Securities & Exchange Commission v. Rooney et al

Filing 59

MOTION by Plaintiff Securities & Exchange Commission for judgment of Permanent Injunctions Against All Defendants (Agreed) (Attachments: # 1 Exhibit 1 -- Consent of Defendant Rooney, # 2 Exhibit 2 -- Consent of Defendant Solaris Management)(Hayes, Daniel)

EXHIBIT 1

UNITED STATES DISTRICT COURT
FOR THE NORTHERN DISTRICT OF ILLINOIS
EASTERN DIVISION

UNITED STATES SECURITIES AND
EXCHANGE COMMISSION,
Plaintiff,

Case No.: 11-CV-8264

v.

Judge Charles P. Kocoras

PATRICK G. ROONEY and
SOLARIS MANAGEMENT, LLC
Defendants.

JUDGMENT AS TO
PATRICK G. ROONEY AND SOLARIS MANAGEMENT, LLC
The Securities and Exchange Commission (“Commission”) having filed a Complaint and
Defendants Patrick G. Rooney (“Rooney”) and Solaris Management, LLC (collectively,
“Defendants”) having entered general appearances; consented to the Court’s jurisdiction over
Defendants and the subject matter of this action; consented to entry of this Judgment (without
admitting or denying the allegations of the Complaint, except as to jurisdiction and for the
purposes identified in Sections VI and VII below); waived findings of fact and conclusions of
law; and waived any right to appeal from this Judgment:
I.
IT IS ORDERED, ADJUDGED, AND DECREED that Defendants and Defendants’
agents, servants, employees, attorneys, and those persons in active concert or participation with
them, and each of them, who receive actual notice of this Judgment by personal service or
otherwise are permanently restrained and enjoined from violating Sections 206(1) and (2) of the
Investment Advisers Act of 1940 (“Advisers Act”) [15 U.S.C. § 80b-6(1) and (2)] by, while

acting as an investment adviser, by the use of the means and instrumentalities of interstate
commerce and of the mails, directly or indirectly, employing devices, schemes, and artifices to
defraud its clients and prospective clients, or engaging in transactions, practices, and courses of
business which operate as a fraud or deceit upon its clients and prospective clients.
II.
IT IS HEREBY FURTHER ORDERED, ADJUDGED, AND DECREED that
Defendants and Defendants’ agents, servants, employees, attorneys, and those persons in active
concert or participation with them, and each of them, who receive actual notice of this Judgment
by personal service or otherwise are permanently restrained and enjoined from violating Section
206(4) of the Advisers Act [15 U.S.C. § 80b-6(4)] and Rule 206(4)-8(a)(1) and (a)(2) thereunder
[17 C.F.R. § 275.206(4)-8(a)(1) and (a)(2)] by, while acting as an investment adviser to a pooled
investment vehicle, by the use of the means and instrumentalities of interstate commerce and of
the mails, making untrue statements of material fact or omitting to state a material fact necessary
to make the statements made, in light of the circumstances under which they were made, not
misleading, to any investor or prospective investor in a pooled investment vehicle or otherwise
engaging in acts, practices, or courses of business that are fraudulent, deceptive or manipulative
with respect to any investor or prospective investor in a pooled investment vehicle.
III.
IT IS HEREBY FURTHER ORDERED, ADJUDGED, AND DECREED that
Defendants and Defendants’ agents, servants, employees, attorneys, and all persons in active
concert or participation with them who receive actual notice of this Judgment by personal service
or otherwise are permanently restrained and enjoined from violating Section 17(a) of the
Securities Act of 1933 (the “Securities Act”) [15 U.S.C. § 77q(a)] 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
commerce or by use of the mails, directly or indirectly:
(1)

to employ any device, scheme, or artifice to defraud;

(2)

to obtain money or property by means of any untrue statement of a material fact
or any omission of a material fact necessary in order to make the statements
made, in light of the circumstances under which they were made, not misleading;
or

(3)

to engage in any transaction, practice, or course of business which operates or
would operate as a fraud or deceit upon the purchaser.
IV.

IT IS HEREBY FURTHER ORDERED, ADJUDGED, AND DECREED that
Defendants and Defendants’ agents, servants, employees, attorneys, and all persons in active
concert or participation with them who receive actual notice of this Judgment by personal service
or otherwise are permanently restrained and enjoined from violating, directly or indirectly,
Section 10(b) of the Securities Exchange Act of 1934 (the “Exchange Act”) [15 U.S.C. § 78j(b)]
and Rule 10b-5 thereunder [17 C.F.R. § 240.10b-5], by using any means or instrumentality of
interstate commerce, or of the mails, or of any facility of any national securities exchange, in
connection with the purchase or sale of any security:
(1)

to employ any device, scheme, or artifice to defraud;

(2)

to make any untrue statement of a material fact or to omit to state a material fact
necessary in order to make the statements made, in the light of the circumstances
under which they were made, not misleading; or

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(3)

to engage in any act, practice, or course of business which operates or would
operate as a fraud or deceit upon any person.
V.

