SEC v. ABRAXAS J. DISCALA, No. 1:14-cv-04346, Eastern District of New York (Sept. 20, 2024) — Judgment

1
UNITED STATES DISTRICT COURT
EASTERN DISTRICT OF NEW YORK
________________________________________________
:
SECURITIES AND EXCHANGE COMMISSION, :
:
Plaintiff,   :
: 14 CIV. 4346 (ENV) (RML)
-against-     : ECF CASE
:
ABRAXAS J. DISCALA, :
MARC E. WEXLER, :
MATTHEW A. BELL, :
CRAIG L. JOSEPHBERG,  :
IRA SHAPIRO, :
MICHAEL T. MORRIS,  :
RONALD M. HEINEMAN, and :
DARREN L. OFSINK, :
:
Defendants.      :
________________________________________________:
[P
ROPOSED] FINAL JUDGMENT AS TO DEFENDANT ABRAXAS J. DISCALA

The Securities and Exchange Commission having filed a Complaint and Defendant
Abraxas J. DiScala 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 Final Judgment;
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

2
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 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 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

3
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 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  I.
IT IS HEREBY ORDERED, ADJUDGED, AND DECREED that Defendant is
permanently restrained and enjoined from violating, directly or indirectly, Section 9(a) of the
Exchange Act [15 U.S.C. § 78i(a)], by using any means or instrumentality of interstate
commerce, or of the mails, or of any facility of any national securities exchange, for the purpose
of creating a false or misleading appearance of active trading in, or a false and misleading
appearance with respect to the market by:
(a)effecting transactions in securities which involve no change in the beneficial
ownership thereof;
(b)entering an order or orders for the purchase of securities 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 securities had been or would be
entered by or for the same or different parties; or

4
(c)entering an order or orders for the sale of securities 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 securities had been or would be
entered by or for the same or different parties.
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).
IV.
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

5
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 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).
V.
IT IS HEREBY FURTHER ORDERED, ADJUDGED, AND DECREED that
Defendant is liable for disgorgement of $2,412,748, representing his ill-gotten gains as a result of
the conduct alleged in the Complaint, together with prejudgment interest in the amount of
$364,867.12.  However, Defendant’s obligation to pay disgorgement and prejudgment interest
shall be deemed satisfied upon entry of this Final Judgment by the order of restitution entered
against him in United States v. DiScala, et al., 14 Cr. 399 (E.D.N.Y.) (Dkt. No. 861).
VI.
IT IS HEREBY FURTHER ORDERED, ADJUDGED, AND DECREED that
Defendant is permanently barred 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

6
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 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, 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).
IX.
I
T IS FURTHER ORDERED, ADJUDGED, AND DECREED that the Consent is
incorporated herein with the same force and effect as if fully set forth herein.
X.
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.

7
____________________________________
UNITED STATES DISTRICT JUDGE
XI.
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 Final Judgment forthwith and without further notice.
Dated:  ______________, _____
September  132024
/s/ Eric N. Vitaliano
The Clerk of Court is directed to clo
se this case.

UNITEDSTATESDISTRICTCOURT
EASTERNDISTRICTOFNEWYORK
SECURITIESANDEXCHANGECOMMISSION,
Plaintiff,
-against-
ABRAXASJ.DISCALA,
MARCE.WEXLER,
MATTHEWA.BELL,
CRAIGL.JOSEPHBERG,
IRASHAPIRO,
MICHAELT.MORRIS,
RONALDM.HEINEMAN,and
DARRENL.OFSINK,
Defendants.
14CIV.4346(ENV)(RML)
ECF CASE
CONSENTOF DEFENDANTABRAXASJ.DISCALA
I.DefendantAbraxasJ.DiScala("Defendant")acknowledgeshavingbeenserved
withthecomplaintinthisaction,entersageneralappearance,andadmitstheCourt'sjurisdiction
overDefendantand overthesubjectmatterofthisaction.
2.Defendanthaspleadedguiltytocriminalconductrelatingtocertainmatters
allegedinthecomplaintinthisaction.Specifically,inUnitedStatesv.DiScalaetal.,14cr.399
(E.D.N.Y.),afterajurytrial,Defendantwasfoundguilty ontwocountsofsecuritiesand wire
fraudconspiracy,twocountsofsecuritiesfraud,andfourcountsofwirefraudinviolation of18
U.S.C.§§371,1342,1343,1349and15U.S.C.§§78j(b),78ff.ThisConsentshallremainin
fullforceandeffectregardlessoftheexistenceoroutcomeofanyfurtherproceedingsinUnited
Statesv.DiScalaetal.

