Securities and Exchange Commission v. Galleon Management, LP et al

Filing 220

CONSENT JUDGMENT # 11,1239 in favor of Securities and Exchange Commission against David Plate in the amount of $ 53,291.91. (Signed by Judge Jed S. Rakoff on 6/27/11) (Attachments: # 1 notice of right to appeal)(ml)

UNITED STATES DISTRICT COURT
SOUTHERN DISTRICT OF NEW YORK

SECURITIES AND EXCHANGE COMMISSION,
Plaintiff,

-apIDstGALLEON MANAGEMENT, LP,
RAJ RAJARATNAM,
RAJlVGOEL,
ANlLKUMAR,
DANIELLE CHIESI,
MARK KURLAND,
ROBERT MOFFAT,
NEW CASTLE FUNDS LLC, .
ROOMY KHAN,
DEEP SHAH,
ALIHARIRI,
ZVIGOFFER,
DAVID PLATE,
GAUTHAM SHANKAR,
SCBOTI'ENFELD GROUP LLC,
STEVEN FORTUNA,
aDd
S2 CAPITAL MANAGEMENT, LP,

09 Civ. 8811 (JSR)
ECFCASE

DeleDdaDU.
CONSENT ORDER AND JUDGMENT AS TO DEFENDANT DAVID PLATE
The Securities and Exchange Commission having filed a Second Amended Complaint
("Complaint',) and Defendant David Plate (''Defendant'') having entered a general appearance;
consented to the Court's jurisdiction over Defendant and the subject matter ofthis action;
consented to entry ofthis Consent Order and Judgment ("Consent Order'') without admitting or
denying the allegations ofthe Complaint (except as to jurisdiction); waived findings of fact and
conclusions of law; and waived any right to appeal from this Consent Order.

I.
lT 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 ofthis Consent Order by personal service or
otherwise are permanently restrained and enjoined from violating, directly or indirectly, Section
lOeb) ofthe Securities Exchange Act of1934 (the "Exchange Act") [15 U.S.C. § 78j(b)] and
Rule lOb-5 promulgated thereunder [17 C.F.R. § 240.101>-5], by using any means or
instrumentality of interstate commerce, or ofthe mails, or of any facility of any national
securities exchange, in connection with the purchase or sale ofany security:
(a)

to employ any device, scheme, or artifice to defraud;

(b)

to make any untrue statement ofa material fact or to omit to state a material fact
necessary in order to make the statements made, in the light ofthe 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.
lT IS FURTHER ORDERED, ADJUDGED, AND DECREED that Defendant is liable
for $43,876.37, representing profits gained and/or losses avoided as a result ofthe conduct
alleged in the Complaint, together with prejudgment interest thereon in the amount of $9,415.54,
for a total of$53,29 1.91. In the event that an order offorfeiture is entered against Defendant in
the criminal case before the United States District Court ofthe Southern District ofNew York
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titled United States v. David Plate, IO--CR-0056, then Defendant's monetary obligations,
including all outstanding pre and post judgment interest, will be credited dollar for dollar by the
amount of the forfeiture ordered. The monetary obligations ordered by this Consent Order shall
become due thirty (30) days after entry ofthe Judgment ofConviction in the criminal case, or
three (3) years from the date of the entry ofthis Consent Order, whichever comes later.
Defendant shall pay the monetary obligations ordered by this Consent Order (minus any amount
ordered in forfeiture) by certified check., bank cashier's check, or United States postal money
order payable to the Securities and Exchange Commission. The payment shall be delivered or
mailed to the Office ofFinancial Management, Securities and Exchange Commission, 100 F
Street NE, Mail Stop 6041-A, Washington, DC 20549, and shall be accompanied by a letter
identifYing Defendant's name as defendant in this action; setting forth the title and civil action
number ofthis action and the name of this Court; and specifying that payment is made pursuant
to this Consent Order. A copy of the letter shall be sent to counsel of record for the Commission
in this action. The Commission shall remit the funds paid pursuant to this paragraph to the
United States Treasury. Defendant shall provide counsel of record for the Commission with a
copy ofthe Judgment ofConviction in the criminal action within five (5) days onts entry.

m.
The Court shall determine no later than

• whether it is appropriate to

order a civil penalty pursuant to Section 21A and/or 21 (d)(3) ofthe Exchange Act [15 U.S.C.
§§ 78u(d)(3), 78u-IJ and, ifso, the amount of the penalty. In connection with such a

determination: (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 ofthe
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Consent or this Consent Order; (c) solely for the purposes of such a detennination, the
allegations of the Complaint shall be accepted as and .deemed true by the Court; and (d) the Court
may detennine the issues on the basis ofaffidavits, declarations, excerpts of sworn deposition or
investigative testimony, and documentary evidence, without regard to the standards for summary
judgment contained in Rule 56(c) ofthe Federal Rules of Civil Procedure. In connection with
such a detennination, the parties may take discovery, including discovery from appropriate non­
parties, but only as expressly approved by the Court.
N.