IT IS HEREBY FURTHER ORDERED, ADJUDGED, AND DECREED that
Defendants and Defendants’ agents, servants, employees, attorneys, and all persons in active
concert or participation with them who receive actual notice of this Judgment by personal service
or otherwise are permanently restrained and enjoined from violating, directly or indirectly,
Section 13(d)(1) of the Exchange Act [15 U.S.C. § 78m(d)(1)] and Rule 13d-1 thereunder [17
C.F.R. § 240.13d-1], after acquiring directly or indirectly a beneficial ownership of more than
five (5) percent of any equity security of a class which is registered pursuant to Section 12 of the
Exchange Act [15 U.S.C. § 78l] or any other equity security described in Section 13(d)(1) of the
Exchange Act or Rule 13d-1 thereunder, does not file within ten (10) days after such acquisition
a Schedule 13D with the Commission.
VI.
IT IS FURTHER ORDERED, ADJUDGED, AND DECREED that – upon motion of
the Commission – this Court shall determine if Rooney, pursuant to Section 20(e) of the
Securities Act [15 U.S.C. § 77t(e) and Section 21(d)(2) of the Exchange Act [15 U.S.C. §
78u(d)(2)], should be prohibited from acting as an officer or director of any issuer that has a class
of securities registered pursuant to Section 12 of the Exchange Act [15 U.S.C. § 78l] or that is
required to file reports pursuant to Section 15(d) of the Exchange Act [15 U.S.C. § 78o(d)]. In
connection with the Commission’s motion for an officer or director bar against Rooney, (a)
Defendants will be precluded from arguing that they did not violate the federal securities laws as
alleged in the Complaint; (b) Defendants may not challenge the validity of the Consents or this

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Judgment; (c) solely for the purposes of such motion, the allegations of the Complaint shall be
accepted as and deemed true by the Court; and (d) the Court may determine the issues raised in
the motion on the basis of affidavits, declarations, excerpts of sworn deposition or investigative
testimony, and documentary evidence, without regard to the standards for summary judgment
contained in Rule 56(c) of the Federal Rules of Civil Procedure. In connection with the
Commission’s motion for an officer and director bar, the parties may take discovery, including
discovery from appropriate non-parties, for sixty (60) days from entry of the Judgment.
VII.
IT IS HEREBY FURTHER ORDERED, ADJUDGED, AND DECREED that upon
motion of the Commission, the Court shall determine whether it is appropriate to order
disgorgement of ill-gotten gains and a civil penalty pursuant to Section 20(d) of the Securities
Act [15 U.S.C. § 77t(d)], Section 21(d)(3) of the Exchange Act [15 U.S.C. § 78u(d)(3)], and
Section 209(e) of the Advisers Act [15 U.S.C. § 80b-9(e)] from Defendants and, if so, the
amounts of the disgorgement and civil penalty. If disgorgement is ordered, Defendant shall pay
prejudgment interest thereon, calculated from August 1, 2008, based on the rate of interest used
by the Internal Revenue Service for the underpayment of federal income tax as set forth in 26
U.S.C. § 6621(a)(2). In connection with the Commission’s motion for disgorgement and civil
penalties, and at any hearing held on such a motion: (a) Defendants will be precluded from
arguing that they did not violate the federal securities laws as alleged in the Complaint; (b)
Defendants may not challenge the validity of the Consents or this Judgment; (c) solely for the
purposes of such motion, the allegations of the Complaint shall be accepted as and deemed true
by the Court; and (d) the Court may determine the issues raised in the motion on the basis of
affidavits, declarations, excerpts of sworn deposition or investigative testimony, and

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documentary evidence, without regard to the standards for summary judgment contained in Rule
56(c) of the Federal Rules of Civil Procedure. In connection with the Commission’s motion for
disgorgement and civil penalties, the parties may take discovery, including discovery from
appropriate non-parties, for sixty (60) days from entry of the Judgment.
VIII.
IT IS FURTHER ORDERED, ADJUDGED, AND DECREED that the Consents are
incorporated herein with the same force and effect as if fully set forth herein, and that
Defendants shall comply with all of the undertakings and agreements set forth therein.
IX.
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 Judgment and for
adjudicating the appropriateness of an officer and director bar and the amounts of disgorgement
(if appropriate), including prejudgment interest thereon, and civil penalties (if appropriate).
X.
There being no just reason for delay, pursuant to Rule 54(b) of the Federal Rules of Civil
Procedure, the Clerk is ordered to enter this Judgment forthwith and without further notice.

Dated: ______________, _____
____________________________________
UNITED STATES DISTRICT JUDGE

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