Securities and Exchange Commission v. Boock et al

Filing 172

OPINION AND ORDER re: 167 on MOTION for Reconsideration. filed by Birte Boock, 169 on MOTION for Reconsideration. filed by Irwin Boock, 153 on MOTION for Judgment Establishing Remedies As To Defendants Boock, Wong, DeFreitas. filed by Se curities and Exchange Commission. CONCLUSION: The SEC's April 12 motion for judgments is granted. The May 25 and June 1 motions for reconsideration of Birte Boock and Irwin Boock, respectively, are denied. SO ORDERED.(Signed by Judge Denise L. Cote on 8/02/2012) (ama)

UNITED STATES DISTRICT COURT
SOUTHERN DISTRICT OF NEW YORK
----------------------------------------X
:
SECURITIES AND EXCHANGE COMMISSION,
:
:
Plaintiff,
:
:
-v:
:
IRWIN BOOCK, STANTON B.J. DEFREITAS,
:
NICOLETTE D. LOISEL, ROGER L. SHOSS and :
JASON C. WONG,
:
:
Defendants,
:
:
and
:
:
BIRTE BOOCK and 1621533 ONTARIO, INC., :
:
Relief Defendants. :
:
----------------------------------------X

09 Civ. 8261 (DLC)
OPINION AND ORDER

APPEARANCES:
For the plaintiff:
Paul W. Kisslinger
United States Securities and Exchange Commission
100 F Street, N.E.
Washington, DC 20549
For defendant Jason C. Wong:
Russell Cornelius Weigel, III
Edward Robert Averbuch
Law Office of Russell C. Weigel, III, P.A.
5775 Blue Lagoon Drive
Suite 100
Miami, FL 33126
Defendant Irwin Boock, pro se
500 Hidden Trail
Toronto, Ontario
M2R 3R5
Canada

Relief Defendant Birte Boock, pro se
500 Hidden Trail
Toronto, Ontario
M2R 3R5
Canada
DENISE COTE, District Judge:
Plaintiff the United States Securities and Exchange
Commission (“SEC”), moves for an entry of judgments establishing
equitable and monetary remedies as to defendants Irwin Boock
(“Boock”), Stanton B.J. DeFreitas (“DeFreitas”), and Jason C.
Wong (“Wong”) (collectively, the “Toronto-based Defendants”).
The factual background of this litigation was set forth in
detail in the Court’s Opinion of August 25, which granted in
part the SEC’s motion for summary judgment against defendant
Wong.

See SEC v. Boock, et al., No. 09 Civ. 8261 (DLC), 2011 WL

3792819 (S.D.N.Y. Aug. 25, 2011) (the “Summary Judgment
Opinion”).

Familiarity with that Opinion is assumed.

Briefly stated, the SEC brought this action against five
defendants -- Boock, DeFreitas, Wong, Nicolette D. Loisel
(“Loisel”), and Roger L. Shoss (“Shoss”) -- alleging a
securities fraud scheme whereby these individuals hijacked
defunct or inactive corporations, issued unregistered stock and
sold the securities in violation of the antifraud and
registration requirements of the federal securities laws.

On

March 26, 2010, the Court entered a default as to Boock and
DeFreitas and imposed permanent injunctions and penny-stock bars
2

as to both of them and an officer-and-director bar as to Boock.
The action is stayed with regard to the SEC’s claims against
Loisel and Shoss pending the resolution of criminal proceedings
against them.
As noted, on August 25, the Court entered summary judgment
as to Wong on the SEC’s claims under Section 17(A) of the
Securities Act of 1933, 15 U.S.C. § 77q(a) (“Section 17(a)”);
Section 10(b) of the Securities Exchange Act of 1934, 15 U.S.C.
§ 78j(b) (“Section 10(b)”); and Rule 10b-5, 17 C.F.R. § 240.10b5 (“Rule 10b-5”).

With respect to the SEC’s claims under

Section 5 of the Securities Act of 1933, 15 U.S.C. § 77e(a)
(“Section 5”), the Court granted summary judgment in part,
finding that the evidence established Section 5 violations by
Wong as to only 12 of the 23 companies that were hijacked
pursuant to the scheme.
3792819, at *19.

See Summary Judgment Opinion, 2011 WL

Wong’s motion for reconsideration of the

Summary Judgment Opinion was denied on November 9, 2011.

