SEC v. Harmel S. Rayat, No. 1:21-cv-04777, Southern District of New York (Feb. 27, 2024) — Judgment

1
UNITED STATES DISTRICT COURT
SOUTHERN DISTRICT OF NEW YORK
SECURITIES AND EXCHANGE
COMMISSION,
Plaintiff,
v. No. 1:21-cv-04777-LJL
HARMEL S. RAYAT,
RENOVACARE, INC., JATINDER
BHOGAL, JEETENDERJIT SINGH
SIDHU, and SHARON FLEMING,
Defendants,

and
TREADSTONE FINANCIAL
GROUP LTD., TREADSTONE
FINANCIAL GROUP LLC,
BLACKBRIAR ASSET
MANAGEMENT LTD., and
1420527 ALBERTA LTD.,
Relief Defendants.
FINAL JUDGMENT AS TO DEFENDANT HARMEL S. RAYAT
The Securities and Exchange Commission having filed an Amended Complaint, and
Defendant Harmel S. Rayat (“Defendant” or “Rayat”) 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 without admitting or denying the allegations of the
Amended Complaint (except as to jurisdiction and except as otherwise provided herein); waived
findings of fact and conclusions of law; and waived any right to appeal from this Final Judgment:

2
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 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;

3
(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 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 FURTHER ORDERED, ADJUDGED, AND DECREED that Defendant
is permanently restrained and enjoined from violating Section 20(b) of the Exchange Act [15
U.S.C. § 78t(b)] by doing, directly or indirectly, any act or thing which it would be unlawful for
him to do under the provisions of the Exchange Act or any rule or regulation thereunder through
or by means of any other 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).
IV.
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)] and Section 20(e) of the Securities Act [15
U.S.C. § 77t(e)], Defendant is permanently prohibited from acting as an officer or director of any

4
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)].
V.
IT
IS HEREBY FURTHER ORDERED, ADJUDGED, AND DECREED that Defendant
is  permanently barred from participating in any 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 HEREBY FURTHER ORDERED,
ADJUDGED, AND DECREED that Defendant
is  liable for disgorgement of $1,270,352, representing net profits gained as a result of the conduct
alleged in
 the Amended Complaint, together with prejudgment interest thereon in the amount of
$207,656.  Defendant is further liable for a civil penalty in the amount of $1,270,352 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 $2,748,360 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

5
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; Harmel S. Rayat 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.
Defendant shall pay post judgment interest on any  amounts due after 30 days of entry of this
Final Judgment pursuant to 28 U.S.C. § 1961.
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

6
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 Final 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 they are entitled to, nor shall they 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 Final 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 Amended Complaint in this
action.
VII.
I
T IS FURTHER ORDERED, ADJUDGED, AND DECREED that, solely for purposes of
exceptions to discharge set   forth in Section 523 of the Bankruptcy Code, 11 U.S.C. §523, the

7
I
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.
X.
The
re 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.
Da
ted:  ______________, _____
____________________________________
UNITED STATES DISTRICT JUDGE

allegations in the Amended 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).
VIII.
IT IS FURTHER ORDERED, ADJUDGED, AND DECREED that the Consent of
Defendant is incorporated herein with the same force and
effect as if fully set forth herein, and
that Defendant shall comply with all of the undertakings and agreements set   forth therein.
February 27
2024

1 

UNITED STATES DISTRICT COURT 
SOUTHERN DISTRICT OF NEW YORK 

SECURITIES AND EXCHANGE 
COMMISSION, 

Plaintiff, 

v. No. 1:21-cv-04777-LJL 

HARMEL S. RAYAT,  
RENOVACARE, INC., JATINDER 
BHOGAL, JEETENDERJIT SINGH 
SIDHU, and SHARON FLEMING, 

Defendants, 

        and 

TREADSTONE FINANCIAL 
GROUP LTD., TREADSTONE 
FINANCIAL GROUP LLC, 
BLACKBRIAR ASSET 
MANAGEMENT LTD., and 
1420527 ALBERTA LTD., 

Relief Defendants. 

