Securities and Exchange Commission v. Alderson et al

Filing 130

FINAL JUDGMENT ON CONSENT AS TO DEFENDANT BENJAMIN ALDERSON: IT IS HEREBY FURTHER ORDERED, ADJUDGED, AND DECREED that Defendant is liable for disgorgement of $265,000, representing profits gained as a result of the conductalleged in the Complain t, together with prejudgment interest thereon in the amount of $10,060.57, and a civil penalty in the amount of $125,000 pursuant to Advisers Act Section 209(e), 15 U.S.C. § 80b-9(e). Defendant shall satisfy this obligation by paying & #036;400,060.57 to the Securities and Exchange Commission pursuant to the terms of the payment schedule set forth in paragraph VI below after entry of this Final Judgment. Defendant shall pay the total of disgorgement, prejudgment interest, and penal ty due of $400,060.57 in two installments to the Commission according to the following schedule: (1) the$125,000 civil penalty within 30 days of entry of this Final Judgment; (2) the $275,060.57 disgorgement and prejudgment interest wi thin 364 days of the entry of this Final Judgment. Payments shall be deemed made on the date they are received by the Commission and shall be applied first to post judgment interest, which accrues pursuant to 28 U.S.C. § 1961 on any unpaid amoun ts due after 30 days of the entry of Final Judgment. Prior to making the final payment set forth herein, Defendant shall contact the staff of the Commission for the amount due for the final payment. IT IS FURTHER ORDERED, ADJUDGED, AND DECREED that t his Court shall retain jurisdiction of this matter for the purposes of enforcing the terms of this Final Judgement. 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 Final Judgment forthwith and without further notice., Benjamin Alderson terminated. (Signed by Judge Valerie E. Caproni on 7/08/2020) (ama)

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UNITED STATES DISTRICT COURT
SOUTHERN DISTRICT OF NEW YORK
------------------------------------------------------------------------x
:
SECURITIES AND EXCHANGE COMMISSION,
:
:
Plaintiff,
:
:
- against :
:
BENJAMIN ALDERSON and
:
BRADLEY HAMILTON,
:
:
Defendants.
:
:
------------------------------------------------------------------------x

USDC SDNY
DOCUMENT
ELECTRONICALLY FILED
DOC #:
DATE FILED: 07/08/2020

18-cv-4930(VEC)

FINAL JUDGMENT ON CONSENT AS TO DEFENDANT BENJAMIN ALDERSON
The Securities and Exchange Commission having filed a Complaint and Defendant
Benjamin Alderson 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
On Consent (“Final Judgment”) without admitting or denying the allegations of the Complaint
(except as to jurisdiction and except as otherwise provided herein in paragraph VIII); 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 206(1) and
Section 206(2) of the Investment Advisers Act of 1940 (“Advisers Act”) [15 U.S.C. §§ 80b-6(1)
and 80b-6(2)], by using any means or instrumentality of interstate commerce, or of the mails:
(a)

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

(b)

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

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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’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 ORDERED, ADJUDGED, AND DECREED that Defendant is
permanently restrained and enjoined from any violation of Advisers Act Section 204, 15 U.S.C.
§ 80b-4, and Rule 204-2 thereunder, 17 C.F.R. § 275.204-2, by knowingly or recklessly
providing substantial assistance to a registered investment adviser’s failure to make and keep
true, accurate, and current books and records relating to an investment advisory business.
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 ORDERED, ADJUDGED, AND DECREED that Defendant is
permanently restrained and enjoined from any violation of Advisers Act Section 206(4), 15
U.S.C. § 80b-6(4), and Rule 206(4)-7 thereunder, 17 C.F.R. § 275.206(4)-7, by knowingly or
recklessly providing substantial assistance to a registered investment adviser’s failure to adopt
and implement written policies and procedures reasonably designed to prevent violation of the
Advisers Act and the rules promulgated under the Advisers Act.

