Securities and Exchange Commission v. eAdGear, Inc. et al

Filing 90

STIPULATION AND ORDER 89 Further Amending Order Granting Preliminary Injunction. Signed by Judge Richard Seeborg on 1/15/16. (cl, COURT STAFF) (Filed on 1/15/2016)

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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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12 SECURITIES AND EXCHANGE COMMISSION, Case No. 3:14-CV-04294-RS
Plaintiff,

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v.

[PROPOSED] FOURTH AMENDED
ORDER GRANTING PRELIMINARY
INJUNCTION

15 EADGEAR, INC., EADGEAR HOLDINGS
LIMITED, CHARLES S. WANG, FRANCIS Y.
16 YUEN, AND QIAN CATHY ZHANG,
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Defendants,

18 LAURATA P. CHAN,
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Relief Defendant.

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This matter came before the Court upon the Motion of Plaintiff Securities and Exchange
Commission (“SEC”) for a Preliminary Injunction as to each of the Defendants, and as to the Relief
Defendant, in which the SEC seeks: (1) Preliminary injunctions against the Defendants from
engaging in specified conduct; (2) An asset freeze as to each of the Defendants, and as to specified
assets of the Relief Defendant; (3) An order requiring repatriation of assets; (4) An order prohibiting
the destruction of documents; and (5) An order requiring an accounting as to Defendants eAdGear,
Inc. and eAdGear Holdings Limited.

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The Court, having considered the Complaint filed by the Commission in this action; the

2 parties’ briefing concerning the Commission’s motions for Temporary Restraining Order and for a
3 Preliminary Injunction; and the proceedings before the Court, finds that:
A.

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This Court has jurisdiction over the subject matter of this action, and as to all

5 parties, Defendants and Relief Defendant, and venue properly lies in this District.
B.

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The Commission has made a sufficient and proper showing in support of the

7 relief granted herein, as required by Section 20(b) of the Securities Act of 1933 (“Securities Act”) (15
8 U.S.C. § 77t(b)) and Section 21(d) of the Securities Exchange Act of 1934 (“Exchange Act”) (15
9 U.S.C. § 78u(b)) by evidence establishing a prima facie case and a reasonable likelihood that
10 Defendants eAdGear Holdings Limited, eAdGear, Inc., Charles S. Wang, Francis Y. Yuen, and Qian
11 Cathy Zhang have engaged in, are engaging in, are about to engage in, and will continue to engage in,
12 unless restrained and enjoined by order of this Court, transactions, acts, practices and courses of
13 business that constitute violations of Sections 5(a) and 5(c) of the Securities Act of 1933 (15 U.S.C.
14 §§ 77e(a), 77e(c)); Section 17(a) of the Securities Act (15 U.S.C. § 77q(a)); Section 10(b) of the
15 Securities Exchange Act of 1934 (15 U.S.C. § 78j(b)) and Rule 10b-5 thereunder (17 C.F.R. §
16 240.10b-5); and that Relief Defendant Laurata P. Chan is in possession (either individually or jointly
17 with her husband, Defendant Yuen) of the proceeds of those violations and has been unjustly
18 enriched.
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C.

Good cause exists to believe that, unless restrained and enjoined by order of

20 this Court, Defendants and Relief Defendant will dissipate, conceal, or transfer from the jurisdiction
21 of this Court assets which could be subject to an order directing disgorgement or the payment of civil
22 money penalties in this action. It is therefore appropriate for the Court to issue preliminary
23 injunctions, and an asset freeze to prevent the dissipation of assets and to preserve the status quo.
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D.

Good cause exists to believe that an order requiring Defendants and the Relief

25 Defendant to repatriate all assets described in Plaintiff’s Complaint is necessary to effectuate and
26 ensure compliance with the freeze imposed on the Defendants’ and Relief Defendant’s assets.
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E.

Good cause exists to believe that an order requiring eAdGear, Inc. and

28 eAdGear Holdings Limited to provide a verified accounting of all assets, money, and property held
[PROPOSED] FOURTH AMENDED ORDER OF
PRELIMINARY INJUNCTION

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CASE NO. 3:14-CV-04294-RS

1 directly or indirectly by each of them, or by others for their direct and indirect beneficial interest, is
2 necessary to effectuate and ensure compliance with the freeze imposed on their assets.
I.

