Securities and Exchange Commission v. Penn et al

Filing 410

AMENDED FINAL JUDGMENT AS TO DEFENDANT LAWRENCE E. PENN III: IS FURTHER ORDERED, ADJUDGED, AND DECREED that Defendant Penn is liable for disgorgement of $9,286,916.65, representing profits gained as a result of the conductalleged in the Complain t, together with prejudgment interest thereon in the amount of $1,875,414.15, for a total of $11,162,330.80. Defendant Penn shall satisfy this obligation by paying $11,162,330.80 to the Securities and Exchange Commission within 30 days after entry of this Final Judgment. IT IS FURTHER ORDERED, ADJUDGED, AND DECREED that Defendant Penn shall pay a civil penalty in the amount of $9,286,916.65 to the Securities and Exchange Commission pursuant to Section 21(d) of the Exchange Ac t and Section 209(e) of the Advisers Act. Defendant Penn shall make this payment within 14 days after entry of this Final Judgment. IT IS FURTHER ORDERED, ADJUDGED, AND DECREED that this Final Judgment is entered nunc pro tunc. 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. The Clerk of Court is respectfully directed to terminate all open motions and to close this case. And as set forth herein. (Signed by Judge Valerie E. Caproni on 4/14/2021) (ama)

USDC SDNY
DOCUMENT
ELECTRONICALLY FILED
DOC #:
DATE FILED:

UNITED STATES DISTRICT COURT
SOUTHERN DISTRICT OF NEW YORK
SECURITIES AND EXCHANGE COMMISSION,
Plaintiff,

14 Civ. 0581 (VEC)
ECF CASE

v.
LAWRENCE E. PENN, III, et al.,
Defendants,
- AND A BIGHOUSE PHOTOGRAPHY AND FILM STUDIO
LLC,
Relief Defendant.

AMENDED FINAL JUDGMENT AS TO DEFENDANT LAWRENCE E. PENN III
WHEREAS on January 30, 2014, Plaintiff Securities and Exchange Commission (the
“Commission”) commenced this action by filing a Complaint, Order to Show Cause, and
supporting papers, including a memorandum of law, declarations, and exhibits, for its emergency
application for a temporary restraining order, preliminary injunction, asset freeze and other
relief;
WHEREAS the same day, the Court entered an Order to Show Cause, Temporary
Restraining Order, and Order Freezing Assets and Granting Other Relief (the “January 30
Order,” Docket Entry 2);
WHEREAS the Court entered an Order Imposing Preliminary Injunction and Other
Relief Against Defendants Lawrence E. Penn III (“Penn”), Camelot Acquisitions Secondary
Opportunities Management LLC (“CASO Management”), and The Camelot Group International,
LLC (collectively, the “Camelot Defendants”) on July 11, 2014 (the “July 11 Order,” Docket
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Entry 56) that, among other things, froze the defendants’ assets pending the final disposition of
this action;
WHEREAS Defendant Penn entered a general appearance;
WHEREAS on December 22, 2016, the Court granted the Commission’s motion for
summary judgment against Defendant Penn and entered an injunction against him from further
violations (Docket Entries 168 and 170);
WHEREAS on January 23, 2018, the Court ordered that this case would remain stayed
as to the Camelot Defendants pending the conclusion of the proceedings relative to Defendant
Penn (Docket Entry 243);
WHEREAS on September 14, 2018, the Court ordered that Defendant Penn was liable
for disgorgement of $9,286,916.65, plus prejudgment interest at the IRS underpayment rate, and
that he must pay a civil penalty of $9,286,916.65 (Docket Entry 297);
WHEREAS on October 1, 2018, the Court entered a Final Judgment against Defendant
Penn (Docket Entry 300, the “Original Judgment”);
WHEREAS the disgorgement, prejudgment interest and civil penalty amounts ordered in
the Original Judgment remain unpaid; and
WHEREAS on April 9, 2021, the Commission submitted to the Court a correction of the
prejudgment interest amount reflected in the Original Judgment and requested that the Court
issue an amended final judgment nunc pro tunc (this “Final Judgment”):
I.
NOW, THEREFORE, IT IS HEREBY ORDERED, ADJUDGED, AND DECREED
that Defendant Penn 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)]

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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.

