Lr20508 Ljk Pi
Lr20508 Ljk Pi, No. 3:06-CV-06384-MHP (Mar. 24, 2008)
summary
L. John Kern consented to a permanent injunction without admitting or denying allegations, agreeing to prohibitions against securities fraud, falsifying books and records, and interfering with auditors, and was ordered to pay $472,496 in disgorgement and interest while being barred for five years from serving as an officer or director of any SEC-registered issuer.
paragraph
L. John Kern agreed to a permanent injunction prohibiting violations of Sections 10(b), 13(b)(5), and 13(a) of the Securities Exchange Act, including fraud, falsification of financial records, and interference with auditors. He was ordered to pay $472,496 in total disgorgement and prejudgment interest—$347,066 in ill-gotten gains and $125,430 in interest—via certified check to the SEC’s Office of Financial Management, with post-judgment interest accruing under 28 U.S.C. § 1961. Additionally, he was barred for five years from serving as an officer or director of any SEC-registered company, and the court retained jurisdiction to enforce compliance with the decree.
narrative
L. John Kern consented to a permanent injunction without admitting or denying the allegations in the SEC’s First Amended Complaint, waiving his right to appeal and findings of fact. The court permanently enjoined him from violating Sections 10(b), 13(b)(5), and 13(a) of the Securities Exchange Act, including engaging in fraud, falsifying books and records, circumventing internal controls, and interfering with or influencing auditors. He was ordered to disgorge $347,066 in ill-gotten gains plus $125,430 in prejudgment interest, totaling $472,496, payable via certified check or money order to the SEC’s Office of Financial Management, with post-judgment interest accruing under 28 U.S.C. § 1961. Kern was also barred for five years from serving as an officer or director of any SEC-registered issuer. The court retained jurisdiction to enforce the terms of the injunction, and Kern was required to comply within ten business days. The conduct underlying the injunction was part of a broader accounting fraud scheme involving material misstatements in public filings and deceptive practices toward auditors.
Classified accounting-fraud(confidence 100%). EDGAR detection: forms 10-K/10-Q/8-K/NT 10-K· recall 80% / precision 48%. detection rule →
Statutes
15 U.S.C. § 78j(b)15 U.S.C. § 78m(b)28 U.S.C. § 196115 U.S.C. § 78u(d)15 U.S.C. § 78l15 U.S.C. § 78o(d)17 C.F.R. § 240.10b-5Section 10(b) of the Securities Exchange ActRule 10b-5
Parties
Securities and Exchange Commission
Keywords
ljk
Extracted insights
Entities 2
- agency Securities and Exchange Commission
- organization Securities and Exchange Commission
Triples 5
- Securities and Exchange Commission filed a First Amended Complaint against L. John Kern and other defendants
- L. John Kern consented to the Court's jurisdiction over him personally and over the subject matter of this action
- L. John Kern waived findings of fact and conclusions of law and waived any right to appeal
- L. John Kern is permanently restrained and enjoined from violating Section 10(b) of the Securities Exchange Act of 1934 and Rule 10b-5
- L. John Kern is permanently restrained and enjoined from violating Section 13(b)(5) of the Exchange Act and Rules 13b2-1 and 13b2-2
PDF
Text layers
Extracted body text (140c)
[OCR_UNRECOVERABLE method=prefilter reason=body_binary ts=2026-05-14T21:49:26.078Z]
OCR text (10,460c · tika · 95% conf)
1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 __________________________________________ __________________________________________ Case 3:06-cv-06384-CRB Document 92-3 Filed 03/24/2008 Page 1 of 5 LESLIE J. HUGHES (CO Bar No. 15043) [email protected] LEE C. ROBINSON (CO Bar No. 32734) [email protected] Attorneys for Plaintiff U.S. Securities and Exchange Commission 1801 California Street, Suite 1500 Denver, Colorado 80202-2656 Telephone: (303) 844-1000 Fax: (303) 844-1068 UNITED STATES DISTRICT COURT NORTHERN DISTRICT OF CALIFORNIA SAN FRANCISCO DIVISION SECURITIES AND EXCHANGE Case No. C 06-6384 CRB COMMISSION, Plaintiff, v. ROMULUS S. PEREIRA, ROBERT B. STANTON, L. JOHN KERN, ANDREW D. FELDMAN, WILLIAM F. McFARLAND, LORI H. CORNMESSER, Defendants. ORDER OF PERMANENT INJUNCTION AND OTHER RELIEF AGAINST L. JOHN KERN The Court finds that Plaintiff, Securities and Exchange Commission (“SEC”), has filed a First Amended Complaint; and Defendant L. John Kern has entered a general appearance, consented to the Court’s jurisdiction over him personally and over the subject matter of this action, consented to the entry of this Order of Permanent Injunction and Other Relief against L. John Kern (referred to as “Order of Permanent Injunction”) without admitting or denying the allegations of the First Amended Complaint (except as to jurisdiction), waived findings of fact Kern Permanent Injunction Case No. C 06-6384 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 Case 3:06-cv-06384-CRB Document 92-3 Filed 03/24/2008 Page 2 of 5 and conclusions of law, and waived any right to appeal from this Order of Permanent Injunction. I. IT IS ORDERED, ADJUDGED AND DECREED, that L. John Kern and his agents, servants, employees, attorneys, and all persons in active concert or participation with them who receive actual notice of this Order of Permanent Injunction 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 FURTHER ORDERED, ADJUDGED, AND DECREED that L. John Kern and his agents, servants, employees, attorneys, and all persons in active concert or participation with them who receive actual notice of this Order of Permanent Injunction by personal service or otherwise are permanently restrained and enjoined from violating, directly or indirectly, Section 13(b)(5) of the Exchange Act [15 U.S.C. § 78m(b)(5)] and Rules 13b2-1 and 13b2-2 promulgated