Securities and Exchange Commission v. Copeland et al
Filing
1
Copy of Judgment of Permanent Injunctioin [sic] and appointing Thomas C. Hebrank as permanent receiver of Defendants, signed by U.S. District Court, Central District of California Judge, on 10/19/11. (Attachments: # 1 Complaint, # 2 Civil Cover Sheet, # 3 Receipt) (lyg, )
Case 2:11-cv-08607-R -DTB Document 3
Filed 10/19/11 Page 1 of 11 Page ID #:39
1 JOHN M. McCOY III, Cal. Bar No. 166244
Email: mccoyj@sec.gov
2 SPENCER E. B'ENDELL, Cal. Bar No. 181220
Email: bendellscmsec.gov
3 DAVID M. ROSEN, Cal. Bar No. 150880
Email: rosend@sec.gov
4
Attorneys for Plaintiff
5 Securities and Exchange Commission
Rosalind R. Tyson Regional Director
6 John M. McCoy IIi, Associate Regional Director
5670 Wilshire Boulevar4< 11 th Floor
7 Los Ang¢l~s, CaJifornia ~0036-3648
Tele~~::; (323) 965-3998
c:s Facsml1l~~(j23) 965-3908
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UNITED STATES DISTRICT COURT
CENTRAL DISTRICT OF CALIFORNIA
EASTERN
SECURITIES AND EXCHANGE
COMMISSION,
DIil~ 11 - 0 8 6 0 7 t'- (D i6~
••
Case No.
cWlt8P8BfgBl JUDGMENT OF
PERMANENT INJUNCTIOIN AND
OTHER RELIEF AS TO
DEFENDANTS CHARLES P.
vs.
COPELANDJ-,COPELAND WEALTH
MANAGEMENT, A FINANCIAL
CHARLES P. COPELAND
COPELAND WEALTH :MANAGEMENT, ADVISORY CORPORATION, AND
COPELAND WEALTH
A FINANCIAL ADVISORY
MANAGEMENT" A REAL ESTATE
CORPORATION, and
COPELAND WEALTH MANAGEMENT, CORPORATI01~
AREAL ESTATE CORPORATION,
Plaintiff,
Defendants.
Case 2:11-cv-08607-R -DTB Document 3
Filed 10/19/11 Page 2 of 11 Page ID #:40
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Plaintiff Securities and Exchange Commission ("Commission") having filed
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a Complaint and Defendants Charles P. Copeland ("Charles Copeland"), Copeland
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Wealth Management, A Financial Advisory Corporation ("CWM") and Copeland
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Wealth Management, a Real Estate Corporation ("Copeland Realty") (collectively,
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"Defendants") having entered a general appearance; consented to the Court's
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jurisdiction over Defendants and the subject matter of this action; consented to
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entry of this Judgment without admitting or denying the allegations of the
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Complaint (except as to jurisdiction); waived findings of fact and conclusions of
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law; and waived any right to appeal from this Judgment:
I.
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IT IS HEREBY FURTHER ORDERED, ADJUDGED, AND DECREED
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that Defendants Charles Copeland, CWM and Copeland Realty, and their agents,
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servants, employees, attorneys, and all persons in active concert or participation
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with them who receive actual notice of this Judgment by personal service or
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otherwise are permanently restrained and enjoined from violating Section l7(a) of
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the Securities Act of 1933 (the "Securities Act"), 15 U.S.C. § 77q(a), in the offer
17 ,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
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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 of a
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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
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they were made, not misleading; or
(c)
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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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27
III
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III
1
Case 2:11-cv-08607-R -DTB Document 3
II.
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Filed 10/19/11 Page 3 of 11 Page ID #:41
IT IS HEREBY ORDERED, ADJUDGED, AND DECREED that
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Defendants Charles Copeland, CWM and Copeland Realty, and their agents,
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servants, employees, attorneys, and all persons in active concert or participation
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with them who receive actual notice of this Judgment by personal service or
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otherwise are 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 the
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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
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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
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misleading; or
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(c)
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would operate as a fraud or deceit upon any person.
III.
