Securities And Exchange Commission v. Wu et al

Filing 56

ORDER GRANTING 55 Final Judgment as to Defendant Ebrahim Shabudin. Signed by Judge Jeffrey S. White on 8/8/11. (jjoS, COURT STAFF) (Filed on 8/8/2013)

Case3:11-cv-04988-JSW Document55 Filed08/05/13 Page1 of 7

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MICHAEL S. DICKE (Cal. Bar No. 158187)
ROBERT L. MITCHELL (Cal. Bar No. 161354)
[e-mail]
LLOYD FARNHAM (Cal. Bar No. 202231)
[e-mail]
Attorneys for Plaintiff
SECURITIES AND EXCHANGE COMMISSION
44 Montgomery Street, 26th Floor
San Francisco, California 94104
Telephone: [phone]
Facsimile: [phone]

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UNITED STATES DISTRICT COURT

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NORTHERN DISTRICT OF CALIFORNIA

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SAN FRANCISCO DIVISION

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SECURITIES AND EXCHANGE
COMMISSION,

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Plaintiff,
v.

Case No. 11-CV-4988 JSW
[PROPOSED]
FINAL JUDGMENT AS TO
DEFENDANT EBRAHIM SHABUDIN

THOMAS S. WU, EBRAHIM SHABUDIN,
and THOMAS T. YU,
Defendants.

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SEC V. WU, ET AL.
CASE NO. 11-CV-4988 JSW

FINAL JUDGMENT AS TO
DEFENDANT EBRAHIM SHABUDIN

Case3:11-cv-04988-JSW Document55 Filed08/05/13 Page2 of 7

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I.

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The Securities and Exchange Commission having filed a Complaint and Defendant

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Ebrahim Shabudin having entered a general appearance; consented to the Court’s jurisdiction

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over Defendant and the subject matter of this action; consented to entry of this Final Judgment

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without admitting or denying the allegations of the Complaint (except as to jurisdiction); waived

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findings of fact and conclusions of law; and waived any right to appeal from this Final Judgment:

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II.

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IT IS HEREBY ORDERED, ADJUDGED, AND DECREED that Defendant and

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Defendant’s agents, servants, employees, attorneys, and all persons in active concert or

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participation with them who receive actual notice of this Final Judgment by personal service or

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otherwise are permanently restrained and enjoined from violating, directly or indirectly, Section

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

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Rule 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 national

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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 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.
III.

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IT IS HEREBY FURTHER ORDERED, ADJUDGED, AND DECREED that Defendant

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and Defendant’s agents, servants, employees, attorneys, and all persons in active concert or

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participation with them who receive actual notice of this Final Judgment by personal service or

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otherwise are permanently restrained and enjoined from violating Section 17(a)(1) of the

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Securities Act of 1933 (the “Securities Act”) [15 U.S.C. § 77q(a)(1)] in the offer or sale of any

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security by the use of any means or instruments of transportation or communication in interstate
SEC V. WU, ET AL.
CASE NO. 11-CV-4988 JSW

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FINAL JUDGMENT AS TO
DEFENDANT EBRAHIM SHABUDIN

Case3:11-cv-04988-JSW Document55 Filed08/05/13 Page3 of 7

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commerce or by use of the mails, directly or indirectly, to employ any device, scheme, or artifice

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to defraud; and from violating Section 17(a)(3) of the Securities Act [15 U.S.C. § 77q(a)(3)] in

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the offer or 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 to engage in

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any transaction, practice, or course of business which operates or would operate as a fraud or

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deceit upon the purchaser.

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IV.

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IT IS FURTHER ORDERED, ADJUDGED AND DECREED that Defendant and

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Defendant’s agents, servants, employees, attorneys-in-fact, and all persons in active concert or

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participation with any of them, who receive actual notice of this Final Judgment, by personal

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service or otherwise, and each of them, are permanently enjoined and restrained from, directly or

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indirectly, violating Section 13(b)(5) of the Exchange Act [15 U.S.C. § 78m(b)(5)] by knowingly

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circumventing or failing to implement a system of internal accounting controls.

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V.

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IT IS FURTHER ORDERED, ADJUDGED AND DECREED that Defendant and

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Defendant’s agents, servants, employees, attorneys-in-fact, and all persons in active concert or

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participation with any of them, who receive actual notice of this Final Judgment, by personal

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service or otherwise, and each of them, are permanently enjoined and restrained from, directly or

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indirectly, violating Rule 13b2-1 under the Exchange Act [17 C.F.R. § 240.13b2-1] by falsifying

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or causing to be falsified any book, record or account subject to Section 13(b)(2)(A) of the

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Exchange Act [15 U.S.C. § 78m(b)(2)(A)]; and from directly or indirectly, violating Rule 13b2-2

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under the Exchange Act [17 C.F.R. § 240.13b2-2] by making or causing to be made a materially

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false or misleading statement to an accountant, or omitting any material fact necessary in order to

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make statements made to an accountant not misleading, in connection with any audit, review or

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examination of the financial statements of an issuer.

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VI.

