SEC v. Linda C. Knott, No. 4:23-cv-10017, Eastern District of Michigan (July 8, 2024) — Judgment

UNITED STATES DISTRICT COURT
EASTERN DISTRICT OF MICHIGAN
SOUTHERN DIVISION

UNITED STATES SECURITIES
AND EXCHANGE COMMISSION,
          Case No. 23-cv-10017
   Plaintiff,
             District Judge Shalina D. Kumar
   v.     Magistrate Elizabeth A. Stafford

NEIL S. CHANDRAN, et al.,

   Defendants.
_____________________________________/

FINAL JUDGMENT BY DEFAULT
AGAINST DEFENDANT LINDA C. KNOTT

 This matter having come before the Court on Plaintiff United States
Securities and Exchange Commission’s Motion for Default Judgment against
Linda C. Knott (the “Motion”), and the Court having considered the Motion, the
brief filed in support of the motion, the complaint, and the evidence, papers and
arguments presented therein:
I.
 It is hereby ORDERED that the Motion is GRANTED against Linda C.
Knott (“Knott” or “Defendant”).

II.
 It is hereby ORDERED, ADJUDGED, and DECREED that Knott 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).

III.
It is hereby further ORDERED, ADJUDGED, and DECREED that Knott
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).

IV.
It is hereby further ORDERED, ADJUDGED, and DECREED that Knott
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).
V.
It is hereby further ORDERED, ADJUDGED, and DECREED that,
pursuant to Section 21(d)(2) of the Exchange Act [15 U.S.C. § 78u(d)(2)] and
Section 20(e) of the Securities Act [15 U.S.C. § 77t(e)], 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)].
VI.
It is hereby further ORDERED, ADJUDGED, and DECREED that Knott
is liable for disgorgement of $108,171.77, representing net profits gained as a
result of the conduct alleged in the Complaint, together with prejudgment interest

thereon in the amount of $12,714.49, and a civil penalty in the amount of $223,229
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 $344,115.26 to  the Securities and Exchange Commission
within 30 days 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; Linda C. Knott as a defendant 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
Defendant.
The Commission may enforce the Court’s judgment for disgorgement and
prejudgment interest by using all collection procedures authorized by law,
including, but not limited to, moving for civil contempt at any time after 30 days
following entry of this Final Judgment.
The Commission may enforce the Court’s judgment for penalties by the use
of all collection procedures authorized by law, including the Federal Debt
Collection Procedures Act, 28 U.S.C. § 3001 et seq., and moving for civil
contempt for the violation of any Court orders issued in this action.   Defendant
shall pay post judgment interest on any amounts due after 30 days of the entry of
this Final Judgment pursuant to 28 U.S.C. § 1961.  The Commission 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 and the Fund may only be disbursed pursuant to an Order
of the Court.

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 she is
entitled to, nor shall she 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.

VII.
It is hereby 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.
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 Final Judgment
forthwith and without further notice.
Dated: June 3, 2024
s/Shalina D. Kumar
SHALINA D. KUMAR
UNITED STATES DISTRICT JUDGE

UNITED STATES DISTRICT COURT  
EASTERN DISTRICT OF MICHIGAN 

SOUTHERN DIVISION 
 
         
UNITED STATES SECURITIES     
AND EXCHANGE COMMISSION,   
          Case No. 23-cv-10017 
   Plaintiff,      
             District Judge Shalina D. Kumar 
   v.     Magistrate Elizabeth A. Stafford    
   
NEIL S. CHANDRAN, et al.,     
        
   Defendants.         
_____________________________________/ 
 

FINAL JUDGMENT BY DEFAULT  
AGAINST DEFENDANT LINDA C. KNOTT 

 
 This matter having come before the Court on Plaintiff United States 

Securities and Exchange Commission’s Motion for Default Judgment against 

Linda C. Knott (the “Motion”), and the Court having considered the Motion, the 

brief filed in support of the motion, the complaint, and the evidence, papers and 

arguments presented therein: 

I. 

 It is hereby ORDERED that the Motion is GRANTED against Linda C. 

Knott (“Knott” or “Defendant”). 

Case 4:23-cv-10017-SDK-EAS   ECF No. 41, PageID.255   Filed 06/03/24   Page 1 of 9



II.  

 It is hereby ORDERED, ADJUDGED, and DECREED that Knott 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). 

Case 4:23-cv-10017-SDK-EAS   ECF No. 41, PageID.256   Filed 06/03/24   Page 2 of 9



III. 

It is hereby further ORDERED, ADJUDGED, and DECREED that Knott 

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). 

Case 4:23-cv-10017-SDK-EAS   ECF No. 41, PageID.257   Filed 06/03/24   Page 3 of 9



IV. 

It is hereby further ORDERED, ADJUDGED, and DECREED that Knott 

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 

Case 4:23-cv-10017-SDK-EAS   ECF No. 41, PageID.258   Filed 06/03/24   Page 4 of 9



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). 

V. 

It is hereby further ORDERED, ADJUDGED, and DECREED that, 

pursuant to Section 21(d)(2) of the Exchange Act [15 U.S.C. § 78u(d)(2)] and 

Section 20(e) of the Securities Act [15 U.S.C. § 77t(e)], 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)].  

VI. 

It is hereby further ORDERED, ADJUDGED, and DECREED that Knott 

is liable for disgorgement of $108,171.77, representing net profits gained as a 

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

Case 4:23-cv-10017-SDK-EAS   ECF No. 41, PageID.259   Filed 06/03/24   Page 5 of 9



thereon in the amount of $12,714.49, and a civil penalty in the amount of $223,229 

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 $344,115.26 to the Securities and Exchange Commission 

within 30 days 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; Linda C. Knott as a defendant 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 

Case 4:23-cv-10017-SDK-EAS   ECF No. 41, PageID.260   Filed 06/03/24   Page 6 of 9



right, title, and interest in such funds and no part of the funds shall be returned to 

Defendant. 

The Commission may enforce the Court’s judgment for disgorgement and 

prejudgment interest by using all collection procedures authorized by law, 

including, but not limited to, moving for civil contempt at any time after 30 days 

following entry of this Final Judgment. 

The Commission may enforce the Court’s judgment for penalties by the use 

of all collection procedures authorized by law, including the Federal Debt 

Collection Procedures Act, 28 U.S.C. § 3001 et seq., and moving for civil 

contempt for the violation of any Court orders issued in this action.   Defendant 

shall pay post judgment interest on any amounts due after 30 days of the entry of 

this Final Judgment pursuant to 28 U.S.C. § 1961.  The Commission 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 and the Fund may only be disbursed pursuant to an Order 

of the Court.    

Case 4:23-cv-10017-SDK-EAS   ECF No. 41, PageID.261   Filed 06/03/24   Page 7 of 9



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 she is 

entitled to, nor shall she 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. 

Case 4:23-cv-10017-SDK-EAS   ECF No. 41, PageID.262   Filed 06/03/24   Page 8 of 9



VII. 

It is hereby 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.  

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 Final Judgment 

forthwith and without further notice. 

Dated: June 3, 2024 

s/Shalina D. Kumar 
SHALINA D. KUMAR 
UNITED STATES DISTRICT JUDGE 

Case 4:23-cv-10017-SDK-EAS   ECF No. 41, PageID.263   Filed 06/03/24   Page 9 of 9


	UNITED STATES DISTRICT COURT
	EASTERN DISTRICT OF MICHIGAN
	SOUTHERN DIVISION