Securities and Exchange Commission v. David Welch et al

Filing 65

FINAL JUDGMENT AS TO DAVID HOWARD WELCH, MARC JAY BRYANT, BIO-GLOBAL RESOURCES, INC., AND DIVERSIFIED EQUITIES DEVELOPMENT, INC. by Judge John F. Walter. IT IS FURTHER ORDERED, ADJUDGED, AND DECREED that Defendants David Howard Welch and Bio-Global Resources, Inc. are liable jointly and severally for disgorgement of $1,321,821.00, representing ill-gotten gains obtained as a result of the conduct alleged in the Complaint, plus prejudgment interest thereon in the amount of $151,243. 97, for a total of $1,473,064.97. It is further ordered, adjudged and decreed that Defendants David Howard Welch and Bio-Global Resources, Inc. are each liable for a civil penalty in the amount of $1,321,821.00 pursuant to Section 20(d)(2 )(B) of the Securities Act and Section 21(d)(3)(B)(ii) of the Exchange Act. Defendants David Howard Welch and Bio-Global Resources, Inc. shall satisfy these obligations by paying jointly and severally disgorgement and prejudgment interest totaling $1,473,064.97, and each paying separately a civil penalty of $1,321,821.00 to the SEC within 14 days after entry of this Judgment. (iv)

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NOTE CHANGES MADE BY COURT

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UNITED STATES DISTRICT COURT

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CENTRAL DISTRICT OF CALIFORNIA

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SECURITIES AND EXCHANGE
COMMISSION,

Case No. EDCV 17-1968-JFW (AGRx)

Plaintiff,

FINAL JUDGMENT AS TO
DAVID HOWARD WELCH,
MARC JAY BRYANT,
BIO-GLOBAL RESOURCES, INC.,
AND DIVERSIFIED EQUITIES
DEVELOPMENT, INC.

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vs.
DAVID HOWARD WELCH,
MARC JAY BRYANT,
JOHN CHARLES KNIGHT,
PERRY DOUGLAS WEST,
BIO-GLOBAL RESOURCES, INC.,
DIVERSIFIED EQUITIES, INC.,
DIVERSIFIED EQUITIES
DEVELOPMENT, INC.,
and NEW GLOBAL ENERGY, INC.,
Defendants.

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In accordance with the Court’s Order Granting Motion for Default Judgment

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Against Defendants David Howard Welch, Marc Jay Bryant, Bio-Global Resources,

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Inc., and Diversified Equities Development, Inc., dated June 11, 2018 [Docket No.

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61], judgment is entered on the motion of the Securities and Exchange Commission

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(“SEC” or “Commission”) for default judgments against Defendants David Howard
Judgment as to Welch, Bryant, Bio-Global and
Diversified Equities Development, Inc.

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Welch, Marc Jay Bryant, Bio-Global Resources, Inc., and Diversified Equities

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Development, Inc.

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I.

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IT IS ORDERED, ADJUDGED, AND DECREED that Defendants David

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Howard Welch, Marc Jay Bryant, Bio-Global Resources, Inc., and Diversified

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Equities Development, Inc. are permanently restrained and enjoined from violating

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Section 5 of the Securities Act of 1933 (“Securities Act”) [15 U.S.C. § 77e] by,

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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

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any means or instruments of transportation or communication in interstate commerce

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

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otherwise;

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(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 means or

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

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after sale; or

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(c)

Making use of any means or instruments of transportation or

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

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through 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 security, or

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while the registration statement is the subject of a refusal order or stop order or (prior

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to the effective date of the registration statement) any public proceeding or

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examination under Section 8 of the Securities Act [15 U.S.C. § 77h].

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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 Judgment by personal service or

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otherwise: (a) Defendants’ officers, agents, servants, employees, and attorneys; and

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(b) other persons in active concert or participation with any of the Defendants or with
Judgment as to Welch, Bryant, Bio-Global and
Diversified Equities Development, Inc.

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anyone described in (a).
II.

