Securities And Exchange Commission v. Broadwind Energy, Inc. et al

Filing 4

MOTION by Plaintiff Securities And Exchange Commission for judgment as to all Defendants by consent (Leiman, Timothy)

UNITED STATES DISTRICT COURT
NORTHERN DISTRICT OF ILLINOIS
EASTERN DIVISION

SECURITIES AND EXCHANGE COMMISSION,
Plaintiff,
Civil Action No. 15-cv-1142
v.
Hon. Milton I. Shadur
BROADWIND ENERGY, INC.,
J. CAMERON DRECOLL, and
STEPHANIE K. KUSHNER,
Defendants.

MOTION FOR ENTRY OF FINAL JUDGMENTS
Defendants Broadwind Energy, Inc. (“Broadwind”), J. Cameron Drecoll (“Drecoll”), and
Stephanie K. Kushner (“Kushner”) agreed to settle this matter with the Securities and Exchange
Commission (“SEC” or the “Commission”). Accordingly, the Commission respectfully moves
this Court for entry of the proposed final judgments attached as Exhibits 4 through 6 (“Proposed
Judgments”). As reflected in Exhibits 1 through 3, Defendants Broadwind, Drecoll, and Kushner
(collectively, “Defendants”) consent to the entry of the Proposed Judgments. In support of the
Motion, the SEC states as follows:
1.

On February 5, 2015, the Commission filed a complaint against Defendants

Broadwind, Drecoll, and Kushner for violation of the federal securities laws.
2.

In the Complaint, the Commission alleges that Broadwind failed to record and

disclose a $58 million impairment charge prior to a public offering of its stock in January 2010.

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3.

According to the Complaint, in the registration statement for the offering,

Broadwind failed to disclose the impairment of intangible assets caused by the severe
deterioration of the two most significant customer relationships at its largest subsidiary, Brad
Foote Gear Works, Inc. (“Brad Foote”). As early as August 2009, senior management
anticipated substantial impairment of its intangible assets and shared this knowledge with its
auditors, investment bankers, and lender. However, Broadwind did not disclose any impairment
to the investing public when it raised $58 million through the public offering of its stock in
January 2010. When Broadwind finally recorded and disclosed the charge in an annual report
filed only two months after the offering, Broadwind’s share price declined 29% on increased
volume.
4.

Although he should have known that the intangible assets were impaired,

Broadwind’s Chief Executive Officer (“CEO”) at the time, Drecoll, approved and certified
public filings containing these misrepresentations and misleading omissions. Drecoll personally
sold over $6.3 million worth of stock through the offering.
5.

Broadwind’s newly hired Chief Financial Officer (“CFO”), Kushner, failed to

take the steps necessary to ensure that the financial statements and disclosures were accurate.
6.

The Complaint also alleges that Broadwind violated the federal securities laws

through problematic revenue recognition practices and disclosures ahead of the offering.
7.

According to the Complaint, the deterioration in customer relationships that

produced the impairment charge also compromised Brad Foote’s ability to meet monthly debt
covenants associated with its primary credit facility. To avoid default and other negative
consequences, Brad Foote personnel accelerated revenue to meet its covenants until Broadwind
could raise funds to retire the credit facility through the offering in January 2010. Broadwind

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failed to disclose this practice and its effect on future revenue in the registration statement used
in the offering. In addition, as a result of the transactions, Broadwind reported $4 million of
improperly recognized revenue for the third and fourth quarters of 2009.
8.

As a result of the conduct described in the Complaint, the Commission alleges

that Defendant Broadwind violated Section 17(a)(2) of the Securities Act of 1933 (“Securities
Act”) [15 U.S.C. § 77q(a)(2)] and Sections 13(a), 13(b)(2)(A), and 13(b)(2)(B) of the Securities
Exchange Act of 1934 (“Exchange Act”) [15 U.S.C. §§ 78m, 78m-1(b)(2)(A)-(B)] and
Rules 12b-20, 13a-1, and 13a-13 thereunder [17 C.F.R. § 240.12b-20, 13a-1, 13a-13].
9.

In addition, the Commission alleges that Defendant Drecoll violated

Section 17(a)(2) of the Securities Act [15 U.S.C. § 77q(a)(2)] and Rule 13a-14 under the
Exchange Act [17 C.F.R. § 240.13a-14] and controlled Broadwind’s violations of Sections 13(a),
13(b)(2)(A), and 13(b)(2)(B) of the Exchange Act and Rules 12b-20, 13a-1, and 13a-13 [15
U.S.C. § 78t(a)].
10.

Finally, the Commission alleges that Defendant Kushner controlled Broadwind’s

violations of Sections 13(a), 13(b)(2)(A), and 13(b)(2)(B) of the Exchange Act and
Rules 12b-20, 13a-1, and 13a-13 [15 U.S.C. § 78t(a)].
11.

The Complaint seeks orders of permanent injunction, disgorgement and

prejudgment interest, and civil monetary penalties against Defendants.
12.

Prior to the filing of the Complaint, Defendants agreed to resolve this matter with

the SEC – without admitting or denying the allegations of the Complaint –by agreeing to the
relief requested in the Proposed Judgments, attached as Exhibits 4 through 6.

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13.

As reflected in Paragraph 1 in each of the Consents attached as Exhibits 1 to 3,

each Defendant waived service of a summons and the complaint in this action and admitted the
Court’s jurisdiction over them and over the subject matter of this action.
14.

The Proposed Judgment against Broadwind permanently enjoins it from

violations of Section 17(a)(2) of the Securities Act and Sections 13(a), 13(b)(2)(A), and
13(b)(2)(B) of the Exchange Act and Rules 12b-20, 13a-1, and 13a-13 thereunder and imposes a
civil penalty of $1 million.
15.

The Proposed Judgment against Drecoll permanently enjoins him from violations

of Section 17(a)(2) of the Securities Act, Rule 13a-14 under the Exchange Act, and from
controlling any person liable for violations of Sections 13(a), 13(b)(2)(A), and 13(b)(2)(B) of the
Exchange Act and Rules 12b-20, 13a-1, and 13a-13. The Proposed Judgment also orders
disgorgement of $475,000, with prejudgment interest of $68,358, and imposes a civil penalty of
$75,000.
16.

