Securities and Exchange Commission v. Edward Chen et al

Filing 27

ORDER RE: (1) ENTRY OF PARTIAL PRELIMINARY INJUNCTION; (2) TO CONTINUE HEARING RE ORDER TO SHOW CAUSE WHY A PRELIMINARY INJUNCTION SHOULD NOT BE GRANTED; AND (3) PERMIT THE RECEIVER TO ENGAGE EB-5 COUNSEL PENDING HEARING ON THE PRELIMINARY INJUNCTION by Judge Percy Anderson. IT IS HEREBY ORDERED pending trial on the action that Defendants Edward Chen a/k/a Jianqiao Chen, Jian Qiao Chen, and Jian Chen (Edward Chen), Jean Chen a/k/a Jing Jian and Jean Jiang (Jean Chen), and their officers, agent s, servants, employees, attorneys, subsidiaries and affiliates, and those persons in active concert or participation with any of them, who receive actual notice of this Order, by personal service or otherwise, and each of them, be and hereby are p reliminarily restrained and enjoined from, directly or indirectly, in the offer or sale of any securities, by the use of any means or instruments of transportation or communication in interstate commerce or by the use of the mails: (see document for further details). (mrgo)

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1 2 3 4 5 6 7 8 UNITED STATES DISTRICT COURT 9 CENTRAL DISTRICT OF CALIFORNIA 10 11 12 SECURITIES AND EXCHANGE COMMISSION, 13 Plaintiff, 14 15 16 17 vs. EDWARD CHEN, JEAN CHEN, HOME PARADISE INVESTMENT CENTER LLC, GH INVESTMENT LP, GH DESIGN GROUP, LLC, GOLDEN GALAXY LP, AND MEGA HOME, LLC, 18 19 20 21 22 23 24 25 26 27 28 Defendants. Case No. 2:17-cv-06929-PA-JEM ORDER RE: (1) ENTRY OF PARTIAL PRELIMINARY INJUNCTION; (2) TO CONTINUE HEARING RE ORDER TO SHOW CAUSE WHY A PRELIMINARY INJUNCTION SHOULD NOT BE GRANTED; AND (3) PERMIT THE RECEIVER TO ENGAGE EB-5 COUNSEL PENDING HEARING ON THE PRELIMINARY INJUNCTION 1 This matter is before the Court on Consent and Stipulation of Edward and Jean 2 Chen to Entry of Preliminary Injunction and Orders: (1) Empowering the Receiver to 3 Employ Immigration Counsel; (2) Vacating the Hearing on the Order to Show Cause 4 Why a Preliminary Injunction Should Not Be Granted; and (3) Ordering a Hearing on 5 November 22, 2017 to Determine Whether a Permanent Receiver Should Be Appointed. 6 The Court, having previously issued a Temporary Restraining Order and Orders: 7 (1) Freezing Assets; (2) Appointing a Temporary Receiver; (3) Requiring Accountings; 8 and (4) Prohibiting the Destruction of Documents; and Order To Show Cause Re 9 Preliminary Injunction on September 20, 2017 (“TRO”); and having considered the 10 SEC’s Complaint, the TRO Application, the supporting Memorandum of Points and 11 Authorities, the supporting declarations and exhibits, the other evidence and argument 12 presented to the Court, as well as the Consents and Stipulations, finds that: 13 A. this action. 14 15 B. 18 Edward and Jean Chen have consented to the entry of a preliminary injunction on the terms below. 16 17 This Court has jurisdiction over the parties to, and the subject matter of, Preliminary Injunction Enjoining Future Violations of the Securities Laws IT IS HEREBY ORDERED pending trial on the action that Defendants Edward 19 Chen a/k/a Jianqiao Chen, Jian Qiao Chen, and Jian Chen (“Edward Chen”), Jean Chen 20 a/k/a Jing Jian and Jean Jiang (“Jean Chen”), and their officers, agents, servants, 21 employees, attorneys, subsidiaries and affiliates, and those persons in active concert or 22 participation with any of them, who receive actual notice of this Order, by personal 23 service or otherwise, and each of them, be and hereby are preliminarily restrained and 24 enjoined from, directly or indirectly, in the offer or sale of any securities, by the use of 25 any means or instruments of transportation or communication in interstate commerce or 26 by the use of the mails: 27 A. employing any device, scheme or artifice to defraud; 28 B. obtaining money or property by means of any untrue statement of a 1 1 material fact or any omission to state a material fact necessary in order to 2 make the statements made, in light of the circumstances under which they 3 were made, not misleading; or 4 C. engaging in any transaction, practice, or course of business which operates 5 or would operate as a fraud or deceit upon the purchaser; in violation of 6 Section 17(a)(1)(2) & (3) of the Securities Act, 15 U.S.C. § 77q(a)(1) (2) & 7 (3). 