See

SEC v. Boock, et al., No. 09 Civ. 8261 (DLC), 2011 WL 5417106
(S.D.N.Y. Nov. 9, 2011).
Having conducted additional discovery in an effort to trace
the proceeds of the scheme, the SEC now petitions the Court for
the following remedies as to the Toronto-based Defendants: 1)
permanent injunctions and penny-stock bars as to Boock,
DeFreitas, and Wong; 2) officer-and-director bars as to Boock
3

and Wong; 3) joint and several liability for disgorgement in the
amount of $6,140,172 and prejudgment interest in the amount of
$2,062,282 as to Boock, DeFreitas, and Wong; and 4) civil
penalties in the amount of $2,999,000 as to Boock, $1,560,000 as
to Wong, and $130,000 as to DeFreitas.
Boock and Wong have opposed the motion for judgments.
Because Boock is in default, he lacks standing to challenge the
SEC’s application.

Nonetheless, both Boock’s objections and

Wong’s objections are considered below.

DISCUSSION
Once a violation of the federal securities laws has been
found, a district court “has broad equitable power to fashion
appropriate remedies.” SEC v. First Jersey Securities, Inc., 101
F.3d 1450, 1474 (2d Cir. 1996).

Among these remedies are

permanent injunctive relief, a penny-stock bar, civil penalties,
disgorgement and prejudgment interest.
I.

See id. at 1474–78.

Permanent Injunction as to Wong
Section 21(d) of the Exchange Act and Section 20(b) of the

Securities Act authorize a court to enjoin future violations of
the securities laws.

See 15 U.S.C. §§ 78u(d), 77t(b).

A

permanent injunction is appropriate in SEC enforcement cases
where “‘there is a likelihood that, unless enjoined, the
violations will continue.’”

First Jersey, 101 F.3d at 1477
4

(quoting Commodity Futures Trading Commission v. American Board
of Trade, Inc., 803 F.2d 1242, 1250-51 (2d Cir. 1996)).

A

permanent injunction may be particularly appropriate where a
violation was “founded on systematic wrongdoing, rather than an
isolated occurrence,” or involved a “high degree of scienter.”
Id. (citation omitted).
Because the March 26, 2010 Order imposed permanent
injunctions and penny-stock bars as to DeFreitas and Boock, it
only remains for the Court to consider the propriety of similar
relief as to Wong.

Wong resists the imposition of a permanent

injunction, arguing primarily that he poses no threat to the
public going forward.
record.

That assertion, however, is belied by the

Wong's fraudulent behavior did not arise from a single,

isolated incident, but rather represented a continuing course of
wrongful conduct lasting for more than two years.

The record

further reflects that Wong acted willfully and knowingly in
carrying out the fraud.
3792819, at *24.

See Summary Judgment Opinion, 2011 WL

Because of his history and experience in the

penny stock industry, there is reason to believe that Wong might
attempt to return to investment activity in the future.

Based

on the above facts, there is a likelihood that, unless enjoined,
Wong will continue to violate the federal securities laws.
Accordingly, the SEC's request to enjoin Wong permanently from

5

future violations of Section 10(b), Rule 10b-5, Section 17(a),
and Section 5 of the Securities Act is granted.
II.

Penny-Stock Bar and Officer-and-Director Bar as to Wong
Section 20(e) of the Securities Act and Section 21(d)(2) of

the Exchange Act authorize the court to bar a violator of the
securities laws from serving as an officer or director of a
publicly held company if the court determines that “the person’s
conduct demonstrates unfitness” to serve as an officer or
director.

See 15 U.S.C. §§ 77t(e), 78u(d)(2).

In making that

determination, the court must consider ““(1) the egregiousness
of the underlying securities law violation; (2) the defendant's
repeat offender status; (3) the defendant's role or position
when he engaged in the fraud; (4) the defendant's degree of
scienter; (5) the defendant's economic stake in the violation;
and (6) the likelihood that misconduct will recur.” SEC v.
Patel, 61 F.3d 137, 141 (2d Cir. 1995) (citation omitted).

The

standard for imposing a penny-stock bar pursuant to Section
20(g) of the Securities Act and Section 21(d)(6) of the Exchange
Act, 15 U.S.C. §§ 77t(g), 78u(d)(6), “essentially mirrors that
for imposing an officer-or-director bar.”

SEC v. Universal

Exp., Inc., 475 F. Supp. 2d 412, 429 (S.D.N.Y. 2007).
As discussed, Wong’s conduct was blatantly unlawful and not
at all isolated.