thereunder [17 C.F.R. §§ 240.13b2-1 and 240.13b2-2] by: (a) knowingly circumventing or knowingly failing to implement a system of internal accounting controls, or knowingly falsifying any book, record or account described in Section 13(b)(2) of the Exchange Act [15 U.S.C. § 78m(b)(2)]; or 2 Kern Permanent Injunction Case No. C 06-6384 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 Case 3:06-cv-06384-CRB Document 92-3 Filed 03/24/2008 Page 3 of 5 (b) directly or indirectly falsifying or causing to be falsified any book, record or account subject to Section 13(b)(2)(A) of the Exchange Act [15 U.S.C. § 78m(b)(2)(A)]; or (c) directly or indirectly making or causing to be made a materially false or misleading statement, or omitting to state or causing another person to omit to state any material fact, to an accountant in connection with any audit, review or examination of the financial statements of an issuer or company, or the preparation or filing of any document or report required to be filed with the Commission; or (d) directly or indirectly taking any action to coerce, manipulate, mislead, or fraudulently influence any independent public or certified public accountant engaged in the performance of an audit or review of financial statements of an issuer that are required to be filed with the Commission where that person knew or should have known that such action, if successful, could result in rendering the issuer’s financial statements materially misleading. III. IT IS FURTHER ORDERED, ADJUDGED, AND DECREED that L. John Kern and his agents, servants, employees, attorneys, and all persons in active concert or participation with them who receive actual notice of this Order of Permanent Injunction by personal service or otherwise are permanently restrained and enjoined from aiding and abetting any violation of Sections 13(a) and 13(b)(2)(A) of the Exchange Act [15 U.S.C. §§ 78m(a) and 78m(b)(2)(A)] and Rules 12b-20, 13a-1, and 13a-13 thereunder [17 C.F.R. §§ 240.12b-20, 240.13a-1, and 240.13a-13], by knowingly providing substantial assistance to an issuer that: (a) fails to file with the Commission such information, documents, or annual, quarterly or periodic reports that the Commission may require or prescribe pursuant to Section 13(a) of the Exchange Act or any of the rules, regulations or forms promulgated thereunder; or 3 Kern Permanent Injunction Case No. C 06-6384 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 Case 3:06-cv-06384-CRB Document 92-3 Filed 03/24/2008 Page 4 of 5 (b) files with the Commission any information, document, or report, that contains any untrue statement of a material fact, omits any material information, or otherwise fails to comply with the provisions of Section 13(a) of the Exchange Act or any of the rules, regulations or forms thereunder; or (c) fails to add or include, in addition to the information expressly required to be included in a statement or report, such further material information as may be necessary to make the required statements, in the light of the circumstances under which they were made, not misleading; or (d) fails to make and keep books, records, and accounts, which, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the issuer. IV. IT IS FURTHER ORDERED, ADJUDGED, AND DECREED that L. John Kern is liable for disgorgement of $347,066 (three hundred and forty-seven thousand and sixty-six dollars), representing profits gained as a result of the conduct alleged in the Complaint, together with prejudgment interest thereon in the amount of $125,430 (one hundred twenty-five thousand, four hundred and thirty dollars), for a total of $472,496 (four hundred and seventy-two thousand, four hundred and ninety six dollars). L. John Kern shall satisfy this obligation within ten business days after the date of entry of this Order of Permanent Injunction by the Clerk of this Court, by paying $472,496 (four hundred and seventy-two thousand, four hundred and ninety six dollars) by certified check, bank cashier’s check, or United States postal money order payable to the Securities and Exchange Commission. The payment shall be delivered or mailed to the Office of Financial Management, Securities and Exchange Commission, Operations Center, 6432 General Green Way, Mail Stop 0-3, Alexandria, Virginia 22312, together with a cover letter identifying L. John Kern 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 Order of Permanent Injunction. L. John Kern shall simultaneously transmit photocopies of such payment 4 Kern Permanent Injunction Case No. C 06-6384 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 ____________________________________ Case 3:06-cv-06384-CRB Document 92-3 Filed 03/24/2008 Page 5 of 5 and the transmittal letter to the Commission’s attorney in this action. The Commission shall remit the funds paid pursuant to this paragraph to the United States Treasury. V. IT IS FURTHER ORDERED, ADJUDGED, AND DECREED that L. John Kern shall pay post-judgment interest on any delinquent amounts pursuant to 28 U.S.C. § 1961. VI. 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)], ). L. John Kern is prohibited for five years following the date of entry of this Final Judgment 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)]. VII. March 24 IT IS FURTHER ORDERED, ADJUDGED, AND DECREED that the Consent of L. John Kern is incorporated herein with the same force and effect as if fully set forth herein, and that L. John Kern shall comply with all of the undertakings and agreements set forth therein. 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 Order for Permanent Injunction and Other Relief. Dated: ____________________, 2008 Charles R. Breyer UNITED STATES DISTRICT JUDGE U N IT ED ST ATES DISTRICT COU R T N O R T H ERN DISTRICT OF CA LI FO R N IA IT IS SO ORDERED Judge Charles R. Breyer 5 Kern Permanent Injunction Case No. C 06-6384