8 IT IS FURTHER ORDERED that pending trial on this action Defendants Edward 9 Chen, Jean Chen, and their officers, agents, servants, employees, attorneys, subsidiaries 10 and affiliates, and those persons in active concert or participation with any of them, who 11 receive actual notice of this Order, by personal service or otherwise, and each of them, 12 be and hereby are preliminarily restrained and enjoined from, directly or indirectly, in 13 connection with the purchase or sale of any security, by the use of any means or 14 instrumentality of interstate commerce, or of the mails, or of any facility of any national 15 securities exchange: 16 A. employing any device, scheme or artifice to defraud; or 17 B. engaging in any act, practice, or course of business which operates or 18 would operate as a fraud or deceit upon any person; 19 in violation of Section 10(b) of the Exchange Act, 15 U.S.C. § 78j(b), and Rules 10b- 20 5(a) and (c) thereunder, 17 C.F.R. §§ 240.10b-5(a) & (c). 21 IT IS FURTHER ORDERED that Edward Chen and his officers, agents, servants, 22 employees, attorneys, subsidiaries and affiliates, and those persons in active concert or 23 participation with any of them, who receive actual notice of this Order, by personal 24 service or otherwise, and each of them, be and hereby are preliminarily restrained and 25 enjoined from, directly or indirectly, in connection with the purchase or sale of any 26 security, by the use of any means or instrumentality of interstate commerce, or of the 27 mails, or of any facility of any national securities exchange, making any untrue 28 statement of a material fact or omitting to state a material fact necessary in order to 2 1 make the statements made, in the light of the circumstances under which they were 2 made, not misleading; in violation of Section 10(b) of the Exchange Act, 15 U.S.C. § 3 78j(b), and Rule 10b-5(b) thereunder, 17 C.F.R. § 240.10b-5(b). 4 Continued Hearing and Extension of Remaining Provisions of TRO 5 IT IS FURTHER ORDERED that the Temporary Restraining Order and Orders: 6 (1) Freezing Assets; (2) Appointing a Temporary Receiver; (3) Requiring Accountings 7 and (4) Prohibiting the Destruction of Documents shall be extended to 5:00 p.m. on 8 November 22, 2017, or to such date when the hearing on such matters is actually held; 9 That any declarations, affidavits, points and authorities or other submissions in 10 support of, or opposition to the issuance of an order continuing the aforementioned 11 provisions of the Temporary Restraining Order shall be filed with the Court and 12 electronically served on opposing counsel by the Court’s CM/ECF system no later than 13 5:00 p.m. on November 13, 2017. Any reply papers shall be filed with the Court and 14 electronically served on opposing counsel by the Court’s CM/ECF system no later than 15 5:00 p.m. on November 16, 2017. 16 IT IS FURTHER ORDERED that the Receiver's request to engage EB-5 counsel is 17 denied because of the failure to comply with the Court's October 4, 2017 Order. [Docket 18 No. 20] 19 20 21 22 23 IT IS FURTHER ORDERED that the Receiver or his designated agent may sign checks or wire instructions for the Receivership estate for times when the Receiver is unavailable. IT IS SO ORDERED. 24 DATED: October 16, 2017 25 HONORABLE PERCY ANDERSON UNITED STATES DISTRICT JUDGE 26 27 28 3

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