Securities and Exchange Commission v. Silver

Filing 8

JUDGMENT AS TO DEFENDANT MARTIN SILVER: The Securities and Exchange Commission having filed a Complaint and Defendant Martin Silver ("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; 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, 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). IT IS HEREBY ORDERED, ADJUDGED, AND DECREED that Defendant is permanently restrained and enjoined from violating Sections 206(1) and 206(2) of the Investment Advisers Act of 1940 (the Advisers Act) [15 U.S.C. 80b-6(1) and 80(b)-6 (2)], by, while acting as an investment adviser, using any means or instrumentalities of interstate commerce, or any means or instruments of transportation or communication in interstate commerce, or by the mails or any facility of any national securities exchange: As further set forth. 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). 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 this Court shall retain jurisdiction of this matter for the purposes of enforcing the terms of this Judgment. Pursuant to Fed. R Civ. P 54(b), there is no just reason for delay in the entry of Judgment. So Ordered (Signed by Judge Denise L. Cote on 4/16/2021) (js)

Case 1:21-cv-03179-DLC Document 6 Filed 04/15/21 Page 1 of 6

UNITED STATES DISTRICT COURT
SOUTHERN DISTRICT OF NEW YORK

SECURITIES AND EXCHANGE
COMMISSION,
Plaintiff,

No. 21-cv-3179 (DLC)

v.
MARTIN SILVER,
Defendant.

JUDGMENT AS TO DEFENDANT MARTIN SILVER
The Securities and Exchange Commission having filed a Complaint and Defendant
Martin Silver (“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; waived findings of fact and conclusions of law; and waived any right to appeal from
this Judgment:
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 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;

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Case 1:21-cv-03179-DLC Document 6 Filed 04/15/21 Page 2 of 6

(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 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) 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:
(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.

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Case 1:21-cv-03179-DLC Document 6 Filed 04/15/21 Page 3 of 6

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 ORDERED, ADJUDGED, AND DECREED that Defendant is
permanently restrained and enjoined from violating Sections 206(1) and 206(2) of the Investment
Advisers Act of 1940 (the “Advisers Act”) [15 U.S.C. §§ 80b-6(1) and 80(b)-6(2)], by, while
acting as an investment adviser, using any means or instrumentalities of interstate commerce, or
any means or instruments of transportation or communication in interstate commerce, or by the
mails or any facility of any national securities exchange:
(a)

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

(b)

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

(c)

to engage in any acts, practices, or courses of business which are fraudulent,
deceptive, or manipulative.

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).

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IV.
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 any disgorgement and civil penalty shall be determined by the Court upon motion of
the Commission; and that prejudgment interest shall be calculated from October 1, 2013, 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)], Section 21(d)(3) of the Exchange Act [15 U.S.C. § 78u(d)(3)], and Section 209(e) of
the Advisers Act [15 U.S.C. § 80b-9(e)] is appropriate and, if so, the amount of the penalty. 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.

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V.
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, including, but not
limited to, the undertakings to:
(a)

directly or through counsel cooperate with the directors of funds managed or

advised by IIG (the “Private Funds”) and/or any fiduciary of the Private Funds with respect to
the orderly liquidation of the Private Funds and distribution of assets thereof by such directors or
fiduciaries; and
(b)

certify, in writing, compliance with the undertaking(s) set forth above. The

certification shall identify the undertakings, provide written evidence of compliance in the form
of a narrative, and be supported by exhibits sufficient to demonstrate compliance. The
Commission staff may make reasonable requests for further evidence of compliance, and
Respondent agrees to provide such evidence. The certification and supporting material shall be
submitted to Sanjay Wadhwa, New York Regional Office, 200 Vesey Street, New York, NY
10281, with a copy to the Office of Chief Counsel of the Enforcement Division, no later than
sixty (60) days from the date of the completion of the undertakings.
VI.
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

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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).
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 this Court shall
retain jurisdiction of this matter for the purposes of enforcing the terms of this Judgment.
Pursuant to Fed. R. Civ. P. 54(b), there is

April 16
Dated: ______________, 2021

no just reason for delay in the entry of
judgment.

____________________________________
UNITED STATES DISTRICT JUDGE

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Case 1:21-cv-03179-DLC Document 6-1 Filed 04/15/21 Page 1 of 7

UNITED STATES DISTRICT COURT
SOUTHERN DISTRICT OF NEW YORK

SECURITIES AND EXCHANGE
COMMISSION,
Plaintiff,

No. 21-cv-3179 (DLC)

v.
MARTIN SILVER,
Defendant.

CONSENT OF DEFENDANT MARTIN SILVER
1.

Defendant Martin Silver (“Defendant”) waives service of a summons and the

complaint in this action, enters a general appearance, and admits the Court’s jurisdiction over
Defendant and over the subject matter of this action.
2.

Defendant has entered into a written agreement to plead guilty to criminal conduct

relating to certain matters alleged in the complaint in this action. Specifically, in United States v.
Silver, Crim. No. 20-cr-360 (AKH) (S.D.N.Y.). Defendant agreed to plead guilty to violation of
Section 10(b) of the Securities Exchange Act of 1934 (“Exchange Act”), and Rule 10b-5
thereunder [15 U.S.C. § 78j(b) and 78ff; 17 C.F.R. § 240.10b-5], as well as wire fraud [18 U.S.C.
§§ 1343 and 2], and conspiracy to commit investment adviser fraud, securities fraud, and wire
fraud [18 U.S.C. § 371]. This Consent shall remain in full force and effect regardless of the
existence or outcome of any further proceedings in United States v. Silver.
3.

