.C. § 1961. The Commission shall hold the funds, together with
20
any interest and income earned thereon (collectively, the “Fund”), pending further
21
order of the Court.
22
The Commission may propose a plan to distribute the Fund subject to the
23
Court’s approval. Such a plan may provide that the Fund shall be distributed
24
pursuant to the Fair Fund provisions of Section 308(a) of the Sarbanes-Oxley Act of
25
2002. The Court shall retain jurisdiction over the administration of any distribution
26
of the Fund. If the Commission staff determines that the Fund will not be distributed,
27
the Commission shall send the funds paid pursuant to this Final Judgment to the
28
United States Treasury.
5
1
Regardless of whether any such Fair Fund distribution is made, amounts
2
ordered to be paid as civil penalties pursuant to this Judgment shall be treated as
3
penalties paid to the government for all purposes, including all tax purposes. To
4
preserve the deterrent effect of the civil penalty, Defendant shall not, after offset or
5
reduction of any award of compensatory damages in any Related Investor Action
6
based on Defendant’s payment of disgorgement in this action, argue that he is entitled
7
to, nor shall he further benefit by, offset or reduction of such compensatory damages
8
award by the amount of any part of Defendant’s payment of a civil penalty in this
9
action (“Penalty Offset”). If the court in any Related Investor Action grants such a
10
Penalty Offset, Defendant shall, within 30 days after entry of a final order granting
11
the Penalty Offset, notify the Commission’s counsel in this action and pay the amount
12
of the Penalty Offset to the United States Treasury or to a Fair Fund, as the
13
Commission directs. Such a payment shall not be deemed an additional civil penalty
14
and shall not be deemed to change the amount of the civil penalty imposed in this
15
Judgment. For purposes of this paragraph, a “Related Investor Action” means a
16
private damages action brought against Defendant by or on behalf of one or more
17
investors based on substantially the same facts as alleged in the Complaint in this
18
action.
19
20
21
V.
IT IS FURTHER ORDERED, ADJUDGED, AND DECREED that, solely for
22
purposes of exceptions to discharge set forth in Section 523 of the Bankruptcy Code,
23
11 U.S.C. §523, the allegations in the complaint are true and admitted by Defendant,
24
and further, any debt for disgorgement, prejudgment interest, civil penalty or other
25
amounts due by Defendant under this Final Judgment or any other judgment, order,
26
consent order, decree or settlement agreement entered in connection with this
27
proceeding, is a debt for the violation by Defendant of the federal securities laws or
28
6
1
any regulation or order issued under such laws, as set forth in Section 523(a)(19) of
2
the Bankruptcy Code, 11 U.S.C. §523(a)(19).
3
VI.
4
5
IT IS FURTHER ORDERED, ADJUDGED, AND DECREED that this Court
6
shall retain jurisdiction of this matter for the purposes of enforcing the terms of this
7
Final Judgment.
8
9
VII.
10
There being no just reason for delay, pursuant to Rule 54(b) of the Federal
11
Rules of Civil Procedure, the Clerk is ordered to enter this Final Judgment forthwith
12
and without further notice.
13
14
Dated: September 15, 2016.
15
____________________________________
16
THE HON. TERRY J. HATTER, JR.,
17
UNITED STATES DISTRICT JUDGE
18
19
20
21
22
23
24
25
26
27
28
7
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
1
Disclaimer: Justia Dockets & Filings provides public litigation records from the federal appellate and district courts. These filings and docket sheets should not be considered findings of fact or liability, nor do they necessarily reflect the view of Justia.
Why Is My Information Online?