The Proposed Judgment against Kushner permanently enjoins her from

controlling any person liable for violations of Sections 13(a), 13(b)(2)(A), and 13(b)(2)(B) of the
Exchange Act and Rules 12b-20, 13a-1, and 13a-13. The Proposed Judgment also orders
disgorgement of $20,000, with prejudgment interest of $3,109, and imposes a civil penalty of
$50,000.
17.

As reflected in Exhibits 1 through 3, the Proposed Judgments have been reviewed

by Defendants and their counsel.

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WHEREFORE, the SEC respectfully moves this Court to enter the Proposed Judgments
as to Defendants Broadwind, Drecoll, and Kushner.
Grant such other and further relief as the Court deems just and appropriate.

Dated: February 5, 2015

Respectfully submitted,
s/ Timothy Leiman
Timothy Leiman ([e-mail])
John E. Birkenheier ([e-mail])
Paul M. G. Helms ([e-mail])
Kathryn A. Pyszka ([e-mail])
U.S. Securities and Exchange Commission
175 West Jackson Boulevard, Suite 900
Chicago, Illinois 60604
Telephone: [phone]
Facsimile: [phone]
Attorneys for Plaintiff U.S. Securities and Exchange
Commission

5

CERTIFICATE OF SERVICE
Timothy Leiman, an attorney, hereby certifies that he will cause a copy of the foregoing
Motion for Entry of Final Judgments to be served upon:
Broadwind Energy, Inc.
c/o Thomas K. Cauley, Esq.
Sidley Austin LLP
One South Dearborn
Chicago, Illinois 60603

Stephanie K. Kushner
c/o Asheesh Goel
Ropes & Gray LLP
191 North Wacker Drive, 32nd Floor
Chicago, Illinois 60606

J. Cameron Drecoll
c/o James D. Adducci, Esq.
Adducci, Dorf, Lehner, Mitchell &
Blankenship, PC
150 North Michigan Avenue, Suite 2130
Chicago, Illinois 60601

Stephanie K. Kushner
c/o R. Daniel O’Connor
Ropes & Gray LLP
Prudential Tower
800 Boylston Street
Boston, Massachusetts 02199

by express United Parcel Service this 5th day of February 2015.
s/ Timothy Leiman
Timothy Leiman ([e-mail])
John E. Birkenheier ([e-mail])
Paul M. G. Helms ([e-mail])
Kathryn A. Pyszka ([e-mail])
U.S. Securities and Exchange Commission
175 West Jackson Boulevard, Suite 900
Chicago, Illinois 60604
Telephone: [phone]
Facsimile: [phone]
Attorneys for Plaintiff U.S. Securities and Exchange
Commission

6

Exhibit 1

UNITED STATES DISTRICT COURT
NORTHERN DISTRICT OF ILLINOIS
EASTERN DIVISION

SECURITIES AND EXCHANGE COMMISSION,
Plaintiff,
C.A. No. 14v.
BROADWIND ENERGY, INC.,
J. CAMERON DRECOLL, and
STEPHANIE K. KUSHNER,
Defendants.

CONSENT OF DEFENDANT BROADWIND ENERGY, INC.
1.

Defendant Broadwind Energy, Inc. (“Defendant”) waives service of a summons

and the complaint in this action, enters a general appearance, and admits the Court’s jurisdiction
over Defendant and over the subject matter of this action.
2.

Without admitting or denying the allegations of the complaint (except as to

personal and subject matter jurisdiction, which Defendant admits), Defendant hereby consents to
the entry of the final Judgment in the form attached hereto (the “Final Judgment”) and
incorporated by reference herein, which, among other things:
(a)

permanently restrains and enjoins Defendant from violation of
Section 17(a)(2) of the Securities Act of 1933 (“Securities Act”) [15
U.S.C. § 77q(a)] and Sections 13(a), 13(b)(2)(A), and 13(b)(2)(B) of the
Securities Exchange Act of 1934 (“Exchange Act”) (15 U.S.C. § 78m) and
Rules 12b-20, 13a-1, and 13a-13 thereunder (17 C.F.R. § 240.12b-20,
13a-1, 13a-13); and

1

(b)

orders Defendant to pay a civil penalty in the amount of $1 million under
Section 20(d) of the Securities Act [15 U.S.C. § 77t(d)] and
Section 21(d)(3) of the Exchange Act [15 U.S.C. § 78u(d)(3)].

3.

Defendant acknowledges that the civil penalty paid pursuant to the Final

Judgment may be distributed pursuant to the Fair Fund provisions of Section 308(a) of the
Sarbanes-Oxley Act of 2002. Regardless of whether any such Fair Fund distribution is made, the
civil penalty shall be treated as a penalty paid to the government for all purposes, including all
tax purposes. To preserve the deterrent effect of the civil penalty, Defendant agrees that it shall
not, after offset or reduction of any award of compensatory damages in any Related Investor
Action based on Defendant’s payment of disgorgement in this action, argue that it is entitled to,
nor shall it further benefit by, offset or reduction of such compensatory damages award by the
amount of any part of Defendant’s payment of a civil penalty in this action (“Penalty Offset”). If
the court in any Related Investor Action grants such a Penalty Offset, Defendant agrees that it
shall, within thirty (30) days after entry of a final order granting the Penalty Offset, notify the
Commission’s counsel in this action and pay the amount of the Penalty Offset to the United
States Treasury or to a Fair Fund, as the Commission directs. Such a payment shall not be
deemed an additional civil penalty and shall not be deemed to change the amount of the civil
penalty imposed in this action. For purposes of this paragraph, a “Related Investor Action”
means a private damages action brought against Defendant by or on behalf of one or more
investors based on substantially the same facts as alleged in the Complaint in this action.
4.

Defendant agrees that it shall not seek or accept, directly or indirectly,

reimbursement or indemnification from any source, including but not limited to payment made
pursuant to any insurance policy, with regard to any civil penalty amounts that Defendant pays

2

pursuant to the Final Judgment, regardless of whether such penalty amounts or any part thereof
are added to a distribution fund or otherwise used for the benefit of investors. Defendant further
agrees that it shall not claim, assert, or apply for a tax deduction or tax credit with regard to any
federal, state, or local tax for any penalty amounts that Defendant pays pursuant to the Final
Judgment, regardless of whether such penalty amounts or any part thereof are added to a
distribution fund or otherwise used for the benefit of investors.
5.

Defendant waives the entry of findings of fact and conclusions of law pursuant to

Rule 52 of the Federal Rules of Civil Procedure.
6.

