Securities and Exchange Commission v. Guy Scott Griffithe et al

Filing 127

FINAL JUDGMENT AS TO DEFENDANT ROBERT WILLIAM RUSSELL 125 by Judge David O. Carter: : Defendant and his agents are permanently restrained and enjoined from violating, directly or indirectly the Securities Exchange Act as cited therein. Defendant is liable for disgorgement of $275,153.90 representing net profits gained as a result of the conduct alleged in the Complaint, together withprejudgment interest thereon in the amount of $44,190.38 and a civil penalty in the amount of $378,888.93 Defendant shall satisfy this obligation by paying $698,232.56 to the Securities and Exchange Commission within 30 days after entry of this Final Judgment. (SEE DOCUMENT FOR COMPLIANCE REQUIREMENTS) (lc)

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UNITED STATES DISTRICT COURT

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CENTRAL DISTRICT OF CALIFORNIA

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Southern Division

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SECURITIES AND EXCHANGE
COMMISSION,

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Plaintiff,

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Case No. 8:20-cv-00124-DOC-JDE
FINAL JUDGMENT AS TO
DEFENDANT ROBERT WILLIAM
RUSSELL

vs.
GUY SCOTT GRIFFITHE, and
ROBERT WILLIAM RUSSELL,
Defendants.

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The Securities and Exchange Commission (“Commission”) having filed a

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Complaint and Robert William Russell (“Defendant”) having entered a general

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appearance, consented to the Court’s jurisdiction over Defendant and the subject

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matter of this action, consented to entry of the Judgment dated June 21, 2021

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(“Judgment,” which is incorporated herein) 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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provided in Paragraph III of the Judgment, and upon motion of the Commission for

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entry of final judgment ordering disgorgement and civil money penalties the Court

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finds that:

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

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Defendant is permanently restrained and enjoined from violating, directly or

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indirectly, Section 10(b) of the Securities Exchange Act of 1934 (the “Exchange

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Act”) [15 U.S.C. § 78j(b)] and Rule 10b-5 promulgated thereunder [17 C.F.R.

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§ 240.10b-5], by using any means or instrumentality of interstate commerce, or of

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the mails, or of any facility of any national securities exchange, in connection with

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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

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state a material fact necessary in order to make the statements made, in the

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light of the 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.

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IT IS FURTHER ORDERED, ADJUDGED, AND DECREED that,

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as provided in Federal Rule of Civil Procedure 65(d)(2), the foregoing paragraph

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also binds the following who receive actual notice of this Final Judgment by

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personal service or otherwise: (a) Defendant’s officers, agents, servants,

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

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with Defendant or with anyone described in (a).

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II.
IT IS HEREBY FURTHER ORDERED, ADJUDGED, AND

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DECREED that Defendant is permanently restrained and enjoined from violating

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Section 17(a) of the Securities Act of 1933 (the “Securities Act”) [15 U.S.C. §

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77q(a)] in the offer or sale of any security by the use of any means or instruments

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of transportation or communication in interstate commerce or by use of the mails,

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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

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

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

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were made, not misleading; or

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(c) 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,

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as provided in Federal Rule of Civil Procedure 65(d)(2), the foregoing paragraph

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also binds the following who receive actual notice of this Final Judgment by

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personal service or otherwise: (a) Defendant’s officers, agents, servants,

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

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with Defendant or with anyone described in (a).

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III.
IT IS FURTHER ORDERED, ADJUDGED, AND DECREED that

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the Consent executed by Defendant on May 3, 2021 and filed on the case docket

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as Document No 72-1 is incorporated herein with the same force and effect as if

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

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and agreements set forth therein.

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

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solely for purposes of exceptions to discharge set forth in Section 523 of the

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Bankruptcy Code [11 U.S.C. §523], the allegations in the complaint are true and

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admitted by Defendant, and further, any debt for disgorgement, prejudgment

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interest, civil penalty or other amounts due by Defendant under this Judgment or

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any other judgment, order, consent order, decree or settlement agreement entered

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in connection with this proceeding, is a debt for the violation by Defendant of the

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federal securities laws or any regulation or order issued under such laws, as set

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forth in Section 523(a)(19) of the Bankruptcy Code [11 U.S.C. §523(a)(19)].

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V.

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IT IS HEREBY FURTHER ORDERED, ADJUDGED, AND

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DECREED that Defendant is liable for disgorgement of $275,153.90 representing

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net profits gained as a result of the conduct alleged in the Complaint, together with

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prejudgment interest thereon in the amount of $44,190.38 and a civil penalty in the

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amount of $378,888.93 pursuant to Section 20(d) of the Securities Act, 15 U.S.C. §

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

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(iii). Defendant shall satisfy this obligation by paying $698,232.56 to the Securities

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and Exchange Commission within 30 days after entry 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

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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; Defendant’s name as a defendant in this action; and

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specifying that payment is made pursuant to this Final Judgment.

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Defendant shall simultaneously transmit photocopies of evidence of

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payment and case identifying information to the Commission’s counsel in this

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action. By making this payment, Defendant relinquishes all legal and equitable

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right, title, and interest in such funds and no part of the funds shall be returned to

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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,

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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.

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The Commission may enforce the Court’s judgment for penalties by the use

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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

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this Final Judgment pursuant to 28 U.S.C. § 1961. The Commission shall hold the

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funds, together with any interest and income earned thereon (collectively, the

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“Fund”), pending further order of the Court.

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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

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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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of the Court.

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Regardless of whether any such Fair Fund distribution is made, amounts

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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, 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

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entitled to, nor shall he further benefit by, offset or reduction of such compensatory

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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

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action and pay the amount of the Penalty Offset to the United States Treasury or to

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a Fair Fund, as the Commission directs. Such a payment shall not be deemed an

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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

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in the Complaint in this action.

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VI.

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IT IS FURTHER ORDERED, ADJUDGED, AND DECREED that

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

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terms of this Judgment.

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IT IS SO ORDERED.

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_______________________________

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DAVID O. CARTER

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United States District Judge

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Dated: November 18, 2021

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