Securities and Exchange Commission v. Berger et al

Filing 41

FINAL JUDGMENT in favor of Plaintiff against Kwong-Chung Chan. Judgment in the amount of $ 100,000. Signed by District Judge Robert H. Cleland. (LWag)

UNITED STATES DISTRICT COURT
EASTERN DISTRICT OF MICHIGAN

SECURITIES AND EXCHANGE COMMISSION,
Plaintiff,
11-CV-10403 (RHC)
v.
GREGG M.S. BERGER, ET AL.
Defendants.

FINAL JUDGMENT AS TO DEFENDANT KWONG-CHUNG CHAN
The Securities and Exchange Commission having filed a Complaint and Defendant
Kwong-Chung Chan, a.k.a., Bernard Chan (“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
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.

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 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.

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 violating Section 5 of the Securities Act
[15 U.S.C. § 77e] 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 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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IV.
IT IS HEREBY FURTHER ORDERED, ADJUDGED, AND DECREED that Defendant
is permanently barred from participating in an offering of penny stock, including engaging in
activities with a broker, dealer, or issuer for purposes of issuing, trading, or inducing or
attempting to induce the purchase or sale of any penny stock. A penny stock is any equity
security that has a price of less than five dollars, except as provided in Rule 3a51-1 under the
Exchange Act [17 C.F.R. 240.3a51-1].

V.
IT IS HEREBY FURTHER ORDERED, ADJUDGED, AND DECREED that Defendant
is liable for disgorgement of $100,000, representing profits gained as a result of the conduct
alleged in the Complaint. Defendant shall satisfy this obligation by paying $100,000 pursuant to
the terms of the payment schedule set forth in paragraph VI. below after entry of this Final
Judgment to the Clerk of this Court, together with a cover letter identifying Kwong-Chung Chan,
a.k.a., Bernard Chan, as a defendant in this action; setting forth the title and civil action number
of this action and the name of this Court; and specifying that payment is made pursuant to this
Final Judgment. Defendant shall simultaneously transmit photocopies of such payment and
letter to Elaine C. Greenberg, Associate Regional Director, Securities and Exchange
Commission, Philadelphia Regional Office, 701 Market Street, Suite 2000, Philadelphia, PA
19106. 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 Clerk shall
deposit the funds into an interest bearing account with the Court Registry Investment System
("CRIS") or any other type of interest bearing account that is utilized by the Court. These funds,

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together with any interest and income earned thereon (collectively, the “Fund”), shall be held in
the interest bearing account until further order of the Court. In accordance with 28 U.S.C.
§ 1914 and the guidelines set by the Director of the Administrative Office of the United States
Courts, the Clerk is directed, without further order of this Court, to deduct from the income
earned on the money in the Fund a fee equal to ten percent of the income earned on the Fund.
Such fee shall not exceed that authorized by the Judicial Conference of the United States. The
Commission may propose a plan to distribute the Fund subject to the Court’s approval.
Defendant shall pay post-judgment interest on any delinquent amounts pursuant to 28 USC
§ 1961.

VI.
Defendant shall pay $100,000 in 12 installments according to the following schedule: (1)
$14,000 within 14 days of entry of this Final Judgment plus post-judgment interest on any
delinquent amounts pursuant to 28 U.S.C. § 1961; (2) ten quarterly payments of $7,200
beginning within 60 days of the entry this Final Judgment and plus post-judgment interest on any
delinquent amounts pursuant to 28 U.S.C. § 1961; and (3) $14,000 within 395 days of the entry
of this Final Judgment plus post-judgment interest on any delinquent amounts pursuant to 28
U.S.C. § 1961.
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 without further application to the Court.

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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.
VIII.
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 Final Judgment forthwith and without further notice.

Dated: January 27, 2012

s/Robert H. Cleland
UNITED STATES DISTRICT JUDGE

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