United States Securities and Exchange Commission v. Western International Securities, Inc. et al

Filing 133

FINAL JUDGMENT AS TO DEFENDANT WESTERN INTERNATIONAL SECURITIES, INC. by Judge Wesley L. Hsu in favor of United States Securities and Exchange Commission against Western International Securities, Inc.: IT IS HEREBY ORDERED, ADJUDGED, AND DECREED th at Defendant is permanently restrained and enjoined. Defendant shall satisfy this obligation by paying $196,468.63 to the Securities and Exchange Commission within 30 days after entry of this Final Judgment. 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. (see document for further details) Related to: NOTICE OF MOTION AND MOTION for Judgment by Consent 129 . (bm)

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UNITED STATES DISTRICT COURT
CENTRAL DISTRICT OF CALIFORNIA

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UNITED STATES SECURITIES
AND EXCHANGE COMMISSION,

Case No. 2:22-cv-04119-WLH-JCx

Plaintiff,
v.
WESTERN INTERNATIONAL
SECURITIES, INC., NANCY COLE,
PATRICK EGAN, ANDY
GITIPITYAPON, STEVEN
GRAHAM, and THOMAS SWAN,
Defendants,
FINAL JUDGMENT AS TO DEFENDANT
WESTERN INTERNATIONAL SECURITIES, INC.
The Securities and Exchange Commission (“Commission”) having filed a

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Complaint and Defendant Western International Securities, Inc. (“Western” or

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“Defendant”) 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

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of this Final Judgment without admitting or denying the allegations of the Complaint

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(except as to jurisdiction); waived findings of fact and conclusions of law; and

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Final Judgment of Defendant Western International
Securities, Inc.

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Case No. 2:22-cv-04119-WLH-JCx

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waived any right to appeal from this Final Judgment:

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I.

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IT IS HEREBY ORDERED, ADJUDGED, AND DECREED that Defendant is
permanently restrained and enjoined from violating, directly or indirectly, Rule 15l1(a)(1) of the Securities Exchange Act of 1934 (the “Exchange Act”) [15 CFR §

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240.15l-1(a)(1)], by failing, when making a recommendation of any securities

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transaction or investment strategy involving securities to a retail customer, to act in

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the best interest of the retail customer at the time the recommendation is made,

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without placing its financial or other interest ahead of the interest of the retail

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customer.

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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) Defendant’s officers, agents, servants, employees, and

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

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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

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Defendant is liable for disgorgement of $34,468, representing net profits gained as a
result of conduct alleged in the Complaint, together with prejudgment interest
thereon in the amount of $2,000.63, and a civil penalty in the amount of $160,000
Final Judgment of Defendant Western International
Securities, Inc.

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Case No. 2:22-cv-04119-WLH-JCx

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pursuant to Sections 21(d)(3), (5), and (7) of the Exchange Act [15 U.S.C. §§
78u(d)(3), (5), (7)]. Defendant shall satisfy this obligation by paying $196,468.63 to

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the Securities and Exchange Commission within 30 days after entry of this Final
Judgment.
Defendant may transmit payment electronically to the Commission, which will

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provide detailed ACH transfer/Fedwire instructions upon request. Payment may also

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be made directly from a bank account via Pay.gov through the SEC website at

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http://www.sec.gov/about/offices/ofm.htm. Defendant may also pay by certified

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

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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; Western International Securities, Inc. as a defendant in this

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action; and specifying that payment is made pursuant to this Final Judgment.
Defendant shall simultaneously transmit photocopies of evidence of payment
and case identifying information to the Commission’s counsel in this action. By
making this payment, Defendant relinquishes all legal and equitable right, title, and
interest in such funds and no part of the funds shall be returned to Defendant.
The Commission may enforce the Court’s judgment for disgorgement and

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prejudgment interest by using all collection procedures authorized by law, including,
Final Judgment of Defendant Western International
Securities, Inc.

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Case No. 2:22-cv-04119-WLH-JCx

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but not limited to, moving for civil contempt at any time after 30 days following entry
of this Final Judgment.

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The Commission may enforce the Court’s judgment for penalties by the use of
all collection procedures authorized by law, including the Federal Debt Collection
Procedures Act, 28 U.S.C. § 3001 et seq., and moving for civil contempt for the

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violation of any Court orders issued in this action. Defendant shall pay post

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judgment interest on any amounts due after 30 days of the entry of this Final

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Judgment pursuant to 28 U.S.C. § 1961.
The Commission shall hold the funds, together with any interest and income
earned thereon (collectively, the “Fund”), pending further order of the Court.
The Commission may propose a plan to distribute the Fund subject to the

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Court’s approval. Such a plan may provide that the Fund shall be distributed

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pursuant to the Fair Fund provisions of Section 308(a) of the Sarbanes-Oxley Act of

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2002. The Court shall retain jurisdiction over the administration of any distribution
of the Fund and the Fund may only be disbursed pursuant to an Order of the Court.
Regardless of whether any such Fair Fund distribution is made, amounts
ordered to be paid as civil penalties pursuant to this Judgment shall be treated as

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penalties paid to the government for all purposes, including all tax purposes. To

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preserve the deterrent effect of the civil penalty, Defendant shall not, after offset or

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reduction of any award of compensatory damages in any Related Investor Action
based on Defendant’s payment of disgorgement in this action, argue that it is entitled
Final Judgment of Defendant Western International
Securities, Inc.

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Case No. 2:22-cv-04119-WLH-JCx

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to, nor shall it further benefit by, offset or reduction of such compensatory damages
award by the amount of any part of Defendant’s payment of a civil penalty in this

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action (“Penalty Offset”). If the court in any Related Investor Action grants such a
Penalty Offset, Defendant shall, within 30 days after entry of a final order granting
the Penalty Offset, notify the Commission’s counsel in this action and pay the amount

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of the Penalty Offset to the United States Treasury or to a Fair Fund, as the

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Commission directs. Such a payment shall not be deemed an additional civil penalty

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and shall not be deemed to change the amount of the civil penalty imposed in this

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Judgment. For purposes of this paragraph, a “Related Investor Action” means a

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private damages action brought against Defendant by or on behalf of one or more

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investors based on substantially the same facts as alleged in the Complaint in this
action.

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III.
IT IS FURTHER ORDERED, ADJUDGED, AND DECREED that the
Consent executed by Defendant in connection with this Final Judgment is

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

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

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Final Judgment of Defendant Western International
Securities, Inc.

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Case No. 2:22-cv-04119-WLH-JCx

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IV.
IT IS FURTHER ORDERED, ADJUDGED, AND DECREED that this Court

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shall retain jurisdiction of this matter for the purposes of enforcing the terms of this
Final Judgment.

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Dated: August 28, 2024
______________________________________
HON. WESLEY L. HSU
UNITED STATES DISTRICT JUDGE

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Final Judgment of Defendant Western International
Securities, Inc.

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Case No. 2:22-cv-04119-WLH-JCx