Securities and Exchange Commission v. Hovannisian, et al.

Filing 10

FINAL JUDGMENT as to Defendant Vernon S. Hovannisian signed by District Judge Dale A. Drozd on 8/18/17. (Hellings, J)

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UNITED STATES DISTRICT COURT

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EASTERN DISTRICT OF CALIFORNIA

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SECURITIES AND EXCHANGE
COMMISSION,
Plaintiff,

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vs.
DAMON V. HOVANNISIAN,
VERNON S. HOVANNISIAN, VINCENT
G. HOVANNISIAN, and EDDIE
ARAKELIAN

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Defendants.
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Case No. 1:17-CV-01078-DAD-EPG
FINAL JUDGMENT AS TO DEFENDANT
VERNON S. HOVANNISIAN

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The Securities and Exchange Commission having filed a Complaint and Defendant Vernon

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S. Hovannisian having entered a general appearance; consented to the Court’s jurisdiction over

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Defendant and the subject matter of this action; consented to entry of this Final Judgment without

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admitting or denying the allegations of the Complaint (except as to jurisdiction and except as

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otherwise provided herein in paragraph IV); waived findings of fact and conclusions of law; and

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waived any right to appeal from this Final Judgment:

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I.
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

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Exchange Act of 1934 (the “Exchange Act”) [15 U.S.C. § 78j(b)] and Rule 10b-5 promulgated

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thereunder [17 C.F.R. § 240.10b-5], by using any means or instrumentality of interstate commerce,

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

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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 fact

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

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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 Federal

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Rule of Civil Procedure 65(d)(2), the foregoing paragraph also binds the following who receive

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actual notice of this Final Judgment by personal service or otherwise: (a) Defendant’s officers,

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agents, servants, 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.

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IT IS FURTHER ORDERED, ADJUDGED, AND DECREED that Defendant is liable for

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disgorgement of $ 111,145.23, representing profits gained as a result of the conduct alleged in the

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Complaint, together with prejudgment interest thereon in the amount of $ 10,917.55. Defendant
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shall satisfy this obligation by paying $122,062.78 to the Securities and Exchange Commission

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within 14 days after entry of this Final Judgment.

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Defendant may transmit payment electronically to the Commission, which will provide

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detailed ACH transfer/Fedwire instructions upon request. Payment may also be made directly from

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a bank account via Pay.gov through the SEC website at http://www.sec.gov/about/offices/ofm.htm.

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Defendant may also pay by certified check, bank cashier’s check, or United States postal money

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order payable 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, and name of this

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Court; Vernon S. Hovannisian as a defendant in this action; and specifying that payment is made

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pursuant to this Final Judgment.

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Defendant shall simultaneously transmit photocopies of evidence of payment and case

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identifying information to the Commission’s counsel in this action. By making this payment,

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Defendant relinquishes all legal and equitable right, title, and interest in such funds and no part of

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the funds shall be returned to Defendant. The Commission shall send the funds paid pursuant to

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this Final Judgment to the United States Treasury.

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

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

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law) at any time after 14 days following entry of this Final Judgment. Defendant shall pay post

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judgment interest on any delinquent amounts pursuant to 28 U.S.C. § 1961.

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III.
IT IS FURTHER ORDERED, ADJUDGED, AND DECREED that Defendant shall pay a

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civil penalty in the amount of $111,145.23 to the Securities and Exchange Commission pursuant to

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Section 21(d)(3) of the Exchange Act [15 U.S.C. § 78u(d)(3)]. Defendant shall make this payment

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within 14 days after entry of this Final Judgment.
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Defendant may transmit payment electronically to the Commission, which will provide

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detailed ACH transfer/Fedwire instructions upon request. Payment may also be made directly from

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a bank account via Pay.gov through the SEC website at http://www.sec.gov/about/offices/ofm.htm.

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Defendant may also pay by certified check, bank cashier’s check, or United States postal money

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order payable 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, and name of this

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Court; Vernon S. Hovannisian as a defendant in this action; and specifying that payment is made

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pursuant to this Final Judgment.

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Defendant shall simultaneously transmit photocopies of evidence of payment and case

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identifying information to the Commission’s counsel in this action. By making this payment,

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Defendant relinquishes all legal and equitable right, title, and interest in such funds and no part of

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the funds shall be returned to Defendant. The Commission shall send the funds paid pursuant to

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this Final Judgment to the United States Treasury. Defendant shall pay post-judgment interest on

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any delinquent amounts pursuant to 28 USC § 1961.

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IV.

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IT IS FURTHER ORDERED, ADJUDGED, AND DECREED that, solely for purposes of

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exceptions to discharge set forth in Section 523 of the Bankruptcy Code, 11 U.S.C. §523, the

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allegations in the complaint are true and admitted by Defendant, and further, any debt for

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

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Final Judgment or 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 federal securities

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

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

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V.
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.

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VI.

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

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Procedure, the Clerk is ordered to enter this Final Judgment forthwith and without further notice.

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IT IS SO ORDERED.
Dated:

August 18, 2017
UNITED STATES DISTRICT JUDGE

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