SEC v. Frederick L. Sharp; Zhiying Yvonne Gasarch; Courtney Kelln; Mike K. Veldhuis; Paul Sexton; Jackson T. Friesen, et al., No. 1:21-cv-11276, District of Massachusetts (June 26, 2024) — Judgment
raw: On September 27, 2023, the jury in this matter found
On September 27, 2023, the jury in this matter found, No. 1:21-cv-11276 (June 26, 2024)
Jackson T. Friesen was found liable by a jury for securities fraud and violations of the Securities Act and Exchange Act, resulting in a permanent injunction and significant financial penalties.
A jury found defendant Jackson T. Friesen liable for violating multiple sections of the Securities Act of 1933 and the Securities Exchange Act of 1934. The court imposed a civil penalty of $1,562,603 and a disgorgement cap of $11,846,176, totaling a $13,408,779 obligation. The judgment also includes a permanent injunction against future fraudulent securities transactions and violations of Section 10(b) and Section 17(a).
In a civil action brought by the SEC, a jury found defendant Jackson T. Friesen liable for violating various provisions of the Securities Act of 1933 and the Securities Exchange Act of 1934, including schemes to defraud and failure to disclose beneficial ownership. The U.S. District Court for the District of Massachusetts entered a partial judgment against Friesen, imposing a permanent injunction to prevent future fraudulent securities transactions and misrepresentations. The financial terms of the judgment include a civil penalty of $1,562,603 and a disgorgement cap of $11,846,176, amounting to a total payment obligation of $13,408,779. Additionally, the court restricted Friesen from participating in certain securities offerings and prohibited the use of any device or artifice to defraud. While the monetary penalties and injunctive relief were established, the court held the issues of prejudgment interest under advisement. The judgment also binds Friesen's agents and employees from participating in similar violations.
Extracted insights
- $42.50M $42,503,547 $10M–$100M
- $13.41M $13,408,779 $10M–$100M
- $11.85M $11,846,176 $10M–$100M
- $1.56M $1,562,603 $1M–$10M
- person under advisement
- The Jury Found Liable Defendant Jackson T. Friesen for violating Sections 5(a), 5(c), 17(a)(1) and 17(a)(3) of the Securities Act of 1933 and Sections 10(b) and 13(d) of the Securities Exchange Act of 1934 and Rules 10b-5(a) and (c) and 13d-1 thereunder
- The Court Imposed Injunctive Relief and Civil Penalty On Friesen
- The Court Held Issues of Disgorgement and Prejudgment Interest Under Advisement
- The Court Entered Partial Judgment As Follows
- The Court Ordered, Adjudged, and Decreed Defendant is Permanently Restrained and Enjoined from Violating Section 10(b) of the Securities Exchange Act of 1934 and Rule 10b-5 Promulgated Thereunder
- The Court Ordered, Adjudged, and Decreed The Foregoing Paragraph Also Binds Defendant’s Officers, Agents, Servants, Employees, and Attorneys and Other Persons in Active Concert or Participation with Defendant
- The Court Further Ordered, Adjudged, and Decreed Defendant is Permanently Restrained and Enjoined from Violating Section 17(a) of the Securities Act of 1933 in the Offer or Sale of Any Security
1
UNITED STATES DISTRICT COURT
DISTRICT OF MASSACHUSETTS
___________________________________
)
SECURITIES AND EXCHANGE )
COMMISSION, )
)
Plaintiff, )
)
v. ) CIVIL ACTION
) NO. 21-11276-WGY
FREDERICK L. SHARP, )
ZHIYING YVONNE GASARCH, )
COURTNEY KELLN, )
MIKE K. VELDHUIS, )
PAUL SEXTON, )
JACKSON T. FRIESEN, )
WILLIAM T. KAITZ, )
AVTAR S. DHILLON, and )
GRAHAM R. TAYLOR, )
)
Defendants. )
)
___________________________________)
YOUNG, D.J. June 20, 2024
JUDGMENT AS TO DEFENDANT JACKSON T. FRIESEN
On September 27, 2023, the jury in this matter found
Defendant Jackson T. Friesen (“Defendant” or “Friesen”) liable
for violating Sections 5(a), 5(c), 17(a)(1) and 17(a)(3) of the
Securities Act of 1933 and Sections 10(b) and 13(d) of the
Securities Exchange Act of 1934 and Rules 10b-5(a) and (c) and
13d-1 thereunder. On May 8, 2024, the Court, at a hearing,
imposed injunctive relief and a civil penalty on Friesen that is
incorporated into this judgment. The Court held the issues of
disgorgement and prejudgment interest under advisement.