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IT IS FURTHER ORDERED, ADJUDGED, AND DECREED that Defendants

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David Howard Welch, Marc Jay Bryant, Bio-Global Resources, Inc., and Diversified

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Equities Development, Inc. are each permanently restrained and enjoined from

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violating, directly or indirectly, Section 15(a) of the Securities Exchange Act of 1934

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(the “Exchange Act”) [15 U.S.C. § 78o(a)] by making use of the mails or any means

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or instrumentality of interstate commerce to effect any transactions in, or to induce or

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attempt to induce the purchase or sale of, any security, without being registered as a

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broker and/or dealer pursuant to Section 15(b) of the Exchange Act [15 U.S.C. §

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78o(b)] or while Defendants are not associated with an entity registered with the

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Commission as a broker or dealer.

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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 Judgment by personal service or

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otherwise: (a) Defendants’ officers, agents, servants, employees, and attorneys; and

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(b) other persons in active concert or participation with any of the Defendants or with

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anyone described in (a).
III.

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IT IS FURTHER ORDERED, ADJUDGED, AND DECREED that Defendants

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David Howard Welch and Marc Jay Bryant are permanently restrained and enjoined

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from violating, directly or indirectly, Section 20(b) of the Exchange Act [15 U.S.C. §

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78t(b)], by committing violations of the broker and dealer registration provisions of

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Section 15(a) of the Exchange Act [15 U.S.C. § 78o(a)], through or by means of other

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persons.

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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 Judgment by personal service or
Judgment as to Welch, Bryant, Bio-Global and
Diversified Equities Development, Inc.

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otherwise: (a) Defendants Howard Welch’s and Marc Jay Bryant’s officers, agents,

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

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participation with Defendants Howard Welch or Marc Jay Bryant or with anyone

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described in (a).
IV.

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IT IS FURTHER ORDERED, ADJUDGED, AND DECREED that Defendants David

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Howard Welch, Marc Jay Bryant, Bio-Global Resources, Inc., and Diversified

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Equities Development, Inc. are permanently barred from participating in an offering

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of penny stock, including engaging in activities with a broker, dealer, or issuer for

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purposes of issuing, trading, or inducing or attempting to induce the purchase or sale

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of any penny stock. A penny stock is any equity security that has a price of less than

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five dollars, except as provided in Rule 3a51-1 under the Exchange Act [17 C.F.R. §

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240.3a51-1].

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V.
IT IS FURTHER ORDERED, ADJUDGED, AND DECREED that Defendants

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David Howard Welch and Bio-Global Resources, Inc. are liable jointly and severally

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for disgorgement of $1,321,821.00, representing ill-gotten gains obtained as a result

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of the conduct alleged in the Complaint, plus prejudgment interest thereon in the

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amount of $151,243.97, for a total of $1,473,064.97. It is further ordered, adjudged

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and decreed that Defendants David Howard Welch and Bio-Global Resources, Inc.

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are each liable for a civil penalty in the amount of $1,321,821.00 pursuant to Section

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20(d)(2)(B) of the Securities Act and Section 21(d)(3)(B)(ii) of the Exchange Act [15

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U.S.C. §§ 77t(d)(2)(B) and 78u(d)(3)(B)(ii)]. Defendants David Howard Welch and

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Bio-Global Resources, Inc. shall satisfy these obligations by paying jointly and

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severally disgorgement and prejudgment interest totaling $1,473,064.97, and each

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paying separately a civil penalty of $1,321,821.00 to the SEC within 14 days after

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entry of this Judgment.

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VI.
Judgment as to Welch, Bryant, Bio-Global and
Diversified Equities Development, Inc.

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IT IS FURTHER ORDERED, ADJUDGED, AND DECREED that Defendant

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Marc Jay Bryant is liable for disgorgement of $2,471,126.92, representing ill-gotten

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gains obtained as a result of the conduct alleged in the Complaint, plus prejudgment

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interest thereon in the amount of $455,358.22, and a civil penalty in the amount of

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$2,471,126.92, pursuant to Section 20(d)(2)(B) of the Securities Act and Section

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21(d)(3)(B)(ii) of the Exchange Act [15 U.S.C. §§ 77t(d)(2)(B) and 78u(d)(3)(B)(ii)],

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for a total of $5,397,612.06. Defendant Marc Jay Bryant shall satisfy these

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obligations by paying $5,397,612.06 to the SEC within 14 days after entry of this

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Judgment.
VII.

