U.S. Securities and Exchange Commission v. Hadsell Chemical Processing, LLC et al

Filing 4

JUDGMENT as to Defendant Robert Walton, Jr. Signed by Judge George C. Smith on 5/22/2017. (agm)

UNITED STATES DISTRICT COURT
SOUTHERN DISTRICT OF OHIO
EASTERN DIVISION

SECURITIES AND EXCHANGE
COMMISSION,
Plaintiff,
Case No.: 2:17-cv-432
v.
Hadsell Chemical Processing, LLC and
Robert Walton, Jr.
Defendants.

JUDGMENT AS TO DEFENDANT
ROBERT WALTON, JR.
The Securities and Exchange Commission having filed a Complaint and Defendant
Robert Walton, Jr. 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 as provided
in paragraph V.; 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;

(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.

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 of the Securities Act [15 U.S.C.
§ 77e] 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;

(b)

Unless a registration statement is in effect as to a security, carrying or causing to
be carried through the mails or in interstate commerce, by any means or
instruments of transportation, any such security for the purpose of sale or for
delivery after sale; or

(c)

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
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
shall pay disgorgement of ill-gotten gains, prejudgment interest thereon, and 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)]. The Court shall determine the amounts of the
disgorgement and civil penalty upon motion of the Commission. Prejudgment interest shall be
calculated from July 1, 2015, 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). 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.
V.
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.

IT IS SO ORDERED.

s/ George C. Smith__________________
GEORGE C. SMITH, JUDGE
UNITED STATES DISTRICT COURT