IT IS FURlHER ORDERED, ADJUDGED, AND DECREED that the Consent is
incorporated herein with the same force and effect as jf fully set forth herein, and that Defendant
shall comply with all of the undertakings and agreements set forth therein.

V.
IT IS FURlHER ORDERED, ADJUDGED, AND DECREED that this Court shall retain
jurisdiction of this matter for the purposes ofenforcing the tenns ofthis Consent Order.

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UNITED STATES DISTRICT COURT
SOUTHERN DISTRICT OF NEW YORK

SECURITIES AND EXCHANGE COMMISSION,
Plaintiff,

-againstGALLEON MANAGEMENT, LP,
RAJ RAJARATNAM,
RAJlVGOEL,
ANILKUMAR,
DANIELLE cmESI,
MARK KURLAND,
ROBERT MOFFAT,
NEW CASTLE FUNDS LLC,
ROOMY KHAN,
DEEP SHAH,
ALI HARIRI,
ZYIGOFFER,
DAYID PLATE,
GAUTHAM SHANKAR,
SCHOTTENFELD GROUP LLC,
STEVEN FORTUNA,
and
S2 CAPITAL MANAGEMENT, LP,

09 Clv. 8811 (JSR)
ECFCASE

Defendants.

CONSENT OF DEFENDANT DAVID PLATE
].

Defendant David Plate ("Defendant") acknowledges having been served with the

Second Amended Complaint ("Complaint") in this action, enters a general appearance, and
admits the Court's jurisdiction over Defendant and over the subject matter ofthis action.
2.

Without admitting or denying the allegations of the Complaint (except as to

personal and subject matter jurisdiction, which Defendant admits), Defendant hereby consents to

the entry of the Consent Order and Judgment in the form attached hereto (the "Consent Order")
and incorporated by reference herein, which, among other things:
(a)

permanently restrains and enjoins Defendant from violations of Section
Section 1O(b) of the Securities Exchange Act of 1934 (the "Exchange
Act") [15 U.S.C. § 78j(b)], and Rule IOb-5 promulgated thereunder
[17 C.F.R. § 240.10b-5]; and

(b)

orders Defendant to pay disgorgement in the amount of $43,876.37, plus
prejudgment interest thereon in the amount of $9,415.54, for a total of
$53,291.91, but provides that in the event that an order of forfeiture is
entered against Defendant in the criminal case before the United States
District Court of the Southern District of New York titled United States v.
David Plate. IO-CR-0056, then Defendant's disgorgement obligations,
including all outstanding pre and post judgment interest, will be credited
dollar for dollar by the amount of the forfeiture ordered.

3.

Defendant agrees that the Court shall order disgorgement of ill-gotten gains and

prejudgment interest thereon. Defendant further agrees that the Court shall determine whether a
civil penalty pursuant to Section 21 (d)(3) and Section 21A of the Exchange Act [15 U.S.C. §§
78u(d)(3), 78u-l] is appropriate and, if so, the amount of the penalty. Defendant further agrees
that in connection with any such determination on civil penalties: (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 this Consent or the Consent Order;
(c) solely for the purposes of such a determination, the allegations ofthe Complaint shall be
accepted as and deemed true by the Court; and (d) the Court may determine the issues on the

2

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 such a determination, the
parties may take discovery, including discovery from appropriate non-parties, but only as
expressly approved by the Court.
4.

Defendant agrees that he shall not seek or accept, directly or indirectly,

reimbursement or indemnification from any source, including but not limited to payment made
pursuant to any insurance policy. with regard to any civil penalty amounts that Defendant pays
pursuant to a judgment, regardless of whether such penalty amounts or any part thereof are added
to a distribution fund or otherwise used for the benefit of investors. Defendant further agrees
that he shall not claim, assert, or apply for a tax deduction or tax: credit with regard to any
federal, state, or local tax: for any penalty amounts that Defendant pays pursuant to a judgment,
regardless of whether such penalty amounts or any part thereof are added to a distribution fund
or otherwise used for the benefit of investors. This paragraph does not apply to any
disgorgement amounts that Defendant pays.
5.