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to engage in any act, practice, or course of business which operates or
IT IS HEREBY FURTHER ORDERED, ADJUDGED, AND DECREED
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that Charles Copeland, CWM and Copeland Realty, and their agents, servants,
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employees, attorneys, and all persons in active concert or participation with them
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who receive actual notice of this Judgment by personal service or otherwise are
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permanently restrained and enjoined from violating Sections 206(1) and 206(2) of
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the Investment Advisers Act of 1940 ("Advisers Act"), 15 U.S.C. §§ 80b-6(1) &
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80b-6(2), by the use of the mails or any means or instrumentalities of interstate
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commerce:
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Case 2:11-cv-08607-R -DTB Document 3
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(a)
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Filed 10/19/11 Page 4 of 11 Page ID #:42
to employ any device, scheme, or artifice to defraud any client or
prospective client; or
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(b)
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to engage in any transaction, practice, or course of business which
operates as a fraud or deceit upon any client or prospective client.
IV.
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IT IS HEREBY FURTHER ORDERED, ADJUDGED, AND DECREED
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that Defendants shall each pay disgorgement of ill-gotten gains, prejudgment
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interest thereon, and a civil penalty pursuant to Section 20(d) of the Securities Act,
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15 U.S.C. § 77t(d), Section 21 (d)(3) of the Exchange Act, 15 U.S.C. § 78u(d)(3),
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and Section 209(e)(1) of the Advisers Act, 15 U.S.C. § 80b-9(e)(1). The Court
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shall determine the amounts of the disgorgement and civil penalties upon motion
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of the Commission. Prejudgment interest shall be calculated from April 1, 2011,
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based on the rate of interest used by the Internal Revenue Service for the
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underpayment of federal income tax as set forth in 26 U.S.C. § 6621(a)(2). In
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connection with the Commission's motion for disgorgement and/or civil penalties,
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and at any hearing held on such a motion: (a) Defendants will be precluded from
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arguing that they did not violate the federal securities laws as alleged in the
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Complaint; (b) Defendants may not challenge the validity of the Consent or this
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Judgment; (c) solely for the purposes of such motion, the allegations of the
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Complaint shall be accepted as and deemed true by the Court; and (d) the Court
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may determine the issues raised in the motion on the basis of affidavits,
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declarations, excerpts of sworn deposition or investigative testimony, and
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documentary evidence, without regard to the standards for summary judgment
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contained in Rule 56(c) of the Federal Rules of Civil Procedure. In connection
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with the Commission's motion for disgorgement and/or civil penalties, the parties
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may take discovery, including discovery from appropriate non-parties.
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III
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III
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Case 2:11-cv-08607-R -DTB Document 3
Filed 10/19/11 Page 5 of 11 Page ID #:43
v.
1
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IT IS FURTHER ORDERED, ADJUDGED, AND DECREED that
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Thomas C. Hebrank, is appointed as permanent receiver of Defendants CWM and
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Copeland Realty and their subsidiaries and affiliates, with full powers of an equity
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receiver, including, but not limited to, full power over all funds, assets, collateral,
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premises (whether owned, leased, occupied, or otherwise controlled), choses in
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action, books, records, papers and other property belonging to, being managed by
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or in the possession of or control of Defendants CWM and Copeland Realty and
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their subsidiaries and affiliates, and that such receiver is immediately authorized,
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empowered and directed:
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(a)
to have access to and to collect and take custody, control, possession,
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and charge of all funds, assets, collateral, premises (whether owned,
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leased, occupied, or otherwise controlled), choses in action, books,
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records, papers and other real or personal property, wherever located,
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of or managed by Defendants CWM and Copeland Realty and their
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subsidiaries and affiliates, with full power to sue, foreclose, marshal,
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collect, receive, and take into possession all such property;
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(b)
to have control of, and to be added as the sole authorized signatory
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for, all accounts of the entities in receivership, and all accounts over
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which any of their employees or agents have signatory authority, at
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any bank, title company, escrow agent, financial institution or
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brokerage firm which has possession, custody or control of any assets
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or funds of Defendants CWM and Copeland Realty and their
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subsidiaries and affiliates, or which maintains any accounts over
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which Defendants CWM and Copeland Realty and their subsidiaries
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and affiliates, and/or any of their officers, employees or agents have
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signatory authority;
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III
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Case 2:11-cv-08607-R -DTB Document 3
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(c)
Filed 10/19/11 Page 6 of 11 Page ID #:44
to conduct such investigation and discovery as may be necessary to
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locate, account for and recover all of the assets of or managed by (and
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to account for and pursue recovery of the losses of Defendants CWM
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and Copeland Realty and their subsidiaries and affiliates), and to
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engage and employ attorneys, accountants and other persons to assist
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in such investigation and discovery;
