Securities & Exchange Commission v. Hemp, Inc. et al

Filing 57

ORDER Granting 52 Stipulated/Consent Judgment as to Defendant Jed M. Perlowin. Signed by Judge Jennifer A. Dorsey on 2/21/17. (Copies have been distributed pursuant to the NEF - ADR)

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UNITED STATES DISTRICT COURT
DISTRICT OF NEVADA
SECURITIES AND EXCHANGE
COMMISSION,

JUDGMENT AS TO DEFENDANT
JED M. PERLOWIN

Plaintiff,
vs.
Civil No. 2:16-cv-1413-JAD-PAL
HEMP, INC., a Colorado Corporation;
BRUCE J. PERLOWIN, an individual;
BARRY K. EPLING, an individual; JED M.
PERLOWIN, an individual; FERRIS
HOLDING, INC., a private Nevada
Corporation; HOBBES EQUITIES INC., a
private Nevada Corporation; DIVERSIFIED
INVESTMENTS LLC, a private Nevada
Limited Liability Company; AND
QUANTUM ECONOMIC PROTOCOLS
LLC, a private Nevada Limited Liability
Company,

Judge Jennifer A. Dorsey
Magistrate Judge Peggy A. Leen

Defendants.
The Securities and Exchange Commission having filed a Complaint and Defendant JED
M. PERLOWIN 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 and
except as otherwise provided herein in paragraph VI); 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 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

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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 Final 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
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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, 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 Final 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 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
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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].
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 Final 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
shall pay disgorgement of ill-gotten gains, prejudgment interest thereon, and a civil penalty
pursuant to Section 20(d) of the Securities Act [15 U.S.C. § 77t(d)] and Section 21(d)(3) of the
Exchange Act [15 U.S.C. § 78u(d)(3)]. The Court shall determine the amounts of the
disgorgement and civil penalty upon motion of the Commission. Prejudgment interest shall be
calculated from July 1, 2013, 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). 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 Final 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
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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 appropriate non-parties.
V.
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.
VI.
IT IS FURTHER ORDERED, ADJUDGED, AND DECREED that, solely for purposes of
exceptions to discharge set forth in Section 523 of the Bankruptcy Code, 11 U.S.C. §523, the
allegations in the complaint are true and admitted by Defendant, and further, any debt for
disgorgement, prejudgment interest, civil penalty or other amounts due by Defendant under this
Final Judgment or any other judgment, order, consent order, decree or settlement agreement
entered in connection with this proceeding, is a debt for the violation [by Defendant] of the
federal securities laws or any regulation or order issued under such laws, as set forth in Section
523(a)(19) of the Bankruptcy Code, 11 U.S.C. §523(a)(19).
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.

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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 Judgment forthwith and without further notice.
February 21, 2017.
Dated: ______________, 2017
_____________________
_ _____ ___
____ ___ _
____________________________________
ITED STATES DISTRI
E
T T D T
UNITED STATES DISTRICT JUDGE

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