United States Securities and Exchange Commission v. Onyx Capital Advisors, LLC et al

Filing 130

JUDGMENT against defendant Michael A. Farr Signed by District Judge Denise Page Hood. (JOwe)

IN THE UNITED STATES DISTRICT COURT
EASTERN DISTRICT OF MICHIGAN
SOUTHERN DIVISION

U. S. SECURITIES AND EXCHANGE
COMMISSION,
Plaintiff,

Case No. 2:10-cv-11633-DPH-MKM

v.

Judge Denise Page Hood

ONYX CAPITAL ADVISORS, LLC,
ROY DIXON, JR., and MICHAEL A. FARR,

Magistrate Judge Mona K. Majzoub

Defendants.
/
JUDGMENT AS TO DEFENDANT MICHAEL A. FARR
The Securities and Exchange Commission having filed a Complaint and Defendant
Michael A. Farr (“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 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 Judgment by personal service or
otherwise are permanently restrained and enjoined from aiding and abetting violations of
Sections 206(1) and 206(2) of the Investment Advisers Act of 1940 (“Advisers Act”) [15 U.S.C.
§ 80b-6(1) and (2)] by knowingly providing assistance to another who, while acting as an

investment adviser, uses the means and instrumentalities of interstate commerce and of the mails
to, directly or indirectly, employ devices, schemes, or artifices to defraud their clients or
prospective clients, or engages in any transaction, practice, or course of business which operates
as a fraud or deceit upon their clients or prospective clients.
II.
IT IS HEREBY FURTHER ORDERED, ADJUDGED, AND DECREED that Defendant
shall pay disgorgement of ill-gotten gains and prejudgment interest thereon; that the amount of
the disgorgement shall be determined by the Court upon motion of the Commission; and that
prejudgment interest shall be calculated from the date of the violation based on the rate of
interest used by the Internal Revenue Service for the underpayment of federal income tax as set
forth in 26 U.S.C. § 6621(a)(2). Upon motion of the Commission, the Court shall determine
whether a civil penalty pursuant to 209(e) of the Advisers Act [15 U.S.C. §80b-9(e)] is
appropriate and, if so, the amount of the penalty. In connection with the Commission’s motion
for disgorgement and/or civil penalties, and at any hearing held on such a motion: (a) Defendant
will be precluded from arguing that he did not violate the federal securities laws as alleged in the
Complaint; (b) Defendant may not challenge the validity of the Consent or this Judgment; (c)
solely for the purposes of such motion, the allegations of the Complaint shall be accepted as and
deemed true by the Court; and (d) the Court may determine the issues raised in the motion on the
basis of affidavits, declarations, excerpts of sworn deposition or investigative testimony, and
documentary evidence, without regard to the standards for summary judgment contained in Rule
56(c) of the Federal Rules of Civil Procedure. In connection with the Commission’s motion for
disgorgement and/or civil penalties, the parties may take discovery, including discovery from

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appropriate non-parties.
III.
IT IS HEREBY FURTHER ORDERED, ADJUDGED, AND DECREED that once the
amounts of disgorgement, prejudgment interest and any civil penalty have been determined,
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; Michael A. Farr as a defendant in this action; and specifying that payment is made
pursuant to this 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 for disgorgement and prejudgment
interest by moving for civil contempt (and/or through other collection procedures authorized by
law) at any time after 14 days following entry of this Judgment. Defendant shall pay post
judgment interest on any delinquent amounts pursuant to 28 U.S.C. § 1961. The Commission
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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 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 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 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

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more investors based on substantially the same facts as alleged in the Complaint in this action.

IV.
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.
V.
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.
VI.
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.

S/Denise Page Hood
Denise Page Hood
United States District Judge
Dated: February 8, 2013
I hereby certify that a copy of the foregoing document was served upon counsel of record on
February 8, 2013, by electronic and/or ordinary mail.
S/LaShawn R. Saulsberry
Case Manager

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