2

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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’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 ORDERED, ADJUDGED, AND DECREED that Defendant is
permanently restrained and enjoined from violating Advisers Act Section 207, 15 U.S.C. § 80b7, by making any untrue statement of a material fact in any registration application or report filed
with the Commission under Advisers Act Sections 203 or 204, 15 U.S.C. §§ 80b–3 or 80b–4, or
omitting to state in any such application or report any material fact which is required to be stated
therein.
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).
V.
IT IS HEREBY FURTHER ORDERED, ADJUDGED, AND DECREED that Defendant
is liable for disgorgement of $265,000, representing profits gained as a result of the conduct
alleged in the Complaint, together with prejudgment interest thereon in the amount of
$10,060.57, and a civil penalty in the amount of $125,000 pursuant to Advisers Act Section
209(e), 15 U.S.C. § 80b-9(e). Defendant shall satisfy this obligation by paying $400,060.57 to

3

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the Securities and Exchange Commission pursuant to the terms of the payment schedule set forth
in paragraph VI below 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
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; Benjamin Alderson 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 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 shall pay post
judgment interest on any delinquent amounts 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.
4

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A Fair Fund is established pursuant to Section 308(a) of the Sarbanes-Oxley Act of 2002,
as amended by the Dodd-Frank Act of 2010, 15 U.S.C. § 7246(a), for all disgorgement,
prejudgment interest and penalty paid pursuant to this judgment (the “Alderson Fair Fund”).
The Commission shall combine the Alderson Fair Fund plus interest earned on those
funds minus court registry fees, taxes, and other expenses pursuant to the Final Judgment entered
in this case with the Fair Fund created in In the Matter of deVere USA, Inc., Administrative
Proceeding File No. 3-18527 (June 4, 2018), to be distributed pursuant to a plan of distribution
entered in that action.
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.

5

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VI.
Defendant shall pay the total of disgorgement, prejudgment interest, and penalty due of
$400,060.57 in two installments to the Commission according to the following schedule: (1) the
$125,000 civil penalty within 30 days of entry of this Final Judgment; (2) the $275,060.57
disgorgement and prejudgment interest within 364 days of the entry of this Final Judgment.
Payments shall be deemed made on the date they are received by the Commission and shall be
applied first to post judgment interest, which accrues pursuant to 28 U.S.C. § 1961 on any unpaid
amounts due after 30 days of the entry of Final Judgment. Prior to making the final payment set
forth herein, Defendant shall contact the staff of the Commission for the amount due for the final
payment.
If Defendant fails to make any payment by the date agreed and/or in the amount agreed
according to the schedule set forth above, all outstanding payments under this Final Judgment,
including post-judgment interest, minus any payments made, shall become due and payable
immediately at the discretion of the staff of the Commission without further application to the
Court.
VII.
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.
VIII.
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, and for
no other purposes and in no other proceeding not involving the Commission, the allegations in

6

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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).
IX.
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 Judgement.
X.
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 Final Judgment forthwith and without further notice.

July 8
Dated: ______________, 2020
____________________________________
UNITED STATES DISTRICT JUDGE

7

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UNITED STATES DISTRICT COURT
SOUTHERN DISTRICT OF NEW YORK
------------------------------------------------------------------------x
:
SECURITIES AND EXCHANGE COMMISSION,
:
:
Plaintiff,
:
:
- against :
:
BENJAMIN ALDERSON and
:
BRADLEY HAMILTON,
:
:
Defendants.
:
:
------------------------------------------------------------------------x

18-cv-4930(VEC)

CONSENT OF DEFENDANT BENJAMIN ALDERSON
1.

Defendant Benjamin Alderson ( Defe da

with the complaint in this action, enters a ge e a a

) acknowledges having been served

ea a ce, a d ad i

he C

j i dic i

over Defendant and over the subject matter of this action.
2.