3.DefendantherebyconsentstotheentryofthefinalJudgmentintheformattached
hereto(the"FinalJudgment")andincorporated byreferenceherein,which,amongotherthings:
(a)permanentlyrestrainsandenjoinsDefendant fromviolationofSections5(a),5(c),andl7(a)
oftheSecuritiesActof1933 ("SecuritiesAct") [15U.S.C.§§77e(a),77e(c),and 77q(a)]and
Sections9(a)andl0(b)oftheSecuritiesExchangeActof1934(the"ExchangeAct") [15U.S.C.
§§ 78i(a)and78j(b)]andRulel0b-5promulgatedthereunder[17C.F.R.§240.l0b-5];
(b)ordersthatDefendantisliablefordisgorgementintheamountof$2,412,748and
prejudgmentinterestintheamountof$364,867.12,whichwillbedeemedsatisfiedbytheorder
ofrestitutionenteredagainsthiminUnitedStatesv.DiScalaetal.,Crim.  14er.399(E.D.N.Y)
(Dkt.No.861);(c)permanentlybarshimfromparticipatinginanofferingofpennystock,
includingengaginginactivitieswithabroker,dealer,orissuerforpurposesofissuing,trading,
orinducingorattemptingtoinducethepurchaseorsaleofanypennystock;and(d)permanently
barshimfromactingasanofficerordirectorofanissuerthathasaclassofsecuritiesregistered
pursuanttoSection12oftheExchangeActorthatisrequiredto filereportspursuanttoSection
15(d)oftheExchangeAct.
4.Defendantwaivestheentryoffindingsoffactandconclusionsoflawpursuantto
Rule52 oftheFederalRulesofCivilProcedure.
5.Defendantwaivestheright,ifany,toajurytrialandtoappealfromtheentryof
theFinalJudgment.
6.DefendantentersintothisConsentvoluntarilyandrepresentsthatnothreats,
offers,promises,orinducementsofanykindhavebeenmadebytheCommission orany
member,officer,employee,agent,orrepresentativeoftheCommissiontoinduce Defendantto
enterintothisConsent.
2

7.Defendantagreesthatthis ConsentshallbeincorporatedintotheFinalJudgment
withthesameforceandeffectasiffullysetforththerein.
8.DefendantwillnotopposetheenforcementoftheFinalJudgmentontheground,
ifanyexists,thatitfailstocomplywithRule65(d)oftheFederalRulesofCivilProcedure,and
hereby waivesanyobjectionbasedthereon.
9.Defendantwaives serviceoftheFinalJudgmentandagreesthatentryoftheFinal
JudgmentbytheCourtand filingwiththeClerk oftheCourtwillconstitutenoticetoDefendant
ofitstermsandconditions.Defendant furtheragreesto provide counselfortheCommission,
withinthirty daysaftertheFinalJudgmentisfiledwiththeClerk oftheCourt,withanaffidavit
ordeclarationstatingthatDefendanthasreceivedand reada copyoftheFinalJudgment.
I0.Consistentwith17C.F.R.§202.5(f),thisConsentresolvesonlytheclaims
assertedagainstDefendant inthiscivilproceeding.Defendantacknowledgesthatno promiseor·
representationhasbeenmadebytheCommissionoranymember,officer,employee,agent,or
representativeoftheCommissionwithregardtoanycriminalliabilitythatmayhave arisenor
mayarisefromthefactsunderlyingthisaction orimmunityfromanysuchcriminalliability.
DefendantwaivesanyclaimofDoubleJeopardybased uponthesettlementofthisproceeding,
includingtheimpositionofany remedyorcivilpenalty herein.Defendantfurtheracknowledges
thattheCourt'sentryofapermanentinjunctionmay have collateralconsequencesunderfederal
orstatelawandtherulesandregulationsofself-regulatoryorganizations,licensingboards,and
otherregulatoryorganizations.Suchcollateralconsequencesinclude,butarenotlimitedto,a
statutorydisqualificationwithrespect tomembershiporparticipationin,orassociationwitha
memberof,aself-regulatoryorganization.Thisstatutorydisqualification hasconsequencesthat
areseparatefrom anysanctionimposedinanadministrativeproceeding.Inaddition,inany
3