Wong was listed as an officer or director of

several of the companies involved in the scheme, positions he
6

exploited for his own benefit and that of his co-conspirators.
Summary Judgment Opinion, 2011 WL 3792819, at *3.

Though Wong

continues to insist that he never consented to the use of his
name, the Court found otherwise in its Summary Judgment Opinion.
Id. at *12-*14.

Wong not only consciously engaged in the fraud,

he also profited from it, both by selling shares of the hijacked
issuers at inflated prices and by requiring compensation for
promotion and other services he performed.

Id. at *6, *24.

He

acted willfully and knowingly, and there is a serious risk that,
if not enjoined, he would engage in similar fraudulent conduct
again.

The record therefore justifies the imposition of

officer-and-director and penny-stock bars as to Wong.1
III.

Disgorgement
The SEC also seeks a disgorgement order holding Boock,

DeFreitas, and Wong jointly and severally liable for $6,140,172
in illegal proceeds.

As explained in the Summary Judgment

Opinion, “disgorgement is a well-established remedy in the
Second Circuit, particularly in securities enforcement actions.”
1

In opposing the SEC’s motion for a penny-stock bar, Wong
maintains that the record does not establish that any of the
securities involved in the scheme qualified as penny stocks. 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. See 17 C.F.R. § 240.3a51–1. The record
establishes conclusively that the hijacked issuers, none of
which met the exceptions in Rule 3a51-1, traded for well under
five dollars per share. Indeed, Wong’s own trades in the
hijacked issuers using his Royal Bank of Canada account averaged
just $.00629 per share.
7

SEC v. Cavanagh, 445 F.3d 105, 116-17 (2d Cir. 2006).

In

ordering disgorgement, a court will engage in fact-finding “to
determine the amount of money acquired through wrongdoing -- a
process sometimes called ‘accounting’” and issue an “order
compelling the wrongdoer to pay that amount plus interest.”
A.

Id.

Joint and Several Liability
When two or more defendants collaborate in the illegal

conduct and liability must be apportioned among them, courts
have the discretion to impose joint and several liability up to
the amount of their combined income from illegal conduct.
v. AbsoluteFuture.com, 393 F.3d 94, 97 (2d Cir. 2004).

SEC

Joint

and several liability is particularly appropriate where
“apportionment [of the disgorgement amount] is difficult or even
practically impossible because [the] defendants have engaged in
complex and heavily disguised transactions” in an effort to
conceal their fraud.

SEC v. Hughes Capital Corp., 124 F.3d 449,

455 (3d Cir. 1997).
Boock objects to joint and several liability on the ground
that it allows the SEC to “paint all of the defendants with the
same brush.”

But he has offered no evidence to rebut the SEC’s

argument that joint and several liability is appropriate here.
To the contrary, the evidence establishes that in perpetrating
their fraud, Boock, DeFreitas, and Wong worked closely together,
transferring cash and stock among them and maintaining frequent
8

contact by telephone and e-mail.

They also sought to frustrate

efforts to trace the proceeds of their illegal activity to any
one of them by using offshore accounts, cash payments, stolen
identities and aliases.

Joint and several liability is thus

appropriate here.
Recognizing, as Boock does not, that the threshold
requirements for joint and several liability are met here, Wong
takes a different tack.

He notes that the SEC’s application for

disgorgement identifies trading profits that accrued to him in
the first instance through his sale of stock in certain hijacked
issuers.

From this Wong concludes that his gain from the

fraudulent scheme is capable of apportionment and that,
accordingly, joint and several liability is inappropriate as to
him.

But the SEC has never asserted that Wong profited from the

scheme only through trades in which he was directly involved.
Indeed, as noted above, Wong also received compensation for his
fraudulent promotion activities through Select American Transfer
(SAT), a transfer agency Boock incorporated to facilitate the
fraud.

Nor has Wong carried his burden of demonstrating that he

did not receive any of the proceeds from the scheme through some
other avenue such as cash payments or transfers from accounts
controlled by his co-conspirators.

See Hughes, 124 F.3d at 455

(“[T]he burden is on the tortfeasor to establish that the
liability is capable of apportionment.”)
9

In sum, because Wong

participated with Boock and DeFreitas both in perpetrating the
fraud and in disguising the trail of the profits that accrued
from it, it is appropriate to hold the three of them jointly and
severally liable for any disgorgement judgment.
B.

