Securities and Exchange Commisison v. Bajic et al

Filing 248

JUDGMENT AS TO DEFENDANT KENNETH CIAPALA: The Securities and Exchange Commission having filed a Complaint and Defendant Kenneth Ciapala (Ciapala or Defendant) having entered a general appearance; consented to the Court's jurisdiction over Def endant and the subject matter of this action; consented to entry of this Judgment without admitting or denying the allegations of the Complaint (except as to jurisdiction and except as otherwise provided herein in paragraph IX); waived findings of fact and conclusions of law; and waived any right to appeal from this Judgment. 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 sh all comply with all of the undertakings and agreements set forth therein. 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 Judgment. 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 Judgment forthwith and without further notice. (As further set forth herein). SO ORDERED., Kenneth Ciapala terminated. (Signed by Judge Lorna G. Schofield on 4/27/2021) (nb)

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

Civil Action No. 20-cv-00007-LGS

STEVE M. BAJIC,
RAJESH TANEJA,
NORFOLK HEIGHTS LTD.,
FOUNTAIN DRIVE LTD.,
ISLAND FORTUNE GLOBAL LTD.,
CRYSTALMOUNT LTD.,
WISDOM CHAIN LTD.,
SSID LTD.,
SURE MIGHTY LTD.,
TAMARIND INVESTMENTS INC.,
KENNETH CIAPALA,
ANTHONY KILLARNEY,
BLACKLIGHT SA,
CHRISTOPHER LEE MCKNIGHT, and
AARON DALE WISE,
Defendants.
JUDGMENT AS TO DEFENDANT KENNETH CIAPALA
The Securities and Exchange Commission having filed a Complaint and Defendant
Kenneth Ciapala (“Ciapala” or “Defendant”) 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 Judgment without admitting or denying the allegations of the Complaint (except as to
jurisdiction and except as otherwise provided herein in paragraph IX); waived findings of fact
and conclusions of law; and waived any right to appeal from this Judgment:

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I.
IT IS HEREBY 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 Rules 10b-5(a)
and (c) promulgated thereunder [17 C.F.R. § 240.10b-5(a), (c)], 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; or

(b)

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 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 FURTHER ORDERED, ADJUDGED, AND DECREED that Defendant
is permanently restrained and enjoined from violating Section 17(a)(1) and (3) of the Securities
Act of 1933 (the “Securities Act”) [15 U.S.C. § 77q(a)(1), (3)] 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:
(a)

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

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(b)

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 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 5(a) and (c) of the Securities Act
[15 U.S.C. § 77e(a), (c)] by, directly or indirectly, in the absence of any applicable exemption:
(a)

Unless a registration statement is in effect as to a security, making use of any
means or instruments of transportation or communication in interstate commerce
or of the mails to sell such security through the use or medium of any prospectus
or otherwise; or

(b)

Making use of any means or instruments of transportation or communication in
interstate commerce or of the mails to offer to sell or offer to buy through the use
or medium of any prospectus or otherwise any security, unless a registration
statement has been filed with the Commission as to such security, or while the
registration statement is the subject of a refusal order or stop order or (prior to the
effective date of the registration statement) any public proceeding or examination
under Section 8 of the Securities Act [15 U.S.C. § 77h].

IT IS FURTHER ORDERED, ADJUDGED, AND DECREED that, as provided in

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Federal Rule of Civil Procedure 65(d)(2), the foregoing paragraph also binds the following who
receive actual notice of this 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 violation Section 13(d) of the Exchange
Act [15 U.S.C. §78m(d)] by, directly or indirectly, failing to file statements with the Commissoin
containing the information required by Schedule 13D [17 C.F.R. §240.13d-101], within 10 days
after acquiring directly or indirectly the beneficial ownership of more than five percent of any
equity security of a class of securities which is specified in Exchange Act Rule 13d-1(i) [17
C.F.R. § 240.13d-1(i)]..
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 Judgment by personal service or otherwise: (a) Defendant’s 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 permanently restrained and enjoined from violating Section 15(a) of the Exchange Act [15
U.S.C. §78o(a)] by, directly or indirectly, using the mails or any means or instrumentality of
interstate commerce to effect any transactions in, or to induce or attempt to induce the purchase
or sale of, any security (with certain exemptions not applicable here), unless he is associated with

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a broker or dealer that is registered in accordance with Section 15(b) of the Exchange Act [15
U.S.C. §78o(b)].
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 Judgment by personal service or otherwise: (a) Defendant’s agents,
servants, employees, and attorneys; and (b) other persons in active concert or participation with
Defendant or with anyone described in (a).
VI.
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].
VII.
IT IS HEREBY FURTHER ORDERED, ADJUDGED, AND DECREED that Defendant
shall pay disgorgement of ill-gotten gains and prejudgment interest thereon; that the amounts of
the disgorgement and civil penalty shall be determined by the Court upon motion of the
Commission; and that prejudgment interest shall be calculated based on the rate of interest used
by the Internal Revenue Service for the underpayment of federal income tax as set forth in 26
U.S.C. §6621(a)(2). Upon motion of the Commission, the Court shall determine whether a civil
penalty 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)] is appropriate and, if so, the amount of the penalty.

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In connection with the Commission’s motion for disgorgement and/or civil penalties, and at any
hearing held on such a motion: (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 the Consent or this Judgment; (c) solely for the purposes of such motion, the
allegations of the Complaint shall be accepted as and deemed true by the Court; and (d) the
Court may determine the issues raised in the motion on the 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 the Commission’s motion for disgorgement and/or civil
penalties, the parties may take discovery, including discovery from appropriate non-parties.
VIII.
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.
IX.
IT IS FURTHER ORDERED, ADJUDGED, AND DECREED that, for purposes of
exceptions to discharge set forth in Section 523 of the Bankruptcy Code, 11 U.S.C. §523, the
allegations in 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
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).

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X.
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 Judgment.
XI.
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 Judgment forthwith and without further notice.

SO ORDERED.
Dated: April 27, 2021

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