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IT IS HEREBY ORDERED that the SEC’s Motion for an Order of Preliminary Injunction is

5 GRANTED.
II.

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IT IS FURTHER ORDERED that Defendants eAdGear, Inc., eAdGear Holdings Limited,

8 Charles S. Wang, Francis Y. Yuen, and Qian Cathy Zhang, and their officers, agents, servants,
9 employees, attorneys, subsidiaries, and affiliates, and those persons in active concert or participation
10 with any of them who receive actual notice of this Order, by personal service or otherwise, and each
11 of them, be and hereby are preliminarily restrained and enjoined until further order by this Court
12 from, directly or indirectly, in the absence of any applicable exemption:
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A.

Unless a registration statement is in effect as to a security, making use of any

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means or instruments of transportation or communication in interstate commerce or of the

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mails to sell such security through the use 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 causing

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to be carried through the mails or in interstate commerce, by any means or instruments of

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transportation, any such security for the purpose of sale or for delivery after sale; or

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C.

Making use of any means or instruments of transportation or communication in

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interstate commerce or of the mails to offer to sell or offer to buy through the use or medium

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of any prospectus or otherwise any security, unless a registration statement has been filed with

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the SEC as to such security, or while the registration statement is the subject of a refusal order

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or stop order or (prior to the effective date of the registration statement) any public proceeding

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or examination under Section 8 of the Securities Act, 15 U.S.C. § 77h;

25 in violation of Section 5 of the Securities Act, 15 U.S.C. § 77e.
III.

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IT IS FURTHER ORDERED that Defendants eAdGear, Inc., eAdGear Holdings Limited,

28 Charles S. Wang, Francis Y. Yuen, and Qian Cathy Zhang, and their officers, agents, servants,
[PROPOSED] FOURTH AMENDED ORDER OF
PRELIMINARY INJUNCTION

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CASE NO. 3:14-CV-04294-RS

1 employees, attorneys, subsidiaries, and affiliates, and those persons in active concert or participation
2 with any of them, who receive actual notice of this Order, by personal service or otherwise, and each
3 of them, be and hereby are preliminarily restrained and enjoined until further order by this Court
4 from, directly or indirectly, in the offer or sale of any securities, by the use of any means or
5 instruments of transportation or communication in interstate commerce or by the use of the mails:
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A.

Employing any device, scheme or artifice to defraud;

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B.

Obtaining money or property by means of any untrue statement of a material

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

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light of the circumstances under which they were made, not misleading; or

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C.

Engaging in any transaction, practice, or course of business which operates or

would operate as a fraud or deceit upon the purchaser;

12 in violation of Section 17(a) of the Securities Act, 15 U.S.C. § 77q(a).
IV.

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IT IS FURTHER ORDERED that Defendants eAdGear, Inc., eAdGear Holdings Limited,

15 Charles S. Wang, Francis Y. Yuen, and Qian Cathy Zhang, and their officers, agents, servants,
16 employees, attorneys, subsidiaries, and affiliates, and those persons in active concert or participation
17 with any of them, who receive actual notice of this Order, by personal service or otherwise, and each
18 of them, be and hereby are preliminarily restrained and enjoined until further order by this Court
19 from, directly or indirectly, in connection with the purchase or sale of any security, by the use of any
20 means or instrumentality of interstate commerce, or of the mails, or of any facility of any national
21 securities exchange:
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A.

Employing any device, scheme or artifice to defraud;

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B.

Making any untrue statement of a material fact or omitting to state a material

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

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which they were made, not misleading; or

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C.

Engaging 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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[PROPOSED] FOURTH AMENDED ORDER OF
PRELIMINARY INJUNCTION

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CASE NO. 3:14-CV-04294-RS

1 in violation of Section 10(b) of the Exchange Act, 15 U.S.C. § 78j(b), and Rule 10b-5 thereunder, 17
2 C.F.R. § 240.10b-5.
V.

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IT IS FURTHER ORDERED that, except as otherwise ordered by this Court, Defendants

5 eAdGear Holdings Limited, eAdGear, Inc., Charles S. Wang, Francis Y. Yuen, and Qian Cathy
6 Zhang, their agents, servants, employees, attorneys, and those persons in active concert or
7 participation with any of them, who receive actual notice of this Order, by personal service or
8 otherwise, and each of them, be and hereby are preliminarily restrained and enjoined until further
9 order by this Court from directly or indirectly participating in the issuance, offer, or sale of any
10 security of any entity controlled by, or under joint control with, any of them, including but not limited
11 to securities of eAdGear (or of eAdGear Holdings Limited or of eAdGear, Inc.), and in particular:
12

a.