Disgorgement Amount
In fixing the size of any disgorgement award, the Court

need only arrive at “a reasonable approximation of profits
causally connected to the violation.

So long as the measure of

disgorgement is reasonable, any risk of uncertainty should fall
on the wrongdoer whose illegal conduct created the uncertainty.”
SEC v. Warde, 151 F.3d 42, 50 (2d Cir. 1998) (citation omitted).
Moreover, because “the primary purpose of disgorgement orders is
to deter violations of the securities laws by depriving
violators of their ill-gotten gains, . . . the size of a
disgorgement order need not be tied to the losses suffered by
defrauded investors.””

Official Comm. of Unsecured Creditors of

WorldCom, Inc. v. SEC, 467 F.3d 73, 81 (2d Cir. 2006) (citation
omitted).
The Toronto-based Defendants earned illegal revenues from
their fraudulent scheme in two ways.

First, as discussed, they

used the hijacked companies to issue unregistered shares into
the market, the sale of which generated substantial profits.
Second, they sold the hijacked issuers to various third-parties.

10

With respect to the sale of unregistered shares, the
defendants amassed their illegal gains through at least five
different avenues.

First, shares of hijacked issuers were

deposited into offshore trading accounts that were under the
control of DeFreitas.

The record indicates that in the first

half of 2007, $2,360,072 in proceeds from the sale of
unregistered shares was deposited into these accounts.

The

defendants also used a Scottrade account opened in the name of a
company, For Better Living, to deposit and liquidate shares of
four hijacked issuers, resulting in proceeds totaling $280,500.2
In addition, as discussed in the Summary Judgment Opinion, Wong
used trading accounts at the Royal Bank of Canada to sell
unregistered shares in the hijacked issuers, resulting in
proceeds of $82,600.

Records collected by the SEC also

establish that the defendants used accounts in the names of two

2

In his opposition papers, Boock argues that the SEC overstates
the revenues attributable to the Scottrade account, noting that
while the SEC has determined that only “some $160,000 was raised
selling certain securities” from that account, $120,000 was sent
to DeFreitas. Boock misunderstands the SEC’s argument. The
evidence establishes that the defendants sold more than 30
million shares from the Scottrade account, resulting in proceeds
of $280,500. The $160,500 figure that Boock emphasizes is the
SEC’s calculation of the revenues attributable to the Scottrade
account after the $280,500 total is reduced to account for
$120,000 that was transferred to DeFreitas’s offshore accounts.
Because the analysis above accounts for the $120,000 as revenue
attributable to the Scottrade account rather than the DeFreitas
accounts, the full $280,500 sum is used and a correspondingly
lower sum is attributed to the DeFreitas accounts.
11

nominees -- Alena Dubinsky and Elena Lazareva -- to sell shares
in the hijacked issuers for proceeds of at least $1,117,000.
Except for the meritless objections noted above, Boock’s
only argument with regard to these calculations is that they are
based, in part, on statements of DeFreitas, whose credibility
Boock questions.

But Boock has provided no evidence to rebut

the calculations of the SEC, nor has he explained what motive
DeFrietas might have to overestimate a disgorgement amount for
which he will be jointly and severally liable.
Wong challenges this portion of the SEC’s disgorgement
calculation on the ground that it includes proceeds from the
scheme that were not derived from the Section 5 violations for
which the Court found Wong liable in the Summary Judgment
Opinion.

As noted above, however, Wong’s violation of the anti-

fraud provisions of the securities laws exposes him to joint and
several liability for the proceeds of the scheme as a whole.
Wong also argues that the disgorgement calculation should be
reduced to account for securities that he sold at a loss, but in
awarding disgorgement, “where the profits from fraud and the
defendant's ill-gotten gains diverge, the district court may
award the larger sum.”

FTC v. Bronson Partners, LLC, 654 F.3d

359, 375 (2d Cir. 2011); accord SEC v. DiBella, 587 F.3d 553,
572 (2d Cir. 2009).

Here, the record establishes conclusively

12

that defendants’ collective gains from their sale of
unregistered shares totaled at least $3,840,172.
As discussed, the defendants’ fraudulent conduct was not
limited to using the hijacked companies to issue unregistered
shares of stock; they also resold them as shell entities to
various third parties.

In a sworn declaration, DeFreitas

affirmed that the proceeds from the sales of the 23 shell
companies identified in the Summary Judgment Opinion exceeded
$2.3 million.

