Securities and Exchange Commission v. SHE Beverage Company, Inc.

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Case No.: 2:21-cv-07339-CAS-AS

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UNITED STATES DISTRICT COURT
CENTRAL DISTRICT OF CALIFORNIA
Western Division

SECURITIES AND EXCHANGE
COMMISSION,
Plaintiff,
vs.
SHE BEVERAGE COMPANY, INC.,
LUPE L. ROSE, SONJA F. SHELBY
AND KATHERINE E. DIRDEN,
Defendants.
    Case    No.    2:21-cv-07339-CAS-AS
x

FINAL JUDGMENT AS TO
SHE BEVERAGE COMPANY, INC.

Judge: Hon. Christina A. Snyder

Plaintiff Securities and Exchange Commission (“Plaintiff”) having filed a
Complaint on September 14, 2021 and Defendant SHE Beverage Company, Inc.
(“Defendant”) having been served and having failed to retain counsel pursuant to the
Court’s November 1, 2022 order; the Court having issued an order to show cause on
December 21, 2022 as to why default judgment against Defendant should not be
entered; the clerk having entered default against Defendant for failing to retain
counsel and respond to the court’s order to show cause on March 30, 2023; the Court
having considered the entire record in this case, Plaintiff’s Motion for Default
Judgment, Plaintiff’s Motion for Disgorgement, Prejudgment Interest, and Civil

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Penalties, and all the pleadings and evidence submitted in support thereof; and the
Court having determined that Defendant is not an infant or incompetent person and is
not in the military service of the United States; and for good cause shown, the Court
now enters the following Findings of Fact and Conclusions of Law, Order, and Final
Judgment:
FINDINGS OF FACT AND CONCLUSIONS OF LAW
1. This Court has personal jurisdiction over Defendant.
2. This Court has subject matter jurisdiction over this action pursuant to
Sections 20(b),20(d)(1) and 22(a) of the Securities Act of 1933 (“Securities
Act”), 15 U.S.C. §§ 77t(b), 77t(d)(1) & 77v(a), and Sections 21(d)(1),
21(d)(3)(A), 21(e) and 27(a) of the Securities Exchange Act of 1934
(“Exchange Act”), 15 U.S.C. §§ 78u(d)(1), 78u(d)(3)(A), 78u(e) &
78aa(a).
3. Venue is proper in this District.
4. Plaintiff is a proper party to bring this action seeking the relief sought in
the Plaintiff’s Complaint.
5. Pursuant to Rule of the Federal Rules of Civil Procedure, Plaintiff has
properly served Defendant with process, and Defendant received proper
notice of this action.
6. Pursuant to Federal Rule of Civil Procedure 55(a), the Clerk of Court
entered the Default of Defendant on March 30, 2023.
7. As of the date of this Order, Defendant has failed to retain counsel.
8. The Court finds that disgorgement of Defendant’s ill-gotten gains, along
with prejudgment interest, is appropriate.
9. The Court incorporates the findings in its December 14, 2023 Minute
Order, Dkt. No. 108.
10. The Court’s findings are based on the record of this case, Plaintiff’s
Motion for Default Judgment and Request for Monetary Relief, Motion for

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Disgorgement, Prejudgment Interest, and Civil Penalties, and all the
evidence submitted in support thereof, including the declaration and the
exhibits thereto. By perpetrating the fraudulent scheme alleged in the
Complaint, Defendant violated Section 10(b) of the Exchange Act [15
U.S.C. § 78j(b)] and Rule 10b-5 thereunder [17 C.F.R. § 240.10b-5];
Section 17(a) of the Securities Act [15 U.S.C. § 77q(a)]; and Section 5 of
the Securities Act [15 U.S.C. § 77e(a) and (c)].
ORDER
IT IS HEREBY ORDERED, ADJUDGED, AND DECREED that Plaintiff’s
Motion for Default Judgment and Motion for Disgorgement, Prejudgment Interest,
and Civil Penalties is GRANTED.
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 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.

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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).
II.
IT IS HEREBY ORDERED, ADJUDGED, AND DECREED that Defendant is
permanently restrained and enjoined from violating, directly or indirectly, 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 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).

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III.
IT IS HEREBY 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 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].
(d) 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

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(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 jointly and severally liable for disgorgement of $12,021,500,
representing net profits from the fraud, as well as $738,774 in prejudgment interest.
Defendant shall satisfy its obligations as described in this paragraph by paying the
total amount for which it is liable to the Commission within 30 days after entry of this
Final Judgment.  Each side shall bear its own attorneys’ fees and costs associated
with this action.
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; SHE Beverage Company, Inc. 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.

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The Commission may enforce the Court’s judgment by moving for civil
contempt (and/or through other collection procedures authorized by law) at any time
after 30 days following entry of this Final Judgment.  Defendant shall pay post
judgment interest on any delinquent amounts 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.
V.
IT IS FURTHER ORDERED, ADJUDGED, AND DECREED that this Court
shall retain jurisdiction of this matter for the purpose of enforcing the terms of this
Final Judgment. Each side shall bear its own attorneys’ fees and costs associated with
this action.
VI.
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.
Date: January 16, 2024
                                                                                                              HON.          CHRISTINA          A.          SNYDER
                                                                                UNITED          STATES          DISTRICT          JUDGE

1 Case No.: 2:21-cv-07339-CAS-AS 

 

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UNITED STATES DISTRICT COURT 

CENTRAL DISTRICT OF CALIFORNIA 

Western Division 
 

SECURITIES AND EXCHANGE 
COMMISSION, 

Plaintiff, 

vs. 