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IT IS FURTHER ORDERED, ADJUDGED, AND DECREED that Defendant

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Marc Jay Bryant, in addition to the amounts ordered above in Section VI, and

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Defendant Diversified Equities Development, Inc. are liable jointly and severally for

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disgorgement of $1,977,735.85, representing ill-gotten gains obtained as a result of

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the conduct alleged in the Complaint, plus prejudgment interest thereon in the amount

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of $245,099.11, for a total of $2,222,834.96. It is further ordered, adjudged and

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decreed that Defendants Marc Jay Bryant and Diversified Equities Development, Inc.

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are each liable for a civil penalty in the amount of $1,977,735.85, pursuant to Section

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20(d)(2)(B) of the Securities Act and Section 21(d)(3)(B)(ii) of the Exchange Act [15

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U.S.C. § 77t(d)(2)(B) and 78u(d)(3)(B)(ii)]. Defendants Marc Jay Bryant and

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Diversified Equities Development, Inc. shall satisfy these obligations by paying

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jointly and severally disgorgement and prejudgment interest totaling $2,222,834.96,

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and each paying separately a civil penalty of $1,977,735.85 to the SEC within 14

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days after entry of this Judgment.
VIII.

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IT IS FURTHER ORDERED, ADJUDGED, AND DECREED that Defendants

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may transmit payment electronically to the SEC, which will provide detailed ACH

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transfer/Fedwire instructions upon request. Payment may also be made directly from
Judgment as to Welch, Bryant, Bio-Global and
Diversified Equities Development, Inc.

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a bank account via Pay.gov through the SEC website at

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http://www.sec.gov/about/offices/ofm.htm. Defendants 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:
Enterprise Service Center
Accounts Receivable Branch
6500 South MacArthur Boulevard

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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; the name of the defendant making the payment in this action;

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and specifying that payment is made pursuant to this Judgment.

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Defendants shall simultaneously transmit photocopies of evidence of payment

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and case identifying information to the SEC’s counsel in this action. By making this

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payment, Defendants relinquish all legal and equitable right, title, and interest in such

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funds and no part of the funds shall be returned to Defendants.

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The SEC may enforce the Court’s the portion of this Judgment for

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disgorgement and prejudgment interest by moving for civil contempt (and/or through

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other collection procedures authorized by law) at any time after 14 days following

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entry of this Judgment. Defendants shall pay post-judgment interest on any

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delinquent amounts pursuant to 28 U.S.C. § 1961. The SEC shall hold the funds,

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together with any interest and income earned thereon (collectively, the “Fund”),

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pending further order of the Court.

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The SEC may propose a plan to distribute the Fund subject to the Court’s

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approval. Such a plan may provide that the Fund shall be distributed pursuant to the

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Fair Fund provisions of Section 308(a) of the Sarbanes-Oxley Act of 2002. The

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Court shall retain jurisdiction over the administration of any distribution of the Fund.

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If the SEC staff determines that the Fund will not be distributed, the SEC shall send

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the funds paid pursuant to this Judgment to the United States Treasury.

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Regardless of whether any such Fair Fund distribution is made, amounts
Judgment as to Welch, Bryant, Bio-Global and
Diversified Equities Development, Inc.

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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, Defendants 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 Defendants’ payment of disgorgement in this action, argue that Defendants

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are entitled to, nor shall Defendants further benefit by, offset or reduction of such

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compensatory damages award by the amount of any part of Defendants’ payment of a

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

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

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final order granting the Penalty Offset, notify the SEC’s counsel in this action and

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

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as the SEC 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 Defendants 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

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action.
IX.

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

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shall retain jurisdiction of this matter for purposes of enforcing the terms of this

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Judgment.

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Judgment as to Welch, Bryant, Bio-Global and
Diversified Equities Development, Inc.

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X.

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

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Rules of Civil Procedure, the Clerk is ordered to enter this Judgment forthwith and

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without further notice.

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IT IS SO ORDERED.

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DATED: June 18, 2018.

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_______________________________
JOHN F. WALTER
UNITED STATES DISTRICT JUDGE

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Judgment as to Welch, Bryant, Bio-Global and
Diversified Equities Development, Inc.

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