U.S. Securities and Exchange Commission v. Wilson et al
Filing
36
Agreed ORDER of Preliminary Injunction. Signed by District Judge Thomas L. Ludington. (SGam)
UNITED STATES DISTRICT COURT
EASTERN DISTRICT OF MICHIGAN
NORTHERN DIVISION
SECURITIES AND EXCHANGE
COMMISSION,
CIVIL ACTION No. 12 cv 15062
Plaintiff,
HON. Thomas L. Ludington
v.
JOEL I. WILSON, DIVERSIFIED
GROUP PARTNERSHIP MANAGEMENT,
LLC, and AMERICAN REALTY FUNDS
CORPORATION,
Defendants.
___________________________________/
AGREED ORDER OF PRELIMINARY INJUNCTION
Plaintiff U.S. Securities and Exchange Commission (“SEC”) having filed its complaint in
this matter, Defendant Joel I. Wilson (“Wilson”) acknowledges receipt of the complaint and
admits the personal jurisdiction of the Court over him and over the subject matter thereof, and
without admitting or denying the allegations of the complaint, except as to jurisdiction, agrees to
the entry of this Agreed Order of Preliminary Injunction (“Order”). Defendant Wilson waives
the entry of findings of fact and conclusions of law, as provided by Rule 52 of the Federal Rules
of Civil Procedure, and waives any right to appeal from this Order. The Court having
jurisdiction over the parties and the subject matter hereof, and being fully advised in the
premises, hereby states:
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I.
PRELIMINARY INJUNCTION
IT IS HEREBY ORDERED that until a final adjudication on the merits may be made,
Defendants Wilson and his agents, servants, employees, attorneys, and those persons in active
concert or participation with him, be and hereby are preliminarily enjoined from violating,
directly or indirectly, Sections 5(a) and 5(c) of the Securities Act of 1933 (the “Securities Act”)
[15 U.S.C. §§ 77e(a) and 77e(c)] 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 the 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].
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IT IS FURTHER ORDERED that until a final adjudication on the merits may be made,
Defendants Wilson and his agents, servants, employees, attorneys, and those persons in active
concert or participation with him, and each of them, be and hereby are preliminarily enjoined
from violating, directly or indirectly, Section 17(a) of 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 that until a final adjudication on the merits may be made,
Defendants Wilson and his agents, servants, employees, attorneys, and those persons in active
concert or participation with him, and each of them, be and hereby are preliminarily 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;
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(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 that until a final adjudication on the merits may be made,
Defendant Wilson and his agents, servants, employees, attorneys, and those persons in active
concert or participation with him, and each of them, be and hereby are preliminarily enjoined
from violating, directly or indirectly, Section 206(4) of the Investment Advisers Act of 1940
(“Advisers Act”) [15 U.S.C. § 80b-6(1), 80b-6(2) and 80b-6(4)], and Rule 206(4)-8 promulgated
thereunder [17 C.F.R. 275.206(4)-8], while acting as investment advisers within the meaning of
Section 202(11) of the Advisers Act [15 U.S.C. § 80b-2(11)], by use of the mails or any means
or instrumentality of interstate commerce, directly or indirectly, to make any untrue statement of
a material fact or to omit to state a material fact necessary to make the statements made, in light
of the circumstances under which they are made, not misleading, to any investor or prospective
investor in a pooled investment vehicle or otherwise engage in any act, practice, or course of
business that is fraudulent, deceptive, or manipulative with respect to any investor or prospective
investor in the pooled investment vehicle.
IT IS FURTHER ORDERED that until a final adjudication on the merits may be made,
Defendant Wilson and his agents, servants, employees, attorneys, and those persons in active
concert or participation with him, and each of them, be and hereby are preliminarily enjoined
from aiding and abetting any violation of Section 13(a) of the Exchange Act, 15 U.S.C. §§
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78m(a), and Rules 12b-20, 13a-1, and 13a-13 thereunder, 17 C.F.R. §§ 240.12b-20, 240.13a-1,
and 240.13a-13, by knowingly providing substantial assistance to an issuer that:
(a)
fails to file with the Commission such information, documents, or annual,
quarterly or periodic reports that the Commission may require or prescribe
pursuant to Section 13(a) of the Exchange Act or any of the rules, regulations or
forms promulgated thereunder; or
(b)
files with the Commission any information, document, or report, that contains any
untrue statement of a material fact, omits any material information, or otherwise
fails to comply with the provisions of Section 13(a) of the Exchange Act or any of
the rules, regulations or forms thereunder; or
(c)
fails to add or include, in addition to the information expressly required to be
included in a statement or report, such further material information as may be
necessary to make the required statements, in the light of the circumstances under
which they were made, not misleading.
IT IS FURTHER ORDERED that until a final adjudication on the merits may be made,
Defendant Wilson and his agents, servants, employees, attorneys, and all persons in active
concert or participation with him, and each of them, be and hereby are preliminarily 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, 240.13a-1, and 240.13a-13, by:
(a)
failing to file with the Commission such information, documents, or annual,
quarterly or periodic reports that the Commission may require or prescribe
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pursuant to Section 13(a) of the Exchange Act or any of the rules, regulations or
forms promulgated thereunder; or
(b)
filing with the Commission any information, document, or report, that contains
any untrue statement of a material fact, omits any material information, or
otherwise fails to comply with the provisions of Section 13(a) of the Exchange
Act or any of the rules, regulations or forms thereunder; or
(c)
failing to add or include, in addition to the information expressly required to be
included in a statement or report, such further material information as may be
necessary to make the required statements, in the light of the circumstances under
which they were made, not misleading
unless Defendant Wilson acts in good faith and does not directly or indirectly induce the act or
acts constituting the violation.
IT IS FURTHER ORDERED that until a final adjudication on the merits may be made,
Defendant Wilson, and his agents, servants, employees, attorneys, and those persons in active
concert or participation with him, and each of them, be and hereby are preliminarily enjoined
from violating, directly or indirectly, Exchange Act Rule 13a-14 [17 C.F.R. § 240.13a-14] by
signing personal certifications falsely stating that he has reviewed periodic reports containing
financial statements which an issuer filed with the Commission pursuant to Section 13(a) of the
Exchange Act [15 U.S.C. § 78m(a)] and that, based on his knowledge,
(a)
these reports do not contain any untrue statement of material fact or omit to state a
material fact necessary to make the statements made, in light of the circumstances
under which such statements were made, not misleading with respect to the period
covered by the report; and
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(b)
that information contained in these reports fairly present, in all material respects,
the financial condition and results of the issuer’s operations.
II.
SERVICE AND NOTICE
IT IS FURTHER ORDERED that service of any notices or other documents required or
permitted by this Order may be accomplished by any means, including, but not limited to fax,
email, overnight courier, personal delivery, or U.S. mail.
III.
PRESERVATION OF RIGHTS AND PRIVILEGES
IT IS FURTHER ORDERED that nothing in the Preliminary Injunction Order shall be
construed to require that Defendant Wilson abandon or waive any constitutional or other legal
privilege which he may have available to him.
IV.
IT IS FURTHER ORDERED that the Court shall retain jurisdiction of this matter for
all purposes, including, but not limited to, enforcement of this Order.
SO ORDERED:
s/Thomas L. Ludington
THOMAS L. LUDINGTON
United States District Judge
Dated: January 18, 2013
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PROOF OF SERVICE
The undersigned certifies that a copy of the foregoing order was served
upon each attorney or party of record herein by electronic means or first
class U.S. mail on January 18, 2013.
s/Tracy A. Jacobs
TRACY A. JACOBS
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