This assertion is supported by the other evidence

in the record, including the declaration of Jean-Francois Amyot,
who purchased many of the shells, as well as records regarding
individual sales.
Taken together, the evidence thus establishes that the
proceeds from the defendants’ sale of unregistered shares and
hijacked issuers totaled at least $6,140,172.

That number

represents “a reasonable approximation of profits causally
connected to the violation,” Warde, 151 F.3d at 50, and it is
therefore appropriate to impose a disgorgement award in that
amount.
IV.

Prejudgment Interest
Once a court determines that disgorgement is appropriate,

it has the discretion to add prejudgment interest to the
disgorgement amount.

In deciding whether an award of

prejudgment interest is warranted, a court should consider “(i)
13

the need to fully compensate the wronged party for actual
damages suffered, (ii) considerations of fairness and the
relative equities of the award, (iii) the remedial purpose of
the statute involved, and/or (iv) such other general principles
as are deemed relevant by the court.”
1476 (citation omitted).

First Jersey, 101 F.3d at

In an enforcement action brought by a

regulatory agency, however, “the remedial purpose of the statute
takes on special importance.”

Id.

“[E]ven if litigation was

protracted through some fault of the SEC, the award of
prejudgment interest for the entire period is proper because
defendant had use of unlawful profits for the entire period.”
Warde, 151 F.3d at 50 (citation omitted).
Prejudgment interest is appropriate here in order to
vindicate fully the remedial purposes of the securities laws.
The defendants’ illegal conduct was flagrant and longstanding.
Moreover, since at least August 16, 2006, the date of last
hijacking, the defendants have had use of their illegally
generated profits.

Applying the IRS underpayment rate to the

$6,140,172 disgorgement award calculated above, defendants will
be held jointly and severally liable for $2,144,462 in
prejudgment interest, calculated from August 16, 2006, to the
date of this opinion, August 2, 2012.3

3

Although Wong argues that a more favorable interest rate should
be applied in light of prevailing market conditions, it is well
14

V.

Civil Penalties
The SEC also seeks the imposition of civil penalties

against Boock, DeFreitas, and Wong.

The Securities Act and the

Exchange Act authorize a court to impose civil monetary
penalties for violations of the securities laws in three tiers.
Tier III penalties are available if the violation involved
“fraud, deceit, manipulation, or deliberate or reckless
disregard of a regulatory requirement” and the violation
“resulted in substantial losses or created a significant risk of
substantial losses to other persons.”
§§ 77t(d)(2)(C), 78u(d)(3)(B)(iii).

15 U.S.C.

For violations occurring

after 2005 but before March 3, 2009, the inflation adjusted
maximum for third tier penalties is $130,000 per violation.

See

17 C.F.R. Pt. 201, Subpt. E, Tbl. I.
A monetary penalty is designed to serve as a deterrent
against securities law violations, SEC v. Palmisano, 135 F.3d
860, 866 (2d Cir. 1998), and courts thus have broad discretion
to determine the appropriate amount of any penalty in light of
the facts and circumstances surrounding each defendant’s role in
the violations.

See SEC v. Cavanagh, No. 98 Civ. 1818 (DLC),

2004 WL 1594818, at *31 (S.D.N.Y. July 16, 2004).

In

determining what penalty to impose, courts look to the following
established that when disgorgement is ordered in an SECinitiated proceeding, the IRS underpayment rate is appropriate.
First Jersey, 101 F.3d at 1476.
15

factors: (1) the egregiousness of the violations; (2) a
defendant's scienter; (3) the repeated nature of the violations;
(4) a defendant's failure to admit wrongdoing; (5) whether a
defendant's conduct created substantial losses or the risk of
substantial losses to others; (6) a defendant's lack of
cooperation with authorities; and (7) whether the penalty that
would otherwise be appropriate should be reduced due to a
defendant's demonstrated current and future financial condition.
Id.
The SEC has requested that Boock be ordered to pay Tier III
penalties at the statutory maximum for each of the 23 issuers
that were hijacked during the Toronto phase of the fraud.

As

the Agency notes, Boock conceived of the fraudulent scheme and
recruited others to participate in it.

He directed his co-

conspirators in how to hijack issuers, market unregistered
shares, and arrange shell deals to profit themselves and him.
Boock also participated personally in the scheme, forging
signatures and incorporating SAT.

The evidence leaves no doubt

that Boock’s violations of the securities laws were knowing and
intentional, a conclusion that is reinforced by the fact that he
is a recidivist.

