Securities and Exchange Commission v. Femenia et al

Filing 116

JUDGMENT as to Defendant Frank M. Burgess. Signed by Senior Judge Graham Mullen on 7/2/2013. (eef)

UNITED STATES DISTRICT COURT
WESTERN DISTRICT OF NORTH CAROLINA
CHARLOTTE DIVISION

SECURITIES AND EXCHANGE
COMMISSION,
Plaintiff,
Civil Action No.
v.
3:12-cv-803-GCM
JOHN W. FEMENIA, SHAWN C.
HEGEDUS, DANIELLE C. LAURENTI,
CORAM REAL ESTATE HOLDING,
INC., GOLDSTAR P.S. INC., ROGER A.
WILLIAMS, KENNETH M. RABY,
FRANK M. BURGESS, JAMES A.
HAYES, MATTHEW J. MUSANTE,
ANTHONY C. MUSANTE and AARON M.
WENS,
Defendants,
and
KRISTINE LACK and CHRISTINE E.
MUSANTE,

Relief Defendants.

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JUDGMENT AS TO DEFENDANT FRANK M. BURGESS
The Securities and Exchange Commission having filed a complaint and a
First Amended Complaint and Defendant Frank M. Burgess (“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
and Defendant’s agents, servants, employees, attorneys, and all persons in active
concert or participation with them who receive actual notice of this Judgment by
personal service or otherwise are 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.
II.
IT IS HEREBY FURTHER ORDERED, ADJUDGED, AND DECREED
that Defendant is liable for disgorgement of $266,955.00, representing profits
gained as a result of the conduct alleged in the First Amended Complaint, together
with prejudgment interest thereon in the amount of $3,323.07. Defendant shall
satisfy this obligation by paying $270,278.07 to the Securities and Exchange
Commission within 14 days after entry of this Judgment.
Defendant may transmit payment electronically to the Securities and
Exchange 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; Frank M. Burgess as a defendant in this action; and
specifying that payment is made pursuant to this 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 shall send the funds paid pursuant to this Judgment
to the United States Treasury.
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 14 days following entry of this
Final Judgment. Defendant shall pay post judgment interest on any delinquent
amounts pursuant to 28 U.S.C. § 1961.
III.
Upon motion of the Commission, the Court shall determine whether a civil
penalty pursuant to Section 21A of the Exchange Act [15 U.S.C. § 78u-1] is
appropriate and, if so, the amount of the penalty. In connection with the
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Commission’s motion for 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 First Amended 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 First Amended 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.
IV.
IT IS FURTHER ORDERED, ADJUDGED, AND DECREED that the asset
freeze ordered by the Court in its December 13, 2012 Order Granting Preliminary
Injunction and Other Relief as to Defendant [Dkt. 26], as such asset freeze has
been amended from time to time by the Court, shall be partially lifted in a total
amount of $270,278.07 for the sole purpose of permitting Defendant to use such
funds to satisfy the disgorgement and prejudgment interest obligations set forth
herein.

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V.
IT IS FURTHER ORDERED, ADJUDGED, AND DECREED that the
Commission may seek to amend this Judgment to modify the disgorgement and
prejudgment interest amounts set forth herein, and/or seek a penalty amount based
upon the modified disgorgement amount, if the Commission identifies additional
conduct not presently alleged in the First Amended Complaint for which
Defendant is found liable.
VI.
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.
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 Judgment.

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VIII.
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.

Signed: July 2, 2013

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