Securities and Exchange Commission v. Titanium Blockchain Infrastructure Services Inc. et al

Filing 87

JUDGMENT by Judge Dale S. Fischer. Related to: Stipulation for Judgment as to Defendant Michael Alan Stollery aka Michael Stollaire 83 . (SEE JUDGMENT FOR SPECIFICS). (jp)

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DOUGLAS M. MILLER (Cal. Bar No. 240398)
Email: [e-mail]
DAVID S. BROWN (Cal. Bar No. 134569)
Email: [e-mail]
Attorneys for Plaintiff
Securities and Exchange Commission
Joseph G. Sansone, Unit Chief (Market Abuse Unit)
New York Regional Office
200 Vesey Street, Suite 400
New York, New York 10281
Robert A. Cohen, Unit Chief (Cyber Unit)
Headquarters
100 F Street, N.E.
Washington, District of Columbia 20549
Michele Wein Layne, Regional Director
Amy J. Longo, Regional Trial Counsel
444 S. Flower Street, Suite 900
Los Angeles, California 90071
Telephone: [phone]
Facsimile: [phone]

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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,

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Plaintiff,

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vs.

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JUDGMENT AS TO DEFENDANT
MICHAEL ALAN STOLLERY, aka
MICHAEL STOLLAIRE

TITANIUM BLOCKCHAIN
INFRASTRUCTURE SERVICES,
INC.; EHI INTERNETWORK AND
SYSTEMS MANAGEMENT, INC.
aka EHI-INSM, INC.; and MICHAEL
ALAN STOLLERY aka MICHAEL
STOLLAIRE,

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Case No. CV18-4315-DSF (JPRx)

Defendants.

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Case No. CV18-4315-DSF (JPRx)

JUDGMENT AS TO DEFENDANT MICHAEL STOLLAIRE

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The Securities and Exchange Commission having filed a Complaint and Defendant Michael

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Alan Stollery aka Michael Stollaire having entered a general appearance; consented to the Court’s

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jurisdiction over Defendant and the subject matter of this action; consented to entry of this Final

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Judgment without admitting or denying the allegations of the Complaint (except as to jurisdiction
and except as otherwise provided herein in paragraph VII); waived findings of fact and conclusions
of law; and waived any right to appeal from this Final Judgment:
I.

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IT IS HEREBY ORDERED, ADJUDGED, AND DECREED 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:

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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 material fact

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necessary in order to make the statements made, in the light of the circumstances

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under which they were made, not misleading; or
(c)

to engage in any act, practice, or course of business which operates or would
operate as a fraud or deceit upon any person.

IT IS FURTHER ORDERED, ADJUDGED, AND DECREED that, as provided in Federal

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Rule of Civil Procedure 65(d)(2), the foregoing paragraph also binds the following who receive

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actual notice of this Final Judgment by personal service or otherwise: (a) Defendant’s officers,

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agents, servants, employees, and attorneys; and (b) other persons in active concert or participation

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with Defendant or with anyone described in (a).

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II.

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

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permanently restrained and enjoined from violating Section 17(a) of the Securities Act of 1933 (the

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“Securities Act”) [15 U.S.C. § 77q(a)] in the offer or sale of any security by the use of any means or
instruments of transportation or 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 material fact

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any omission of a material fact necessary in order to make the statements made, in light of
the circumstances under which they were made, not misleading;
(c)

or

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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or

IT IS FURTHER ORDERED, ADJUDGED, AND DECREED that, as provided in Federal

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Rule of Civil Procedure 65(d)(2), the foregoing paragraph also binds the following who receive

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actual notice of this Final Judgment by personal service or otherwise: (a) Defendant’s officers,

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agents, servants, employees, and attorneys; and (b) other persons in active concert or participation

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with Defendant or with anyone described in (a).

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III.

