Securites and Exchange Commission

Filing 79

ORDER REGARDING DISBURSEMENT OF FUNDS AND APPOINTMENT OF TAX ADMINISTRATOR. Signed by Judge Jon S. Tigar on November 30, 2015. (wsn, COURT STAFF) (Filed on 11/30/2015)

JINA L. CHOI (NY Bar No. 2699718)
JOHN S. YUN (CA Bar No. 112260)
2 [e-mail]
SHEILA E. O'CALLAGHAN (CA Bar No. 131 032)
3 [e-mail]
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Attorneys for Plaintiff
SECURITIES AND EXCHANGE
5 COMMISSION
44 Montgomery Street, Suite 2600
6 San Francisco, California 941 04
Telephone: [phone]
7 Telecopy: [phone]
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UNITED STATES DISTRICT COURT

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NORTHERN DISTRICT OF CALIFORNIA
SAN FRANCISCO DIVISION

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12 SECURITIES AND EXCHANGE COMMISSION,
Plaintiff,

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v.

15 TERENCE M. COXON and WORLD
MONEY MANAGERS,
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Defendants.
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Miscellaneous Action No.
CV 04-0145-MISC. MHP
PLAINTIFF'S AND DEFENDANTS'
STIPULATION AND PROPOSED ORDER
REGARDING DISBURSEMENT OF FUNDS
AND APPOINTMENT OF TAX
ADMINISTRATOR
Date: N/A
Time: N/A
Judge: General Duty Judge
Courtroom: TBD

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STIPULATION FOR ORDER

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Plaintiff Securities and Exchange Commission ("Commission") and defendants

23 Terrence M. Coxon ("Coxon") and World Money Managers ("World Money"), by and
2 4 through their attorneys, hereby enter into the following Stipulation Regarding the
2 5 Disbursement of Funds and the Appointment of a Tax Administrator (the "Stipulation").
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On August 25, 2003, the Commission ordered Coxon and World Money to disgorge

2 7 the principal amount of $971,777.54, plus $564,964.43 in prejudgment interest, for a total
2 8 disgorgement of $1,536,741.97 (the "Disgorgement Order"). On November 15, 2004, this
Stip. For Disburse and Taxes
CV 04-0145-MISC MHP

1 Court ordered Coxon and World Money to satisfy the Disgorgetnent Order within thirty days

2 (the "Payment Order").
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Following Coxon's and World Money's failure to cmnply with the Paytnent Order, the
Court entered Findings of Facts and Conclusions of Law on May 31, 2005 directing Coxon to

5 pay $200,000 into the court registry within twenty one days and to pay 78.125% of the equity

6 value of his Santa Rosa house into the court registry within one hundred eighty days. Docket
7 No. 37, ~~ 3l(a), (b). On July 14, 2005, following the sale by Coxon and his wife, Elizabeth,

8 of their Santa Rosa home, an escrow company deposited $387,213.74 into the court's registry
9 as being the Coxons' proceeds from the sale. On April 3, 2006, Coxon deposited an
1 o additional $200,000 into the court's registry.

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Subsequently, on April 26, 2006, the Court approved the parties' stipulation that

12 $72,013 should be transferred frotn the court's registry to Elizabeth Coxon, as her separate
13 property share of the proceeds from the Santa Rosa house sale. Docket No. 65. Later, on
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December 15, 2006, the Court entered a written order approving the distribution of $515,123

15 from the court's registry to the Permanent Portfolio Fund in partial satisfaction of the
16 Disgorgement Order. Docket No. 72. In light of other paytnents to the Fund, the undersigned
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agree that Coxon and World Money have satisfied the Disgorgement Order, and are no longer

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in breach of the Payment Order.

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At the current time, the court's registry for this case is holding nearly $32,000.00,

2 o which represents the accrued interest on the amounts that were previously deposited by Coxon
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and his wife. Because Coxon and World Money have satisfied their disgorgement

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obligations, the Commission does not claim any interest in the amount remaining in the

23 court's registry. The parties to this Stipulation agree that $1,990.00 of the amount remaining
2 4 in the court's registry should be disbursed to Coxon's wife, Elizabeth, as her share of the
2 5 accrued interest in the court's registry. The parties to this Stipulation also agree that after the
2 6 payment to Coxon's wife, the remaining balance in the court's registry should go to the Fund
2 7 to reduce an obligation by Coxon and World Money to reimburse the Fund for its advances of
2 8 defendants' attorney's fees and costs.
Stip. For Disburse and Taxes
CV04-0145-MISC. MHP

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The retnaining funds in the court's registry are subject, however, to federal incotne tax

2 reporting and liability because those funds constitute a qualified investor fund under federal
3 tax regulations. Such a qualified investor fund requires the preparation and filing of tax forms
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with the Internal Revenue Service pursuant to Section 468B(g) of the Internal Revenue Code.

