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

Filing 90

JUDGMENT AS TO DEFENDANT TITANIUM BLOCKCHAIN INFRASTRUCTURE SERVICES, INC by Judge Dale S. Fischer. See judgment for specifics. (MD JS-6. Case Terminated) (lom)

JS-6

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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
TITANIUM BLOCKCHAIN
INFRASTRUCTURE SERVICES, INC.

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)

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JUDGMENT AS TO DEFENDANT TITANIUM BLOCKCHAIN INFRASTRUCTURE
SERVICES, INC.
The Securities and Exchange Commission having filed a Complaint and Defendant Titanium
Blockchain Infrastructure Services, Inc. having entered a general appearance; consented to the

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

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Final Judgment without admitting or denying the allegations of the Complaint (except as to

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jurisdiction and except as otherwise provided herein); waived findings of fact and conclusions of

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law; and waived any right to appeal from this Final Judgment:

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I.
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

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Exchange Act of 1934 (the “Exchange Act”) [15 U.S.C. § 78j(b)] and Rule 10b-5 promulgated

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thereunder [17 C.F.R. § 240.10b-5], by using any means or instrumentality of interstate commerce,

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

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purchase or sale of any security:

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(a)

to employ any device, scheme, or artifice to defraud;

(b)

to make any untrue statement of a material fact or to omit to state a material fact
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

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(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
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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II.
IT IS HEREBY FURTHER ORDERED, ADJUDGED, AND DECREED that Defendant is
permanently restrained and enjoined from violating Section 17(a) of the Securities Act of 1933 (the
“Securities Act”) [15 U.S.C. § 77q(a)] in the offer or sale of any security by the use of any means or

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instruments of transportation or communication in interstate commerce or by use of the mails,

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directly or indirectly:

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(a)

to employ any device, scheme, or artifice to defraud;

(b)

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

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)

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to engage in any transaction, practice, or course of business which operates or

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,
agents, servants, employees, and attorneys; and (b) other persons in active concert or participation
with Defendant or with anyone described in (a).
III.

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or

would operate as a fraud or deceit upon the purchaser.

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or

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

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or instruments of transportation or communication in interstate commerce or of the

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mails to sell such security through the use or medium of any prospectus or otherwise;

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(b)

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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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Unless a registration statement is in effect as to a security, carrying or causing to be

(c)

Making use of any means or instruments of transportation or communication in

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interstate commerce or of the mails to offer to sell or offer to buy through the use or

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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
statement is the subject of a refusal order or stop order or (prior to the effective date
of the registration statement) any public proceeding or examination under Section 8
of the Securities Act [15 U.S.C. § 77h].
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).
IV.
IT IS HEREBY FURTHER ORDERED, ADJUDGED, AND DECREED that Defendant

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shall pay disgorgement of ill-gotten gains, prejudgment interest thereon, and a civil penalty pursuant

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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

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federal income tax as set forth in 26 U.S.C. § 6621(a)(2). In connection with the Commission’s

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motion for disgorgement and/or civil penalties, and at any hearing held on such a motion: (a)

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

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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.
V.

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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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VI.
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.

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IT IS SO ORDERED.
Date: May 23, 2019

___________________________
Dale S. Fischer
United States District Judge

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