Securities And Exchange Commission v. Carlson, Jr.

Filing 17

MOTION by Plaintiff Securities And Exchange Commission for judgment (Attachments: # 1 Appendix OF DEFENDANT WILLIAM P. CARLSON, Jr., # 2 Text of Proposed Order FINAL JUDGMENT AS TO DEFENDANT WILLIAM P. CARLSON, Jr.)(Ablaev, Arsen)

EXHIBIT 1

UNITED STATES DISTRICT COURT
NORTHERN DISTRICT OF ILLINOIS
EASTERN DIVISION

SECURITIES AND EXCHANGE
COMMISSION,
Plaintiff,
Case No. 17-cv-1328

.
v
WILLIAM P. CARLSON,Jr.,
Defendant.

CONSENT OF DEFENDANT WILLIAM P. CARLSON,Jr.
1.

Defendant William P. Carlson, Jr.("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.

Defendant has pleaded guilty to criminal conduct relating to certain matters

alleged in the complaint in this action. Specifically, in United States v. William Carlson, Jr.,
Case No. 17-CR-106(N.D. Ill.), Defendant pleaded guilty to mail fraud, in violation Title 18,
United States Code, Section 1341 [18 U.S.C. § 1341]. In connection with that plea, Defendant
admitted, among other things, that: (a) he was associated with "a registered investment adviser,
located in Lombard, Illinois";(b)through this company, he "provided investment advisory
services to over 70 clients";(c)"Client A was one of[his] investment adviser clients";(d)
"[o]ver a period of five years,[he] misappropriated funds from Client A's investment account for
his own personal benefit, on approximately 41 occasions, by falsely representing to his company,
and the broker-dealer holding Client A's funds, that Client A had authorized the disbursement of
funds from her account";(e) he "misappropriated approximately $911,000 of Client A's funds

for his own personal use"; and(~ he "made false representations to Client A about the balance of
her individual investment account," including by creating and sending to Client A "at least three
fake account statements that showed a balance that was substantially greater than the actual
account balance in the account." This Consent shall remain in full force and effect regardless of
the existence or outcome of any further proceedings in United States v. William Carlson, Jr.,
Case No. 17-CR-106(N.D. Ill.).
3.

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
10(b) ofthe Securities Exchange Act of 1934(the "Exchange Act")[15
U.S.C. § 78j(b)] and Rule lOb-5 promulgated thereunder [17 C.F.R.
§ 240.1 Ob-5], and Sections 206(1) and 206(2) of the Investment Advisers
Act of 1940(the "Advisers Act")[15 U.S.C. §§ 80b-6(1),(2)]; and

(b)

orders Defendant to pay disgorgement in the amount of $711,000, plus
prejudgment interest thereon in the amount of $21,326.04, and further
orders that the disgorgement and prejudgment interest shall be deemed
satisfied upon entry of an Order of Restitution against the Defendant in
United States v. William Carlson, Jr., Case No. 17-CR-106(N.D. Ill.).

4.

Defendant waives the entry offindings offact and conclusions of law pursuant to

Rule 52 of the Federal Rules of Civil Procedure.
5.

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

the Final Judgment.

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6.

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.
7.

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

with the same force and effect as if fully set forth therein.
Defendant will not oppose the enforcement ofthe 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.
9.

Defendant waives service of the Final Judgment and agrees that entry ofthe 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 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.
10.

Consistent with 17 C.F.R. 202.50,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, aself-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 he shall not be permitted to contest the factual allegations of
the complaint in this action.
11.

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." As part of Defendant's agreement to
comply with the terms of Section 202.5(e), Defendant acknowledges the guilty plea for related
conduct described in paragraph 2 above, and:(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; (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 for purposes of exceptions to discharge
set forth in Section 523 ofthe Bankruptcy Code, 11 U.S.C. §523, that the allegations in the
complaint axe 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

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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) ofthe 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:(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.
Defendant hereby waives any rights under the Equal Access to Justice Act, the

12.

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 ofthe 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.
13.

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

Court for signature and entry without further notice.
14.

Defendant agrees that this Court shall retain jurisdiction over this matter for the

purpose of enforcing the terms ofthe Final

Dated:~~~ ~ ,2017
2017, William P. Carlson, Jr., a person known to me, ersonally appeared
On~~,
before me and acknowledged executing the foregoing Consent.

"~~~'~~s~~

Cassandra M BohNn
;vot~►y ~ub~~c, State of Illinois
fro,849792
Commission Expires:Ja~ua 18,2029
:~ia.~.ior.sa

Notar3' Public
Commission expires:
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