2
Accordingly, the Court enters partial Judgment as follows:
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)
3
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 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)
4
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 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
5
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 FURTHER ORDERED, ADJUDGED, AND DECREED that Defendant
is permanently restrained and enjoined from violating, directly or
indirectly, Section 13(d) of the Exchange Act [15 U.S.C. § 78j(b)]
and Rule 13d-1 promulgated thereunder [17 C.F.R. § 240.13d- 1], by
failing to file with the Commission a statement containing the
information required by Schedule 13D (as provided in 17 C.F.R.
§240.13d-101), within ten days after acquiring directly or
indirectly beneficial ownership of more than five percent of any
equity security of a class which is specified in Exchange Act Rule
13d-1(I) [17 C.F.R. § 240.13d-1(i)].
IT IS FURTHER ORDERED, ADJUDGED, AND DECREED that, as
6
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 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 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].
VI.
IT IS FURTHER ORDERED, ADJUDGED, AND DECREED that pursuant
to Section 21(d)(5) of the Exchange Act [15 U.S.C. § 78u(d)(5)],
Defendant is permanently restrained and enjoined from directly or
indirectly, including, but not limited to, through an entity
owned or controlled by him, participating in the issuance,
purchase, offer, or sale of any security; provided, however, that
such injunction shall not prevent Defendant from purchasing or
selling securities listed on a national securities exchange for
7
his own personal account.
VII.
IT IS FURTHER ORDERED, ADJUDGED, AND DECREED that (i)
Defendant is jointly and severally liable with co-Defendants
Frederick L. Sharp, Paul Sexton, and Mike K. Veldhuis for
disgorgement of $42,503,547.00, with the amount to be disgorged
from Defendant to not exceed $11,846,176.00, representing
profits gained as a result of the conduct on which he was found
liable, and (ii) Defendant is liable for a civil penalty in the
amount of $1,562,603.00 pursuant to Section 21(d) of the
Exchange Act [15 U.S.C. § 78u]. The Court does not award
prejudgment interest. Defendant shall satisfy this obligation
by paying $13,408,779.00 to the Securities and Exchange
Commission within 30 days after entry of this 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
8
Boulevard Oklahoma
City, OK 73169
and shall be accompanied by a letter identifying the case title,
civil action number, and name of this Court; Jackson Friesen 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 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 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
9
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
he is entitled to, nor shall he 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
10
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.
VIII.
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. Further, the asset
freeze order imposed by Paragraph I of this Court’s Order dated
October 7, 2021 shall continue in full force and effect until
the monetary obligation imposed by this Judgment is paid in
full.
IX.
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.
SO ORDERED.
_/s/ William G. Young
WILLIAM G. YOUNG
DISTRICT JUDGE1
UNITED STATES DISTRICT COURT
DISTRICT OF MASSACHUSETTS
___________________________________
)
SECURITIES AND EXCHANGE )
COMMISSION, )
)
Plaintiff, )
)
v. ) CIVIL ACTION
) NO. 21-11276-WGY
FREDERICK L. SHARP, )
ZHIYING YVONNE GASARCH, )
COURTNEY KELLN, )
MIKE K. VELDHUIS, )
PAUL SEXTON, )
JACKSON T. FRIESEN, )
WILLIAM T. KAITZ, )
AVTAR S. DHILLON, and )
GRAHAM R. TAYLOR, )
)
Defendants. )
)
___________________________________)
YOUNG, D.J. June 20, 2024
JUDGMENT AS TO DEFENDANT JACKSON T. FRIESEN
On September 27, 2023, the jury in this matter found
Defendant Jackson T. Friesen (“Defendant” or “Friesen”) liable
for violating Sections 5(a), 5(c), 17(a)(1) and 17(a)(3) of the
Securities Act of 1933 and Sections 10(b) and 13(d) of the
Securities Exchange Act of 1934 and Rules 10b-5(a) and (c) and
13d-1 thereunder. On May 8, 2024, the Court, at a hearing,
imposed injunctive relief and a civil penalty on Friesen that is
incorporated into this judgment. The Court held the issues of
disgorgement and prejudgment interest under advisement.