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(d)
to take such action as is necessary and appropriate to preserve and
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take control of and to prevent the dissipation, concealment, or
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disposition of any assets of or managed by Defendants CWM and
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Copeland Realty and their subsidiaries and affiliates;
(e)
to make an accounting, as soon as practicable, to this Court and the
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Commission of the assets and financial condition of Defendants
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CWM and Copeland Realty and the assets under their management,
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and to file the accounting with the Court and deliver copies thereof to
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all parties;
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(f)
to make such payments and disbursements from the funds and assets
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taken into custody, control and possession or thereafter received by
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him or her, and to incur, or authorize the making of, such agreements
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as may be necessary and advisable in discharging his or her duties as
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permanent receiver;
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(g)
to employ attorneys, accountants and others to investigate and, where
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appropriate, to institute, pursue, and prosecute all claims and causes of
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action of whatever kind and nature which may now or hereafter exist
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as a result of the activities of present or past employees or agents of
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Defendants CWM and Copeland Realty and their subsidiaries and
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affiliates;
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(h)
to have access to, monitor, and redirect all mail (including email and
facsimile) of Defendants CWM and Copeland Realty and their
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Case 2:11-cv-08607-R -DTB Document 3
Filed 10/19/11 Page 7 of 11 Page ID #:45
1
subsidiaries and affiliates, in order to review such mail which he or
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she deems relates to their business and the discharging of his or her
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duties as permanent receiver;
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(i)
to operate and control the content of information posted on any
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Internet web site maintained by Defendants CWM and Copeland
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Realty and their subsidiaries and affiliates; and
G)
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to exercise all of the lawful powers of Defendants CWM and
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Copeland Realty and their subsidiaries and affiliates, and their
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officers, directors, employees, representatives, or persons who
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exercise similar powers and perform similar duties.
VI.
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IT IS HEREBY FURTHER ORDERED, ADJUDGED, AND DECREED
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that Defendants CWM and Copeland Realty and their agents, servants, employees,
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attorneys, and all persons in active concert or participation with them who receive
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actual notice of this Judgment by personal service or otherwise, and any other
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persons who are in custody, possession or control of any assets, collateral, books,
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records, papers or other property of or managed by any of the entities in
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receivership in this action, shall forthwith give access to and control of such
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property to the permanent receiver.
VII.
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IT IS HEREBY FURTHER ORDERED, ADJUDGED, AND DECREED
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that neither Defendants CWM or Copeland Realty nor any agent, servant,
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employee, or attorney of Defendants CWM or Copeland Realty shall take any
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action or purport to take any action, in the name of or on behalf of Defendants
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CWM or Copeland Realty without the written consent of the permanent receiver or
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order of this Court.
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III
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III
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Case 2:11-cv-08607-R -DTB Document 3
Filed 10/19/11 Page 8 of 11 Page ID #:46
"III.
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IT IS FURTHER ORDERED, ADJUDGED, AND DECREED that, except
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by leave of this Court, during the pendency of this receivership, all clients,
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investors, trust beneficiaries, note holders, creditors, claimants, lessors, and all
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other persons or entities seeking relief of any kind, in law or in equity, from
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Defendants CWM and Copeland Realty or their subsidiaries or affiliates, and all
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persons acting on behalf of any such investor, trust beneficiary, note holder,
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creditor, claimant, lessor, consultant group, or other person, including sheriffs,
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marshals, servants, agents, employees, and attorneys, are hereby restrained and
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enjoined from, directly or indirectly, with respect to these persons and entities:
II
(a)
commencing, prosecuting, continuing or enforcing any suit or
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proceeding (other than actions by the Commission) against any of
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them;
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(b)
using self-help or executing or issuing or causing the execution or
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issuance of any court attachment, subpoena, replevin, execution or
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other process for the purpose of impounding or taking possession of
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or interfering with or creating or enforcing a lien upon any property or
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property interests owned by or in the possession of Defendants CWM
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and Copeland Realty; and
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(c)
doing any act or thing whatsoever to interfere with taking control,
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possession or management by the permanent receiver appointed
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hereunder of the property and assets owned, controlled or managed by
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or in the possession of Defendants CWM and Copeland Realty, or in
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any way to interfere with or harass the permanent receiver or his or
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her attorneys, accountants, employees, or agents or to interfere in any
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manner with the discharge of the permanent receiver's duties and
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responsibilities hereunder.