disciplinary proceedingbeforetheCommissionbasedontheentryoftheinjunctioninthis
action,Defendantunderstandsthatheshallnotbepermittedtocontestthefactualallegationsof
the complaintinthisaction.
11.Defendantunderstandsandagreestocomplywiththetermsof17C.F.R.
§202.5(e),which providesinpartthatitistheCommission'spolicy"nottopermitadefendant
or respondenttoconsenttoajudgmentororderthatimposesasanctionwhiledenyingthe
allegationsinthecomplaintororderforproceedings."AspartofDefendant'sagreementto
complywiththetermsofSection202.5(e),Defendantacknowledgestheguiltypleaforrelated
conductdescribedinparagraph2above,and:(i)willnottakeanyaction ormakeorpennitto be
madeanypublicstatementdenying,directlyorindirectly,anyallegationinthecomplaintor
creatingtheimpressionthatthecomplaintiswithoutfactualbasis;(ii)willnotmakeorpennitto
bemadeany publicstatementtotheeffectthatDefendantdoesnotadmitthe allegationsofthe
complaint,orthat thisConsentcontainsnoadmissionoftheallegations;(iii)uponthefilingof
thisConsent,Defendantherebywithdrawsany papersfiledinthisactiontotheextentthat they
denyanyallegationinthecomplaint;and(iv)stipulatesforpurposesofexceptionstodischarge
setforthinSection523oftheBankruptcyCode,11U.S.C.§523,that theallegationsinthe
complaintaretrue,andfurther,thatany debtfordisgorgement,prejudgmentinterest,civil
penaltyorotheramountsduebyDefendantundertheFinalJudgmentorany otherjudgment,
order,consentorder,decreeorsettlementagreemententeredinconnectionwiththisproceeding,
isadebtfortheviolationbyDefendantofthefederalsecuritieslawsoranyregulationororder
issued undersuchlaws,assetforthinSection523(a)(19)oftheBankruptcyCode,11U.S.C.
§523(a)(l9).IfDefendantbreachesthisagreement,theCommissionmaypetitiontheCourtto
vacatetheFinalJudgmentandrestorethisactiontoitsactivedocket.Nothinginthisparagraph
4

affectsDefendant's:(i)testimonialobligations;or(ii)right totakelegalorfactualpositionsin
litigation orotherlegalproceedingsinwhichtheCommissionisnotaparty.
12.Defendantherebywaivesanyrights undertheEqualAccesstoJusticeAct,the
SmallBusinessRegulatoryEnforcementFairnessActof1996,orany otherprovision oflawto
seekfromtheUnitedStates,oranyagency,orany officialoftheUnitedStatesactinginhisor
herofficialcapacity,directlyorindirectly,reimbursementofattorney'sfeesorotherfees,
expenses,orcostsexpended byDefendanttodefendagainstthisaction.Forthesepurposes,
DefendantagreesthatDefendantis nottheprevailingpartyinthisactionsincetheparties have
reachedagood faithsettlement.
13.DefendantagreesthattheCommissionmaypresent theFinalJudgmenttothe
Courtforsignatureandentrywithout furthernotice.
5

14.DefendantagreesthatthisCourtshallretainjurisdictionoverthis matterforthe
purposeofenforcingthetermsoftheFinalJudgment.
Dated:.$/3/2r
TTAbraxas J.DiScala
o»luau,k0_,2o4./lbayasbiscodlo.asrsontowtome.
personallyappe
1
ared beforeme andacknowledgedexe~utinheforegoingConsent.
,+tu),
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={i99l55jsfcommissionspires;1l,38\4080
-pause"qa
4
54-
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Approvedastoform:'air
[___,
AttorneyforDefendant
6