This prohibition includes but is not limited to the securities described as “business

13 packages” or “memberships” marketed by Defendants or any of them, including through the websites
14 found at: www.eadgear.com, www.eadgear.net, www.winteam777.com, and www.winteam168.com;
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b.

This prohibition includes but is not limited to the offer or sale of securities, and the

16 acceptance of any money or anything of value by Defendants for such securities, through the websites
17 (or through the instructions provided in the websites) found at: www.eadgear.com, www.eadgear.net,
18 www.winteam777.com, and www.winteam168.com.
VI.

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IT IS FURTHER ORDERED that, except as otherwise ordered by this Court, Defendants

21 eAdGear Holdings Limited, eAdGear, Inc., Charles S. Wang, Francis Y. Yuen, and Qian Cathy
22 Zhang, their agents, servants, employees, attorneys, and those persons in active concert or
23 participation with any of them, who receive actual notice of this Order, by personal service or
24 otherwise, and each of them, be and hereby are preliminarily restrained and enjoined until further
25 order by this Court from directly or indirectly soliciting any person or entity to purchase or sell any
26 security.
VII.

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IT IS FURTHER ORDERED that, except as otherwise ordered by this Court:
[PROPOSED] FOURTH AMENDED ORDER OF
PRELIMINARY INJUNCTION

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CASE NO. 3:14-CV-04294-RS

1

a.

Defendants eAdGear, Inc., eAdGear Holdings Limited, Charles S. Wang, Francis Y.

2 Yuen, and Qian Cathy Zhang, and their officers, agents, servants, employees, attorneys, subsidiaries,
3 and affiliates, and those persons in active concert with them, who receive actual notice of this Order,
4 by personal service or otherwise, and each of them, be and hereby are preliminarily restrained and
5 enjoined until further order by this Court from, directly or indirectly, transferring, assigning, selling,
6 hypothecating, changing, wasting, dissipating, converting, concealing, encumbering, or otherwise
7 disposing of, in any manner, any funds, assets, securities, claims or other real or personal property,
8 including any notes or deeds of trust or other interest in real property, wherever located, of any one of
9 the Defendants, or their subsidiaries or affiliates, owned by, controlled by, managed by or in the
10 possession or custody of any of them and from transferring, encumbering dissipating, incurring
11 charges or cash advances on any debit or credit card of the credit arrangement of any one of the
12 Defendants, or their subsidiaries and affiliates; and
13

b.

Relief Defendant Laurata P. Chan, and her, agents, servants, employees, and attorneys,

14 and those persons in active concert with them, who receive actual notice of this Order, by personal
15 service or otherwise, and each of them, be and hereby are preliminarily restrained and enjoined until
16 further order by this Court from, directly or indirectly, transferring, assigning, selling, hypothecating,
17 changing, wasting, dissipating, converting, concealing, encumbering, or otherwise disposing of, in
18 any manner, any funds, assets, securities, claims or other real or personal property, including any
19 notes or deeds of trust or other interest in real property, wherever located, of, or owned by, controlled
20 by, managed by or in the possession or custody of the Relief Defendant to the extent such funds,
21 assets, securities, claims or other real or personal property constitutes or is derived from the proceeds
22 of, or is otherwise related to, the activities set forth in the Complaint.
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This Order specifically applies to (but is not limited to) the following real property:

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1. 37 Mount Horeb Road, Warren, New Jersey 07059

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2. 7638 Ridgeline Drive, Dublin, CA 94568

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The Commission also is permitted to record this asset freeze in the appropriate recorder’s

27 office reflecting that these properties may be the subject of litigation.
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[PROPOSED] FOURTH AMENDED ORDER OF
PRELIMINARY INJUNCTION

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CASE NO. 3:14-CV-04294-RS

1

This Order specifically applies to each of the Defendants, and to the Relief Defendant, who

2 are also known by the following names:
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Defendant CHARLES S. WANG, who is also known as WANG SHENG GUO and

4 CHARLES SHENG GUO WANG;
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Defendant FRANCIS Y. YUEN, who is also known as YUEN YUI KI and FRANCIS YUI KI

6 YUEN;
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Defendant QIAN CATHY ZHANG, who is also known as QIAN ZHANG and QIAN

8 ZHANG WANG; and
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Relief Defendant LAURATA P. CHAN, who is also known as CHAN PO LEE and

10 LAURATA PO LEE CHAN.
VIII.

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IT IS FURTHER ORDERED that, except as otherwise ordered by this Court, a freeze shall

13 remain on:
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a.