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III
7
Case 2:11-cv-08607-R -DTB Document 3
1
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Filed 10/19/11 Page 9 of 11 Page ID #:47
IX.
IT IS HEREBY FURTHER ORDERED, ADJUDGED, AND DECREED
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that Defendants Charles Copeland, CWM and Copeland Realty and their officers,
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agents, servants, employees, attorneys, subsidiaries and affiliates, and all persons
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in active concert or participation with them who receive actual notice of this
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Judgment by personal service or otherwise, shall cooperate with and assist the
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permanent receiver and shall take no action, directly or indirectly, to hinder,
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obstruct, or otherwise interfere with the permanent receiver or his or her attorneys,
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accountants, employees, or agents, in the conduct of the permanent receiver's
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duties or to interfere in any manner, directly or indirectly, with the custody,
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possession, management, or control by the permanent receiver of the funds, assets,
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collateral, premises, and choses in action described above.
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X.
IT IS FURTHER ORDERED, ADJUDGED, AND DECREED that, except
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as otherwise ordered by this Court, Defendants Charles Copeland, CWM and
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Copeland Realty, and their officers, agents, servants, employees, attorneys,
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subsidiaries and affiliates, including the other entities in receivership, and those
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persons in active concert or participation with any of them, who receive actual
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notice of this Judgment, by personal service or otherwise, and each of them, be and
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hereby are restrained and enjoined from, directly or indirectly: destroying,
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mutilating, concealing, transferring, altering, or otherwise disposing of, in any
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manner, any documents, which includes all books, records, computer programs,
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computer files, computer printouts, contracts, correspondence, memoranda,
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brochures, or any other documents of any kind in their possession, custody or
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control, however created, produced, or stored (manually, mechanically,
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electronically, or otherwise), pertaining in any manner to Defendants CWM and
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Copeland Realty, and their subsidiaries and affiliates. Nothing in this paragraph
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shall prevent the permanent receiver from disposing of documents in compliance
8
Case 2:11-cv-08607-R -DTB Document 3
Filed 10/19/11 Page 10 of 11 Page ID #:48
1 with applicable law upon the termination of the receivership by the Court at the
2
conclusion of this case.
3
~.
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IT IS FURTHER ORDERED, ADJUDGED, AND DECREED that no bond
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shall be required in connection with the appointment of the permanent receiver.
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Except for an act of gross negligence, the permanent receiver shall not be liable for
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any loss or damage incurred by Defendants CWM, Copeland Realty, or their
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officers, agents, servants, employees and attorneys or any other person, by reason
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of any act performed or omitted to be performed by the permanent receiver in
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connection with the discharge of his or her duties and responsibilities.
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XII.
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IT IS FURTHER ORDERED, ADJUDGED, AND DECREED that
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representatives of the Commission and any other government agency, are
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authorized to have continuing access to inspect or copy any or all of the corporate
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books and records and other documents of Defendants CWM and Copeland Realty
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and the other entities in receivership, and continuing access to inspect their funds,
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property, assets and collateral, wherever located.
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~II.
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IT IS FURTHER ORDERED, ADJUDGED, AND DECREED that the
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Consent of Defendants Charles Copeland, CWM and Copeland Realty are
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incorporated herein with the same force and effect as if fully set forth herein, and
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that Defendants shall comply with all of the undertakings and agreements set forth
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therein.
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III
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III
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III
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III
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III
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Case 2:11-cv-08607-R -DTB Document 3
Filed 10/19/11 Page 11 of 11 Page ID #:49
1
XIV.
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IT IS FURTHER ORDERED, ADJUDGED, AND DECREED that this
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Court shall retain jurisdiction of this matter for
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es of enforcing the terms
of this Judgment.
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Dated:
0,*. "
,2011
UNITED STATES DISTRICT JUDGE
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