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IT IS FURTHER ORDERED, ADJUDGED AND DECREED that Defendant and

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Defendant’s agents, servants, employees, attorneys-in-fact, and all persons in active concert or
SEC V. WU, ET AL.
CASE NO. 11-CV-4988 JSW

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FINAL JUDGMENT AS TO
DEFENDANT EBRAHIM SHABUDIN

Case3:11-cv-04988-JSW Document55 Filed08/05/13 Page4 of 7

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participation with any of them, who receive actual notice of this Final Judgment, by personal

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service or otherwise, and each of them, are permanently enjoined and restrained from aiding and

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abetting any violation of Section 13(a) of the Exchange Act [15 U.S.C. § 78m(a)], and Rules

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12b-20, 13a-1, and 13a-11 [17 C.F.R. §§ 240.12b-20, 240.13a-1 and 240.13a-11] under the

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Exchange Act, by knowingly providing substantial assistance to an issuer which has a class of

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securities registered pursuant to Section 12 of the Exchange Act [15 U.S.C. § 78l] or Section

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15(d) of the Exchange Act [15 U.S.C. § 78o] in failing to file with the Commission such accurate

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and complete information, reports, and documents as are required to be filed with the

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Commission pursuant to Section 13(a) of the Exchange Act [15 U.S.C. § 78m(a)] and the

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Commission’s Rules, including annual reports on Form 10-K and current reports on Form 8-K.

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VII.

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IT IS FURTHER ORDERED, ADJUDGED AND DECREED that Defendant and

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Defendant’s agents, servants, employees, attorneys-in-fact, and all persons in active concert or

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participation with any of them, who receive actual notice of this Final Judgment, by personal

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service or otherwise, and each of them, are permanently enjoined and restrained from aiding and

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abetting any violation of Section 13(b)(2)(A) of the Exchange Act [15 U.S.C. § 78m(b)(2)(A)]

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by knowingly providing substantial assistance to any issuer which has a class of securities

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registered pursuant to Section 12 of the Exchange Act [15 U.S.C. § 78l] or Section 15(d) of the

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Exchange Act [15 U.S.C. § 78o] in failing to make or keep books, records or accounts, which, in

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reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of

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the issuer.

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VIII.

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IT IS FURTHER ORDERED, ADJUDGED AND DECREED that Defendant and

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Defendant’s agents, servants, employees, attorneys-in-fact, and all persons in active concert or

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participation with any of them, who receive actual notice of this Final Judgment, by personal

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service or otherwise, and each of them, are permanently enjoined and restrained from aiding and

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abetting any violation of Section 13(b)(2)(B) of the Exchange Act [15 U.S.C. § 78m(b)(2)(B)] by

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knowingly providing substantial assistance to any issuer which has a class of securities registered
SEC V. WU, ET AL.
CASE NO. 11-CV-4988 JSW

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FINAL JUDGMENT AS TO
DEFENDANT EBRAHIM SHABUDIN

Case3:11-cv-04988-JSW Document55 Filed08/05/13 Page5 of 7

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pursuant to Section 12 of the Exchange Act [15 U.S.C. § 78l] or Section 15(d) of the Exchange

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Act [15 U.S.C. § 78o] in failing to devise and maintain a system of internal accounting controls

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sufficient to provide reasonable assurance that transactions are recorded as necessary to permit

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preparation of financial statements in conformity with generally accepted accounting principles

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or other applicable criteria, and to maintain accountability for assets.
IX.

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IT IS FURTHER ORDERED, ADJUDGED, AND DECREED that, pursuant to Section

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21(d)(2) of the Exchange Act [15 U.S.C. § 78u(d)(2)] and Section 20(e) of the Securities Act [15

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U.S.C. § 77t(e)], Defendant is prohibited from acting as an officer or director of any issuer that

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has a class of securities registered pursuant to Section 12 of the Exchange Act [15 U.S.C. § 78l]

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or that is required to file reports pursuant to Section 15(d) of the Exchange Act [15 U.S.C.

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§ 78o(d)].
X.

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

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civil penalty in the amount of $175,000 pursuant to Section 20(d) of the Securities Act [15

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U.S.C. § 77t(d) and Section 21(d) of the Exchange Act [15 U.S.C. § 78u(d)]. Defendant shall

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make this payment, and this payment shall be reduced if appropriate, pursuant to the terms of the

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payment schedule set forth in paragraph XI. below.

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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

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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 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
Accounts Receivable Branch
6500 South MacArthur Boulevard
Oklahoma City, OK 73169

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SEC V. WU, ET AL.
CASE NO. 11-CV-4988 JSW

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FINAL JUDGMENT AS TO
DEFENDANT EBRAHIM SHABUDIN

Case3:11-cv-04988-JSW Document55 Filed08/05/13 Page6 of 7

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and shall be accompanied by a letter identifying the case title, civil action number, and name of

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this Court; Ebrahim Shabudin 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

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

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

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on any delinquent amounts pursuant to 28 USC § 1961.
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Ebrahim Shabudin shall pay the total of penalty due in two installments to the

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Commission according to the following schedule: (1) $50,000, within 14 days of entry of this

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Final Judgment; (2) $125,000, within 90 days of entry of this Final Judgment, with the amount

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due, if any, in the second installment reduced by any civil money penalties paid by Ebrahim

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Shabudin in connection with the administrative proceedings instituted against him by the Federal

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Deposit Insurance Corporation.

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If Ebrahim Shabudin fails to make any payment by the date agreed and/or in the amount

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agreed according to the schedule set forth above, all outstanding payments under this Final

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Judgment, including post-judgment interest, minus any payments made, shall become due and

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payable immediately at the discretion of the staff of the Commission without further application

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to the Court.
XII.

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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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SEC V. WU, ET AL.
CASE NO. 11-CV-4988 JSW

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FINAL JUDGMENT AS TO
DEFENDANT EBRAHIM SHABUDIN

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XIII.

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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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Dated: August 7, 2013
____________________________________
UNITED STATES DISTRICT JUDGE

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SEC V. WU, ET AL.
CASE NO. 11-CV-4988 JSW

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FINAL JUDGMENT AS TO
DEFENDANT EBRAHIM SHABUDIN