United States Securities and Exchange Commission v. Quadrant 4 System Corporation et al

Filing 33

MOTION by Plaintiff United States Securities and Exchange Commission for judgment against Defendant Quadrant 4 Systems Corp. (Attachments: # 1 Exhibit 1 (Final Judgment))(Andrews, Robin)

UNITED STATES DISTRICT COURT
NORTHERN DISTRICT OF ILLINOIS

SECURITIES AND EXCHANGE
COMMISSION,
Plaintiff,
Civil Action No. 17-cv-4883
v.
Judge Sara L. Ellis
QUADRANT 4 SYSTEM CORP., NANDU
THONDAVADI, and DHRU DESAI,
Defendants.

FINAL JUDGMENT AS TO DEFENDANT QUADRANT 4 SYSTEM CORP.
The U.S. Securities and Exchange Commission (“Commission”) having filed a
Complaint and Defendant Quadrant 4 System Corporation (“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 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 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 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
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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 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 13(b)(2)(A) of the Exchange Act
[15 U.S.C. § 78m(b)(2)(A)] by 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.
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 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 Section 13(b)(2)(B) of the Exchange Act
[15 U.S.C. § 78m(b)(2)(B)] by failing to devise and maintain a system of internal accounting
controls sufficient to provide reasonable assurances that:
(a)

transactions are executed in accordance with management’s general or specific
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authorization;
(b)

transactions are recorded as necessary (1) to permit preparation of financial
statements in conformity with generally accepted accounting principles or any
other criteria applicable to such statements, and (2) to maintain accountability for
assets;

(c)

access to assets is permitted only in accordance with management’s general or
specific authorization; and

(d)

the recorded accountability for assets is compared with the existing assets at
reasonable intervals and appropriate action is taken with respect to any
differences.

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 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 15(d) of the Exchange Act [15
U.S.C. § 78o(d)] or Rules 12b-20, 15d-1, 15d-11, and 15d-13 thereunder by failing to file
accurate periodic and current reports with the Commission.
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 Judgment by personal service or otherwise: (a) Defendant’s officers,
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agents, servants, employees, and attorneys; and (b) other persons in active concert or
participation with Defendant or with anyone described in (a).
VI.
The Commission has determined not to seek imposition of disgorgement, prejudgment
interest, and a civil penalty as to Defendant in light of the liquidating Chapter 11 bankruptcy
case, In re Quadrant 4 System Corporation, Case No. 17-19689 (Bankr. 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 Judgment.
IX.
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: ______________, _____
____________________________________
SARA L. ELLIS
UNITED STATES DISTRICT JUDGE

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