Securities and Exchange Commission v. Nicolas Arkells

Filing 34

JUDGMENT AS TO NICOLAS ARKELLS by Judge Christina A. Snyder: 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 193 4 (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: (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 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 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 instruments of transportation or communication in interstate commerce or by use of the mails, directly or indirectly: (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 or 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; or (c) to engage in any transaction, practice, or course of business which operates or would ope rate as a fraud or deceit upon the purchaser. 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 Judgment. There being no just reason for delay, pursuant to Rule 54(b) of the Federal Rules of Civil Procedure, the Clerk is ordered to enter this Judgment forthwith and without further notice. See order for more information. Related to: Stipulation for Judgment 33 (MD JS-6, Case Terminated). (shb)

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The Securities and Exchange Commission having filed a Complaint and Defendant

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Nicolas Arkells 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

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

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jurisdiction and except as otherwise provided herein in paragraphs VI and VIII); waived

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findings of fact and conclusions of law; and waived any right to appeal from this

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Judgment:

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

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permanently restrained and enjoined from violating, directly or indirectly, Section 10(b)

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of the Securities Exchange Act of 1934 (the “Exchange Act”) [15 U.S.C. § 78j(b)] and

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Rule 10b-5 promulgated thereunder [17 C.F.R. § 240.10b-5], by using any means or

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instrumentality of interstate commerce, or of the mails, or of any facility of any national

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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

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

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circumstances 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

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Federal Rule of Civil Procedure 65(d)(2), the foregoing paragraph also binds the

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following who receive actual notice of this Judgment by personal service or otherwise:

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(a) Defendant’s officers, agents, servants, employees, and attorneys; and (b) other

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persons in active concert or participation 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

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Defendant is permanently restrained and enjoined from violating Section 17(a) of the

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

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any security by the use of any means or instruments of transportation or communication

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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

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fact or any omission of a material fact necessary in order to make the

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statements made, in light of the circumstances under which they were made,

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not misleading; or

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(c)

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

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

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Federal Rule of Civil Procedure 65(d)(2), the foregoing paragraph also binds the

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following who receive actual notice of this Judgment by personal service or otherwise:

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(a) Defendant’s officers, agents, servants, employees, and attorneys; and (b) other

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persons in active concert or participation 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

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Defendant is permanently restrained and enjoined from violating Section 5 of the

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Securities Act [15 U.S.C. § 77e] by, directly or indirectly, in the absence of any

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applicable exemption:

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(a)

Unless a registration statement is in effect as to a security, making use of any

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means or instruments of transportation or communication in interstate

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commerce or of the mails to sell such security through the use or medium of

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any prospectus or otherwise;
(b)

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

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causing to be carried through the mails or in interstate commerce, by any

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means or instruments of transportation, any such security for the purpose of

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sale or for delivery after sale; or

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(c)

Making use of any means or instruments of transportation or communication

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

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the use or medium of any prospectus or otherwise any security, unless a

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registration statement has been filed with the Commission as to such

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security, or while the registration statement is the subject of a refusal order

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or stop order or (prior to the effective date of the registration statement) any

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public proceeding or examination under Section 8 of the Securities Act [15

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U.S.C. § 77h].

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

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Federal Rule of Civil Procedure 65(d)(2), the foregoing paragraph also binds the

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following who receive actual notice of this Judgment by personal service or otherwise:

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(a) Defendant’s officers, agents, servants, employees, and attorneys; and (b) other

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persons in active concert or participation with Defendant or with anyone described in (a).

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IV.

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IT IS HEREBY FURTHER ORDERED, ADJUDGED, AND DECREED that

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Defendant is permanently restrained and enjoined from violating Section 15(a) of the

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Exchange Act [15 U.S.C. § 78o(a)] by, while engaging in business as a broker or dealer,

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making use of the mails or any instrumentality of interstate commerce to effect any

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transaction in, or to induce the purchase or sale of, any security (other than an exempted

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security or commercial paper, bankers’ acceptances, or commercial bills) unless

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registered as a broker dealer in accordance with Section 15(b) of the Exchange Act [15

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U.S.C. § 78o(b)] or associated with a broker or dealer that is registered with the

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Commission in 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 provided in

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Federal Rule of Civil Procedure 65(d)(2), the foregoing paragraph also binds the

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following who receive actual notice of this Judgment by personal service or otherwise:

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(a) Defendant’s officers, agents, servants, employees, and attorneys; and (b) other

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persons in active concert or participation with Defendant or with anyone described in (a).

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V.

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IT IS FURTHER ORDERED, ADJUDGED, AND DECREED that pursuant to

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Sections 21(d)(1) and 21(d)(5) of the Exchange Act [15 U.S.C. § 78u(d)(1) and (5)], and

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Section 20(b) of the Securities Act [15 U.S.C. § 77t(b)], Defendant is permanently

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restrained and enjoined from directly or indirectly, including, but not limited to, through

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any entity owned or controlled by Defendant, soliciting any person or entity to purchase

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or sell any security; provided, however, that such injunction shall not prevent him from

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purchasing or selling securities for his own personal account.

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

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Federal Rule of Civil Procedure 65(d)(2), the foregoing paragraph also binds the

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following who receive actual notice of this Judgment by personal service or otherwise:

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(a) Defendant’s officers, agents, servants, employees, and attorneys; and (b) other

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persons in active concert or participation with Defendant or with anyone described in (a).

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VI.

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Upon motion of the Commission, the Court shall determine whether it is

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appropriate to order disgorgement of ill-gotten gains and/or a civil penalty pursuant to

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Section 20(d) of the Securities Act [15 U.S.C. § 77t(d)] and Section 21(d)(3) of the

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Exchange Act [15 U.S.C. § 78u(d)(3)] and, if so, the amount(s) of the disgorgement

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and/or civil penalty. If disgorgement is ordered, Defendant shall pay prejudgment

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interest thereon, calculated from January 7, 2019, based on the rate of interest used by the

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Internal Revenue Service for the underpayment of federal income tax as set forth in 26

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U.S.C. § 6621(a)(2). In connection with the Commission’s motion for disgorgement

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and/or civil penalties, and at any hearing held on such a motion: (a) Defendant will be

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precluded from arguing that he did not violate the federal securities laws as alleged in the

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Complaint; (b) Defendant may not challenge the validity of the Consent or this Judgment;

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(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

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raised in the motion on the basis of affidavits, declarations, excerpts of sworn deposition

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or investigative testimony, and documentary evidence, without regard to the standards for

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summary judgment contained in Rule 56(c) of the Federal Rules of Civil Procedure. In

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connection with the Commission’s motion for disgorgement and/or civil penalties, the

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parties may take discovery, including discovery from appropriate non-parties.

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VII.

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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

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

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VIII.
IT IS FURTHER ORDERED, ADJUDGED, AND DECREED that, solely for

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purposes of exceptions to discharge set forth in Section 523 of the Bankruptcy Code, 11

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

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

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

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decree or settlement agreement entered in connection with this proceeding, is a debt for

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the violation by Defendant of the federal securities laws or any regulation or order issued

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under such laws, as set forth in Section 523(a)(19) of the Bankruptcy Code, 11 U.S.C.

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§523(a)(19).

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IX.

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IT IS FURTHER ORDERED, ADJUDGED, AND DECREED that this Court shall

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

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X.

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There being no just reason for delay, pursuant to Rule 54(b) of the Federal Rules of

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Civil Procedure, the Clerk is ordered to enter this Judgment forthwith and without further

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notice.

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Dated: MAY 7, 2024
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UNITED STATES DISTRICT JUDGE

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