Securities and Exchange Commission v. Fiore et al

Filing 59

FINAL JUDGMENT AS TO DEFENDANT JOSEPH A. FIORE: The United States Securities and Exchange Commission having filed the Complaint and Defendant Joseph A. Fiore ("Defendant" or "Fiore") having answered; consented to the Court� 39;s jurisdiction over Defendant and the subject matter of this action; consented to entry of this Final Judgment without admitting or denying the allegations of the Complaint (except as to jurisdiction and except as otherwise provided herein); wa ived findings of fact and conclusions of law; and waived any right to appeal from this Final Judgment. IT IS FURTHER ORDERED, ADJUDGED, AND DECREED that Defendant is jointly and severally liable with Defendants Berkshire Capital Management Compa ny, Inc. and Eat at Joe's, Ltd. n/k/a SPYR, Inc. for disgorgement and pre-judgment interest in the amount of $2,000,000, representing profits gained as a result of the conduct alleged in the Complaint. Defendant is further liable for a c ivil penalty in the amount of $500,000 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 $2, 500,000 to the Securities and Exchange pursuant to the terms of the payment schedule set forth below after entry of this Final Judgment. Defendant may transmit payment electronically to the Commission, which will provide detailed ACH transfer/Fedw ire 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 cashiers check, or United States postal money order payable to the Securities and Exchange Commission. 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. SO ORDERED BY THE COURT. Joseph A Fiore terminated. (Signed by Judge Kenneth M. Karas on 4/14/2020) (jca)

Case 7:18-cv-05474-KMK Document 56-1 Filed 04/13/20 Page 1 of 11

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

18-CV-5474

JOSEPH A. FIORE, BERKSHIRE CAPITAL
MANAGEMENT COMPANY, INC., and
EAT AT JOE’S, LTD. n/k/a SPYR, INC.,
Defendants.

FINAL JUDGMENT AS TO DEFENDANT JOSEPH A. FIORE
The United States Securities and Exchange Commission having filed the Complaint and
Defendant Joseph A. Fiore (“Defendant” or “Fiore”) having answered; consented to the Court’s
jurisdiction over Defendant and the subject matter of this action; consented to entry of this Final
Judgment without admitting or denying the allegations of the Complaint (except as to
jurisdiction and except as otherwise provided herein); 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 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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(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).
II.
IT IS 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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IT IS FURTHER ORDERED, ADJUDGED, AND DECREED that, as provided in
Federal Rule of Civil Procedure 65(d)(2), the foregoing paragraphs also bind 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 FURTHER ORDERED, ADJUDGED, AND DECREED that Defendant is
permanently restrained and enjoined from violating Sections 9(a)(1) and 9(a)(2) of the Exchange
Act [15 U.S.C. §§ 78i(a)(1) and 78i(a)(2)] by directly or indirectly, using the mails or any means
or instrumentality of interstate commerce, or of any facility of any national securities exchange,
or for any member of a national securities exchange
(1)

For the purpose of creating a false or misleading appearance of active trading in
any security other than a government security, or a false or misleading appearance
with respect to the market for any such security, (A) to effect any transaction in
such security which involves no change in the beneficial ownership thereof, or
(B) to enter an order or orders for the purchase of such security with the
knowledge that an order or orders of substantially the same size, at substantially
the same time, and at substantially the same price, for the sale of any such
security, has been or will be entered by or for the same or different parties, or (C)
to enter any order or orders for the sale of any such security with the knowledge
that an order or orders of substantially the same size, at substantially the same
time, and at substantially the same price, for the purchase of such security, has
been or will be entered by or for the same or different parties.

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(2)

To effect, alone or with one or more other persons, a series of transactions in any
security registered on a national securities exchange, any security not so
registered, or in connection with any security-based swap or security-based swap
agreement with respect to such security creating actual or apparent active trading
in such security, or raising or depressing the price of such security, for the
purpose of inducing the purchase or sale of such security by others.

IT IS FURTHER ORDERED, ADJUDGED, AND DECREED that, as provided in
Federal Rule of Civil Procedure 65(d)(2), the foregoing paragraphs also bind 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 FURTHER ORDERED, ADJUDGED, AND DECREED that Defendant is
permanently restrained and enjoined from violating Section 20(b) of the Exchange Act [15
U.S.C. § 78t(b)] by directly or indirectly, doing any act or thing which it would be unlawful
under the provisions of the Exchange Act or any rule or regulation thereunder through or by
means of any other 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).