1 

UNITED STATES DISTRICT COURT 
EASTERN DISTRICT OF NEW YORK 
________________________________________________ 

: 
SECURITIES AND EXCHANGE COMMISSION, : 

: 
Plaintiff,   : 

: 14 CIV. 4346 (ENV) (RML)  
-against-     : ECF CASE  

: 
ABRAXAS J. DISCALA, : 
MARC E. WEXLER, : 
MATTHEW A. BELL, : 
CRAIG L. JOSEPHBERG,  : 
IRA SHAPIRO, : 
MICHAEL T. MORRIS,  : 
RONALD M. HEINEMAN, and : 
DARREN L. OFSINK, : 

: 
Defendants.   : 

________________________________________________: 

[PROPOSED] FINAL JUDGMENT AS TO DEFENDANT ABRAXAS J. DISCALA 

The Securities and Exchange Commission having filed a Complaint and Defendant 

Abraxas J. DiScala 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 Final Judgment; 

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 

Case 1:14-cv-04346-ENV-MMH   Document 68   Filed 09/13/24   Page 1 of 13 PageID #: 790



2 

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 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 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

Case 1:14-cv-04346-ENV-MMH   Document 68   Filed 09/13/24   Page 2 of 13 PageID #: 791



3 

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 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 HEREBY ORDERED, ADJUDGED, AND DECREED that Defendant is 

permanently restrained and enjoined from violating, directly or indirectly, Section 9(a) of the 

Exchange Act [15 U.S.C. § 78i(a)], by using any means or instrumentality of interstate 

commerce, or of the mails, or of any facility of any national securities exchange, for the purpose 

of creating a false or misleading appearance of active trading in, or a false and misleading 

appearance with respect to the market by: 

(a) effecting transactions in securities which involve no change in the beneficial

ownership thereof;

(b) entering an order or orders for the purchase of securities 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 securities had been or would be

entered by or for the same or different parties; or

Case 1:14-cv-04346-ENV-MMH   Document 68   Filed 09/13/24   Page 3 of 13 PageID #: 792



4 

(c) entering an order or orders for the sale of securities 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 securities had been or would be

entered by or for the same or different parties.

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). 

IV. 

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

Case 1:14-cv-04346-ENV-MMH   Document 68   Filed 09/13/24   Page 4 of 13 PageID #: 793



5 

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 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). 

V. 

IT IS HEREBY FURTHER ORDERED, ADJUDGED, AND DECREED that 

Defendant is liable for disgorgement of $2,412,748, representing his ill-gotten gains as a result of 

the conduct alleged in the Complaint, together with prejudgment interest in the amount of 

$364,867.12.  However, Defendant’s obligation to pay disgorgement and prejudgment interest 

shall be deemed satisfied upon entry of this Final Judgment by the order of restitution entered 

against him in United States v. DiScala, et al., 14 Cr. 399 (E.D.N.Y.) (Dkt. No. 861). 

VI. 

IT IS HEREBY FURTHER ORDERED, ADJUDGED, AND DECREED that 

Defendant is permanently barred 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 

Case 1:14-cv-04346-ENV-MMH   Document 68   Filed 09/13/24   Page 5 of 13 PageID #: 794



6 

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 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, 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). 

IX. 

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. 

X. 

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. 

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7 

____________________________________ 
UNITED STATES DISTRICT JUDGE 

XI. 

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 Final Judgment forthwith and without further notice. 

Dated:  ______________, _____ 

September  13 2024

/s/ Eric N. Vitaliano

The Clerk of Court is directed to close this case.  

Case 1:14-cv-04346-ENV-MMH   Document 68   Filed 09/13/24   Page 7 of 13 PageID #: 796



UNITED STATES DISTRICT COURT
EASTERN DISTRICT OF NEW YORK

SECURITIES AND EXCHANGE COMMISSION,

Plaintiff,

-against-

ABRAXAS J. DISCALA,
MARC E. WEXLER,
MATTHEW A. BELL,
CRAIG L. JOSEPHBERG,
IRA SHAPIRO,
MICHAEL T. MORRIS,
RONALD M. HEINEMAN, and
DARREN L. OFSINK,

Defendants.