All monies and assets in all accounts at any bank, financial institution or brokerage

15 firm, or third-payment payment processor, all certificates of deposit, and other funds or assets, held in
16 the name of, for the benefit of, or over which account authority is held by Defendants eAdGear
17 Holdings Limited, eAdGear, Inc., Charles S. Wang, Francis Y. Yuen, and/or Qian Cathy Zhang
18 (subject to the permitted use of the accounts and assets designated for the purpose of paying living
19 expenses, mortgages owed, and taxes owed as described in paragraph IX, below); and
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b.

Those monies and assets that constitute or are derived from the proceeds of, or are

21 otherwise related to, the activities set forth in the Complaint in accounts at any bank, financial
22 institution or brokerage firm, or third-payment payment processor, all certificates of deposit, and
23 other funds or assets, including real or personal property, held in the name of, for the benefit of, or
24 over which account authority is held by Relief Defendant Laurata P. Chan (subject to the permitted
25 use of the accounts and assets designated for the purpose of paying living expenses, mortgages owed,
26 and taxes owed as described in paragraph IX, below);
27 including but not limited to, the accounts listed below:
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[PROPOSED] FOURTH AMENDED ORDER OF
PRELIMINARY INJUNCTION

7

CASE NO. 3:14-CV-04294-RS

Bank

Account Number

eAdGear, Inc.

Bank of America

REDACTED 795

Charles S. Wang

Bank of China

4 REDACTED 000

Francis Y. Yuen and Laurata Po Lee
5 Chan

Bank of the West

REDACTED 880

6 Francis Y. Yuen and Laurata Po Lee
Chan
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Francis Y. Yuen dba Emerald Consulting
8 Company

Bank of the West

REDACTED 749

Bank of the West

REDACTED 067

Charles S. Wang

China Citic Bank

REDACTED 920

eAdGear Holdings Limited

Citibank

REDACTED 670

eAdGear Holdings Limited

Hang Seng Bank

REDACTED 883

eAdGear Holdings Limited

HSBC

REDACTED 838

Charles S. Wang

HSBC

REDACTED 888

Charles S. Wang

HSBC

REDACTED 001

Charles S. Wang and Qian Zhang Wang

JP Morgan Chase Bank

REDACTED 797

Charles S. Wang and Qian Zhang Wang

JP Morgan Chase Bank

REDACTED 816

Charles S. Wang and Joice Wang

JP Morgan Chase Bank

REDACTED 117

Charles S. Wang and Jennifer Wang

JP Morgan Chase Bank

REDACTED 847

Charles S. Wang and Jennifer Wang

JP Morgan Chase Bank

REDACTED 058

Charles S. Wang and Joice J. Wang

JP Morgan Chase Bank

REDACTED 419

Qian Zhang Wang

JP Morgan Chase Bank

REDACTED 066

Express Consulting Inc.

JP Morgan Chase Bank

REDACTED 984

Express Consulting Inc.

JP Morgan Chase Bank

REDACTED 655

Jeffrey Yuen and Francis Y. Yuen

JP Morgan Chase Bank

REDACTED 363

Francis Y. Yuen

JP Morgan Chase Bank

REDACTED 470

Francis Y. Yuen

JP Morgan Chase Bank

REDACTED 668

Laurata P. Chan

JP Morgan Chase Bank

REDACTED 437

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Account Name
Banks

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[PROPOSED] FOURTH AMENDED ORDER OF
PRELIMINARY INJUNCTION

8

CASE NO. 3:14-CV-04294-RS

JP Morgan Chase Bank

REDACTED 707

Francis Y. Yuen and Laurata Po Lee
2 Chan

Wells Fargo Bank

REDACTED 249

3 Francis Y. Yuen and Laurata Po Lee
Chan
4
Francis Y. Yuen and Laurata Po Lee
5 Chan

Wells Fargo Bank

REDACTED 030

Wells Fargo Bank

REDACTED 181

6 Francis Y. Yuen and Laurata Po Lee
Chan
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Payment Processors
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eAdGear
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Wells Fargo Bank