SHE BEVERAGE COMPANY, INC., 
LUPE L. ROSE, SONJA F. SHELBY 
AND KATHERINE E. DIRDEN, 

Defendants. 

 Case No. 2:21-cv-07339-CAS-ASx 

 

FINAL JUDGMENT AS TO  

SHE BEVERAGE COMPANY, INC. 

 

Judge: Hon. Christina A. Snyder 

 

Plaintiff Securities and Exchange Commission (“Plaintiff”) having filed a 

Complaint on September 14, 2021 and Defendant SHE Beverage Company, Inc. 

(“Defendant”) having been served and having failed to retain counsel pursuant to the 

Court’s November 1, 2022 order; the Court having issued an order to show cause on 

December 21, 2022 as to why default judgment against Defendant should not be 

entered; the clerk having entered default against Defendant for failing to retain 

counsel and respond to the court’s order to show cause on March 30, 2023; the Court 

having considered the entire record in this case, Plaintiff’s Motion for Default 

Judgment, Plaintiff’s Motion for Disgorgement, Prejudgment Interest, and Civil 

Case 2:21-cv-07339-CAS-AS   Document 110   Filed 01/16/24   Page 1 of 7   Page ID #:2993



 
 

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Penalties, and all the pleadings and evidence submitted in support thereof; and the 

Court having determined that Defendant is not an infant or incompetent person and is 

not in the military service of the United States; and for good cause shown, the Court 

now enters the following Findings of Fact and Conclusions of Law, Order, and Final 

Judgment:  

FINDINGS OF FACT AND CONCLUSIONS OF LAW 

1. This Court has personal jurisdiction over Defendant. 

2. This Court has subject matter jurisdiction over this action pursuant to 

Sections 20(b),20(d)(1) and 22(a) of the Securities Act of 1933 (“Securities 

Act”), 15 U.S.C. §§ 77t(b), 77t(d)(1) & 77v(a), and Sections 21(d)(1), 

21(d)(3)(A), 21(e) and 27(a) of the Securities Exchange Act of 1934 

(“Exchange Act”), 15 U.S.C. §§ 78u(d)(1), 78u(d)(3)(A), 78u(e) & 

78aa(a). 

3. Venue is proper in this District.  

4. Plaintiff is a proper party to bring this action seeking the relief sought in 

the Plaintiff’s Complaint.  

5. Pursuant to Rule of the Federal Rules of Civil Procedure, Plaintiff has 

properly served Defendant with process, and Defendant received proper 

notice of this action. 

6. Pursuant to Federal Rule of Civil Procedure 55(a), the Clerk of Court 

entered the Default of Defendant on March 30, 2023. 

7. As of the date of this Order, Defendant has failed to retain counsel. 

8. The Court finds that disgorgement of Defendant’s ill-gotten gains, along 

with prejudgment interest, is appropriate.  

9. The Court incorporates the findings in its December 14, 2023 Minute 

Order, Dkt. No. 108.   

10. The Court’s findings are based on the record of this case, Plaintiff’s 

Motion for Default Judgment and Request for Monetary Relief, Motion for 

Case 2:21-cv-07339-CAS-AS   Document 110   Filed 01/16/24   Page 2 of 7   Page ID #:2994



 
 

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Disgorgement, Prejudgment Interest, and Civil Penalties, and all the 

evidence submitted in support thereof, including the declaration and the 

exhibits thereto. By perpetrating the fraudulent scheme alleged in the 

Complaint, Defendant violated Section 10(b) of the Exchange Act [15 

U.S.C. § 78j(b)] and Rule 10b-5 thereunder [17 C.F.R. § 240.10b-5]; 

Section 17(a) of the Securities Act [15 U.S.C. § 77q(a)]; and Section 5 of 

the Securities Act [15 U.S.C. § 77e(a) and (c)]. 

ORDER 

IT IS HEREBY ORDERED, ADJUDGED, AND DECREED that Plaintiff’s 

Motion for Default Judgment and Motion for Disgorgement, Prejudgment Interest, 

and Civil Penalties is GRANTED.  

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 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. 

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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). 

II. 

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

permanently restrained and enjoined from violating, directly or indirectly, 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 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). 

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III. 

IT IS HEREBY 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 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]. 

(d) 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 

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(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 jointly and severally liable for disgorgement of $12,021,500, 

representing net profits from the fraud, as well as $738,774 in prejudgment interest.  

Defendant shall satisfy its obligations as described in this paragraph by paying the 

total amount for which it is liable to the Commission within 30 days after entry of this 

Final Judgment.  Each side shall bear its own attorneys’ fees and costs associated 

with this action. 

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; SHE Beverage Company, Inc. 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. 

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The Commission may enforce the Court’s judgment by moving for civil 

contempt (and/or through other collection procedures authorized by law) at any time 

after 30 days following entry of this Final Judgment.  Defendant shall pay post 

judgment interest on any delinquent amounts 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.  

V.  

IT IS FURTHER ORDERED, ADJUDGED, AND DECREED that this Court 

shall retain jurisdiction of this matter for the purpose of enforcing the terms of this 

Final Judgment. Each side shall bear its own attorneys’ fees and costs associated with 

this action. 

VI. 

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.   

Date: January 16, 2024 

           HON. CHRISTINA A. SNYDER 
        UNITED STATES DISTRICT JUDGE 
 

 

 

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