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

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permanently restrained and enjoined from violating Section 5 of the Securities Act [15 U.S.C. §

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77e] by, directly or indirectly, in the absence of any 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 interstate commerce or of the
mails to sell such security through the use 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 causing to be

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carried through the mails or in interstate commerce, by any means or instruments of

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transportation, any such security for the purpose of sale or for delivery after sale; or

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(c)

Making use of any means or instruments of transportation or communication in
interstate commerce or of the mails to offer to sell or offer to buy through the use or
medium of any prospectus or otherwise any security, unless a registration statement

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has been filed with the Commission as to such security, or while the registration

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statement is the subject of a refusal order or stop order or (prior to the effective date

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of the registration statement) any public proceeding or examination under Section 8

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of the Securities Act [15 U.S.C. § 77h].
IT IS FURTHER ORDERED, ADJUDGED, AND DECREED that, as provided in Federal
Rule of Civil Procedure 65(d)(2), the foregoing paragraph also binds the following who receive

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actual notice of this Final Judgment by personal service or otherwise: (a) Defendant’s officers,

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agents, servants, employees, and attorneys; and (b) other persons in active concert or participation

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with Defendant or with anyone described in (a).

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IV.
IT IS HEREBY ORDERED, ADJUDGED, AND DECREED that Defendant is permanently
restrained and enjoined from directly or indirectly, including, but not limited to, through any entity
owned or controlled by Defendant, participating in the offering of digital or other securities,

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provided, however, that such injunction shall not prevent Defendant from purchasing or selling

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digital or other securities for himself or his own personal account.

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IT IS FURTHER ORDERED, ADJUDGED, AND DECREED that, as provided in Federal
Rule of Civil Procedure 65(d)(2), the foregoing paragraph also binds the following who receive
actual notice of this Final Judgment by personal service or otherwise: (a) Defendant’s officers,

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agents, servants, employees, and attorneys; and (b) other persons in active concert or participation

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with Defendant or with anyone described in (a).

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V.
IT IS HEREBY FURTHER ORDERED, ADJUDGED, AND DECREED that Defendant
shall pay disgorgement of ill-gotten gains, prejudgment interest thereon, and a civil penalty pursuant
to Section 20(d) of the Securities Act [15 U.S.C. § 77t(d)] and Section 21(d)(3) of the Exchange Act

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[15 U.S.C. § 78u(d)(3)]. The Court shall determine the amounts of the disgorgement and civil

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penalty upon motion of the Commission. Prejudgment interest shall be calculated from November

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2017, based on the rate of interest used by the Internal Revenue Service for the underpayment of
federal income tax as set forth in 26 U.S.C. § 6621(a)(2). In connection with the Commission’s
motion for disgorgement and/or civil penalties, and at any hearing held on such a motion: (a)
Defendant will be precluded from arguing that he did not violate the federal securities laws as

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alleged in the Complaint; (b) Defendant may not challenge the validity of the Consent or this Final

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Judgment; (c) solely for the purposes of such motion, the allegations of the Complaint shall be

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accepted as and deemed true by the Court; and (d) the Court may determine the issues raised in the

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motion on the basis of affidavits, declarations, excerpts of sworn deposition or investigative

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testimony, and documentary evidence, without regard to the standards for summary judgment
contained in Rule 56(c) of the Federal Rules of Civil Procedure. In connection with the
Commission’s motion for disgorgement and/or civil penalties, the parties may take discovery,
including discovery from appropriate non-parties.
VI.

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IT IS FURTHER ORDERED, ADJUDGED, AND DECREED that the Consent is

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incorporated herein with the same force and effect as if fully set forth herein, and that Defendant

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shall comply with all of the undertakings and agreements set forth therein.

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VII.

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IT IS FURTHER ORDERED, ADJUDGED, AND DECREED that, solely for purposes of

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exceptions to discharge set forth in Section 523 of the Bankruptcy Code, 11 U.S.C. §523, the

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allegations in the complaint are true and admitted by Defendant, and further, any debt for

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disgorgement, prejudgment interest, civil penalty or other amounts due by Defendant under this
Final Judgment or any other judgment, order, consent order, decree or settlement agreement entered
in connection with this proceeding, is a debt for the violation by Defendant of the federal securities
laws or any regulation or order issued under such laws, as set forth in Section 523(a)(19) of the
Bankruptcy Code, 11 U.S.C. §523(a)(19).

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VIII.
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.
Dated: May 14, 2019

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___________________________
Dale S. Fischer
United States District Judge

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