Securities and Exchange Commission v. Notis Global, Inc. et al

Filing 48

FINAL JUDGMENT AS TO DEFENDANT BRUCE BEDRICK by Judge Stephen V. Wilson, in favor of Securities and Exchange Commission against Bruce Bedrick Related to: Stipulation for Judgment 47 . (See document for details) (mrgo)

1
2
3
4
5
6
7
8
9

UNITED STATES DISTRICT COURT

10

CENTRAL DISTRICT OF CALIFORNIA

11

Western Division

12
13

SECURITIES AND EXCHANGE
COMMISSION,

14

Plaintiff,

15
16

Case No. 2:17-cv-01905-SVW-SK
FINAL JUDGMENT AS TO
DEFENDANT BRUCE BEDRICK

vs.

18

NOTIS GLOBAL, INC. (f/k/a
MEDBOX, INC.), VINCENT
MEHDIZADEH, BRUCE BEDRICK,
YOCELIN LEGASPI, and NEW-AGE
INVESTMENT CONSULTING, INC,

19

Defendants.

17

20
21
22
23
24
25
26

///

27

///

28

///

Case No. 2:17-cv-01905-SVW-SK

1

The Securities and Exchange Commission having filed a Complaint and

2

Defendant Bruce Bedrick having entered a general appearance; consented to the

3

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

4

entry of this Final Judgment without admitting or denying the allegations of the

5

Complaint (except as to jurisdiction and except as otherwise provided herein in

6

paragraph XII); waived findings of fact and conclusions of law; and waived any right

7

to appeal from this Final Judgment:
I.

8
9

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

10

permanently restrained and enjoined from violating Section 17(a)(2) of the Securities

11

Act of 1933 (the “Securities Act”) [15 U.S.C. § 77q(a)(2)] in the offer or sale of any

12

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

13

in interstate commerce or by use of the mails, directly or indirectly, to obtain money

14

or property by means of any untrue statement of a material fact or any omission of a

15

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

16

circumstances under which they were made, not misleading; or

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.
IT IS HEREBY FURTHER ORDERED, ADJUDGED, AND DECREED that

25

Defendant is permanently restrained and enjoined from violating, directly or

26

indirectly, Section 10(b) of the Securities Exchange Act (the “Exchange Act”) [15

27

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

28

5(b)], by using any means or instrumentality of interstate commerce, or of the mails,
1

1

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

2

or sale of any security, to make any untrue statement of a material fact or to omit to

3

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

4

the circumstances under which they were made, not misleading.

5

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

6

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

7

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

8

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

9

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

10

with anyone described in (a).
III.

11
12

IT IS HEREBY FURTHER ORDERED, ADJUDGED, AND DECREED that

13

Defendant is permanently restrained and enjoined from violating, directly or

14

indirectly, Rule 13b2-2 of the Exchange Act [17 C.F.R. § 240.13b2-2] by:

15

1)

making or causing to be made a materially false or misleading statement,

16

or by omitting to state or causing another person to omit to state, any

17

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

18

circumstances under which such statements were made, not misleading,

19

to an accountant in connection with: (a) any audit, review or

20

examination of the financial statements of an issuer required to be made

21

pursuant to the federal securities laws; or (b) the preparation or filing of

22

any document or report required to be filed with the Commission

23

pursuant to the federal securities laws or otherwise; or

24

2)

taking any action, as an officer or director of an issuer, or as any other

25

person acting under the direction thereof, to coerce, manipulate, mislead,

26

or fraudulently influence any independent public or certified public

27

accountant engaged in the performance of an audit or review of the

28

financial statements of that issuer that are required to be filed with the
2

1

Commission pursuant to the federal securities laws or otherwise, if he

2

knows or should have known that such action, if successful, could result

3

in rendering the issuer’s financial statements materially misleading.

