Securities and Exchange Commission v. Thompson et al

Filing 182

DEFAULT JUDGMENT: IT IS HEREBY ORDERED, ADJUDGED, AND DECREED that the Motion is GRANTED. IT IS HEREBY FURTHER ORDERED, ADJUDGED, AND DECREED that Defendant is permanently restrained and enjoined from violating, directly or indirectly, Section 1 0(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 m aterial 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 de ceit 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 servi ce 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). IT IS HEREBY FURTHER ORDERED, ADJUDGED, AND DECRE ED 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 instrumen ts 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 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 Fi nal 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). IT IS HEREBY FURTHE R ORDERED, ADJUDGED, AND DECREED that Defendant is permanently restrained and enjoined from violating Section 17(b) of the Securities Act [15 U.S.C. § 77q(b)] by the use of any means or instruments of transportation or communication in interst ate commerce or by use of the mails, to publish, give publicity to, or circulate any notice, circular, advertisement, newspaper, article, letter, investment service, or communication which, though not purporting to offer a security for sale, descri bes such security for a consideration received or to be received, directly or indirectly, from an issuer, underwriter, or dealer, without fully disclosing the receipt, whether past or prospective, of such consideration and the amount thereof. 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) Defenda nt's officers, agents, servants, employees, and attorneys; and (b) other persons in active concert or participation with Defendant or with anyone described in (a). IT IS HEREBY FURTHER ORDERED, ADJUDGED, AND DECREED that Defendant is perman ently barred from participating in an offering of penny stock, including engaging in activities with a broker, dealer, or issuer for purposes of issuing, trading, or inducing or attempting to induce the purchase or sale of any penny stock. 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 [17 C.F.R. 240.3a51-1]. IT IS HEREBY FURTHER ORDERED, ADJUDGED, AND DECREED that Defendant is liable for disgorgemen t of $3,907,040, representing net profits gained as a result of the conduct alleged in the Complaint, together with prejudgment interest thereon in the amount of $1,115,521, and a civil penalty in the amount of $750,000 pursuant to S ection 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)]. Defendant shall satisfy this obligation by paying $5,772,561 to the Securities and Exchange Commission within 30 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.g ov through the SEC website at http://www.sec.gov/about/offices/ofm.htm. Defendant 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 del ivered 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; Eric V an Nguyen 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 couns el 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 dis gorgement and prejudgment interest by using all collection procedures authorized by law, including, but not limited to, moving for civil contempt at any time after 30 days following entry of this Final Judgment. The Commission may enforce the Court 's judgment for penalties by the use of all collection procedures authorized by law, including the Federal Debt Collection Procedures Act, 28 U.S.C. § 3001 et seq., and moving for civil contempt for the violation of any Court orders issu ed in this action. Defendant shall pay post judgment interest on any amounts due after 30 days of the entry of this Final Judgment 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. 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 and the Fund may only be disbursed pursuant to an Order of the Court. Regar dless 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 det errent 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 Actio n 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 I nvestor 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. 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. (Signed by Judge Andrew L. Carter, Jr on 10/20/2021) (ate)

UNITED STATES DISTRICT COURT
SOUTHERN DISTRICT OF NEW YORK

10/20/21

SECURITIES AND EXCHANGE
COMMISSION,
Plaintiff,
v.
14 Civ. 9126 (ALC)
ANTHONY J. THOMPSON Jr.,
JAY FUNG, and ERIC VAN NGUYEN,

DEFAULT
JUDGMENT

Defendants,
JOHN BABIKIAN and KENDALL
THOMPSON,
Relief Defendants.

FINAL JUDGMENT AND ORDER AS TO DEFENDANT ERIC VAN NGUYEN
The Securities and Exchange Commission (the “SEC”) having filed a Complaint on
November 17, 2014, defendant Eric Van Nguyen (“Defendant”) having failed to answer, plead, or
otherwise defend this action, the Court having considered the SEC’s motion for a default judgment
(the “Motion”) and all the pleadings and evidence submitted in support thereof; and the Court
having determined that Defendant is not an infant or an incompetent person and is not in the
military service of the United States:
I.
IT IS HEREBY ORDERED, ADJUDGED, AND DECREED that the Motion is
GRANTED.

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II.
IT IS HEREBY FURTHER 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
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).
III.
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:
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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;
(c)

or

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).
IV.
IT IS HEREBY FURTHER ORDERED, ADJUDGED, AND DECREED that Defendant
is permanently restrained and enjoined from violating Section 17(b) of the Securities Act [15 U.S.C.
§ 77q(b)] by the use of any means or instruments of transportation or communication in interstate
commerce or by use of the mails, to publish, give publicity to, or circulate any notice, circular,
advertisement, newspaper, article, letter, investment service, or communication which, though not
purporting to offer a security for sale, describes such security for a consideration received or to be
received, directly or indirectly, from an issuer, underwriter, or dealer, without fully disclosing the
receipt, whether past or prospective, of such consideration and the amount thereof.
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
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participation with Defendant or with anyone described in (a).
V.
IT IS HEREBY FURTHER ORDERED, ADJUDGED, AND DECREED that Defendant
is permanently barred from participating in an offering of penny stock, including engaging in
activities with a broker, dealer, or issuer for purposes of issuing, trading, or inducing or attempting
to induce the purchase or sale of any penny stock. 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 [17 C.F.R.
240.3a51-1].
VI.
IT IS HEREBY FURTHER ORDERED, ADJUDGED, AND DECREED that Defendant
is liable for disgorgement of $3,907,040, representing net profits gained as a result of the conduct
alleged in the Complaint, together with prejudgment interest thereon in the amount of $1,115,521,
and a civil penalty in the amount of $750,000 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)]. Defendant shall
satisfy this obligation by paying $5,772,561 to the Securities and Exchange Commission within 30
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 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
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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; Eric Van Nguyen 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 using all collection procedures authorized by law, including, but not limited to, moving
for civil contempt at any time after 30 days following entry of this Final Judgment.
The Commission may enforce the Court’s judgment for penalties by the use of all collection
procedures authorized by law, including the Federal Debt Collection Procedures Act, 28 U.S.C. §
3001 et seq., and moving for civil contempt for the violation of any Court orders issued in this action.
Defendant shall pay post judgment interest on any amounts due after 30 days of the entry of this
Final Judgment 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.
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 and the Fund may only be disbursed pursuant to an
Order of the Court.
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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.

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.

October 20 2021
Dated: ______________, _____
____________________________________
HONORABLE ANDREW L. CARTER, JR.
UNITED STATES DISTRICT JUDGE

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