Securities and Exchange Commission v. Marcus A. Luna et al

Filing 48

FINAL JUDGMENT AS TO DEFENDANT MARCUS A. LUNA by Judge Beverly Reid O'Connell. IT IS ORDERED that the SEC's Motion for Entry of Final Judgment by Default Against Defendant Marcus A. Luna is hereby GRANTED. FURTHER ORDERED, ADJUDGED, AND DEC REED that Defendant is permanently restrained and enjoined. FURTHER ORDERED, ADJUDGED, AND DECREED that Defendant is liable for disgorgement of $13,331,883, representing profits gained as a result of the conduct alleged in the Complaint, togethe r with prejudgment interest thereon in the amount of $402,476, for a total of $13,734,359. That amount includes Defendant's joint and several liability with defendants Norrell L. Walker, Paul L. Gomez, and Dustin S. Smith for any amounts that they are ordered to pay as disgorgement and prejudgment interest in this action. (jp)

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DAVID J. VAN HAVERMAAT, Cal. Bar No. 175761
Email: [e-mail]
LUCEE S. KIRKA, Cal. Bar No. 121685
Email: [e-mail]
Attorneys for Plaintiff
Securities and Exchange Commission
Michele Wein Layne, Regional Director
John W. Berry, Associate Regional Director
Amy J. Longo, Regional Trial Counsel
444 S. Flower Street, Suite 900
Los Angeles, California 90071
Telephone: [phone]
Facsimile: [phone]
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,

Case No.: CV-16-07333 BRO (SKx)

Plaintiff,

FINAL JUDGMENT AS TO
DEFENDANT MARCUS A. LUNA

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vs.
MARCUS A. LUNA, NORRELL L.
WALKER, PAUL L. GOMEZ, and
DUSTIN S. SMITH,
Defendants.

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Plaintiff Securities and Exchange Commission (“SEC” or “Commission”) filed

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a Motion for Entry of Final Judgment by Default Against Defendant Marcus A. Luna

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(“Defendant” or “Luna”) pursuant to Rule 55 of the Federal Rules of Civil Procedure.

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The Court, having considered the SEC’s motion, the memorandum of points and

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authorities filed in support of the motion, the declarations and all other documents

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filed in support of the motion, and all other evidence and argument presented

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regarding the motion, finds that:

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I.

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IT IS ORDERED that the SEC’s Motion for Entry of Final Judgment by

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Default Against Defendant Marcus A. Luna is hereby GRANTED.
II.

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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).
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 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).
IV.

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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
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).
V.

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IT IS FURTHER ORDERED, ADJUDGED, AND DECREED that Defendant

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is liable for disgorgement of $13,331,883, representing profits gained as a result of

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the conduct alleged in the Complaint, together with prejudgment interest thereon in

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the amount of $402,476, for a total of $13,734,359. That amount includes

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Defendant’s joint and several liability with defendants Norrell L. Walker, Paul L.

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Gomez, and Dustin S. Smith for any amounts that they are ordered to pay as

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disgorgement and prejudgment interest in this action. Defendant shall satisfy this
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obligation by paying $13,734,359 to the Securities and Exchange Commission within

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14 days after entry of this Final Judgment. Defendant’s disgorgement and

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prejudgment interest obligation shall be credited by any amounts that Defendant is

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ordered to pay as restitution in U.S. v. Luna, Case No. CR-16-0012-AG-1, pending in

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the Central District of California.

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Defendant may transmit payment electronically to the Commission, which will

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provide detailed ACH transfer/Fedwire instructions upon request. Payment may also

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be made directly from a bank account via Pay.gov through the SEC website at

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http://www.sec.gov/about/offices/ofm.htm. Defendant may also pay by certified

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check, bank cashier’s check, or United States postal money order payable to the

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Securities and Exchange Commission, which shall be delivered or mailed to

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Enterprise Services Center

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Accounts Receivable Branch

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6500 South MacArthur Boulevard

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Oklahoma City, OK 73169

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and shall be accompanied by a letter identifying the case title, civil action number,

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and name of this Court; Marcus Luna as a defendant in this action; and specifying

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that payment is made pursuant to this Final Judgment.

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Defendant shall simultaneously transmit photocopies of evidence of payment

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and case identifying information to the Commission’s counsel in this action. By

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making this payment, Defendant relinquishes all legal and equitable right, title, and

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interest in such funds and no part of the funds shall be returned to Defendant. The

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Commission shall send the funds paid pursuant to this Final Judgment to the United

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States Treasury. The Commission may enforce the Court’s judgment for

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disgorgement and prejudgment interest by moving for civil contempt (and/or through

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other collection procedures authorized by law) at any time after 14 days following

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entry of this Final Judgment. Defendant shall pay post judgment interest on any

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delinquent amounts pursuant to 28 U.S.C. § 1961.
VI.

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IT IS FURTHER ORDERED, ADJUDGED, AND DECREED that the SEC

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has determined to forgo seeking a civil penalty against Defendant, and the claim for a

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civil penalty against Defendant is hereby DISMISSED.
VII.

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IT IS FURTHER ORDERED, ADJUDGED, AND DECREED that this Court
shall retain jurisdiction of this matter for the purposes of enforcing the terms of this
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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IT IS SO ORDERED.
DATED: October 5, 2017

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By:

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Honorable Beverly R. O’Connell
United States District Court Judge

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