REDACTED 998

Cyberprofit

REDACTED

10 eAdGear

Focal Payments

REDACTED

11 eAdGear

Glbpay

REDACTED 566

12 eAdGear

Glbpay

REDACTED 546

13 eAdGear

IPS

REDACTED 547

14 eAdGear

IPS

REDACTED 359

15 eAdGear

IPS

REDACTED 979

16 eAdGear

IPS

REDACTED 359

17 eAdGear

IPS

REDACTED 360

18 eAdGear

IPS

REDACTED 361

19 eAdGear

Payza

REDACTED

20 eAdGear

Secure Pay

REDACTED 01m

21 eAdGear

SolidTrustPay

REDACTED

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Laurata P. Chan

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Any bank, financial institution or brokerage firm, or third-party payment processor holding
such monies and assets described above, who receives actual notice of this Order, by personal service
or otherwise, including facsimile transmissions, electronic mail, or overnight delivery service, shall

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[PROPOSED] FOURTH AMENDED ORDER OF
PRELIMINARY INJUNCTION

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CASE NO. 3:14-CV-04294-RS

1 hold and retain within its control and prohibit the withdrawal, removal, transfer or other disposal of
2 any such funds or other assets except as otherwise ordered by this Court.
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This Order specifically applies to each of the Defendants, and to the Relief Defendant, who

4 are also known by the following names:
5

Defendant CHARLES S. WANG, who is also known as WANG SHENG GUO and

6 CHARLES SHENG GUO WANG;
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Defendant FRANCIS Y. YUEN, who is also known as YUEN YUI KI and FRANCIS YUI KI

8 YUEN;
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Defendant QIAN CATHY ZHANG, who is also known as QIAN ZHANG and QIAN

10 ZHANG WANG; and
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Relief Defendant LAURATA P. CHAN, who is also known as CHAN PO LEE and

12 LAURATA PO LEE CHAN.
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IX.

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IT IS FURTHER ORDERED that the asset freeze set forth above is subject to the below

15 allowance to permit the payment of living expenses, certain specified mortgages, and property tax
16 payments, and other miscellaneous issues as follows:
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a.

Defendant Charles S. Wang and Defendant Qian Cathy Zhang are together permitted

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to use $1,850 per month for the payment of living expenses out of JP Morgan Chase

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Bank account number XXXXX7816.

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b.

Defendant Charles S. Wang and Defendant Qian Cathy Zhang are together permitted

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to use $2,506 per month for the payment of the mortgage at 37 Mount Horeb Road,

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Warren, New Jersey 07059 when those payments are due out of JP Morgan Chase

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Bank account number XXXXX7816.

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c.

Defendant Charles S. Wang and Defendant Qian Cathy Zhang are together permitted

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to use the amounts necessary to pay for the escrow payment (taxes and insurance) on

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37 Mount Horeb Road, Warren, New Jersey 07059 when those taxes are due (currently

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estimated at $1,994.90 monthly) out of JP Morgan Chase Bank account number

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XXXXX7816.
[PROPOSED] FOURTH AMENDED ORDER OF
PRELIMINARY INJUNCTION

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CASE NO. 3:14-CV-04294-RS

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d.

Wells Fargo Bank account number XXX-XXX8183 in the name of Francis Y. Yuen

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and Laurata Po Lee Chan is excepted from Paragraph VIII of this Order to permit the

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allowances set forth in (e) through (g) below. By this Order, Wells Fargo is not

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required to freeze account XXX-XXX8183 or monitor it in any fashion. Defendant

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Francis Y. Yuen and Relief Defendant Laurata P. Chan are together responsible for

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complying with this Order and ensuring that no more than the allowances set forth in

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(e) through (g) below are withdrawn or otherwise removed from the account.

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e.

Laurata P. Chan are together permitted to use $6,556.02 per month for the payment of

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living expenses out of Wells Fargo Bank account number XXX-XXX8183.

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Effective as of August 1, 2015, Defendant Francis Y. Yuen and Relief Defendant

f.

Defendant Francis Y. Yuen and Relief Defendant Laurata P. Chan are together

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permitted to use $2,355.37 per month for the payment of the home equity loan on

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account number XXX XXXXXXX 1998 when those payments are due out of Wells

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Fargo Bank account number XXX-XXX8183.

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g.

