Securities and Exchange Commission v. Belson et al

Filing 19

FINAL JUDGMENT AS TO DEFENDANT RESIDENCE AT ST. IVES, LLC by Judge Percy Anderson, in favor of Securities and Exchange Commission against Residence at St. Ives, LLC Related to: Stipulation for Settlement 8 . IT IS HEREBY ORDERED, ADJUDGED, AND DE CREED that Defendant is permanently restrained and enjoined from violating, directly or indirectly, Section 10(b) of the Securities Exchange 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 securities exchange, in connection with the purchase or sale of any security: (see document for details). (MD JS-6, Case Terminated). (mrgo)

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JS-6 1 2 3 4 5 6 7 8 KRISTIN S. ESCALANTE, Cal. Bar No. 169635 Email: escalantek@sec.gov MATTHEW T. MONTGOMERY, Cal. Bar No. 260149 Email: montgomerym@sec.gov Attorneys for Plaintiff Securities and Exchange Commission Michele Wein Layne, Regional Director John W. Berry, Associate Regional Director Alka N. Patel, Associate Regional Director Amy Jane Longo, Regional Trial Counsel 444 S. Flower Street, Suite 900 Los Angeles, California 90071 Telephone: (323) 965-3998 Facsimile: (213) 443-1904 9 UNITED STATES DISTRICT COURT 10 CENTRAL DISTRICT OF CALIFORNIA 11 12 SECURITIES AND EXCHANGE COMMISSION, 13 Plaintiff, 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 vs. JAY BELSON, SMARTE REAL ESTATE INVESTMENTS, INC., JACK ROCKMAN, LLC, JOHN BLACKSTONE, LLC, RESIDENCE AT ST. IVES, LLC, AND BELLAGIO PLACE RESIDENCE, LLC, Defendants. Case No. CV 17-5953 PA (KSx) FINAL JUDGMENT AS TO DEFENDANT RESIDENCE AT ST. IVES, LLC 1 The Securities and Exchange Commission having filed a Complaint and 2 Defendant Residences at St. Ives, LLC, having entered a general appearance; 3 consented to the Court’s jurisdiction over Defendant and the subject matter of this 4 action; consented to entry of this Final Judgment without admitting or denying the 5 allegations of the Complaint (except as to jurisdiction and except as otherwise 6 provided herein in paragraph VI); waived findings of fact and conclusions of law; and 7 waived any right to appeal from this Final Judgment: 8 9 I. IT IS HEREBY ORDERED, ADJUDGED, AND DECREED that Defendant is 10 permanently restrained and enjoined from violating, directly or indirectly, Section 11 10(b) of the Securities Exchange Act of 1934 (the “Exchange Act”) [15 U.S.C. § 12 78j(b)] and Rule 10b-5 promulgated thereunder [17 C.F.R. § 240.10b-5], by using 13 any means or instrumentality of interstate commerce, or of the mails, or of any 14 facility of any national securities exchange, in connection with the purchase or sale of 15 any security: 16 (a) to employ any device, scheme, or artifice to defraud; 17 (b) to make any untrue statement of a material fact or to omit to state 18 a material fact necessary in order to make the statements made, in 19 the light of the circumstances under which they were made, not 20 misleading; or 21 22 (c) to engage in any act, practice, or course of business which operates or would operate as a fraud or deceit upon any person. 23 IT IS FURTHER ORDERED, ADJUDGED, AND DECREED that, as 24 provided in Federal Rule of Civil Procedure 65(d)(2), the foregoing paragraph also 25 binds the following who receive actual notice of this Final Judgment by personal 26 service or otherwise: (a) Defendant’s officers, agents, servants, employees, and 27 attorneys; and (b) other persons in active concert or participation with Defendant or 28 with anyone described in (a). 1 1 II. 2 IT IS HEREBY FURTHER ORDERED, ADJUDGED, AND DECREED that 3 Defendant is permanently restrained and enjoined from violating Section 17(a) of the 4 Securities Act of 1933 (the “Securities Act”) [15 U.S.C. § 77q(a)] in the offer or sale 5 of any security by the use of any means or instruments of transportation or 6 communication in interstate commerce or by use of the mails, directly or indirectly: 7 (a) to employ any device, scheme, or artifice to defraud; 8 (b) to obtain money or property by means of any untrue statement of a material fact or any omission of a material fact necessary in order 9 10 to make the statements 11 under which they were made, not misleading; or 12 13 (c) made, in light of the circumstances to engage in any transaction, practice, or course of business which operates or would operate as a fraud or deceit upon the purchaser. 14 IT IS FURTHER ORDERED, ADJUDGED, AND DECREED that, as 15 provided in Federal Rule of Civil Procedure 65(d)(2), the foregoing paragraph also 16 binds the following who receive actual notice of this Final Judgment by personal 17 service or otherwise: (a) Defendant’s officers, agents, servants, employees, and 18 attorneys; and (b) other persons in active concert or participation with Defendant or 19 with anyone described in (a). 