SEC v. Nanotech Engineering, Inc.; and David Sweaney, No. 1:19-cv-03633, District of Columbia (Oct. 8, 2020) — Judgment

1
UNITED STATES DISTRICT COURT
DISTRICT OF COLUMBIA
U.S. SECURITIES AND EXCHANGE
COMMISSION,
Plaintiff,
v.
NANOTECH ENGINEERING, INC., et al.,
Def
endants.
Civil Action No. 19-cv-3633 (ABJ)
JUDGMENT AS TO DEFENDANT DAVID SWEANEY
The U.S. Securities and Exchange Commission, having filed an Amended Complaint,
and Defendant David Sweaney, having entered a general appearance; consented to the Court’s
jurisdiction
over Defendant and the subject matter of this acti   on; consented to entry of this
Judgment; waived findings of fact and conclusions of law; and waived any right to appeal from
this Judgment:
I.
IT IS HER
EBY 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 s  ecurities exchange, in
connection with the purchase or sale of any security:
(a)to e
mploy any device, scheme, or artifice to defraud;

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(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).
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;
(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.

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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).
III.
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 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)].
IV.
IT IS HEREBY FURTHER ORDERED, ADJUDGED, AND DECREED that Defendant
shall pay disgorgement of ill-gotten gains and prejudgment interest thereon; that the amounts of
the disgorgement, prejudgment interest, and civil penalty shall be determined by the Court upon
motion of the Commission; and that prejudgment interest shall be calculated based on the rate of
interest used by the Internal Revenue Service for the underpayment of federal income tax as set
forth in 26 U.S.C. § 6621(a)(2).  Upon motion of the Commission, the Court shall determine
whether a civil penalty 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)] is appropriate and, if so, the
amount of the penalty.  In connection with the Commission’s motion for disgorgement and/or
civil penalties, and at any hearing held on such a motion: (a) Defendant will be precluded from

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arguing that he did not violate the federal securities laws as alleged in the Amended Complaint;
(b) Defendant may not challenge the validity of the Consent or this Final Judgment; (c) solely for
the purposes of such motion, the allegations of the Amended Complaint shall be accepted as and
deemed true by the Court; and (d) the Court may determine the issues raised in the motion on the
basis of affidavits, declarations, excerpts of sworn deposition or investigative testimony, and
documentary evidence, without regard to the standards for summary judgment contained in Rule
56(c) of the Federal Rules of Civil Procedure.  In connection with the Commission’s motion for
disgorgement and/or civil penalties, the parties may take discovery, including discovery from
appropriate non-parties.
V.

 IT IS FURTHER ORDERED, ADJUDGED, AND DECREED that the Consent 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.
VI.

IT
 IS FURTHER ORDERED, ADJUDGED, AND DECREED that, for purposes of
exceptions to discharge set forth in Section 523 of the Bankruptcy Code, 11 U.S.C. §523, the
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 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).

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VII.
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.
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 Judgment forthwith and without further notice.
Dated:  ______________, _____
____________________________________
UNITED STATES DISTRICT JUDGE

2020
October 6

1 

UNITED STATES DISTRICT COURT 
DISTRICT OF COLUMBIA 

U.S. SECURITIES AND EXCHANGE 
COMMISSION, 

Plaintiff, 

v. 

NANOTECH ENGINEERING, INC., et al., 

Defendants. 

Civil Action No. 19-cv-3633 (ABJ) 

JUDGMENT AS TO DEFENDANT DAVID SWEANEY

The U.S. Securities and Exchange Commission, having filed an Amended Complaint, 

and Defendant David Sweaney, 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 

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

this 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;

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(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). 

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;

(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.

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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). 

III. 

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 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)].

IV. 

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

shall pay disgorgement of ill-gotten gains and prejudgment interest thereon; that the amounts of 

the disgorgement, prejudgment interest, and civil penalty shall be determined by the Court upon 

motion of the Commission; and that prejudgment interest shall be calculated based on the rate of 

interest used by the Internal Revenue Service for the underpayment of federal income tax as set 

forth in 26 U.S.C. § 6621(a)(2).  Upon motion of the Commission, the Court shall determine 

whether a civil penalty 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)] is appropriate and, if so, the 

amount of the penalty.  In connection with the Commission’s motion for disgorgement and/or 

civil penalties, and at any hearing held on such a motion: (a) Defendant will be precluded from 

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4 
 

arguing that he did not violate the federal securities laws as alleged in the Amended Complaint; 

(b) Defendant may not challenge the validity of the Consent or this Final Judgment; (c) solely for 

the purposes of such motion, the allegations of the Amended Complaint shall be accepted as and 

deemed true by the Court; and (d) the Court may determine the issues raised in the motion on the 

basis of affidavits, declarations, excerpts of sworn deposition or investigative testimony, and 

documentary evidence, without regard to the standards for summary judgment contained in Rule 

56(c) of the Federal Rules of Civil Procedure.  In connection with the Commission’s motion for 

disgorgement and/or civil penalties, the parties may take discovery, including discovery from 

appropriate non-parties. 

V. 

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

VI.  
 

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

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

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 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). 

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VII. 

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. 

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 Judgment forthwith and without further notice. 

Dated:  ______________, _____ 

____________________________________ 
UNITED STATES DISTRICT JUDGE 

2020October 6

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