Securities And Exchange Commission

Filing 271

MOTION by Plaintiff U.S. Securities and Exchange Commission for judgment proposed as to Defendants William Huber and Hubadex, Inc. (Attachments: # 1 Exhibit 1, # 2 Exhibit 2)(Stoltz, Richard)

Case: 1:09-cv-06068 Document #: 271 Filed: 05/15/23 Page 1 of 5 PageID #:2742

IN THE UNITED STATES DISTRICT COURT
FOR THE NORTHERN DISTRICT OF ILLINOIS
EASTERN DIVISION
__________________________________________
)
UNITED STATES SECURITIES
)
AND EXCHANGE COMMISSION,
)
)
Plaintiff,
)
)
v.
)
Case No. 1:09-cv-06068-EEC
)
WILLIAM A. HUBER and
)
HUBADEX, INC.,
)
)
Defendants,
)
)
and
)
)
THE QUARTER FUNDS, L.P.,
)
THE SYMMETRY FUND, L.P.,
)
THE TRIMESTER FUND, and
)
RUTHANN HUBER
)
)
Relief Defendants.
)
__________________________________________)
PLAINTIFF’S MOTION TO ENTER FINAL JUDGMENT AGAINST
DEFENDANTS WILLIAM A. HUBER AND HUBADEX, INC.
AND DISMISS REMAINING CLAIMS AGAINST RELIEF DEFENDANTS
Plaintiff, the United States Securities and Exchange Commission (the “Commission”),
pursuant to Rule 7(b) of the Federal Rules of Civil Procedure, respectfully moves the Court to
enter a proposed Final Judgment in this matter as to Defendants William A. Huber (“Huber”) and
Hubadex, Inc. (Hubadex”) and dismiss the Commission’s remaining claims against the Relief
Defendants: The Quarter Funds, L.P. (“The Quarter Funds”), The Symmetry Fund, L.P. (“The
Symmetry Fund”), The Trimester Fund and Ruthann Huber. A copy of the proposed Final
Judgment is attached hereto as Exhibit 1. In support of this motion, the Commission submits the
Declaration of Ann Tushaus, attached hereto as Exhibit 2, and states the following:

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1. On September 29, 2009, the Commission filed a Complaint against the above-named
Defendants and Relief Defendants in connection with an offering fraud and misappropriation
scheme. The Commission’s Complaint alleged that Huber misappropriated funds that he raised
from investors through Hubadex to be invested in three private funds that they controlled: The
Quarter Funds, The Symmetry Fund, and The Trimester Fund (collectively, the “Funds”). See
Docket No. 1.
2. In its Complaint, the Commission named Huber and Hubadex as defendants and
named the Funds and Huber’s former spouse, Ruthann Huber, as relief defendants. Id. The
Commission sought emergency relief to halt Huber’s and Hubadex’s fraud including seeking, a
temporary restraining order and orders of preliminary and permanent injunction against Huber
and Hubadex based on their alleged violations of Section 17(a) of the Securities Act of 1933
(“Securities Act”) [15 U.S.C. § 77q(a)], Section 10(b) of the Securities Exchange Act of 1934
(“Exchange Act”) [15 U.S.C. § 78j(b)] and Rule 10b-5 thereunder [17 C.F.R. 240.10b-5], and
Sections 206(1), 206(2) and 206(4) of the Investment Advisers Act of 1940 (“Advisers Act”) [15
U.S.C. §§ 80b-6(1), 80b-6(2) and 80b-6(4)] and Rule 206(4)-8 promulgated thereunder
[17C.F.R. § 275.206(4)-8], along with disgorgement, prejudgment interest, and civil penalties
and the appointment of a Receiver. Id.
3. Defendants Huber and Hubadex agreed to partially resolve this matter by consenting,
without admitting or denying the allegations contained in the Commission’s Complaint, to the
entry of a bifurcated judgment which included all of the injunctive relief sought in the
Commission’s Complaint and ordered the payment of disgorgement, prejudgment interest and a
civil penalty, but left the amounts to be determined by the Court at a later date upon motion of
the Commission. See Docket Nos. 8 and 9.