Defendant waives the right, if any, to a jury trial and to appeal from the entry of

the Final Judgment.
7.

Defendant enters into this Consent voluntarily and represents that no threats,

offers, promises, or inducements of any kind have been made by the Commission or any
member, officer, employee, agent, or representative of the Commission to induce Defendant to
enter into this Consent.
8.

Defendant agrees that this Consent shall be incorporated into the Final Judgment

with the same force and effect as if fully set forth therein.
9.

Defendant will not oppose the enforcement of the Final Judgment on the ground,

if any exists, that it fails to comply with Rule 65(d) of the Federal Rules of Civil Procedure, and
hereby waives any objection based thereon.
10.

Defendant waives service of the Final Judgment and agrees that entry of the Final

Judgment by the Court and filing with the Clerk of the Court will constitute notice to Defendant
of its terms and conditions. Defendant further agrees to provide counsel for the Commission,
within thirty (30) days after the Final Judgment is filed with the Clerk of the Court, with an

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affidavit or declaration stating that Defendant has received and read a copy of the Final
Judgment.
11.

Consistent with 17 C.F.R. § 202.5(f), this Consent resolves only the claims

asserted against Defendant in this civil proceeding. Defendant acknowledges that no promise or
representation has been made by the Commission or any member, officer, employee, agent, or
representative of the Commission with regard to any criminal liability that may have arisen or
may arise from the facts underlying this action or immunity from any such criminal liability.
Defendant waives any claim of Double Jeopardy based upon the settlement of this proceeding,
including the imposition of any remedy or civil penalty herein. Defendant further acknowledges
that the Court’s entry of a permanent injunction may have collateral consequences under federal
or state law and the rules and regulations of self-regulatory organizations, licensing boards, and
other regulatory organizations. Such collateral consequences include, but are not limited to, a
statutory disqualification with respect to membership or participation in, or association with a
member of, a self-regulatory organization. This statutory disqualification has consequences that
are separate from any sanction imposed in an administrative proceeding. In addition, in any
disciplinary proceeding before the Commission based on the entry of the injunction in this
action, Defendant understands that it shall not be permitted to contest the factual allegations of
the complaint in this action.
12.

Defendant understands and agrees to comply with the terms of 17 C.F.R.

§ 202.5(e), which provides in part that it is the Commission’s policy “not to permit a defendant
or respondent to consent to a judgment or order that imposes a sanction while denying the
allegations in the complaint or order for proceedings,” and “a refusal to admit the allegations is
equivalent to a denial, unless the defendant or respondent states that he neither admits nor denies

4

the allegations.” As part of Defendant’s agreement to comply with the terms of Section 202.5(e),
Defendant: (i) will not take any action or make or permit to be made any public statement
denying, directly or indirectly, any allegation in the complaint or creating the impression that the
complaint is without factual basis; (ii) will not make or permit to be made any public statement
to the effect that Defendant does not admit the allegations of the complaint, or that this Consent
contains no admission of the allegations, without also stating that Defendant does not deny the
allegations; and (iii) upon the filing of this Consent, Defendant hereby withdraws any papers
filed in this action to the extent that they deny any allegation in the complaint. If Defendant
breaches this agreement, the Commission may petition the Court to vacate the Final Judgment
and restore this action to its active docket. Nothing in this paragraph affects Defendant’s:
(i) testimonial obligations; or (ii) right to take legal or factual positions in litigation or other legal
proceedings in which the Commission is not a party.
13.

Defendant hereby waives any rights under the Equal Access to Justice Act, the

Small Business Regulatory Enforcement Fairness Act of 1996, or any other provision of law to
seek from the United States, or any agency, or any official of the United States acting in his or
her official capacity, directly or indirectly, reimbursement of attorney’s fees or other fees,
expenses, or costs expended by Defendant to defend against this action. For these purposes,
Defendant agrees that Defendant is not the prevailing party in this action since the parties have
reached a good faith settlement.
14.

Defendant agrees that the Commission may present the Final Judgment to the

Court for signature and entry without further notice.

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Exhibit 2

Exhibit 3

UNITED STATES DISTRICT COURT
NORTHERN DISTRICT OF ILLINOIS
EASTERN DIVISION

SECURITIES AND EXCHANGE COMMISSION,
Plaintiff,
C.A. No. 14v.
BROADWIND ENERGY, INC.,
J. CAMERON DRECOLL, and
STEPHANIE K. KUSHNER,
Defendants.

CONSENT OF DEFENDANT KUSHNER
1.

Defendant Stephanie K. Kushner (“Defendant”) waives service of a summons and

the complaint in this action, enters a general appearance, and admits the Court’s jurisdiction over
Defendant and over the subject matter of this action.
2.

Without admitting or denying the allegations of the complaint (except as provided

herein in Paragraph 12 and except as to personal and subject matter jurisdiction, which
Defendant admits), Defendant hereby consents to the entry of the final Judgment in the form
attached hereto (the “Final Judgment”) and incorporated by reference herein, which, among other
things:
(a)

permanently restrains and enjoins Defendant from controlling any person
liable for, violations of Sections 13(a), 13(b)(2)(A), and 13(b)(2)(B) of the
Exchange Act [15 U.S.C. § 78m] and Rules 12b-20, 13a-1, and 13a-13
thereunder [17 C.F.R. § 240.12b-20, 13a-1, 13a-13];

1

(b)

orders Defendant to pay disgorgement in the amount of $20,000, plus
prejudgment interest thereon in the amount of $3,109; and

(c)

orders Defendant to pay a civil penalty in the amount of $50,000 under
Section 20(d) of the Securities Act [15 U.S.C. § 77t(d)] and
Section 21(d)(3) of the Exchange Act [15 U.S.C. § 78u(d)(3)].

3.

Defendant acknowledges that the civil penalty paid pursuant to the Final

Judgment may be distributed pursuant to the Fair Fund provisions of Section 308(a) of the
Sarbanes-Oxley Act of 2002. Regardless of whether any such Fair Fund distribution is made, the
civil penalty shall be treated as a penalty paid to the government for all purposes, including all
tax purposes. To preserve the deterrent effect of the civil penalty, Defendant agrees that she
shall not, after offset or reduction of any award of compensatory damages in any Related
Investor Action based on Defendant’s payment of disgorgement in this action, argue that she is
entitled to, nor shall she further benefit by, offset or reduction of such compensatory damages
award by the amount of any part of Defendant’s payment of a civil penalty in this action
(“Penalty Offset”). If the court in any Related Investor Action grants such a Penalty Offset,
Defendant agrees that she shall, within thirty (30) days after entry of a final order granting the
Penalty Offset, notify the Commission’s counsel in this action and pay the amount of the Penalty
Offset to the United States Treasury or to a Fair Fund, as the Commission directs. Such a
payment shall not be deemed an additional civil penalty and shall not be deemed to change the
amount of the civil penalty imposed in this action. For purposes of this paragraph, a “Related
Investor Action” means a private damages action brought against Defendant by or on behalf of
one or more investors based on substantially the same facts as alleged in the Complaint in this
action.