Defendant Francis Y. Yuen and Relief Defendant Laurata P. Chan are together

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permitted to use the amount necessary for the payment of property taxes on 7638

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Ridgeline Drive, Dublin, CA 94568 when those taxes are due (currently estimated at

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$7,662.37 bi-annually) out of Wells Fargo Bank account number XXX-XXX8183.

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h.

Defendant Francis Y. Yuen and Relief Defendant Laurata P. Chan are together

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permitted to use the amount necessary for the payment of property taxes on 5158

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Stone Canyon Drive, Castro Valley, CA 94552 when those taxes are due (currently

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estimated at $5,823.04 bi-annually) out of Wells Fargo Bank account number XXX-

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XXX8183.

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i.

Defendants Charles S. Wang and Qian Cathy Zhang are permitted to sell their 2006

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Mercedes E350 and use the proceeds from that sale for the following purposes: (i)

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miscellaneous repairs to their home located at 37 Mount Horeb Road, Warren NJ

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07059; (ii) property tax increases for that same residence, as well as their rental

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residence located at 135 Jansak Court, Emerson NJ; (iii) homeowners insurance
[PROPOSED] FOURTH AMENDED ORDER OF
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CASE NO. 3:14-CV-04294-RS

1

increases for both the Warren and Emerson properties. Defendants shall provide to the

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SEC, upon request, within 10 business days, receipts and/or relevant documents

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related to this sale and any payments made therefrom.

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j.

Bank account REDACTED 066 in the name of Qian Zhang Wang, noted in section

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VIII, paragraph (b) above, which is an escrow account that only contains the security

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deposit paid by the tenants of 135 Jansak Court, Emerson NJ, shall be ordered

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unfrozen and the funds in that account shall be allowed to be withdrawn on or after

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March 1, 2016. Those funds shall be withdrawn only for the purposes of returning the

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security deposit to the tenants currently residing at 135 Jansak Court, Emerson NJ, or

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using that deposit for necessary repairs caused by said tenants, upon the termination of

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their lease on March 31, 2016. Defendants shall provide to the SEC, upon request,

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within 10 business days, any bank statement or check(s) issued related to the return of

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the security deposit in that account.

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X.

15

IT IS FURTHER ORDERED that, within seven (7) days from the entry of this Order:

16

a.

Defendants eAdGear, Inc., eAdGear Holdings Limited, Charles S. Wang, Francis Y.

17 Yuen, and Qian Cathy Zhang and each of them and any other person who receives notice of this
18 Order, shall transfer to the registry of this Court assets, funds and other property held in foreign
19 locations in the name of any Defendant or any person acting in active concert or participation with
20 any of them, or for the benefit or under the direct or indirect control of any of them, or over which
21 any of them exercises control or signatory authority, whether by wire transfer, third-party payment
22 processor or otherwise, at the direction of either Defendants or any of their agents, representatives,
23 advisors, or anyone acting in active concert or participation with any of them.
24

b.

Relief Defendant Laurata P. Chan shall transfer to the registry of this Court assets,

25 funds and other property, that constitute or are derived from the proceeds of, or are otherwise related
26 to, the activities set forth in the Complaint, which are held in foreign locations in the name of Relief
27 Defendant or any person acting in active concert or participation with her, or for the benefit or under
28 the direct or indirect control of any of them, or over which any of them exercises control or signatory
[PROPOSED] FOURTH AMENDED ORDER OF
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12

CASE NO. 3:14-CV-04294-RS

1 authority, whether by wire transfer, third-party payment processor or otherwise, at the direction of
2 Relief Defendant or any of her agents, representatives, advisors, or anyone acting in active concert or
3 participation with any of them.
XI.

4

IT IS FURTHER ORDERED that any person who receives actual notice of this Order by

5

6 personal service or otherwise, and who holds, possesses or controls assets exceeding $5,000 for the
7 account or benefit of any one of the Defendants or Relief Defendants, shall within seven (7) days of
8 receiving actual notice of this Order, by personal service or otherwise, provide counsel for the SEC
9 with a written statement (by mail, or e-mail, directed to: Susan F. LaMarca, Securities and Exchange
10 Commission, 44 Montgomery Street, Suite 2800, San Francisco, CA 94104, [e-mail])
11 identifying all such assets, the value of such assets, or best approximation thereof, and any account
12 numbers or account names in which the assets are held.
XII.