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
Penn’s officers, agents, servants, employees, and attorneys; and (b) other persons in active
concert or participation with Defendant Penn or with anyone described in (a).
II.
IT IS HEREBY FURTHER ORDERED, ADJUDGED, AND DECREED that
Defendant Penn is permanently restrained and enjoined from violating, directly or indirectly,
Section 204 of the Investment Advisers Act of 1940 (the “Advisers Act”) [15 U.S.C. § 80b-4]
and Rule 204-2 promulgated thereunder [17 C.F.R. § 275.204-2] by, while acting as an
investment adviser who makes use of the mails or any means or instrumentality of interstate
commerce in connection with its business as an investment adviser (other than one specifically
exempt from registration under the Advisers Act), failing to make, keep, maintain on its
premises, and provide to the Commission such records and reports as the Commission by rule
may prescribe as necessary or appropriate in the public interest or for the protection of investors.

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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
Penn’s officers, agents, servants, employees, and attorneys; and (b) other persons in active
concert or participation with Defendant Penn or with anyone described in (a).
III.
IT IS HEREBY ORDERED, ADJUDGED, AND DECREED that Defendant Penn is
permanently restrained and enjoined from violating, directly or indirectly, Sections 206(1) and
206(2) of the Advisers Act [15 U.S.C. §§ 80b-6(1), (2)] by, while acting as an investment
adviser, using the mails or any means or instrumentality of interstate commerce:
(a)

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

(b)

to engage in any transaction, practice or course of business which operates as a
fraud or deceit upon any client or prospective client.

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
Penn’s officers, agents, servants, employees, and attorneys; and (b) other persons in active
concert or participation with Defendant Penn or with anyone described in (a).
IV.
IT IS FURTHER ORDERED, ADJUDGED, AND DECREED that Defendant Penn is
liable for disgorgement of $9,286,916.65, representing profits gained as a result of the conduct
alleged in the Complaint, together with prejudgment interest thereon in the amount of
$1,875,414.15, for a total of $11,162,330.80. Defendant Penn shall satisfy this obligation by

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paying $11,162,330.80 to the Securities and Exchange Commission within 30 days after entry of
this Final Judgment.
Defendant Penn 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 Penn may also 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; Lawrence E. Penn III as a defendant in this action; and specifying that payment is
made pursuant to this Final Judgment.
Defendant Penn 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 Penn relinquishes all legal and equitable right, title, and interest in such
funds and no part of the funds shall be returned to Defendant Penn.
The Commission shall hold the funds (collectively, the “Fund”) and may propose a plan
to distribute the Fund subject to the Court’s approval. 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.

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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 30 days following entry of this Final Judgment. Defendant Penn shall pay
post-judgment interest on any delinquent amounts pursuant to 28 U.S.C. § 1961.
V.
IT IS FURTHER ORDERED, ADJUDGED, AND DECREED that Defendant Penn
shall pay a civil penalty in the amount of $9,286,916.65 to the Securities and Exchange
Commission pursuant to Section 21(d) of the Exchange Act and Section 209(e) of the Advisers
Act. Defendant Penn shall make this payment within 14 days after entry of this Final Judgment.
Defendant Penn 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 Penn may also 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; Lawrence E. Penn III as a defendant in this action; and specifying that payment is
made pursuant to this Final Judgment.
Defendant Penn 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 Penn relinquishes all legal and equitable right, title, and interest in such
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funds and no part of the funds shall be returned to Defendant Penn. The Commission shall send
the funds paid pursuant to this Final Judgment to the United States Treasury. Defendant Penn
shall pay post-judgment interest on any delinquent amounts pursuant to 28 USC § 1961.
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, any debt for disgorgement, prejudgment interest, civil penalty or other amounts due by
Defendant Penn 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 Penn 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 Final
Judgment is entered nunc pro tunc.
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.

Dated: ___________________
____________________________________
____________________________
__
UNITED STATES DISTRICT JUDGE

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