2

4.

Defendant agrees that she shall not seek or accept, directly or indirectly,

reimbursement or indemnification from any source, including but not limited to payment made
pursuant to any insurance policy, with regard to any civil penalty amounts that Defendant pays
pursuant to the Final Judgment, regardless of whether such penalty amounts or any part thereof
are added to a distribution fund or otherwise used for the benefit of investors. Defendant further
agrees that she shall not claim, assert, or apply for a tax deduction or tax credit with regard to
any federal, state, or local tax for any penalty amounts that Defendant pays pursuant to the Final
Judgment, regardless of whether such penalty amounts or any part thereof are added to a
distribution fund or otherwise used for the benefit of investors.
5.

Defendant waives the entry of findings of fact and conclusions of law pursuant to

Rule 52 of the Federal Rules of Civil Procedure.
6.

Defendant waives the right, if any, to a jury trial and to appeal from the entry of

the Final Judgment.
7.

Defendant enters into this Consent voluntarily and represents that no threats,

offers, promises, or inducements of any kind have been made by the Commission or any
member, officer, employee, agent, or representative of the Commission to induce Defendant to
enter into this Consent.
8.

Defendant agrees that this Consent shall be incorporated into the Final Judgment

with the same force and effect as if fully set forth therein.
9.

Defendant will not oppose the enforcement of the Final Judgment on the ground,

if any exists, that it fails to comply with Rule 65(d) of the Federal Rules of Civil Procedure, and
hereby waives any objection based thereon.

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10.

Defendant waives service of the Final Judgment and agrees that entry of the Final

Judgment by the Court and filing with the Clerk of the Court will constitute notice to Defendant
of its terms and conditions. Defendant further agrees to provide counsel for the Commission,
within thirty (30) days after the Final Judgment is filed with the Clerk of the Court, with an
affidavit or declaration stating that Defendant has received and read a copy of the Final
Judgment.
11.

Consistent with 17 C.F.R. § 202.5(f), this Consent resolves only the claims

asserted against Defendant in this civil proceeding. Defendant acknowledges that no promise or
representation has been made by the Commission or any member, officer, employee, agent, or
representative of the Commission with regard to any criminal liability that may have arisen or
may arise from the facts underlying this action or immunity from any such criminal liability.
Defendant waives any claim of Double Jeopardy based upon the settlement of this proceeding,
including the imposition of any remedy or civil penalty herein. Defendant further acknowledges
that the Court’s entry of a permanent injunction may have collateral consequences under federal
or state law and the rules and regulations of self-regulatory organizations, licensing boards, and
other regulatory organizations. Such collateral consequences include, but are not limited to, a
statutory disqualification with respect to membership or participation in, or association with a
member of, a self-regulatory organization. This statutory disqualification has consequences that
are separate from any sanction imposed in an administrative proceeding. In addition, in any
disciplinary proceeding before the Commission based on the entry of the injunction in this
action, Defendant understands that she shall not be permitted to contest the factual allegations of
the complaint in this action.

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12.

Defendant understands and agrees to comply with the terms of 17 C.F.R.

§ 202.5(e), which provides in part that it is the Commission’s policy “not to permit a defendant
or respondent to consent to a judgment or order that imposes a sanction while denying the
allegations in the complaint or order for proceedings,” and “a refusal to admit the allegations is
equivalent to a denial, unless the defendant or respondent states that she neither admits nor
denies the allegations.”

As part of Defendant’s agreement to comply with the terms of

Section 202.5(e), Defendant: (i) will not take any action or make or permit to be made any
public statement denying, directly or indirectly, any allegation in the complaint or creating the
impression that the complaint is without factual basis; (ii) will not make or permit to be made
any public statement to the effect that Defendant does not admit the allegations of the complaint,
or that this Consent contains no admission of the allegations, without also stating that Defendant
does not deny the allegations; (iii) upon the filing of this Consent, Defendant hereby withdraws
any papers filed in this action to the extent that they deny any allegation in the complaint; and
(iv) stipulates solely for purposes of exceptions to discharge set forth in Section 523 of the
Bankruptcy Code, 11 U.S.C. § 523, that the allegations in the complaint are true, and further, that
any debt for disgorgement, prejudgment interest, civil penalty or other amounts due by
Defendant under the Final Judgment or any other judgment, order, consent order, decree or
settlement agreement entered in connection with this proceeding, is a debt for the violation by
Defendant of the federal securities laws or any regulation or order issued under such laws, as set
forth in Section 523(a)(19) of the Bankruptcy Code, 11 U.S.C. § 523(a)(19). If Defendant
breaches this agreement, the Commission may petition the Court to vacate the Final Judgment
and restore this action to its active docket. Nothing in this paragraph affects Defendant’s:

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Exhibit 4

UNITED STATES DISTRICT COURT
NORTHERN DISTRICT OF ILLINOIS
EASTERN DIVISION

SECURITIES AND EXCHANGE COMMISSION,
Plaintiff,
C.A. No. 14v.
BROADWIND ENERGY, INC.,
J. CAMERON DRECOLL, and
STEPHANIE K. KUSHNER,
Defendants.