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The Commission has retained the accounting finn of Datnasco & Associates, LLP to serve as

6 the tax administrator in any case where investor recovery funds have been obtained by the
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Commission and placed into a segregated account. Damasco & Associates, LLP will charge

8 up to $1800.00 per tax year to file the necessary fonns and make the necessary payments
9 under the Internal Revenue Code. Damasco & Associates tnight also bill for time involving
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negotiations with the Internal Revenue Service to reduce or abate any interest or penalty

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charges.

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Based upon the foregoing, the Commission, Coxon and World Money hereby enter

13 into a Stipulation for the entry of an Order providing that:

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1.

The Clerk of the Court shall issue a check in the amount of $1,990.00 made

15 payable to Elizabeth Coxon as her share of the accrued interest in the court's registry. The
16 check shall be mailed to John W. Cotton, Esq., at his current law firm address.

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2.

The Court authorizes Damasco & Associates to prepare and file all necessary

tax returns and to arrange all necessary paytnent of income taxes (and if necessary interest and

19 penalties) from the funds in the court's registry for this proceeding. Subject to the Court's

2 o review, Damasco & Associates may submit a claim for payment from the court's registry for
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payment of its professional fees and costs.

3.

The Court authorizes the Clerk of the Court's paytnent to the Fund of the

2 3 remaining balance in the court's registry after (i) the payment of $1,990.00 to Elizabeth
2 4 Coxon, (ii) the payment of all income taxes and penalties and (iii) the payment of Damasco &
2 5 Associates' tax preparation fees.

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Stip. For Disburse and Taxes
CV 04-0145-MISC. MHP

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1 DATED: October_, 2015 _ _ _ _ _.U. S. SECURITIES AND EXCHANGE
COMMISSION
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JohnS. Yun

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Attorney for the United States Securities &
Exchange Commission

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DATED:

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n W. Cotton

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Attorneys for Terence M. Coxon
and World Money Managers

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ORDER R£GARDING DISBURSEMENT OF FUNDS AND TAX ADMINISTRATOR
Good cause appearing, the Court accepts the parties' Stipulation Regarding the

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Disbursement of Funds and the Appointment of Tax Administrator. It is therefore ordered:

1.

The Clerk of the Court shall issue a check in the amount of$1,990.00 made

payable to Elizabeth Coxon as her share of the accrued interest in the court's registry. The

15 check shall be mailed to John W. Cotton, Esq. at his current law finn address.

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2.

Damasco & Associates is hereby authorized to prepare and file all necessary

1 7 tax returns and to arrange all necessary payment of income taxes (and if necessary interest and

18 penalties) from the funds in the court's registry for this proceeding. Subject to the Court's

19 review, Damasco & Associates may submit a claim for payment from the court's registry for
2 o payment of its professional fees and costs.

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3.

The Clerk of the Court shall pay to the Fund the balance remaining in the

court's registry after (i) the payment of$1 ,990.00 to Elizabeth Coxon., (ii) the payment of all
income taxes and penalties and (iii) the payment ofDamasco & Associates' fees.
SO ORDERED.
DATED: November_, 2015

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Judge, United States District Court

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Srip. For Disburse and Taxes
CV 04..014S-MISC. MHP

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DAT ED: Novembe r I 0, 20 15

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ttorney for the Uni ted States Securities &
Exchange Commissio n

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DATED: November 6 , 2015

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JOHN W. COTTON
COTTON & GUNDZ IK LLP

John W . Cotto n

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Atto rneys for Terence M. Coxon
and World Money Managers

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ORDER REGARDING DISBURSEMENT OF FUN DS AN D TAX ADMINISTRATOR
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Good cause appearing, the Co urt accepts the parties ' Stipulatio n R egarding the

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Di sbursem ent of Funds and the A ppo intment of Tax Administrator. It is therefore ordered:

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1.

T he C lerk o f the Court sha ll issue a check in the amo unt of $ 1,990.00 made

payabl e to E lizabeth Coxon as he r share of the accrued interest in the court's registry. T he
check shall be ma ile d to Jolm W. Cotton, Esq . at hi s current law firm address.

2.

Damasco & Associates is h ereby authorized to prepare and fil e all necessary

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tax retums and to arra nge a ll necessary payment of income taxes (and if necessary interest a nd

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penalties) fro m the funds in the cou1i ' s registry for thi s proceed ing. S ubj ect to the Court' s

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review, D amasco & Associates may subm it a claim for paym ent fro m the court ' s registry for

2 o payment of its professiona l fees and costs .

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3.

The C le rk of the Co urt shall pay to the Fund the balance re maining in the

co urt ' s registry after (i) the payme nt of $1,990.00 to Eli zabeth Coxon, (ii ) the payment of all
incom e taxes a nd pena lties a nd (iii) the paym ent of Damasco & Associates' fees .
SO ORD ER ED .
DATED : November _, 20 15
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Judge, U nited States District Cowi

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Stip. For Disburse and Taxes
CV 04-0145-MISC. MHP

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