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V.
IT IS FURTHER ORDERED, ADJUDGED, AND DECREED that Defendant is
permanently restrained and enjoined from violating Section 13(d) of the Exchange Act [15
U.S.C. § 78i(a)(1)] and Rule 13d-1 thereunder [17 C.F.R. § 240.13d-1] by, after acquiring
directly or indirectly a beneficial ownership of any equity security of a class which is registered
pursuant to section 78l of the Exchange Act, or any equity security of an insurance company
which would have been required to be so registered except for the exemption contained in
section 78l(g)(2)(G) of the Exchange Act, or any equity security issued by a closed-end
investment company registered under the Investment Company Act of 1940 [15 U.S.C. §§ 80a–1
– 80a-64] or any equity security issued by a Native Corporation pursuant to section 1629c(d)(6)
of title 43 of the United States Code, or otherwise becomes or is deemed to become a beneficial
owner of any of the foregoing upon the purchase or sale of a security-based swap that the
Commission may define by rule, and is directly or indirectly the beneficial owner of more than 5
per centum of such class shall, failing within ten days after such acquisition or within such
shorter time as the Commission may establish by rule, file with the Commission, a statement
containing such of the following information, and such additional information, as the
Commission may by rules and regulations, prescribe as necessary or appropriate in the public
interest or for the protection of investor, as set forth in Section 13(d) of the Exchange Act and
Rule 13d-1 thereunder.
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

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officers, 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 FURTHER ORDERED, ADJUDGED, AND DECREED that Defendant is barred,
pursuant to Section 20(g)(1) of the Securities Act [15 U.S.C. § 77t(g)(1)] and Section
21(d)(6)(A) of the Exchange Act [15 U.S.C. § 78u(d)(6)(A)], for a period of five (5) years from
the date of this Final Judgment 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 FURTHER ORDERED, ADJUDGED, AND DECREED that, pursuant to Section
21(d)(2) of the Exchange Act [15 U.S.C. § 78u(d)(2)], Defendant is prohibited for a period of
five (5) years from the date of this Final Judgment from acting as an officer or director of any
issuer that has a class of securities registered pursuant to Section 12 of the Exchange Act [15
U.S.C. § 78l] or that is required to file reports pursuant to Section 15(d) of the Exchange Act [15
U.S.C. § 78o(d)].
VIII.
IT IS FURTHER ORDERED, ADJUDGED, AND DECREED that Defendant is jointly
and severally liable with Defendants Berkshire Capital Management Company, Inc. and Eat at
Joe’s, Ltd. n/k/a SPYR, Inc. for disgorgement and pre-judgment interest in the amount of
$2,000,000, representing profits gained as a result of the conduct alleged in the Complaint.
Defendant is further liable for a civil penalty in the amount of $500,000 pursuant to Section 20(d)

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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 $2,500,000 to the Securities and
Exchange pursuant to the terms of the payment schedule set forth 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; Joseph A. Fiore, Berkshire Capital Management Company, Inc. and Eat at Joe’s, Ltd.
n/k/a SPYR, Inc. as defendants 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 Defendants.
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

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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. 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.
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 they are entitled to, nor shall they 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.

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IX.
IT IS FURTHER ORDERED, ADJUDGED, AND DECREED that Defendant shall pay
the total of disgorgement, prejudgment interest, and penalty due of $2,500,000 in 2 installments
to the Commission according to the following schedule: (1) $2,000,000 to be paid jointly and
severally by Defendants Fiore, Berkshire Capital Management Company, Inc., and Eat at Joe’s,
Ltd. n/k/a SPYR, Inc. within 14 days of entry of this Final Judgment; and (2) $500,000 to be paid
by Fiore within 365 days 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 from 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.
X.
IT IS HEREBY FURTHER ORDERED, ADJUDGED, AND DECREED that within 10
days after being served with a copy of this Final Judgment, Defendant’s counsel, Ortoli
Rosenstadt LLP (“Ortoli”), shall transfer the entire balance of any and all moneys received from
Defendant, or held for the benefit of Defendant, representing proceeds from certain allegations in
the Complaint, to the Commission. Ortoli 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

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http://www.sec.gov/about/offices/ofm.htm. Ortoli also may transfer these funds 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; Joseph A. Fiore, Berkshire Capital Management Company, Inc. and Eat at Joe’s, Ltd.
n/k/a SPYR, Inc. as defendants in this action; and specifying that payment is made pursuant to
this Final Judgment.
XI.
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, 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
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).
XII.
IT IS FURTHER ORDERED, ADJUDGED, AND DECREED that the Consent of
Defendant 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.

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XIII.
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
this _14th__ day of _April_____, 2020
SO ORDERED BY THE COURT:
________________________________
Hon. Kenneth M. Karas
UNITED STATES DISTRICT JUDGE

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