Securities and Exchange Commission v. Malom Group AG et al
Filing
38
JUDGMENT in favor of Plaintiff Securities and Exchange Commission and against Defendant Joseph Micelli in the amount of $12,260,827.77, jointly and severally. Signed by Clerk of Court, Lance S. Wilson on 9/15/2014. (Copies have been distributed pursuant to the NEF - EDS)
Stephen W. Simpson
Timothy N. England
Stephen L. Cohen
U.S. Securities and Exchange Commission
100 F Street, N.E.
Washington, DC 20549
Fax: 202.772.9228
simpsons@sec.gov / Tel. 202.551.4513
englandt@sec.gov / Tel. 202.551.4959
cohens@sec.gov / Tel. 202.551.4472
Attorneys for the Plaintiff
UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF NEVADA
SECURITIES AND EXCHANGE
COMMISSION,
Plaintiff,
v.
MALOM GROUP AG, MARTIN U.
SCHLÄPFER, HANS-JÜRG LIPS,
JAMES C. WARRAS, JOSEPH N.
MICELLI, M.Y. CONSULTANTS, INC.,
ANTHONY B. BRANDEL, M. DWYER,
LLC, AND SEAN P. FINN,
Defendants.
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2:13-CV-2280 (GMN)(PAL)
[PROPOSED] FINAL JUDGMENT AS
TO JOSEPH N. MICELLI
WHEREAS, on January 24, 2014, the Court entered default against Defendant Joseph N.
Micelli (hereinafter “Defendant”); and WHEREAS, the Court has reviewed Plaintiff Securities
and Exchange Commission’s (“Commission”) Motion For Default Judgment as to Joseph N.
Micelli, all supporting documents, and all opposition thereto, and based on the evidence and
authorities presented therein, hereby finds and orders as follows:
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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;
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(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.
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;
(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].
IV.
IT IS HEREBY FURTHER ORDERED, ADJUDGED, AND DECREED that Defendant
and Defendant’s agents, servants, employees, attorneys, and all persons in active concert or
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participation with them who receive actual notice of this Final Judgment by personal service or
otherwise are permanently restrained and enjoined from aiding and abetting any violation of
Section 10(b) of the Exchange Act [15 U.S.C. § 78j(b)] and Rule 10b-5 promulgated thereunder
[17 C.F.R. § 240.10b-5], by knowingly or recklessly providing substantial assistance to another
person that violates Section 10(b) of the Exchange Act and Rule 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 or by use of the
mails, directly or indirectly:
(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
V.
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 aiding and abetting any violation of
Section 17(a) of the Securities Act of 1933 (the “Securities Act”) [15 U.S.C. § 77q(a)] by
knowingly or recklessly providing substantial assistance to another person that violates 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:
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(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.
VI.
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 directly or indirectly participating in the
issuance, offer, or sale of any security, including but not limited to joint venture agreements,
proofs of funds, bank guarantees, medium term notes, standby letters of credit, structured notes,
and similar instruments, with the exception of the purchase or sale of securities listed on a
national securities exchange.
VII.
IT IS HEREBY ORDERED, ADJUDGED, AND DECREED that Defendant is jointly
and severally liable for disgorgement of $10,595,000 representing profits gained as a result of the
conduct alleged in the Complaint, together with prejudgment interest thereon in the amount of
899,262.40
$766,565.37, and a civil penalty in the amount of $_________________, pursuant to Section
21(d)(3)(B) of the Securities Exchange Act of 1934 [15 U.S.C. § 78u(d)(3)(B)] and Section
20(d) of the Securities Act of 1933 [15 U.S.C. § 77t(d)]. Defendants shall satisfy this obligation
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12,260,827.77
by paying $____________ to the Securities and Exchange Commission within 14 days after
entry of this Final Judgment.
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 also may 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; Joseph N. Micelli as a Defendant in this action; and specifying that payment is made
pursuant to this Final 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 Final Judgment. Defendant shall pay post
judgment interest on any delinquent amounts pursuant to 28 U.S.C. § 1961. The Commission
shall hold the funds, together with any interest and income earned thereon (collectively, the
“Fund”), pending further order of the Court.
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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 Final 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
more investors based on substantially the same facts as alleged in the Complaint in this action.
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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 Final 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 Final Judgment forthwith and without further notice.
IT IS SO ORDERED:
UNITED STATES DISTRICT JUDGE
Dated: ______________, 2014
September 15
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