Defendant hereby consents to the entry of the Judgment in the form attached

hereto (the “Judgment”) and incorporated by reference herein, which, among other things

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permanently restrains and enjoins Defendant from violation of Section 10(b) of the Securities
Exchange Act of 1934 (the “Exchange Act”) [15 U.S.C. § 78j(b)] and Rule lOb-5 promulgated
thereunder [17 C.F.R. § 240.10b-5]; Section 17(a) of the Securities Act of 1933 (the “Securities
Act”) [15 U.S.C. § 77q(a)]; and Sections 206(1) and 206(2) of the Investment Advisers Act of
1940 (“Advisers Act”) [15 U.S.C. §§ 80b-6(l) and 80(b)-6(2)].
4.

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

and prejudgment interest thereon; that the amounts of any disgorgement and civil penalty shall
be determined by the Court upon motion of the Commission; and that prejudgment interest shall
be calculated from October 1,2013, 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).
Defendant further agrees that, 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)],
Section 21(d)(3) of the Exchange Act [15 U.S.C. § 78u(d)(3)], and Section 209(e) of the
Advisers Act [15 U.S.C. § 80b-9(e)] is appropriate and, if so, the amount of the penalty.
Defendant further agrees that 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 this Consent or the 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

Case 1:21-cv-03179-DLC Document 6-1 Filed 04/15/21 Page 3 of 7

disgorgement and/or civil penalties, the parties may take discovery, including discovery from
appropriate non-parties.
5.
(a)

Defendant undertakes to:
directly or through counsel cooperate with the directors of funds managed or

advised by IIG (the “Private Funds”) and/or any fiduciary of the Private Funds with respect to
the orderly liquidation of the Private Funds and distribution of assets thereof by such directors or
fiduciaries; and
(b)

certify, in writing, compliance with the undertaking(s) set forth above. The

certification shall identify the undertakings, provide written evidence of compliance in the form
of a narrative, and be supported by exhibits sufficient to demonstrate compliance. The
Commission staff may make reasonable requests for further evidence of compliance, and
Respondent agrees to provide such evidence. The certification and supporting material shall be
submitted to Sanjay Wadhwa, New York Regional Office, 200 Vesey Street, New York, NY
10281, with a copy to the Office of Chief Counsel of the Enforcement Division, no later than
sixty (60) days from the date of the completion of the undertakings.
6.

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

Rule 52 of the Federal Rules of Civil Procedure.
7.

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

the Judgment.
8.

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.

Case 1:21-cv-03179-DLC Document 6-1 Filed 04/15/21 Page 4 of 7

9.

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

the same force and effect as if fully set forth therein.
10.

Defendant will not oppose the enforcement of the 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.
11.

Defendant waives service of the Judgment and agrees that entry of the 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, within thirty
days after the 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 Judgment.
12.

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
that the Court’s entry of a permanent injtmction 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-regulatoiy organization. This statutory disqualification has consequences that
are separate from any sanction imposed in an administrative proceeding. In addition, in any

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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.
13.

Defendant understands and agrees to comply wdth the terms of 17 C.F.R.

§ 202.5(e), which provides in part that it is 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
allegations in the complaint or order for proceedings.” As part of Defendant’s agreement to
comply with the terms of Section 202.5(e), Defendant acknowledges the guilty plea for related
conduct described in paragraph 2 above, and: (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; (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 for purposes of exceptions to discharge
set forth in Section 523 of the Bankruptcy Code, 11 U.S.C. § 523, 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 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 Judgment and restore this action to its active docket. Nothing in this paragraph affects

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Defendant’s; (i) testimonial obligations; or (ii) right to take legal or factual positions in litigation
or other legal proceedings in which the Commission is not a party.
14.

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.
15.

In connection with this action and any related judicial or administrative

proceeding or investigation commenced by the Commission or to which the Commission is a
party. Defendant (i) agrees to appear and be interviewed by Commission staff at such times and
places as the staff requests upon reasonable notice; (ii) will accept service by mail or facsimile
transmission of notices or subpoenas issued by the Commission for documents or testimony at
depositions, hearings, or trials, or in connection with any related investigation by Commission
staff; (iii) appoints Defendant’s undersigned attorney as agent to receive service of such notices

and subpoenas; (iv) with respect to such notices and subpoenas, waives the territorial limits on
service contained in Rule 45 of the Federal Rules of Civil Procedure and any applicable local
rules, provided that the party requesting the testimony reimburses Defendant’s travel, lodging, and
subsistence expenses at the then-prevailing U.S. Government per diem rates; and (v) consents to
personal jurisdiction over Defendant in any United States District Court for purposes of
enforcing any such subpoena.
16.

Defendant agrees to waive all objections, including but not limited to.

Case 1:21-cv-03179-DLC Document 6-1 Filed 04/15/21 Page 7 of 7

constitutional, timeliness, and procedural objections, to the administrative proceeding that will be
instituted when the judgment is entered.
17.

Defendant agrees that the Commission may present the Judgment to the Court for

signature and entry without further notice.
18.

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

purpose of enforcing the terms of the Judgment.

Dated:

H-7-Zl

,2021,.
On
a person known to me.
personally appeared before me and acknowledged executmg the foregoing Consent.

Notary Public
Commission expires:

Approved as to form:

Bradley J. Blondi, Esq.
Cahill Gordon & Reindel LLP
1990 K Street, N.W., Suite 950
Washington, D.C. 20006
Attorney for Defendant