Without admitting or denying the allegations of the complaint (except as provided

herein in paragraph 12 and except as to personal and subject matter jurisdiction, which
Defendant admits), Defendant hereby consents to the entry of the final Judgment in the form
a ached he e

( he Fi a J dg e

) and incorporated by reference herein, which, among other

things:
(a)

permanently restrains and enjoins Defendant from violation of Sections
206(1), 206(2), and 207 of the Investment Advisers Act of 1940
( Ad i e Ac ), 15 U.S.C. § 80b-6(1), 80b-6(2), and 80b-7, and from
aiding and abetting violations of Advisers Act Sections 204 and 206(4), 15
U.S.C. §§ 80b-4, 80b-6(4), and Rules 204-2 and 206(4)-7 thereunder, 17
C.F.R. §§ 275.204-2 and 275.206(4)-7; and

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(b)

orders Defendant to pay disgorgement in the amount of $265,000, plus
prejudgment interest thereon in the amount of $10,060.57; and

(c)

orders Defendant to pay a civil penalty in the amount of $125,000 under
Advisers Act Section 209(e), 15 U.S.C. § 80b-9(e).

3.

Defendant acknowledges that the civil penalty paid pursuant to the Final

Judgment may be distributed pursuant to the Fair Fund provisions of Section 308(a) of the
Sarbanes-Oxley Act of 2002. Regardless of whether any such Fair Fund distribution is made, the
civil penalty shall be treated as a penalty paid to the government for all purposes, including all
tax purposes. To preserve the deterrent effect of the civil penalty, Defendant agrees that he shall
not, after offset or reduction of any award of compensatory damages in any Related Investor
Ac i

ba ed

Defe da

a

e

f di g ge e t 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
a

fa

a

f Defe da

a

e

f a ci i

e a

i

hi ac i

( Pe a

Off e ). If

the court in any Related Investor Action grants such a Penalty Offset, Defendant agrees that he
shall, within 30 days after entry of a final order granting the Penalty Offset, notify the
C

i i

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 action. For purposes of this paragraph, a Re a ed I

e

Ac i

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.
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

2

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pursuant to any insurance policy, with regard to any civil penalty amounts that Defendant pays
pursuant to the Final 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 the Final
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.
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 a jury trial and to appeal from the entry of

the Final Judgment.
7.

Defendant enters into this Consent voluntarily and represents 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.
8.

Defendant agrees that this Consent shall be incorporated into the Final Judgment

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

Defendant will not oppose the enforcement of the Final Judgment 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 of the Final Judgment and agrees that entry of the Final

Judgment 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,

3

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within thirty days after the Final Judgment is filed with the Clerk of the Court, with an affidavit
or declaration stating that Defendant has received and read a copy of the Final Judgment.
11.

Consistent with 17 C.F.R. 202.5(f), 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 of this proceeding,
including the imposition of any remedy or civil penalty herein. Defendant further acknowledges
ha he C

s entry of a 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
are separate from any sanction imposed in an administrative proceeding. In addition, in any
disciplinary proceeding before the Commission based on the entry of the 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 terms of 17 C.F.R.

§ 202.5(e), which provides in a

ha i i he C

i i

ic

not to permit a defendant

or respondent to consent to a judgment or order that imposes a sanction while denying the
allegations in the comp ai

de f

ceedi g , a d a refusal to admit the allegations is

equivalent to a denial, unless the defendant or respondent states that he neither admits nor denies

4

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he a ega i

. A

a

f Defe da

ag ee e

c

i h he e

f Sec i

202.5(e),

Defendant: (i) will not take any action or 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; (ii) will not make or permit to be made any public statement
to the effect that Defendant does not admit the allegations of the complaint, or that this Consent
contains no admission of the allegations, without also stating that Defendant does not deny the
allegations; (iii) upon the filing of this Consent, Defendant hereby withdraws any papers filed in
this action to the extent that they deny any allegation in the complaint; and (iv) stipulates solely
for purposes of exceptions to discharge set forth in Section 523 of the Bankruptcy Code, 11
U.S.C. §523, and for no other purposes and in no other proceeding not involving the
Commission, that the allegations in the complaint are true, and further, that any debt for
disgorgement, prejudgment interest, civil penalty or other amounts due by Defendant under the
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). If Defendant breaches this
agreement, the Commission may petition the Court to vacate the Final Judgment and restore this
ac i

i ac i e d c e . N hi g i

hi

a ag a h affec Defe da

: (i) e i

ia

obligations; or (ii) right to take legal or factual positions in litigation or other legal proceedings
in which the Commission is not a party.
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

5

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