United States Securities and Exchange Commission v. Cohn et al

Filing 60

MOTION by Plaintiff United States Securities and Exchange Commission for judgment and Relief (Attachments: # 1 Exhibit Criminal Information, # 2 Exhibit Plea Agreement, # 3 Exhibit Criminal Judgment, # 4 Exhibit Cohn's Consent in Court Action and Offer of Settlement in Follow-On Administrative Proceeding, # 5 Exhibit Proposed Order)(Polish, Jonathan)

IN THE UNITED STATES DISTRICT COURT
FOR THE NORTHERN DISTRICT OF ILLINOIS
EASTERN DIVISION
UNITED STATES SECURITIES
AND EXCHANGE COMMISSION,
Plaintiff,
v.
CLAYTON A. COHN and MARKETACTION
ADVISORS, LLC,
Defendants.
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No. 1:13-cv-05586
JURY DEMANDED

[PROPOSED] FINAL JUDGMENT AS TO DEFENDANT CLAYTON A. COHN
The Securities and Exchange Commission having filed a Complaint and
Defendant Clayton A. Cohn (“Defendant”) having entered a general appearance;
consented to the Court’s jurisdiction over Defendant and the subject matter of this
action; waived findings of fact and conclusions of law; and waived any right to appeal
from this Final Judgment:
I.
IT IS HEREBY ORDERED, ADJUDGED, AND DECREED that Defendant is
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 promulgated 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:

(a)

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

(b)

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

(c)

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

IT IS FURTHER ORDERED, ADJUDGED, AND DECREED that, as
provided in Federal Rule of Civil Procedure 65(d)(2), the foregoing paragraph also binds
the following who receive actual notice of this Final Judgment by personal service or
otherwise: (a) Defendant’s officers, agents, servants, employees, and attorneys; and (b)
other persons in active concert or participation with Defendant or with anyone described
in (a).
II.
IT IS HEREBY FURTHER ORDERED, ADJUDGED, AND DECREED that
Defendant is 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 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:
(a)

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

(b)

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
(c)

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

IT IS FURTHER ORDERED, ADJUDGED, AND DECREED that, as
provided in Federal Rule of Civil Procedure 65(d)(2), the foregoing paragraph also binds
the following who receive actual notice of this Final Judgment by personal service or
otherwise: (a) Defendant’s officers, agents, servants, employees, and attorneys; and (b)
other persons in active concert or participation with Defendant or with anyone described
in (a).
III.
IT IS HEREBY FURTHER ORDERED, ADJUDGED, AND DECREED that
Defendant is permanently restrained and enjoined from violating Section 5 of the
Securities Act [15 U.S.C. § 77e] by, directly or indirectly, in the absence of any
applicable exemption:
(a)

Unless a registration statement is in effect as to a security, making use of
any means or instruments of transportation or communication in interstate
commerce or of the mails to sell such security through the use or medium
of any prospectus or otherwise;

(b)

Unless a registration statement is in effect as to a security, carrying or
causing to be carried through the mails or in interstate commerce, by any
means or instruments of transportation, any such security for the purpose

of sale or for delivery after sale; or
(c)

Making use of any means or instruments of transportation or
communication in interstate commerce or of the mails to offer to sell or
offer to buy through the use or medium of any prospectus or otherwise any
security, unless a registration statement has been filed with the
Commission as to such security, or while the registration statement is the
subject of a refusal order or stop order or (prior to the effective date of the
registration statement) any public proceeding or examination under
Section 8 of the Securities Act [15 U.S.C. § 77h].

IT IS FURTHER ORDERED, ADJUDGED, AND DECREED that, as
provided in Federal Rule of Civil Procedure 65(d)(2), the foregoing paragraph also binds
the following who receive actual notice of this Final Judgment by personal service or
otherwise: (a) Defendant’s officers, agents, servants, employees, and attorneys; and (b)
other persons in active concert or participation with Defendant or with anyone described
in (a).
IV.
IT IS HEREBY FURTHER ORDERED, ADJUDGED, AND DECREED that
Defendant is permanently restrained and enjoined from violating Sections 206(1) and
206(2) of the Investment Advisers Act of 1940 (“Advisers Act”) [15 U.S.C. §§ 80b-6(1)
and 80b-6(2)], while acting as an investment adviser, by use of the mails, and the means
and instrumentalities of interstate commerce, directly or indirectly, knowingly, willfully
or recklessly: (i) employing devices, schemes or artifices to defraud its clients or

prospective clients; and (ii) engaging in transactions, practices and courses of business
which have operated as a fraud or deceit upon its clients or prospective clients.
IT IS FURTHER ORDERED, ADJUDGED, AND DECREED that, as
provided in Federal Rule of Civil Procedure 65(d)(2), the foregoing paragraph also binds
the following who receive actual notice of this Final Judgment by personal service or
otherwise: (a) Defendant’s officers, agents, servants, employees, and attorneys; and (b)
other persons in active concert or participation with Defendant or with anyone described
in (a).
V.
IT IS HEREBY FURTHER ORDERED, ADJUDGED, AND DECREED that
Defendant is permanently restrained and enjoined from violating Section 206(4) of the
Advisers Act and Rule 206(4)-8 thereunder [15 U.S.C. § 80b-6(4); 17 C.F.R. §
275.206(4)-8], while acting as investment advisers to a pooled investment vehicle: (a)
making untrue statements of material facts or omitted to state material facts necessary in
order to make the statements made, in light of the circumstances under which they were
made, not misleading, to investors or prospective investors in the pooled investment
vehicle; or (b) engaging in acts, practices, or courses of business that were fraudulent,
deceptive, or manipulative with respect to investors or prospective investors in the
pooled investment vehicle.
IT IS FURTHER ORDERED, ADJUDGED, AND DECREED that, as
provided in Federal Rule of Civil Procedure 65(d)(2), the foregoing paragraph also binds
the following who receive actual notice of this Final Judgment by personal service or

otherwise: (a) Defendant’s officers, agents, servants, employees, and attorneys; and (b)
other persons in active concert or participation with Defendant or with anyone described
in (a).
VI.
IT IS HEREBY FURTHER ORDERED, ADJUDGED, AND DECREED that
Defendant is liable for disgorgement of $1,556,488.11, representing profits gained as a
result of the conduct alleged in the Complaint. Defendant’s payment of disgorgement is
deemed satisfied by the criminal restitution order entered against Defendant on January
24, 2017 in United States v. Clayton Andrew Cohn, 1:16-cr-325 (N.D. Ill.).
VII.
IT IS FURTHER ORDERED, ADJUDGED, AND DECREED that the Consent is
incorporated herein with the same force and effect as if fully set forth herein, and that Defendant
shall comply with all of the undertakings and agreements set forth therein.

VIII.
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.
Dated: ______________, _____
____________________________________
UNITED STATES DISTRICT JUDGE