Defendant waives the entry of findings of fact and conclusions of law pursuant to

Rule 52 of the Federal Rules of Civil Procedure.
6.

Defendant waives the right, if any, to ajury trial and to appeal from the entry of

the Consent Order.
1.

Defendant enters into this Consent voluntarily and represent that no threats,

offers, promises, or inducements of any kind have been made by the Commission or any
member, officer, employee, agent, or representative of the Commission to induce Defendant to
enter into this Consent.

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8.

Defendant agrees that this Consent shaH be incorporated into the Consent Order

with the same force and effect as if fully set forth therein.
9.

Defendant will not oppose the enforcement of the Consent Order on the ground, if

any exists, that it fails to comply with Rule 65(d) of the Federal Rules of Civil Procedure, and
hereby waives any objection based thereon.
10.

Defendant waives service ofthe Consent Order and agrees that entry ofthe

Consent Order by the Court and filing with the Clerk of the Court will constitute notice to
Defendant of its terms and conditions. Defendant further agrees to provide counsel for the
Commission, within thirty days after the Consent Order is filed with the Clerk of the Court, with
an affidavit or declaration stating that Defendant has received and read a copy of the Consent
Order.
11.

Consistent with 17 C.F.R. 202.5(1), this Consent resolves only the claims asserted

against Defendant in this civil proceeding. Defendant acknowledges that no promise or
representation has been made by the Commission or any member, officer, employee. agent, or
representative of the Commission with regard to any criminal liability that may have arisen or
may arise from the facts underlying this action or immunity from any such criminal liability.
Defendant waives any claim of Double Jeopardy based upon the settlement ofthis proceeding,
including the imposition of any remedy or civil penalty herein. Defendant further acknowledges
that the Court's entry ofa permanent injunction may have collateral consequences under federal
or state law and the rules and regulations of self-regulatory organizations, licensing boards, and
other regulatory organizations. Such collateral consequences include, but are not limited to, a
statutory disqualification with respect to membership or participation in, or association with a
member of, a self-regulatory organization. This statutory disqualification has consequences that

4

are separate from any sanction imposed in an administrative proceeding. In addition, in any
disciplinary proceeding before the Commission based on the entry ofthe injunction in this
action, Defendant understands that he shall not be permitted to contest the factual allegations of
the complaint in this action.
12.

Defendant understands and agrees to comply with the Commission's policy "not

to permit a defendant or respondent to consent to a judgment or order that imposes a sanction
while denying the allegation in the complaint or order for proceedings." 17 C.F.R. § 202.5. In
compliance with this policy, Defendant agrees: (i) not to take any action or to make or permit to

be made any public statement denying, directly or indirectly, any allegation in the complaint or
creating the impression that the complaint is without factual basis; and (ii) that upon the filing of
this Consent, Defendant hereby withdraw any papers filed in this action to the extent that they
deny any allegation in the complaint. If Defendant breaches this agreement, the Commission
may petition the Court to vacate the Consent Order and restore this action to its active docket.
Nothing in this Consent affects Defendant's: (i) testimonial obligations; (ii) right to take legal or
factual positions in litigation or other legal proceedings in which the Commission is not a party;
or (iii) right to assert his Fifth Amendment rights in this and in related proceedings.
13.

Defendant hereby waives any rights under the Equal Access to Justice Act, the

Small Business Regulatory Enforcement Fairness Act of 1996, or any other provision of law to
seek from the United States, or any agency, or any official of the United States acting in his or
her official capacity, directly or indirectly, reimbursement of attorney's fees or other fees,
expenses, or costs expended by Defendant to defend against this action. For these purposes,
Defendant agrees that Defendant is not the prevailing party in this action since the parties have
reached a good faith settlement.

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14.

Defendant agrees to cooperate with the Commission in connection with this

action and any related investigation by the Commission staff. The Commission shaH not require
cooperation from Defendant that is inconsistent with his obligations under existing agreements
he has entered into with other Government agencies.
15.

Defendant agrees that the Commission may present the Consent Order to the

Court for signature and entry without further notice.
16.

Defendant agrees that this Court shall retain jurisdiction over this matter for the

_

~~e:#~the~SOfilieco=n~
id Plate

On:::r;~

U"'VI {; ?(Cf_:{-~

(',2011,
personally appeared before me and acknowle

, a person known to me,

e for oing Co

Approved as to fonn:

'Roland G. Rio 1 e, Es
Sercarz & Riopelle, LLP
152 W. 57111 Street, Suite 24C
New York, NY 10019
Ph: [phone]
Attorney for Defendant David Plate

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