FINAL JUDGMENT AS TO DEFENDANT BROADWIND ENERGY, INC.
The Securities and Exchange Commission having filed a Complaint and Defendant
Broadwind Energy, Inc. (“Broadwind” or “Defendant”) having entered a general appearance;
consented to the Court’s jurisdiction over Defendant and the subject matter of this action;
consented to entry of this Final Judgment without admitting or denying the allegations of the
Complaint (except as to jurisdiction); 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 and
Defendant’s agents, servants, employees, attorneys, and all persons in active concert or
participation with them who receive actual notice of this Final Judgment by personal service or
otherwise are permanently restrained and enjoined from violating, directly or indirectly,
Section 17(a)(2) of the Securities Act of 1933 (“Securities Act”) [15 U.S.C. § 77q(a)(2)] 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 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.
II.
IT IS HEREBY FURTHER ORDERED, ADJUDGED, AND DECREED that Defendant
and Defendant’s agents, servants, employees, attorneys, and all persons in active concert or
participation with them who receive actual notice of this Final Judgment by personal service or
otherwise are permanently restrained and enjoined from violating, directly or indirectly,
Section 13(a) of the Securities Exchange Act of 1934 (“Exchange Act”) [15 U.S.C. § 78m(a)]
and Rules 12b-20, 13a-1, and 13a-13 thereunder (17 C.F.R. § 240.12b-20, 13a-1, 13b-13), by
failing to file, in accordance with such rules and regulations as the Commission prescribes as
necessary or appropriate, such information and documents as the Commission requires to keep
reasonably current the information and documents required to be included in or filed with an
application or registration statement filed pursuant to Section 12 of the Exchange Act, or such
annual, quarterly, or other reports as the Commission prescribes, or by failing to include, in
addition to the information expressly required to be included in any statement or report filed
pursuant to Section 13(a) of the Exchange Act such further material information, if any, as may
be necessary to make the required statements, in light of the circumstances under which they are
made, not misleading.
III.
IT IS HEREBY FURTHER ORDERED, ADJUDGED, AND DECREED that Defendant
and Defendant’s agents, servants, employees, attorneys, and all persons in active concert or
2

participation with them who receive actual notice of this Final Judgment by personal service or
otherwise are permanently restrained and enjoined from violating, directly or indirectly,
Sections 13(b)(2)(A) and 13(b)(2)(B) of the Exchange Act [15 U.S.C. § 78m(b)(2)] by:
(a)

failing to make and keep books, records, and accounts, which, in reasonable
detail, accurately and fairly reflect the transactions and dispositions of the assets
of Defendant; or

(b)

failing to devise and maintain a system of internal accounting controls sufficient
to provide reasonable assurances that: (i) transactions are executed in accordance
with management’s general or specific authorizations; (ii) transactions are
recorded as necessary (A) to permit preparation of financial statements in
conformity with generally accepted accounting principles or any other criteria
applicable to such statements, and (B) to maintain accountability for assets;
(iii) access to assets is permitted only in accordance with management’s general
or specific authorization; and (iv) the recorded accountability for assets is
compared with the existing assets at reasonable intervals and appropriate action is
taken with respect to any differences.
IV.

IT IS HEREBY FURTHER ORDERED, ADJUDGED, AND DECREED that Defendant
is liable for a civil penalty in the amount of $1 million pursuant to Section 20(d) of the Securities
Act [15 U.S.C. § 77t(d)] and Section 21(d)(3) of the Exchange Act [15 U.S.C. § 78u(d)(3)].
Defendant shall satisfy this obligation by paying $1 million to the Securities and Exchange
Commission pursuant to the terms of the payment schedule set forth in Paragraph V below after
entry of this Final Judgment.
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Defendant may transmit payment electronically to the Commission, which will provide
detailed ACH transfer/Fedwire instructions upon request. Payment may also be made directly
from

a

bank

account

via

Pay.gov

through

the

SEC

website

at

http://www.sec.gov/about/offices/ofm.htm. Defendant may also pay by certified check, bank
cashier’s check, or United States postal money order payable to the Securities and Exchange
Commission, which shall be delivered or mailed to
Enterprise Services Center
Accounts Receivable Branch
6500 South MacArthur Boulevard
Oklahoma City, OK 73169
and shall be accompanied by a letter identifying the case title, civil action number, and name of
this Court; Broadwind Energy, Inc. as a defendant in this action; and specifying that payment is
made pursuant to this Final Judgment.
Defendant shall simultaneously transmit photocopies of evidence of payment and case
identifying information to the Commission’s counsel in this action. By making this payment,
Defendant relinquishes all legal and equitable right, title, and interest in such funds and no part
of the funds shall be returned to Defendant.
The Commission may enforce the Court’s judgment by moving for civil contempt (and/or
through other collection procedures authorized by law) at any time after fourteen (14) days
following entry of this Final Judgment. Defendant shall pay post-judgment interest on any
delinquent amounts pursuant to 28 U.S.C. § 1961. The Commission shall hold the funds,
together with any interest and income earned thereon (collectively, the “Fund”), pending further
order of the Court.
The Commission may propose a plan to distribute the Fund subject to the Court’s

4

approval. Such a plan may provide that the Fund shall be distributed pursuant to the Fair Fund
provisions of Section 308(a) of the Sarbanes-Oxley Act of 2002.

The Court shall retain

jurisdiction over the administration of any distribution of the Fund. If the Commission staff
determines that the Fund will not be distributed, the Commission shall send the funds paid
pursuant to this Final Judgment to the United States Treasury.
Regardless of whether any such Fair Fund distribution is made, amounts ordered to be
paid as civil penalties pursuant to this Judgment shall be treated as penalties paid to the
government for all purposes, including all tax purposes. To preserve the deterrent effect of the
civil penalty, Defendant shall not, after offset or reduction of any award of compensatory
damages in any Related Investor Action based on Defendant’s payment of disgorgement in this
action, argue that it is entitled to, nor shall it further benefit by, offset or reduction of such
compensatory damages award by the amount of any part of Defendant’s payment of a civil
penalty in this action (“Penalty Offset”). If the court in any Related Investor Action grants such
a Penalty Offset, Defendant shall, within thirty (30) days after entry of a final order granting the
Penalty Offset, notify the Commission’s counsel in this action and pay the amount of the Penalty
Offset to the United States Treasury or to a Fair Fund, as the Commission directs. Such a
payment shall not be deemed an additional civil penalty and shall not be deemed to change the
amount of the civil penalty imposed in this Judgment. For purposes of this paragraph, a “Related
Investor Action” means a private damages action brought against Defendant by or on behalf of
one or more investors based on substantially the same facts as alleged in the Complaint in this
action.