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4. On September 29, 2009, the Court entered a judgment upon the Commission’s
motion, and pursuant to Huber’s and Hubadex’s consents, in which it permanently restrained and
enjoined Huber and Hubadex from violating, directly or indirectly, Section 17(a) of the
Securities Act [15 U.S.C. § 77q(a)], Section 10(b) of the Exchange Act [15 U.S.C. § 78j(b)] and
Rule 10b-5 thereunder [17 C.F.R. 240.10b-5], and Sections 206(1), 206(2) and 206(4) of the
Advisers Act [15 U.S.C. §§ 80b-6(1), 80b-6(2) and 80b-6(4)] and Rule 206(4)-8 promulgated
thereunder [17C.F.R. § 275.206(4)-8]. (See Docket No. 15, ¶¶ I-III). The judgment further
ordered Defendants Huber and Hubadex to pay disgorgement of ill-gotten gains, prejudgment
interest thereon, and a civil penalty in amounts to be determined by the Court upon motion by the
Commission. See id., ¶ VI.
5. On October 13, 2009, the Court, appointed Kevin B. Duff to serve as Receiver over
Defendants Huber and Hubadex and over the Relief Defendants. See Docket No. 21.
6.

On December 13, 2010, Defendant Huber pled guilty to criminal conduct relating

to substantially the same facts alleged in the Commission’s Complaint in United States v.
William Huber, 10-cr-10088 (C.D. Ill.) (Hon. Joe B. McDade). Specifically, Huber pled guilty
to one count of mail fraud [U.S.C. § 1341], two counts of money laundering U.S.C. §
1956(a)(1)(B)(i), and three counts of prohibited monetary transactions [U.S.C. § 1957(a)]. U.S.
v. William Huber, Docket No. 29. That same day, the Court sentenced Huber to a prison term of
240 months and ordered him to pay $23,652,955 in restitution. Id.
7. Between 2009 and 2019, among other things, the Receiver liquidated and terminated
the operations of Hubadex and the Funds and clawed back certain funds paid to investors and
creditors. Over the course of the Receivership, the Receiver returned a total of $7,060,064 to
investor victims and creditors. See Docket No. 268-1 [Final Accounting Statement Filed by the

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Receiver]. On September 3, 2019, after the last distribution was made to victims, the Court
terminated the Receivership in this matter. See Docket No. 267.
8.

On May 9, 2023, the Commission filed a motion with the Court to reopen this

case and designate a new Judge. See Docket No. 269. On May 11, 2023, the Court reassigned
this case to the Honorable Edmond E. Chang for all further proceedings. See Docket No. 270.
9.

The Commission respectfully moves the Court now to enter a Final Judgment in

this matter as to Defendants Huber and Hubadex which would conclude the Commission’s action
by ordering Huber and Hubadex, jointly and severally, to pay disgorgement of $8,046,494,
representing net profits gained as a result of the conduct alleged in the Commission’s Complaint,
plus prejudgment interest of $5,431,768, (Exhibit 2, Decl. of Ann Tushaus) which shall be offset
by the $7,060,064 returned to victims and creditors by the Court-appointed Receiver, and would
be further deemed satisfied by the order of restitution for $23,652,955 entered against Huber in
the parallel criminal case United States v. William Huber, 10-cr-10088 (C.D. Ill.) (JBM).
10.

The Commission seeks to withdraw its claims for civil monetary penalties against

Defendant Huber based on his prison sentence in the parallel criminal case and against
Defendant Hubadex because it is defunct.
11.

In addition, the Commission seeks to dismiss all remaining claims against

the Relief Defendants because the three Funds are defunct and the Receiver collected all investor
assets received by the Funds and Ruthann Huber.
12.

Counsel for the Commission attempted to contact Defendant Huber, who is

currently in the custody of the Bureau of Prisons and is no longer represented by counsel, to
obtain his consent to the proposed resolution of this matter as discussed herein, but Huber did not
respond. In addition, we sent the Motion to Reopen the case and designate a new Judge to

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Defendant Huber by email and overnight UPS. Counsel for the Commission has no reason to
believe that Defendants Huber and Hubadex would oppose the relief sought by this motion.
WHEREFORE, the Commission respectfully requests that the Court enter the proposed
Final Judgment as to Defendants Huber and Hubadex and dismiss all remaining claims against
the Relief Defendants.
Dated: May 15, 2023

Respectfully Submitted,
UNITED STATES
SECURITIES AND
EXCHANGE COMMISSION
/s/Richard G. Stoltz
Anne C. McKinley ([e-mail])
Richard G. Stoltz ([e-mail])
Attorneys for Plaintiff
U.S. Securities and Exchange
Commission Chicago Regional Office
175 West Jackson Blvd., Suite 1450
Chicago, Illinois 60604
[phone]
[phone] (facsimile)

CERTIFICATE OF SERVICE
I hereby certify that on May 15, 2023, I caused a copy of the Motion to Enter
Final Judgment as to Defendants William Huber and Hubadex and Dismiss
Remaining Claims Against the Relief Defendants to William A. Huber at Ocean
View, 551 South 35th Street, San Diego, California 92113-2715. I also sent the
copy of the above Motion to Defendant Huber’s email address:
[e-mail].

/s/Richard Stoltz
Richard Stoltz

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