Case 1:21-cv-11276-WGY Document 497 Filed 06/20/24 Page 1 of 10
2
Accordingly, the Court enters partial Judgment as follows:
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)
Case 1:21-cv-11276-WGY Document 497 Filed 06/20/24 Page 2 of 10
3
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 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)
Case 1:21-cv-11276-WGY Document 497 Filed 06/20/24 Page 3 of 10
4
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 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
Case 1:21-cv-11276-WGY Document 497 Filed 06/20/24 Page 4 of 10
5
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 FURTHER ORDERED, ADJUDGED, AND DECREED that Defendant
is permanently restrained and enjoined from violating, directly or
indirectly, Section 13(d) of the Exchange Act [15 U.S.C. § 78j(b)]
and Rule 13d-1 promulgated thereunder [17 C.F.R. § 240.13d- 1], by
failing to file with the Commission a statement containing the
information required by Schedule 13D (as provided in 17 C.F.R.
§240.13d-101), within ten days after acquiring directly or
indirectly beneficial ownership of more than five percent of any
equity security of a class which is specified in Exchange Act Rule
13d-1(I) [17 C.F.R. § 240.13d-1(i)].
IT IS FURTHER ORDERED, ADJUDGED, AND DECREED that, as
Case 1:21-cv-11276-WGY Document 497 Filed 06/20/24 Page 5 of 10
6
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 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 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].
VI.
IT IS FURTHER ORDERED, ADJUDGED, AND DECREED that pursuant
to Section 21(d)(5) of the Exchange Act [15 U.S.C. § 78u(d)(5)],
Defendant is permanently restrained and enjoined from directly or
indirectly, including, but not limited to, through an entity
owned or controlled by him, participating in the issuance,
purchase, offer, or sale of any security; provided, however, that
such injunction shall not prevent Defendant from purchasing or
selling securities listed on a national securities exchange for
Case 1:21-cv-11276-WGY Document 497 Filed 06/20/24 Page 6 of 10
7
his own personal account.
VII.
IT IS FURTHER ORDERED, ADJUDGED, AND DECREED that (i)
Defendant is jointly and severally liable with co-Defendants
Frederick L. Sharp, Paul Sexton, and Mike K. Veldhuis for
disgorgement of $42,503,547.00, with the amount to be disgorged
from Defendant to not exceed $11,846,176.00, representing
profits gained as a result of the conduct on which he was found
liable, and (ii) Defendant is liable for a civil penalty in the
amount of $1,562,603.00 pursuant to Section 21(d) of the
Exchange Act [15 U.S.C. § 78u]. The Court does not award
prejudgment interest. Defendant shall satisfy this obligation
by paying $13,408,779.00 to the Securities and Exchange
Commission within 30 days after entry of this 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
Case 1:21-cv-11276-WGY Document 497 Filed 06/20/24 Page 7 of 10
8
Boulevard Oklahoma
City, OK 73169
and shall be accompanied by a letter identifying the case title,
civil action number, and name of this Court; Jackson Friesen 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 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 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
Case 1:21-cv-11276-WGY Document 497 Filed 06/20/24 Page 8 of 10
9
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
he is entitled to, nor shall he 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
Case 1:21-cv-11276-WGY Document 497 Filed 06/20/24 Page 9 of 10
10
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.
VIII.
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. Further, the asset
freeze order imposed by Paragraph I of this Court’s Order dated
October 7, 2021 shall continue in full force and effect until
the monetary obligation imposed by this Judgment is paid in
full.
IX.
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.
SO ORDERED.
_/s/ William G. Young
WILLIAM G. YOUNG
DISTRICT JUDGE
Case 1:21-cv-11276-WGY Document 497 Filed 06/20/24 Page 10 of 10