5

V.
Defendant shall pay the penalty due of $1 million in four installments to the Commission
according to the following schedule: (1) $250,000, within fourteen (14) days of entry of this
Final Judgment; (2) $250,000 on or before March 31, 2014; (3) $250,000 on or before June 30,
2015; and (4) $250,000 on or before September 30, 2015. Payments shall be deemed made on
the date they are received by the Commission and shall be applied first to post-judgment interest,
which accrues pursuant to 28 U.S.C. § 1961 on any unpaid amounts due after fourteen (14) days
of the entry of Final Judgment. Prior to making the final payment set forth herein, Defendant
shall contact the staff of the Commission for the amount due for the final payment.
If Defendant fails to make any payment by the date agreed and/or in the amount
agreed according to the schedule set forth above, all outstanding payments under this Final
Judgment, including post-judgment interest, minus any payments made, shall become due and
payable immediately at the discretion of the staff of the Commission without further application
to the Court.
VI.
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.

6

VII.
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: ______________, 2015
____________________________________
UNITED STATES DISTRICT JUDGE

7

Exhibit 5

UNITED STATES DISTRICT COURT
NORTHERN DISTRICT OF ILLINOIS
EASTERN DIVISION

SECURITIES AND EXCHANGE COMMISSION,
Plaintiff,
C.A. No. 14v.
BROADWIND ENERGY, INC.,
J. CAMERON DRECOLL, and
STEPHANIE K. KUSHNER,
Defendants.

FINAL JUDGMENT AS TO DEFENDANT DRECOLL
The Securities and Exchange Commission having filed a Complaint and Defendant
J. Cameron Drecoll (“Defendant”) having entered a general appearance; consented to the Court’s
jurisdiction over Defendant and the subject matter of this action; consented to entry of this Final
Judgment without admitting or denying the allegations of the Complaint (except as to
jurisdiction and except as otherwise provided herein in Paragraph VIII); 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 and
Defendant’s agents, servants, employees, attorneys, and all persons in active concert or
participation with them who receive actual notice of this Final Judgment by personal service or
otherwise are permanently restrained and enjoined from violating, directly or indirectly,
Section 17(a)(2) 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, 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.
II.
IT IS HEREBY FURTHER ORDERED, ADJUDGED, AND DECREED that Defendant
and Defendant’s agents, servants, employees, attorneys, and all persons in active concert or
participation with them who receive actual notice of this Final Judgment by personal service or
otherwise are permanently restrained and enjoined from violating Rule 13a-14 of the Securities
Exchange Act of 1934 (“Exchange Act”) (17 C.F.R. § 240.13a-14) by knowingly certifying as
true any annual or quarterly report required to be filed with the Commission pursuant to
Section 13(a) of the Exchange Act [15 U.S.C. § 78m(a)] and the rules and regulations
promulgated thereunder, which contains any untrue statement of material fact, which omits to
state any material fact necessary in order to make the statements made, in light of the
circumstances under which they were made, not misleading, or which omits to disclose any
information required to be disclosed.
III.
IT IS HEREBY FURTHER ORDERED, ADJUDGED, AND DECREED that Defendant
and Defendant’s agents, servants, employees, attorneys, and all persons in active concert or
participation with them who receive actual notice of this Final Judgment by personal service or
otherwise are permanently restrained and enjoined from, directly or indirectly, controlling any
person who violates Section 13(a) of the Exchange Act [15 U.S.C. § 78m(a)] and Rules 12b-20,
13a-1, and 13a-13 thereunder (17 C.F.R. § 240.12b-20, 13a-1, and 13b-13), by failing to file, in
2

accordance with such rules and regulations as the Commission prescribes as necessary or
appropriate, such information and documents as the Commission requires to keep reasonably
current the information and documents required to be included in or filed with an application or
registration statement filed pursuant to Section 12 of the Exchange Act, or such annual,
quarterly, or other reports as the Commission prescribes, or by failing to include, in addition to
the information expressly required to be included in any statement or report filed pursuant to
Section 13(a) of the Exchange Act such further material information, if any, as may be necessary
to make the required statements, in light of the circumstances under which they are made, not
misleading, unless Defendant acts in good faith and does not directly or indirectly induce the act
or acts constituting the violation.
IV.
IT IS HEREBY FURTHER ORDERED, ADJUDGED, AND DECREED that Defendant
and Defendant’s agents, servants, employees, attorneys, and all persons in active concert or
participation with them who receive actual notice of this Final Judgment by personal service or
otherwise are permanently restrained and enjoined from, directly or indirectly, controlling any
person who violates Sections 13(b)(2)(A) and 13(b)(2)(B) of the Exchange Act [15 U.S.C.
§ 78m(b)(2)] by (a) failing to make and keep books, records, and accounts, which, in reasonable
detail, accurately and fairly reflect the transactions and dispositions of the assets of the issuer; or
(b) failing to devise and maintain a system of internal accounting controls sufficient to provide
reasonable assurances that: (i) transactions are executed in accordance with management’s
general or specific authorizations; (ii) transactions are recorded as necessary (A) to permit
preparation of financial statements in conformity with generally accepted accounting principles
or any other criteria applicable to such statements, and (B) to maintain accountability for assets;
3

(iii) access to assets is permitted only in accordance with management’s general or specific
authorization; and (iv) the recorded accountability for assets is compared with the existing assets
at reasonable intervals and appropriate action is taken with respect to any differences, unless
Defendant acts in good faith and does not directly or indirectly induce the act or acts constituting
the violation.
V.
IT IS HEREBY FURTHER ORDERED, ADJUDGED, AND DECREED that Defendant
is liable for disgorgement of $475,000, representing losses avoided as a result of the conduct
alleged in the Complaint, together with prejudgment interest thereon in the amount of $68,358,
and a civil penalty in the amount of $75,000 pursuant to Section 20(d) of the Securities Act [15
U.S.C. § 77t(d)] and Section 21(d)(3) of the Exchange Act [15 U.S.C. § 78u(d)(3)]. Defendant
shall satisfy this obligation by paying $618,358 to the Securities and Exchange Commission
pursuant to the terms of the payment schedule set forth in Paragraph VI below after entry of this
Final Judgment.
Defendant may transmit payment electronically to the Commission, which will provide
detailed ACH transfer/Fedwire instructions upon request. Payment may also be made directly
from

a

bank

account

via

Pay.gov

through

the

SEC

website

at

http://www.sec.gov/about/offices/ofm.htm. Defendant may also pay by certified check, bank
cashier’s check, or United States postal money order payable to the Securities and Exchange
Commission, which shall be delivered or mailed to
Enterprise Services Center
Accounts Receivable Branch
6500 South MacArthur Boulevard
Oklahoma City, OK 73169

