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

Filing 135

FINAL JUDGMENT AS TO DEFENDANT PATRICK EGAN by Judge Wesley L. Hsu in favor of United States Securities and Exchange Commission against Patrick Egan: IT IS HEREBY ORDERED, ADJUDGED, AND DECREED that Defendant is permanently restrained and enjoined. Defendant shall satisfy this obligation by paying $18,308.66 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

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CENTRAL DISTRICT OF CALIFORNIA

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UNITED STATES SECURITIES
AND EXCHANGE COMMISSION,

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Plaintiff,

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

WESTERN INTERNATIONAL
SECURITIES, INC., NANCY COLE,
PATRICK EGAN, ANDY
GITIPITYAPON, STEVEN
GRAHAM, and THOMAS SWAN,

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Defendants,

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FINAL JUDGMENT AS TO DEFENDANT PATRICK EGAN
The Securities and Exchange Commission having filed a Complaint and
Defendant Patrick Egan (“Defendant”) having entered a general appearance;

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consented to the Court’s jurisdiction over Defendant 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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Final Judgment as to Defendant Patrick Egan

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

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provided herein in paragraph IV); waived findings of fact and conclusions of law;
and 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
15l-1(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
transaction or investment strategy involving securities to a retail customer, to act in
the best interest of the retail customer at the time the recommendation is made,

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without placing his 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
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

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

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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 liable for disgorgement of $5,490.00 representing net profits

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Final Judgment as to Defendant Patrick Egan

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gained as a result of the conduct alleged in the Complaint, together with
prejudgment interest thereon in the amount of $318.66, and a civil penalty in the
amount of $12,500 pursuant to Sections 21(d)(3), (5), and (7) of the Exchange Act

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[15 U.S.C. §§ 78u(d)(3), (5), (7)]. Defendant shall satisfy this obligation by paying

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$18,308.66 to the Securities and Exchange Commission within 30 days after entry

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of this Final Judgment.

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Defendant 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. Defendant 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
Enterprise Services Center
Accounts Receivable Branch
6500 South MacArthur Boulevard
Oklahoma City, OK 73169
and shall be accompanied by a letter identifying the case title, civil action number,
and name of this Court; Patrick Egan as a defendant in this 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

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Final Judgment as to Defendant Patrick Egan

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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.

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The Commission may enforce the Court’s judgment for disgorgement and
prejudgment interest by using all collection procedures authorized by law,
including, but not limited to, moving for civil contempt at any time after 30 days

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following entry of this Final Judgment.
The Commission may enforce the Court’s judgment for penalties by the use
of all collection procedures authorized by law, including the Federal Debt

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Collection Procedures Act, 28 U.S.C. § 3001 et seq., and moving for civil

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contempt for the violation of any Court orders issued in this action. Defendant

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shall pay post judgment interest on any amounts due after 30 days of the entry of
this Final 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
Court’s approval. Such a plan may provide that the Fund shall be distributed
pursuant to the Fair Fund provisions of Section 308(a) of the Sarbanes-Oxley Act

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of 2002. The Court shall retain jurisdiction over the administration of any

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distribution of the Fund and the Fund may only be disbursed pursuant to an Order

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Final Judgment as to Defendant Patrick Egan

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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

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based on Defendant’s payment of disgorgement in this action, argue that he is
entitled to, nor shall he further benefit by, offset or reduction of such compensatory
damages award by the amount of any part of Defendant’s payment of a civil

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penalty in this action (“Penalty Offset”). If the court in any Related Investor

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Action grants such a Penalty Offset, Defendant shall, within 30 days after entry of

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a final order granting the Penalty Offset, notify the Commission’s counsel in this
action and pay the amount of the Penalty Offset to the United States Treasury or to
a Fair Fund, as the Commission directs. Such a payment shall not be deemed an
additional civil penalty and shall not be deemed to change the amount of the civil

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penalty imposed in this Judgment. For purposes of this paragraph, a “Related

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Investor Action” means a private damages action brought against Defendant by or

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on behalf of one or more investors based on substantially the same facts as alleged
in the Complaint in this action.

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Final Judgment as to Defendant Patrick Egan

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

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III.

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IT IS FURTHER ORDERED, ADJUDGED, AND DECREED that the

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Consent is incorporated herein with the same force and effect as if fully set forth

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herein, and that Defendant shall comply with all of the undertakings and

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agreements set forth therein.

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IV.

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IT IS FURTHER ORDERED, ADJUDGED, AND DECREED that, solely for
purposes of exceptions to discharge set forth in Section 523 of the Bankruptcy Code,

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

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and further, any debt for disgorgement, prejudgment interest, civil penalty or other

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amounts due by Defendant under this Final Judgment or any other judgment, order,

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consent order, decree or settlement agreement entered in connection with this

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proceeding, is a debt for the violation by Defendant of the federal securities laws or

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any regulation or order issued under such laws, as set forth in Section 523(a)(19) of

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the Bankruptcy Code, 11 U.S.C. §523(a)(19).

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Final Judgment as to Defendant Patrick Egan

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

V.

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IT IS FURTHER ORDERED, ADJUDGED, AND DECREED that this
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: August 28, 2024

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____________________________________
HON. WESLEY L. HSU
UNITED STATES DISTRICT JUDGE

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Final Judgment as to Defendant Patrick Egan

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