Securities and Exchange Commission v. Steve Qi et al

Filing 33

FINAL JUDGMENT AS TO DEFENDANTS STEVE QI AND LAW OFFICES OF STEVE QI & ASSOCIATES, A PROFESSIONAL CORPORATION 32 by Judge Cormac J. Carney. IT IS FURTHER ORDERED, ADJUDGED, AND DECREED that Defendants are jointly and severally liable for disgorgem ent of $1,317,248, representing profits gained as a result of the conduct alleged in the Complaint, together with prejudgment interest thereon in the amount of $180,835, and a civil penalty in the amount of $160,000. Defendants shall satisfy this obligation by paying in $1,658,083 to the Securities and Exchange Commission pursuant to the terms of the payment schedule. (MD JS-6, Case Terminated). (iv)

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UNITED STATES DISTRICT COURT

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CENTRAL DISTRICT OF CALIFORNIA

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JS-6

SOUTHERN DIVISION

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Case No. 2:17-cv-08856 CJC(JCx)

SECURITIES AND EXCHANGE
COMMISSION,

FINAL JUDGMENT AS TO
DEFENDANTS STEVE QI AND
LAW OFFICES OF STEVE QI &
ASSOCIATES, A PROFESSIONAL
CORPORATION

Plaintiff,
vs.

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STEVE QI and LAW OFFICES OF
STEVE QI & ASSOCIATES, A
PROFESSIONAL CORPORATION,

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Defendants.

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The Securities and Exchange Commission having filed a Complaint and

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Defendants Steve Qi and Law Offices of Steve Qi & Associates, A Professional

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Corporation (collectively, “Defendants”) having entered a general appearance;

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consented to the Court’s jurisdiction over Defendants and the subject matter of this

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action; consented to entry of this Final Judgment without admitting or denying the

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allegations of the Complaint (except as to jurisdiction and except as otherwise

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provided herein in paragraph VI); waived findings of fact and conclusions of law;

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and waived any right to appeal from this Final Judgment:

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

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Defendants are permanently restrained and enjoined from violating Section 17(a)(2)

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of the Securities Act of 1933 (the “Securities Act”), 15 U.S.C. § 77q(a), in the offer

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or sale 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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to obtain money or property by means of any untrue statement of a material fact or

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any omission of a material fact necessary in order to make the statements made, in

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light of the circumstances under which they were made, not misleading.

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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) Defendants’ officers, agents, servants, employees, and

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

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or with anyone described in (a).
II.

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IT IS HEREBY FURTHER ORDERED, ADJUDGED, AND DECREED

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that Defendants are permanently restrained and enjoined from violating Section

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15(a) of the Exchange Act, 15 U.S.C. § 78o(a), which makes it unlawful for any

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broker or dealer which is either a person other than a natural person or a natural

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person not associated with a broker or dealer which is a person other than a natural

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person (other than such a broker or dealer whose business is exclusively intrastate

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and who does not make sue of any facility of a national securities exchange), to

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make use of the mails or any means or instrumentality of interstate commerce to

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effect any transactions in, or to induce or attempt to induce the purchase or sale of,

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any security (other than an exempted security or commercial paper, bankers’

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acceptances, or commercial bills) unless such broker or dealer is registered in

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accordance with Section 15(b) of the Exchange Act, 15 U.S.C. § 78o(b).

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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) Defendants’ officers, agents, servants, employees, and

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

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or with anyone described in (a).
III.

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IT IS FURTHER ORDERED, ADJUDGED, AND DECREED that

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Defendants are jointly and severally liable for disgorgement of $1,317,248,

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representing profits gained as a result of the conduct alleged in the Complaint,

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together with prejudgment interest thereon in the amount of $180,835, and a civil

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penalty in the amount of $160,000 pursuant to Section 20(d) of the Securities Act,

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15 U.S.C. § 77t(d), and Section 21(d)(3) of the Exchange Act, 15 U.S.C.

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§ 78u(d)(3). Defendants shall satisfy this obligation by paying in $1,658,083 to the

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Securities and Exchange Commission pursuant to the terms of the payment

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schedule set forth in paragraph IV below.

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Defendants may transmit payment electronically to the Commission, which

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will provide detailed ACH transfer/Fedwire instructions upon request. Payment

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may also be made directly from a bank account via Pay.gov through the SEC

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website at http://www.sec.gov/about/offices/ofm.htm. Defendants may also pay by

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

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

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Enterprise Services Center
Accounts Receivable Branch
6500 South MacArthur Boulevard
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; Steve Qi and Law Offices of Steve Qi & Associates, A

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Professional Corporation as defendants in this action; and specifying that payment

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is made pursuant to this Final Judgment.

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Defendants shall simultaneously transmit photocopies of evidence of

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payment and case identifying information to the Commission’s counsel in this

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action. By making this payment, Defendants relinquishes all legal and equitable
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right, title, and interest in such funds and no part of the funds shall be returned to

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Defendant. The Commission shall send the funds paid pursuant to this Final

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Judgment to the United States Treasury.

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The Commission may enforce the Court’s judgment for disgorgement and

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

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procedures authorized by law) at any time after 14 days following entry of this

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Final Judgment. Defendants shall pay post judgment interest on any delinquent

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amounts pursuant to 28 U.S.C. § 1961.

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IV.
Defendants shall pay the total of disgorgement, prejudgment interest, and

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penalty due of $1,658,083 in five installments to the Commission according to the

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following schedule: (1) $233,000 within 14 days of entry of this Final Judgment;

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(2) $250,000 within 90 days of entry of this Final Judgment; (3) $250,000 within

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180 days of entry of this Final Judgment; (4) $250,000 within 270 days of entry of

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this Final Judgment; and (5) $675,083 within 360 days of entry of this Final

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Judgment. Payments shall be deemed made on the date they are received by the

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Commission and shall be applied first to post judgment interest, which accrues

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pursuant to 28 U.S.C. § 1961 on any unpaid amounts due after 14 days of the entry

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of Final Judgment. Prior to making the final payment set forth herein, Defendants

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shall contact the staff of the Commission for the amount due for the final payment.

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If Defendants fail to make any payment by the date agreed and/or in the

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amount agreed according to the schedule set forth above, all outstanding payments

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under this Final Judgment, including post-judgment interest, minus any payments

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made, shall become due and payable immediately at the discretion of the staff of the

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Commission without further application to the Court.

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V.

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IT IS FURTHER ORDERED, ADJUDGED, AND DECREED that the

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Consents are incorporated herein with the same force and effect as if fully set forth
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herein, and that Defendants shall comply with all of the undertakings and

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agreements set forth therein.
VI.

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

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

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

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Defendant Qi, and further, any debt for disgorgement, prejudgment interest, civil

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

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

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

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

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

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VII.

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IT IS FURTHER ORDERED, ADJUDGED, AND DECREED that this

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Court shall retain jurisdiction of this matter for the purposes of enforcing the terms

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of this Final Judgment.

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Dated: November 5, 2018
UNITED STATES DISTRICT JUDGE

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