4

and shall be accompanied by a letter identifying the case title, civil action number, and name of
this Court; J. Cameron Drecoll as a defendant in this action; and specifying that payment is made
pursuant to this Final Judgment.
Defendant shall simultaneously transmit photocopies of evidence of payment and case
identifying information to the Commission’s counsel in this action. By making this payment,
Defendant relinquishes all legal and equitable right, title, and interest in such funds and no part
of the funds shall be returned to Defendant.
The Commission may enforce the Court’s judgment by moving for civil contempt (and/or
through other collection procedures authorized by law) at any time after fourteen (14) days
following entry of this Final Judgment. Defendant shall pay post-judgment interest on any
delinquent amounts pursuant to 28 U.S.C. § 1961. The Commission shall hold the funds,
together with any interest and income earned thereon (collectively, the “Fund”), pending further
order of the Court.
The Commission may propose a plan to distribute the Fund subject to the Court’s
approval. Such a plan may provide that the Fund shall be distributed pursuant to the Fair Fund
provisions of Section 308(a) of the Sarbanes-Oxley Act of 2002.

The Court shall retain

jurisdiction over the administration of any distribution of the Fund. If the Commission staff
determines that the Fund will not be distributed, the Commission shall send the funds paid
pursuant to this Final Judgment to the United States Treasury.
Regardless of whether any such Fair Fund distribution is made, amounts ordered to be
paid as civil penalties pursuant to this Judgment shall be treated as penalties paid to the
government for all purposes, including all tax purposes. To preserve the deterrent effect of the
civil penalty, Defendant shall not, after offset or reduction of any award of compensatory
5

damages in any Related Investor Action based on Defendant’s payment of disgorgement in this
action, argue that he is entitled to, nor shall he further benefit by, offset or reduction of such
compensatory damages award by the amount of any part of Defendant’s payment of a civil
penalty in this action (“Penalty Offset”). If the court in any Related Investor Action grants such
a Penalty Offset, Defendant shall, within thirty (30) days after entry of a final order granting the
Penalty Offset, notify the Commission’s counsel in this action and pay the amount of the Penalty
Offset to the United States Treasury or to a Fair Fund, as the Commission directs. Such a
payment shall not be deemed an additional civil penalty and shall not be deemed to change the
amount of the civil penalty imposed in this Judgment. For purposes of this paragraph, a “Related
Investor Action” means a private damages action brought against Defendant by or on behalf of
one or more investors based on substantially the same facts as alleged in the Complaint in this
action.
VI.
Drecoll shall pay the total of disgorgement, prejudgment interest, and penalty due of
$618,358 in two installments to the Commission according to the following schedule:
(1) $346,679, within fourteen (14) days of entry of this Final Judgment; and (2) $271,679 on or
before March 31, 2015. Payments shall be deemed made on the date they are received by the
Commission and shall be applied first to post judgment interest, which accrues pursuant to 28
U.S.C. § 1961 on any unpaid amounts due after fourteen (14) days of the entry of Final
Judgment. Prior to making the final payment set forth herein, Drecoll shall contact the staff of
the Commission for the amount due for the final payment.
If Drecoll fails to make any payment by the date agreed and/or in the amount agreed
according to the schedule set forth above, all outstanding payments under this Final Judgment,
6

including post-judgment interest, minus any payments made, shall become due and payable
immediately at the discretion of the staff of the Commission without further application to the
Court.
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, solely for purposes of
exceptions to discharge set forth in Section 523 of the Bankruptcy Code, 11 U.S.C. § 523, the
allegations in the complaint are true and admitted by Defendant, and further, any debt for
disgorgement, prejudgment interest, civil penalty or other amounts due by Defendant under this
Final Judgment or any other judgment, order, consent order, decree or settlement agreement
entered in connection with this proceeding, is a debt for the violation by Defendant of the federal
securities laws or any regulation or order issued under such laws, as set forth in
Section 523(a)(19) of the Bankruptcy Code, 11 U.S.C. § 523(a)(19).
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 Final Judgment.

Dated: ______________, 2015
____________________________________
UNITED STATES DISTRICT JUDGE

7

Exhibit 6

UNITED STATES DISTRICT COURT
NORTHERN DISTRICT OF ILLINOIS
EASTERN DIVISION

SECURITIES AND EXCHANGE COMMISSION,
Plaintiff,
C.A. No. 14v.
BROADWIND ENERGY, INC.,
J. CAMERON DRECOLL, and
STEPHANIE K. KUSHNER,
Defendants.

FINAL JUDGMENT AS TO DEFENDANT KUSHNER
The Securities and Exchange Commission having filed a Complaint and Defendant
Stephanie K. Kushner (“Defendant”) having entered a general appearance; consented to the
Court’s jurisdiction over Defendant and the subject matter of this action; consented to entry of
this Final Judgment without admitting or denying the allegations of the Complaint (except as to
jurisdiction and except as otherwise provided herein in Paragraph VI); 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 and
Defendant’s agents, servants, employees, attorneys, and all persons in active concert or
participation with them who receive actual notice of this Final Judgment by personal service or
otherwise are permanently restrained and enjoined from, directly or indirectly, controlling any
person who violates Section 13(a) of the Securities Exchange Act of 1934 (“Exchange Act”) [15
U.S.C. § 78m(a)] and Rules 12b-20, 13a-1, and 13a-13 thereunder (17 C.F.R. § 240.12b-20,

13a-1, and 13b-13), by failing to file, in accordance with such rules and regulations as the
Commission prescribes as necessary or appropriate, such information and documents as the
Commission requires to keep reasonably current the information and documents required to be
included in or filed with an application or registration statement filed pursuant to Section 12 of
the Exchange Act, or such annual, quarterly, or other reports as the Commission prescribes, or by
failing to include, in addition to the information expressly required to be included in any
statement or report filed pursuant to Section 13(a) of the Exchange Act such further material
information, if any, as may be necessary to make the required statements, in light of the
circumstances under which they are made, not misleading, unless Defendant acts in good faith
and does not directly or indirectly induce the act or acts constituting the violation.
II.
IT IS HEREBY FURTHER ORDERED, ADJUDGED, AND DECREED that Defendant
and Defendant’s agents, servants, employees, attorneys, and all persons in active concert or
participation with them who receive actual notice of this Final Judgment by personal service or
otherwise are permanently restrained and enjoined from, directly or indirectly, controlling any
person who violates Sections 13(b)(2)(A) and 13(b)(2)(B) of the Exchange Act [15 U.S.C.
§ 78m(b)(2)] by (a) failing to make and keep books, records, and accounts, which, in reasonable
detail, accurately and fairly reflect the transactions and dispositions of the assets of the issuer; or
(b) failing to devise and maintain a system of internal accounting controls sufficient to provide
reasonable assurances that: (i) transactions are executed in accordance with management’s
general or specific authorizations; (ii) transactions are recorded as necessary (A) to permit
preparation of financial statements in conformity with generally accepted accounting principles
or any other criteria applicable to such statements, and (B) to maintain accountability for assets;
2

