Securities and Exchange Commission v. Jason A. Wallace

Filing 27

ORDER OF FINAL JUDGMENT Against Defendant Jason A. Wallace by Judge Andrew J. Guilford: See document for further information. (MD JS-6, Case Terminated). (lwag)

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UNITED STATES DISTRICT COURT
CENTRAL DISTRICT OF CALIFORNIA
SOUTHERN DIVISION

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JS-6

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SECURITIES AND EXCHANGE
COMMISSION,

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Case No. 8:16-cv-01788-AG(FFMx)
ORDER OF FINAL JUDGMENT
AGAISNT DEFENDANT JASON A.
WALLACE

Plaintiff,
v.
JASON A. WALLACE,

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Defendant.

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GUILFORD, U.S.D.J

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Upon the Motion for a Default Judgment Against Defendant Jason A.

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Wallace filed by Plaintiff Securities and Exchange Commission on March 17,

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2017 pursuant to Rules 55(b) and 54(c) of the Federal Rules of Civil Procedure,

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the Memorandum of Points and Authorities and the Declarations of Nina B.

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Finston submitted in support of the motion, and after a careful review of the

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record and the Court being otherwise fully advised, it is hereby on this 8th day of

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May, 2017:

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I.

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ORDERED, ADJUDGED, AND DECREED that Defendant is permanently

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

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

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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

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national 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

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material 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)

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would operate as a fraud or deceit upon any person.

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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:

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

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

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

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with anyone described in (a).

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II.

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IT IS HEREBY FURTHER ORDERED, ADJUDGED, AND DECREED

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

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

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

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communication 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

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material 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.

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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 in active concert or participation with Defendant or

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with anyone described in (a).

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III.

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IT IS HEREBY FURTHER ORDERED, ADJUDGED, AND DECREED

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that 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

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any means or instruments of transportation or communication in

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

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or medium of any prospectus or 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

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

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of sale or for delivery 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

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offer to buy through the use or medium of any prospectus or otherwise

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any security, unless a registration statement has been filed with the

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Commission as to such security, or while the registration statement is the

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subject of a refusal order or stop order or (prior to the effective date of

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the registration statement) any public proceeding or examination under

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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 Final Judgment by personal

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service or otherwise:

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

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

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with anyone described in (a).

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IV.

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IT IS HEREBY FURTHER ORDERED, ADJUDGED, AND DECREED

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that Defendant is permanently restrained and enjoined from violating, directly or

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indirectly, Section 15(a) of the Exchange Act [15 U.S.C. § 78o(a)] by using any

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

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any national securities exchange, in connection with the purchase or sale of any

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security, while not associated with a broker or dealer which is a person other than a

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natural person (other than such a broker or dealer whose business is exclusively

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intrastate and who does not make use of any facility of a national securities

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exchange), to make use of the mails or any means or instrumentality of interstate

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commerce to effect any transactions in, or to induce or attempt to induce the purchase

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or sale of, any security (other than an exempted security or commercial paper,

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bankers’ acceptances, or commercial bills) unless registered in accordance with

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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

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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:

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

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with anyone described in (a).

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

V.

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IT IS HEREBY FURTHER ORDERED, ADJUDGED, AND DECREED

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that Defendant is permanently restrained and enjoined from violating, directly or

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indirectly, Section 9(b)(2) of the Exchange Act [15 U.S.C. § 78i(b)(2)] by using any

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

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any national securities exchange, in connection with the purchase or sale of any

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security, to effect, alone or with one or more other persons, a series of transactions in
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any security other than a government security or in connection with any security-

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based swap agreement with respect to such security creating actual or apparent active

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trading in such security, or raising or depressing the price of such security, for the

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purpose of inducing the purchase or sale of such security by others.

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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:

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

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

with anyone described in (a).

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VI.

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IT IS HEREBY FURTHER ORDERED, ADJUDGED, AND DECREED

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that Defendant is permanently barred from participating in an offering of penny

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

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

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

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except as provided in Rule 3a51-1 under the Exchange Act [17 C.F.R. 240.3a51-1].

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VII.

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IT IS FURTHER ORDERED, ADJUDGED, AND DECREED that

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Defendant is liable for disgorgement of $434,887.07, representing profits gained as a

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result of the conduct alleged in the Complaint, together with prejudgment interest

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thereon in the amount of $77,161.73. Defendant shall satisfy this obligation by

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paying $512,048.80 to the Securities and Exchange Commission within 14 days after

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entry of this Final Judgment.

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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.
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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

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Accounts Receivable Branch

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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; Jason A. Wallaceas a defendant in this action; and specifying

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that payment is made pursuant to this Final Judgment.

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Defendant shall simultaneously transmit photocopies of evidence of payment

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

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making this payment, Defendant relinquishes all legal and equitable right, title, and

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interest in such funds and no part of the funds shall be returned to Defendant. The

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Commission shall send the funds paid pursuant to this Final Judgment to the United

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States Treasury.

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The Commission may enforce the Court’s judgment for disgorgement and

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

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procedures authorized by law) at any time after 14 days following entry of this Final

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Judgment]. Defendant shall pay post judgment interest on any delinquent amounts

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pursuant to 28 U.S.C. § 1961.

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VIII.

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IT IS HEREBY FURTHER ORDERED, ADJUDGED AND DECREED

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that, upon noticed motion to be filed by the SEC, Defendant will be also ordered to

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pay a civil penalty in a specific amount to be determined by the Court 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)]. This Court shall retain jurisdiction of this

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matter for the purposes of enforcing the terms of the Final Judgment.
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May 9, 2017

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___________________________________________

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Andrew J. Guilford, U.S.D.J.

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