Securities and Exchange Commission v. Wealth Management LLC et al

Filing 399

FINAL JUDGMENT entered in favor of United States Securities and Exchange Commission against Defendant James Putman. (cc: all counsel, via US mail to James Putman)(Griesbach, William)

UNITED STATES DISTRICT COURT
EASTERN DISTRICT OF WISCONSIN
GREEN BAY DIVISION
SECURITIES AND EXCHANGE COMMISSION,

Plaintiff,
v.

Civil Action No. 09-C-506

WEALTH MANAGEMENT LLC;
JAMES PUTMAN; and SIMONE FEVOLA,
Defendants, and
WML GRYPHON FUND LLC;
WML WATCH STONE PARTNERS, L.P.; WML
PANTERA PARTNERS, L.P.; WML PALISADE
PARTNERS, L.P.; WML L3, LLC; and WML
QUETZAL PARTNERS, L.P.,

Relief Defendants.

FINAL JUDGMENT AS TO DEFENDANT JAMES E. PUTMAN

The Securities and Exchange Commission (Commission) having filed a Complaint against
Defendant James E. Putman (“Putman”) or (“Defendant”), and the Court having issued a Decision
and Order on April 24, 2012 granting summary judgment to the Commission on all claims against
Putman, and awarding all relief requested by the Commission in its motion for summary 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 Final 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;

(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 and
Defendant’s agents, servants, employees, attorneys, and all persons in active concert or
participation with them who receive actual notice of this Final Judgment by personal service or
otherwise are 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:
(1)
(2)

to employ any device, scheme, or artifice to defraud;
to obtain money or property by means of any untrue statement of a material fact or
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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
(3)

to engage in any transaction, practice, or course of business which operates or would
operate as a fraud or deceit upon the purchaser.

III.
IT IS HEREBY FURTHER 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 Final Judgment by personal service or
otherwise are permanently restrained and enjoined from violating Sections 206(1) and (2) of the
Investment Advisers Act of 1940 (“Advisers Act”) [15 U.S.C. § 80b-6(1) and (2)], while acting as
an investment adviser within the meaning of Section 202(11) of the Advisers Act [15 U.S.C. § 80b2(11)], by use of the mails or any means or instrumentality of interstate commerce, directly or
indirectly:
(a)

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

(b)

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

IV.
IT IS HEREBY FURTHER 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 Final Judgment by personal service or

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otherwise are permanently restrained and enjoined from violating Sections 206(4) of the Advisers
Act [15 U.S.C. §§80b-6(4)] and Rule 206(4)-8 promulgated thereunder [17 C.F.R. §§275.206(4)-8],
while acting as investment advisers within the meaning of Section 202(11) of the Advisers Act [15
U.S.C. § 80b-2(11)], by use of the mails or any means or instrumentality of interstate commerce,
directly or indirectly, to make any untrue statement of a material fact or to omit to state a material
fact necessary to make the statements made, in light of the circumstances under which they are
made, not misleading, to any investor or prospective investor in a pooled investment vehicle or
otherwise engage in any act, practice, or course of business that is fraudulent, deceptive, or
manipulative with respect to any investor or prospective investor in the pooled investment vehicle.

V.
IT IS HEREBY FURTHER ORDERED, Adjudged, And Decreed that Defendant is liable
for disgorgement of $1.24 million, representing profits gained as a result of the conduct alleged in
the Complaint, together with prejudgment interest thereon in the amount of $290,129, and a civil
penalty of $130,000, for a total monetary judgment amount of $1,660,129. 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 ten days
following entry of this Final Judgment. In response to any such civil contempt motion by the
Commission, the defendant may assert any legally permissible defense. Payments under this
paragraph shall be made to the Clerk of this Court, together with a cover letter identifying James
E. Putman as a defendant in this action; setting forth the title and civil action number of this action
and the name of this Court; and specifying that payment is made pursuant to this Final Judgment.
Defendant shall simultaneously transmit photocopies of each such payment and letter to the

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Commission’s counsel in this action. Defendant relinquishes all legal and equitable right, title, and
interest in such payments, and no part of the funds shall be returned to Defendant. The Clerk shall
deposit the funds into an interest bearing account with the Court Registry Investment System
(ACRIS) or any other type of interest bearing account that is utilized by the Court. These funds,
together with any interest and income earned thereon (collectively, the “Fund”), shall be held in the
interest bearing account until further order of the Court. In accordance with 28 U.S.C. § 1914 and
the guidelines set by the Director of the Administrative Office of the United States Courts, the Clerk
is directed, without further order of this Court, to deduct from the income earned on the money in
the Fund a fee equal to ten percent of the income earned on the Fund. Such fee shall not exceed
that authorized by the Judicial Conference of the United States. The Commission may propose a
plan to distribute the Fund subject to the Court’s approval. Defendant shall pay post-judgment
interest on any delinquent amounts pursuant to 28 USC § 1961.

VI.
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

18th

day of May, 2012.

s/ William C. Griesbach
WILLIAM C. GRIESBACH
U.S. DISTRICT JUDGE

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