4

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

5

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

6

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

7

otherwise: (a) Defendant’s officers, agents, servants, employees, and attorneys; and

8

(b) other persons in active concert or participation with Defendant or with anyone

9

described in (a).
IV.

10
11

IT IS HEREBY FURTHER ORDERED, ADJUDGED, AND DECREED that

12

Defendant is permanently restrained and enjoined from violating, directly or

13

indirectly, Rule 13a-14 [17 C.F.R. § 240.13a-14], by falsely certifying that an issuer’s

14

annual and quarterly reports fully comply with the requirements of the Exchange Act

15

and fairly present, in all material respects, the financial condition and results of

16

operations of the company, when, in fact, the reports contain untrue statements of

17

material fact and omit material information necessary to make the reports not

18

misleading

19

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

20

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

21

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

22

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

23

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

24

with anyone described in (a).

25
26

V.
IT IS HEREBY FURTHER ORDERED, ADJUDGED, AND DECREED that

27

Defendant is permanently restrained and enjoined from aiding and abetting any

28

violation of Section 13(a) of the Exchange Act [15 U.S.C. § 78m(a)] and Rules 12b3

1

20, 13a-11 and 13a-13 [17 C.F.R. §§ 240.12b-20, 240.13a-11 and 240.13a-13]

2

promulgated thereunder, by knowingly or recklessly providing substantial assistance

3

to an issuer’s failure to file accurate periodic and current reports with the

4

Commission.

5

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

6

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

7

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

8

otherwise: (a) Defendant’s officers, agents, servants, employees, and attorneys; and

9

(b) other persons in active concert or participation with Defendant or with anyone

10

described in (a).
VI.

11
12

IT IS HEREBY FURTHER ORDERED, ADJUDGED, AND DECREED that

13

Defendant is permanently restrained and enjoined from violating, directly or

14

indirectly, Section 304(a) of the Sarbanes-Oxley Act of 2002 [15 U.S.C. § 7243] by

15

failing to reimburse an issuer for any bonus or other incentive-based compensation

16

and any profits realized from the sale of the issuer’s securities during the 12-month

17

period following the first public issuance or filing with the Commission of any

18

financial document, for which an issuer is required to prepare an accounting

19

restatement due to the material noncompliance of the issuer, as a result of

20

misconduct, with any financial reporting requirement under the securities laws.

21

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

22

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

23

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

24

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

25

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

26

with anyone described in (a).

27
28

VII.
IT IS HEREBY FURTHER ORDERED, ADJUDGED, AND DECREED that,
4

1

pursuant to Section 21(d)(2) of the Exchange Act [15 U.S.C. § 78u(d)(2)] and/or

2

Section 20(e) of the Securities Act [15 U.S.C. § 77t(e)], Defendant is prohibited from

3

acting as an officer or director of any issuer that has a class of securities registered

4

pursuant to Section 12 of the Exchange Act [15 U.S.C. § 78l] or that is required to

5

file reports pursuant to Section 15(d) of the Exchange Act [15 U.S.C. § 78o(d)].
VIII.

6
7

IT IS HEREBY FURTHER ORDERED, ADJUDGED, AND DECREED that

8

Defendant is prohibited for a period of five (5) years from the date of the entry of this

9

Final Judgment from participating in an offering of penny stock, including engaging

10

in activities with a broker, dealer, or issuer for purposes of issuing, trading, or

11

inducing or attempting to induce the purchase or sale of any penny stock. A penny

12

stock is any equity security that has a price of less than five dollars, except as

13

provided in Rule 3a51-1 under the Exchange Act [17 C.F.R. § 240.3a51-1].
IX.

14
15

IT IS HEREBY FURTHER ORDERED, ADJUDGED, AND DECREED that

16

Defendant shall pay a civil penalty in the amount of $200,000.00 to the Securities and

17

Exchange Commission pursuant to Section 20(d) of the Securities Act [15 U.S.C. §

18

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

19

shall make this payment within 365 days from the date of the entry of this Final

20

Judgment.