20 21 III. IT IS HEREBY FURTHER ORDERED, ADJUDGED, AND DECREED that 22 Defendant is liable, jointly and severally with Defendants Smarte Real Estate 23 Investments, Inc., Jack Rockman, LLC, John Blackstone, LLC, Bellagio Place 24 Residence, LLC, and Jay Belson, for disgorgement of $1,824,872.04, representing 25 profits gained as a result of the conduct alleged in the Complaint, together with 26 prejudgment interest thereon in the amount of $73,993.52, for a total of 27 $1,898,865.56. Defendant shall satisfy this obligation by paying $1,898,865.56 to the 28 Securities and Exchange Commission within 14 days after entry of this Final 2 1 Judgment. 2 Defendant may transmit payment electronically to the Commission, which will 3 provide detailed ACH transfer/Fedwire instructions upon request. Payment may also 4 be made directly from a bank account via Pay.gov through the SEC website at 5 http://www.sec.gov/about/offices/ofm.htm. Defendant may also pay by certified 6 check, bank cashier’s check, or United States postal money order payable to the 7 Securities and Exchange Commission, which shall be delivered or mailed to Enterprise Services Center Accounts Receivable Branch 6500 South MacArthur Boulevard Oklahoma City, OK 73169 8 9 10 11 and shall be accompanied by a letter identifying the case title, civil action number, 12 and name of this Court; Residences at St. Ives, LLC as a defendant in this action; and 13 specifying that payment is made pursuant to this Final Judgment. 14 Defendant shall simultaneously transmit photocopies of evidence of payment 15 and case identifying information to the Commission’s counsel in this action. By 16 making this payment, Defendant relinquishes all legal and equitable right, title, and 17 interest in such funds and no part of the funds shall be returned to Defendant. 18 The Commission shall hold the funds (collectively, the “Fund”) and may 19 propose a plan to distribute the Fund subject to the Court’s approval. The Court shall 20 retain jurisdiction over the administration of any distribution of the Fund. If the 21 Commission staff determines that the Fund will not be distributed, the Commission 22 shall send the funds paid pursuant to this Final Judgment to the United States 23 Treasury. 24 The Commission may enforce the Court’s judgment for disgorgement and 25 prejudgment interest by moving for civil contempt (and/or through other collection 26 procedures authorized by law) at any time after 14 days following entry of this Final 27 Judgment. Defendant shall pay post judgment interest on any delinquent amounts 28 pursuant to 28 U.S.C. § 1961. 3 1 2 IV. IT IS FURTHER ORDERED, ADJUDGED, AND DECREED that 3 Defendant shall pay a civil penalty in the amount of $905,353 to the Securities and 4 Exchange Commission pursuant to Section 20(d) of the Securities Act, 15 U.S.C. § 5 77t(d), and Section 21(d)(3) of the Exchange Act, 15 U.S.C. § 78u(d)(3). Defendant 6 shall make this payment within 14 days after entry of this Final Judgment. 7 Defendant may transmit payment electronically to the Commission, which will 8 provide detailed ACH transfer/Fedwire instructions upon request. Payment may also 9 be made directly from a bank account via Pay.gov through the SEC website at 10 http://www.sec.gov/about/offices/ofm.htm. Defendant may also pay by certified 11 check, bank cashier’s check, or United States postal money order payable to the 12 Securities and Exchange Commission, which shall be delivered or mailed to 13 14 Enterprise Services Center Accounts Receivable Branch 6500 South MacArthur Boulevard Oklahoma City, OK 73169 15 16 and shall be accompanied by a letter identifying the case title, civil action number, 17 and name of this Court; Residences at St. Ives, LLC as a defendant in this action; and 18 specifying that payment is made pursuant to this Final Judgment. 19 Defendant shall simultaneously transmit photocopies of evidence of payment 20 and case identifying information to the Commission’s counsel in this action. By 21 making this payment, Defendant relinquishes all legal and equitable right, title, and 22 interest in such funds and no part of the funds shall be returned to Defendant. The 23 Commission shall send the funds paid pursuant to this Final Judgment to the United 24 States Treasury. Defendant shall pay post-judgment interest on any delinquent 25 amounts pursuant to 28 USC § 1961. 26 27 28 V. IT IS FURTHER ORDERED, ADJUDGED, AND DECREED that the Consent is incorporated herein with the same force and effect as if fully set forth 4 1 herein, and that Defendant shall comply with all of the undertakings and agreements 2 set forth therein. 3 4 VI. IT IS FURTHER ORDERED, ADJUDGED, AND DECREED that this 5 Court shall retain jurisdiction of this matter for the purposes of enforcing the terms of 6 this Final Judgment. 7 8 9 Dated: ______________, _____ August 14 2017 ________________________________ UNITED STATES DISTRICT JUDGE 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 5

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