13

IT IS FURTHER ORDERED that Defendants eAdGear, Inc. and eAdGear Holdings Limited,

14

15 within seven (7) days of receiving actual notice of this Order, by personal service or otherwise, shall
16 prepare and deliver to the SEC a detailed and complete accounting, which shall include:
1.

17

A complete schedule of all transfers or payments of funds to eAdGear, Inc. and to

18 eAdGear Holdings Limited, and to any other entity controlled by them, from investors or “members”
19 or “business packages” in connection with the misconduct described in the Complaint (the
20 identification shall include the amount of each such transfer or payment, the date of the transfer or
21 payment, and the name, address, account number and financial institution of the party making and the
22 party receiving the transfer or payment);
2.

23

A complete schedule, in detail, of the precise disposition of each transfer or payment

24 identified in response to paragraph 1 above and all assets derived therefrom, including but not limited
25 to:
26

a.

the nature and results of any investment in which the funds were used;

27

b.

any subsequent transfer or payment of the funds (the identification shall include the

28 amount of each such transfer or payment, the date of the transfer or payment, the name, address,
[PROPOSED] FOURTH AMENDED ORDER OF
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CASE NO. 3:14-CV-04294-RS

1 account number and financial institution of the party making and receiving the transfer or payment,
2 and the reason for the transfer or payment); and
3

c.

any fees or expenses charged and a detailed statement of the nature and purpose of

4 such fees and expenses.
5

3.

A complete schedule identifying, by name and address, all persons, entities and

6 accounts currently holding funds or assets derived from the transfers or payments described in
7 paragraph 1 above and the reason each received the funds or assets (the identification shall include
8 the amount each received, the date received, the reason received, the institution and account number
9 or location in which the funds or other assets are held and the name, address, account number and
10 financial institution of the person or entity who provided each with the funds or other assets);
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4.

A complete schedule identifying assets of every type and description with a value of at

12 least five hundred dollars ($500) presently owned by or held for the direct or indirect benefit, or
13 subject to the direct or indirect control, of eAdGear, Inc. or eAdGear Holdings Limited, whether in
14 the United States or elsewhere; and,
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5.

A complete schedule of all accounts in the name of eAdGear, Inc. or eAdGear

16 Holdings Limited, held at any bank, securities, and other financial institution, identified by
17 institution, branch address and account number, from July 1, 2010 through the present.
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Such accounting shall be filed with the Court and a copy shall be delivered to the SEC to the

19 attention of Susan F. LaMarca. After completion of the accounting, Defendants eAdGear, Inc. and
20 eAdGear Holdings Limited shall produce to the SEC at a time agreeable to the SEC, all books,
21 records and other documents supporting or underlying their accounting.
XIII.

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IT IS FURTHER ORDERED that, except as otherwise ordered by this Court, each of the

24 Defendants eAdGear, Inc., eAdGear Holdings Limited, Charles S. Wang, Francis Y. Yuen, and Qian
25 Cathy Zhang, and Relief Defendant Laurata P. Chan, and their officers, agents, servants, employees,
26 attorneys, subsidiaries, and affiliates, and those persons in active concert or participation with any of
27 them, who receive actual notice of this Order, by personal service or otherwise, and each of them, be
28 and hereby are preliminarily restrained and enjoined until further by this Court from, directly or
[PROPOSED] FOURTH AMENDED ORDER OF
PRELIMINARY INJUNCTION

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CASE NO. 3:14-CV-04294-RS

1 indirectly: destroying, mutilating, concealing, transferring, altering, or otherwise disposing of, in any
2 manner, any documents, which includes all books, records, computer programs, computer files,
3 computer printouts, contracts, emails, correspondence, memoranda, brochures, or any other
4 documents of any kind in their possession, custody or control, however created, produced, or stored
5 (manually, mechanically, electronically, or otherwise), pertaining in any manner to Defendants
6 eAdGear, Inc., eAdGear Holdings Limited, Charles S. Wang, Francis Y. Yuen, and Qian Cathy
7 Zhang, and Relief Defendant Laurata P. Chan.
8
9 IT IS SO ORDERED.
10
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11 Dated: January 15 2016
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RICHARD G. SEEBORG
UNITED STATES DISTRICT JUDGE

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[PROPOSED] FOURTH AMENDED ORDER OF
PRELIMINARY INJUNCTION

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CASE NO. 3:14-CV-04294-RS