21

Defendant may transmit payment electronically to the Commission, which will

22

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

23

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

24

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

25

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

26

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

27

Enterprise Services Center

28

Accounts Receivable Branch
5

1

6500 South MacArthur Boulevard

2

Oklahoma City, OK 73169

3

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

4

and name of this Court; Defendant’s name as a defendant in this action; and

5

specifying that payment is made pursuant to this Final Judgment.

6

Defendant shall simultaneously transmit photocopies of evidence of payment

7

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

8

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

9

interest in such funds and Defendant shall not seek or accept, directly or indirectly,

10

reimbursement or indemnification from any source, including but not limited to

11

payment made pursuant to any insurance policy, with regard to the penalty amount

12

that Defendant pays pursuant to the Final Judgment. The Commission shall send the

13

funds paid pursuant to this Final Judgment to the United States Treasury. Defendant

14

shall pay post-judgment interest on any delinquent amounts pursuant to 28 USC

15

§ 1961.

16

X.

17

IT IS HEREBY FURTHER ORDERED, ADJUDGED, AND DECREED that

18

Defendant shall reimburse Notis Global, Inc. $1,000,000.00 pursuant to Section 304

19

of the Sarbanes-Oxley Act of 2002, 15 U.S.C. § 7243(a). Defendant shall satisfy this

20

reimbursement obligation by paying Notis Global, Inc. in two (2) installments. The

21

first installment, in the amount of $333,000.00 shall be paid within thirty (30)

22

calendar days after entry of this Final Judgment. The second installment, in the

23

amount of $667,000,000.00, shall be paid within 365 days from the date of the entry

24

of this Final Judgment, plus post-judgment interest pursuant to 28 U.S.C. § 1961.

25

Defendant may transmit payment electronically to Notis Global, Inc. which will

26

provide detailed ACH transfer/Fedwire instructions upon request. All payments to

27

Notis Global, Inc. shall be accompanied by a letter identifying Bruce Bedrick as a

28

defendant in this action; setting forth the title and civil action number of this actions
6

1

and the name of this Court; and specifying that payment is made pursuant to this

2

Final Judgment. Defendant shall simultaneously transmit photocopies of such

3

payment and letter to the Commission’s counsel in this action. By making this

4

payment, Defendant relinquishes all legal and equitable right, title, and interest in

5

such funds, and Defendant shall not seek or accept, directly or indirectly,

6

reimbursement or indemnification from any source, including but not limited to

7

payment made pursuant to any insurance policy, with regard to the reimbursement

8

amount that Defendant pays pursuant to the Final Judgment. If Defendant fails to

9

make any payment by the date agreed and/or in the amount agreed according to the

10

schedule set forth above, all outstanding payments under this Final Judgment,

11

including post-judgment interest, minus any payments made, shall become due and

12

payable immediately at the discretion of the staff of the Commission without further

13

application to the Court.
XI.

14
15

IT IS HEREBY FURTHER ORDERED, ADJUDGED, AND DECREED that

16

the Consent is incorporated herein with the same force and effect as if fully set forth

17

herein, and that Defendant shall comply with all of the undertakings and agreements

18

set forth therein.

19
20

XII.
IT IS HEREBY FURTHER ORDERED, ADJUDGED, AND DECREED that,

21

solely for purposes of exceptions to discharge set forth in Section 523 of the

22

Bankruptcy Code, 11 U.S.C. §523, the allegations in the complaint are true and

23

admitted by Defendant, and further, any debt for disgorgement, prejudgment interest,

24

civil penalty or other amounts due by Defendant under this Final Judgment or any

25

other judgment, order, consent order, decree or settlement agreement entered in

26

connection with this proceeding, is a debt for the violation by Defendant of the

27

federal securities laws or any regulation or order issued under such laws, as set forth

28

in Section 523(a)(19) of the Bankruptcy Code, 11 U.S.C. §523(a)(19).
7