14 CIV. 4346 (ENV) (RML)
ECF CASE

CONSENT OF DEFENDANT ABRAXAS J. DISCALA

I. Defendant Abraxas J. DiScala ("Defendant") acknowledges having been served

with 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 pleaded guilty to criminal conduct relating to certain matters

alleged in the complaint in this action. Specifically, in United States v. DiScala et al., 14 cr. 399

(E.D.N.Y.), after a jury trial, Defendant was found guilty on two counts of securities and wire

fraud conspiracy, two counts of securities fraud, and four counts of wire fraud in violation of 18

U.S.C. §§ 371, 1342, 1343, 1349 and 15 U.S.C. §§ 78j(b), 78ff. This Consent shall remain in

full force and effect regardless of the existence or outcome of any further proceedings in United

States v. DiScala et al.

Case 1:14-cv-04346-ENV-MMH   Document 68   Filed 09/13/24   Page 8 of 13 PageID #: 797



3. Defendant hereby consents to the entry of the final Judgment in the form attached

hereto (the "Final Judgment") and incorporated by reference herein, which, among other things:

(a) permanently restrains and enjoins Defendant from violation of Sections 5(a), 5(c), and l 7(a)

of the Securities Act of 1933 ("Securities Act") [15 U.S.C. §§ 77e(a), 77e(c), and 77q(a)] and

Sections 9(a) and l0(b) of the Securities Exchange Act of 1934 (the "Exchange Act") [15 U.S.C.

§§ 78i(a) and 78j(b)] and Rule l0b-5 promulgated thereunder [17 C.F.R. § 240.l0b-5];

(b) orders that Defendant is liable for disgorgement in the amount of $2,412,748 and

prejudgment interest in the amount of $364,867.12, which will be deemed satisfied by the order

ofrestitution entered against him in United States v. DiScala et al., Crim. 14 er. 399 (E.D.N.Y)

(Dkt. No. 861); (c) permanently bars him 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; and (d) permanently

bars him from acting as an officer or director of an issuer that has a class of securities registered

pursuant to Section 12 of the Exchange Act or that is required to file reports pursuant to Section

15(d) of the Exchange Act.

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

Rule 52 of the Federal Rules of Civil Procedure.

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

the Final Judgment.

6. 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.

2

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7. Defendant agrees that this Consent shall be incorporated into the Final Judgment

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

8. Defendant will not oppose the enforcement of the Final 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.

9. Defendant waives service of the Final Judgment and agrees that entry of the Final

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 Final 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 Final Judgment.

I 0. 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 injunction 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-regulatory organization. This statutory disqualification has consequences that

are separate from any sanction imposed in an administrative proceeding. In addition, in any

3

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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.

11. Defendant understands and agrees to comply with 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 pennit 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 pennit 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 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)(l 9). If Defendant breaches this agreement, the Commission may petition the Court to

vacate the Final Judgment and restore this action to its active docket. Nothing in this paragraph

4

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affects 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.

12. 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.

13. Defendant agrees that the Commission may present the Final Judgment to the

Court for signature and entry without further notice.

5

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

purpose of enforcing the terms of the Final Judgment.

Dated:. $/3/2r
T T Abraxas J. DiScala

o» luau,k 0 _,2o4. /lbayasbiscodlo .asrson tow to me.
personally appe

1
ared before me and acknowledged exe~utin he foregoing Consent.

,+tu),
,,, SA'I l11/ ~,,' ~\~ "~G // ~ -
o---$swE. )f 'a,l or NrWYOH'}'"m

? {{aa«aegc} .= otoo Poe ,L.4= {i99l55j sf commission spires; 1l,38\4080
- pause" qa454 -%01sw%%° /es
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i,"ssoee°Approved as to form: 'air

[ ___,

Attorney for Defendant

6

Case 1:14-cv-04346-ENV-MMH   Document 68   Filed 09/13/24   Page 13 of 13 PageID #: 802


	2024.05.08 DiScala Judgment
	2024.09.05 Discala signed consent