Moreover, to date, Boock has refused to take

responsibility for his conduct or to cooperate in the SEC’s
efforts to get to the bottom of his fraud.

Not only has Boock

refused to answer to the charges against him in this Court, he
16

has been held in contempt of court for attempting to frustrate
the SEC’s efforts to trace the proceeds of his illegal conduct.
The SEC’s application for civil penalties against Boock in the
amount of $2,990,000 is therefore granted.
The SEC has recommended somewhat less weighty penalties
with regard to Wong, in recognition of the fact that he, unlike
Boock, “was neither the ringleader nor architect of the scheme,
and is not a known recidivist.”

Specifically, the agency seeks

to impose Tier III penalties on Wong for only the twelve issuers
for which the Court, in its Summary Judgment Opinion, found him
personally liable under Section 5 of the Securities Act.

There

is no question that Wong’s role in the scheme makes Tier III
penalties appropriate.

His unlawful conduct was conscious and

egregious: lying to various officials, promoting the hijacked
issuers to increase the value of their stock, and selling
unregistered shares at a substantial profit.

Nonetheless, the

SEC’s penalty recommendation represents a substantial discount
from Wong’s maximum potential exposure under the securities
laws.

As recognized in the Summary Judgment Opinion, Wong’s

unlawful conduct was not limited to the twelve Section 5
violations in which the Court found he was personally involved.
Rather, by acting to further the larger goals of the hijacking
scheme, Wong violated the anti-fraud provisions of the
securities laws and exposed himself to penalties for each of the
17

hijackings that were undertaken pursuant to the scheme.

See

Summary Judgment Opinion, 2011 WL 3792819, at *22-*23.

Wong’s

brief in opposition to the SEC’s motion for judgments ignores
this aspect of his liability and demonstrates that,
notwithstanding the mountain of evidence that has been amassed
against him, he has yet to acknowledge the full extent of his
role in the fraud or to cooperate in any meaningful way with the
authorities.

Taking these facts into account, along with the

egregious nature of the fraud and the extended timeframe over
which it occurred, the SEC’s recommended penalty of $1,560,000
against Wong is appropriate and, indeed, conservative.
Just as Wong’s refusal to admit wrongdoing limits the
extent to which his subordinate role in the scheme entitles him
to reduced penalties, so DeFreitas’s willingness to accept
responsibility justifies leniency.

The SEC’s recommended

penalty of $130,000 against DeFreitas is appropriate in light of
the fact that he has conceded liability and cooperated with the
SEC’s investigation and litigation efforts.
VI. Remaining Issues
Finally, in his opposition brief, Wong raises a number of
objections to the evidence that the SEC has offered in support
of its motion for judgments.

Several of these objections were

considered and rejected in the Summary Judgment Opinion.
Court has considered the remainder of Wong’s evidentiary
18

The

objections and finds them all to be either insufficiently
targeted or lacking in merit.
In separate submissions dated May 25, 2012, and June 1,
2012, Birte and Irwin Boock, respectively, seek reconsideration
of this Court’s June 2, 2011 Order refusing to set aside the
defaults that have been entered against them.

Pursuant to SDNY

Local Civil Rule 6.3, a motion for reconsideration must be
served within fourteen days of the Court’s issuance of the
challenged order.

The May 25 and June 1 submissions will thus

be construed as motions for relief from a judgment or order
pursuant to Rule 60(b), Fed. R. Civ. P.

Rule 60(b) relief is

“generally not favored and is properly granted only upon a
showing of exceptional circumstances.”

United States v. Int'l

Bhd. of Teamsters, 247 F.3d 370, 391 (2d Cir. 2001) (citation
omitted).

Birte and Irwin Bock have not made the necessary

showing here.

Their submissions, which are identical in all

material respects, raise various objections to the SEC’s proof
regarding the fraud.

They do not explain the Boocks’ failure to

participate in the litigation up to this point.

Nor do they

provide cause to believe that, if the Court were to vacate the
defaults, the Boocks would abandon their well-established
practice of disregarding this Court’s orders and attempting to
frustrate the SEC’s efforts to obtain relief.

19

CONCLUSION

The SEC's April 12 motion for judgments is granted.

The

May 25 and June 1 motions for reconsideration of Birte Boock and
Irwin Boock, respectivelYt are denied.

SO ORDERED:
Dated:

New York, New York
August 2, 2012

United St tes District Judge

20