(iii) access to assets is permitted only in accordance with management’s general or specific
authorization; and (iv) the recorded accountability for assets is compared with the existing assets
at reasonable intervals and appropriate action is taken with respect to any differences, unless
Defendant acts in good faith and does not directly or indirectly induce the act or acts constituting
the violation.
III.
IT IS HEREBY FURTHER ORDERED, ADJUDGED, AND DECREED that Defendant
is liable for disgorgement of $20,000, representing losses avoided as a result of the conduct
alleged in the Complaint, together with prejudgment interest thereon in the amount of $3,109,
and a civil penalty in the amount of $50,000 pursuant to Section 20(d) of the Securities Act of
1933 [15 U.S.C. § 77t(d)] and Section 21(d)(3) of the Exchange Act [15 U.S.C. § 78u(d)(3)].
Defendant shall satisfy this obligation by paying $73,109 to the Securities and Exchange
Commission pursuant to the terms of the payment schedule set forth in Paragraph IV below after
entry of this Final Judgment.
Defendant may transmit payment electronically to the Commission, which will provide
detailed ACH transfer/Fedwire instructions upon request. Payment may also be made directly
from

a

bank

account

via

Pay.gov

through

the

SEC

website

at

http://www.sec.gov/about/offices/ofm.htm. Defendant may also pay by certified check, bank
cashier’s check, or United States postal money order payable to the Securities and Exchange
Commission, which shall be delivered or mailed to
Enterprise Services Center
Accounts Receivable Branch
6500 South MacArthur Boulevard
Oklahoma City, OK 73169

3

and shall be accompanied by a letter identifying the case title, civil action number, and name of
this Court; Stephanie K. Kushner as a defendant in this action; and specifying that payment is
made pursuant to this Final Judgment.
Defendant shall simultaneously transmit photocopies of evidence of payment and case
identifying information to the Commission’s counsel in this action. By making this payment,
Defendant relinquishes all legal and equitable right, title, and interest in such funds and no part
of the funds shall be returned to Defendant.
The Commission may enforce the Court’s judgment by moving for civil contempt (and/or
through other collection procedures authorized by law) at any time after fourteen (14) days
following entry of this Final Judgment. Defendant shall pay post-judgment interest on any
delinquent amounts pursuant to 28 U.S.C. § 1961. The Commission shall hold the funds,
together with any interest and income earned thereon (collectively, the “Fund”), pending further
order of the Court.
The Commission may propose a plan to distribute the Fund subject to the Court’s
approval. Such a plan may provide that the Fund shall be distributed pursuant to the Fair Fund
provisions of Section 308(a) of the Sarbanes-Oxley Act of 2002.

The Court shall retain

jurisdiction over the administration of any distribution of the Fund. If the Commission staff
determines that the Fund will not be distributed, the Commission shall send the funds paid
pursuant to this Final Judgment to the United States Treasury.
Regardless of whether any such Fair Fund distribution is made, amounts ordered to be
paid as civil penalties pursuant to this Judgment shall be treated as penalties paid to the
government for all purposes, including all tax purposes. To preserve the deterrent effect of the
civil penalty, Defendant shall not, after offset or reduction of any award of compensatory
4

damages in any Related Investor Action based on Defendant’s payment of disgorgement in this
action, argue that she is entitled to, nor shall she further benefit by, offset or reduction of such
compensatory damages award by the amount of any part of Defendant’s payment of a civil
penalty in this action (“Penalty Offset”). If the court in any Related Investor Action grants such
a Penalty Offset, Defendant shall, within thirty (30) days after entry of a final order granting the
Penalty Offset, notify the Commission’s counsel in this action and pay the amount of the Penalty
Offset to the United States Treasury or to a Fair Fund, as the Commission directs. Such a
payment shall not be deemed an additional civil penalty and shall not be deemed to change the
amount of the civil penalty imposed in this Judgment. For purposes of this paragraph, a “Related
Investor Action” means a private damages action brought against Defendant by or on behalf of
one or more investors based on substantially the same facts as alleged in the Complaint in this
action.
IV.
Kushner shall pay the total of disgorgement, prejudgment interest, and penalty due of
$73,109 in four installments to the Commission according to the following schedule:
(1) $18,278, within fourteen (14) days of entry of this Final Judgment; (2) $18,277 on or before
March 31, 2015; (2) $18,277 on or before June 30, 2015; and (2) $18,277 on or before
September 30, 2015. Payments shall be deemed made on the date they are received by the
Commission and shall be applied first to post judgment interest, which accrues pursuant to 28
U.S.C. § 1961 on any unpaid amounts due after fourteen (14) days of the entry of Final
Judgment. Prior to making the final payment set forth herein, Kushner shall contact the staff of
the Commission for the amount due for the final payment.
If Kushner fails to make any payment by the date agreed and/or in the amount agreed
5

according to the schedule set forth above, all outstanding payments under this Final Judgment,
including post-judgment interest, minus any payments made, shall become due and payable
immediately at the discretion of the staff of the Commission without further application to the
Court.
V.
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.
VI.
IT IS FURTHER ORDERED, ADJUDGED, AND DECREED that, solely for purposes of
exceptions to discharge set forth in Section 523 of the Bankruptcy Code, 11 U.S.C. § 523, the
allegations in the complaint are true and admitted by Defendant, and further, any debt for
disgorgement, prejudgment interest, civil penalty or other amounts due by Defendant under this
Final Judgment or any other judgment, order, consent order, decree or settlement agreement
entered in connection with this proceeding, is a debt for the violation by Defendant of the federal
securities laws or any regulation or order issued under such laws, as set forth in
Section 523(a)(19) of the Bankruptcy Code, 11 U.S.C. § 523(a)(19).
VII.
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: ______________, 2015
____________________________________
UNITED STATES DISTRICT JUDGE
6