FINAL JUDGMENT AS TO DEFENDANT HARMEL S. RAYAT

The Securities and Exchange Commission having filed an Amended Complaint, and 

Defendant Harmel S. Rayat (“Defendant” or “Rayat”) 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 without admitting or denying the allegations of the 

Amended Complaint (except as to jurisdiction and except as otherwise provided herein); waived 

findings of fact and conclusions of law; and waived any right to appeal from this Final Judgment: 

Case 1:21-cv-04777-LJL   Document 267   Filed 02/27/24   Page 1 of 7



2 

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 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;

Case 1:21-cv-04777-LJL   Document 267   Filed 02/27/24   Page 2 of 7

http://www.google.com/search?q=FRCP+65(d)(2)
http://www.google.com/search?q=17+c.f.r.++240.10b-5
http://www.google.com/search?q=15+u.s.c.++78j(b)
http://www.google.com/search?q=15+u.s.c.++77q(a)


3 

(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 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 FURTHER ORDERED, ADJUDGED, AND DECREED that Defendant 

is permanently restrained and enjoined from violating Section 20(b) of the Exchange Act [15 

U.S.C. § 78t(b)] by doing, directly or indirectly, any act or thing which it would be unlawful for 

him to do under the provisions of the Exchange Act or any rule or regulation thereunder through 

or by means of any other 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). 

IV. 

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)] and Section 20(e) of the Securities Act [15 

U.S.C. § 77t(e)], Defendant is permanently prohibited from acting as an officer or director of any 

Case 1:21-cv-04777-LJL   Document 267   Filed 02/27/24   Page 3 of 7

http://www.google.com/search?q=FRCP+65(d)(2)
http://www.google.com/search?q=FRCP+65(d)(2)
http://www.google.com/search?q=15++u.s.c.++78t(b)
http://www.google.com/search?q=15++u.s.c.++78t(b)
http://www.google.com/search?q=15+u.s.c.++78u(d)(2)
http://www.google.com/search?q=15++u.s.c.++77t(e)
http://www.google.com/search?q=15++u.s.c.++77t(e)


4 

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)]. 

V. 

IT IS HEREBY FURTHER ORDERED, ADJUDGED, AND DECREED that Defendant 

is permanently barred from participating in any 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 HEREBY FURTHER ORDERED, ADJUDGED, AND DECREED that Defendant 

is liable for disgorgement of $1,270,352, representing net profits gained as a result of the conduct 

alleged in the Amended Complaint, together with prejudgment interest thereon in the amount of 

$207,656.  Defendant is further liable for a civil penalty in the amount of $1,270,352 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 $2,748,360 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 

Case 1:21-cv-04777-LJL   Document 267   Filed 02/27/24   Page 4 of 7

http://www.sec.gov/about/offices/ofm.htm
http://www.google.com/search?q=15u.s.c.++78l
http://www.google.com/search?q=15u.s.c.++78l
http://www.google.com/search?q=15++u.s.c.++78o(d)
http://www.google.com/search?q=15++u.s.c.++78o(d)
http://www.google.com/search?q=15+u.s.c.++77t(d)
http://www.google.com/search?q=15+u.s.c.++78u(d)(3)


5 

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; Harmel S. Rayat 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.  

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

Final Judgment pursuant to 28 U.S.C. § 1961.  

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 

Case 1:21-cv-04777-LJL   Document 267   Filed 02/27/24   Page 5 of 7

http://www.google.com/search?q=28+u.s.c.++1961
http://www.google.com/search?q=28+u.s.c.++3001
http://www.google.com/search?q=28+u.s.c.++1961


6 

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 Final 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 they are entitled to, nor shall they 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 Final 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 Amended Complaint in this 

action. 

VII. 

IT IS FURTHER ORDERED, ADJUDGED, AND DECREED that, solely for purposes of 

exceptions to discharge set forth in Section 523 of the Bankruptcy Code, 11 U.S.C. §523, the 

Case 1:21-cv-04777-LJL   Document 267   Filed 02/27/24   Page 6 of 7

http://www.google.com/search?q=11+u.s.c.+523


7 

IX. 

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. 

X. 

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:  ______________, _____ 

____________________________________ 
UNITED STATES DISTRICT JUDGE 

allegations in the Amended 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). 

VIII. 

IT IS FURTHER ORDERED, ADJUDGED, AND DECREED that the Consent of 

Defendant is incorporated herein with the same force and effect as if fully set forth herein, and 

that Defendant shall comply with all of the undertakings and agreements set forth therein. 

February 27 2024

Case 1:21-cv-04777-LJL   Document 267   Filed 02/27/24   Page 7 of 7

http://www.google.com/search?q=11+u.s.c.+523(a)(19)