SEC v. RARI CAPITAL, INC., No. 2:24-cv-07967-PA, Central District of California (Oct. 2, 2024) — Judgment

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ERIN E. WILK (Cal. Bar No. 310214)
Email: [email protected]
MADIHA M. ZUBERI (Cal. Bar No. 326962)
Email: [email protected]
DAVID ZHOU (NY Bar No. 4926523)
Email: [email protected]
Attorneys for Plaintiff
Securities and Exchange Commission
Monique C. Winkler, Regional Director
Jason H. Lee, Associate Regional Director
44 Montgomery Street, Suite 700
San Francisco, CA 94104
(415) 705-2500 (Telephone)
(415)
705-2501 (Facsimile)
SECURITIES AND EXCHANGE
COMMISSION,
Plaintiff,
v.
RARI CAPITAL, INC., JAI BHAVNANI,
JACK LIPSTONE, and DAVID LUCID,
Case No.2:24-cv-7
967
FINAL JUDGMENT AS TO
DEFENDANT RARI CAPITAL,
INC.
Defendants.
UNITED STATES DISTRICT COURT
CENTRAL DIST
RICT OF CALIFORNIA

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The Securities and Exchange Commission having filed a Complaint and
Defendant Rari Capital, Inc. (“Defendant”) 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 Complaint (except as to jurisdiction); waived findings of fact and
conclusions of law; and waived any right to appeal from this Final Judgment:
I.
IT IS HEREBY ORDERED, ADJUDGED, AND DECREED that Defendant
is permanently restrained and enjoined from violating Sections 5(a) and 5(c) of the
Securities Act of 1933 (“Securities Act”) [15 U.S.C. §§ 77e(a) and 77e(c)] 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; or
(b) 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].
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

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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 Sections
17(a)(2) and 17(a)(3) of the Securities Act [15 U.S.C. §§ 77q(a)(2) and 77q(a)(3)] 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 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
(b) 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 15(a)
of the Securities Exchange Act of 1934 (“Exchange Act”) [15 U.S.C. § 78o(a)], by
making use of the mails or any means or instrumentality of interstate commerce to
effect any transactions in, or to induce or attempt to induce the purchase or sale of,
any security (other than an exempted security or commercial paper, bankers’

#:102

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acceptances, or commercial bills) unless it is registered with the Commission as a
broker or dealer in accordance with Section 15(b) of the Exchange Act [15 U.S.C. §
78o(b)], or associated with a broker or dealer registered with the Commission in
accordance with Section 15(b) of the Exchange Act.
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 20(b) of the Securities Act [15 U.S.C. § 77t(b)] and Sections 21(d)(1) and
21(d)(5) of the Exchange Act [15 U.S.C. §§ 78u(d)(1), (d)(5)], Defendant is
permanently restrained and enjoined from, directly or indirectly, including, but not
limited to, through any entity owned or controlled by Defendant, participating in the
issuance, purchase, offer, or sale of any securities.
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).
V.
IT IS FURTHER ORDERED, ADJUDGED, AND DECREED that the
Consent of Defendant Rari Capital, Inc. 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.

#:103

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VI.
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.
VII.
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:
Percy Anderson
UNITED STATES DISTRICT JUDGE

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ERIN E. WILK (Cal. Bar No. 310214) 
Email: [email protected] 
MADIHA M. ZUBERI (Cal. Bar No. 326962) 
Email: [email protected] 
DAVID ZHOU (NY Bar No. 4926523) 
Email: [email protected] 

Attorneys for Plaintiff 
Securities and Exchange Commission 
Monique C. Winkler, Regional Director 
Jason H. Lee, Associate Regional Director 
44 Montgomery Street, Suite 700 
San Francisco, CA 94104 
(415) 705-2500 (Telephone)
(415) 705-2501 (Facsimile)

SECURITIES AND EXCHANGE 
COMMISSION, 

Plaintiff,

v.

RARI CAPITAL, INC., JAI BHAVNANI, 
JACK LIPSTONE, and DAVID LUCID, 

Case No.2:24-cv-7967

FINAL JUDGMENT AS TO 
DEFENDANT RARI CAPITAL, 
INC. 

Defendants.

UNITED STATES DISTRICT COURT 

CENTRAL DISTRICT OF CALIFORNIA 

Case 2:24-cv-07967-PA-MAA     Document 15     Filed 09/19/24     Page 1 of 5   Page ID
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ksalisuleyman
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The Securities and Exchange Commission having filed a Complaint and 

Defendant Rari Capital, Inc. (“Defendant”) 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 Complaint (except as to jurisdiction); waived findings of fact and 

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

I. 

IT IS HEREBY ORDERED, ADJUDGED, AND DECREED that Defendant 

is permanently restrained and enjoined from violating Sections 5(a) and 5(c) of the 

Securities Act of 1933 (“Securities Act”) [15 U.S.C. §§ 77e(a) and 77e(c)] 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; or 

(b) 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]. 

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 

Case 2:24-cv-07967-PA-MAA     Document 15     Filed 09/19/24     Page 2 of 5   Page ID
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https://www.westlaw.com/Link/Document/FullText?rs=USCLink&vr=3.0&findType=Y&cite=FRCP++65%28d%29%282%29&clientid=USCourts
https://www.westlaw.com/Link/Document/FullText?rs=USCLink&vr=3.0&findType=Y&cite=15%2B%2Bu%2Es%2Ec%2E%2B%2B%2B%2B77e&clientid=USCourts
https://www.westlaw.com/Link/Document/FullText?rs=USCLink&vr=3.0&findType=Y&cite=15%2B%2Bu%2Es%2Ec%2E%2B%2B77e&clientid=USCourts
https://www.westlaw.com/Link/Document/FullText?rs=USCLink&vr=3.0&findType=Y&cite=15%2B%2Bu%2Es%2Ec%2E%2B%2B%2B%2B77h&clientid=USCourts


  

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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 Sections 

17(a)(2) and 17(a)(3) of the Securities Act [15 U.S.C. §§ 77q(a)(2) and 77q(a)(3)] 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 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 

(b) 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 15(a) 

of the Securities Exchange Act of 1934 (“Exchange Act”) [15 U.S.C. § 78o(a)], by 

making use of the mails or any means or instrumentality of interstate commerce to 

effect any transactions in, or to induce or attempt to induce the purchase or sale of, 

any security (other than an exempted security or commercial paper, bankers’ 

Case 2:24-cv-07967-PA-MAA     Document 15     Filed 09/19/24     Page 3 of 5   Page ID
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https://www.westlaw.com/Link/Document/FullText?rs=USCLink&vr=3.0&findType=Y&cite=FRCP++65%28d%29%282%29&clientid=USCourts
https://www.westlaw.com/Link/Document/FullText?rs=USCLink&vr=3.0&findType=Y&cite=15%2B%2Bu%2Es%2Ec%2E%2B%2B%2B%2B77q&clientid=USCourts
https://www.westlaw.com/Link/Document/FullText?rs=USCLink&vr=3.0&findType=Y&cite=15%2B%2Bu%2Es%2Ec%2E%2B%2B77q&clientid=USCourts
https://www.westlaw.com/Link/Document/FullText?rs=USCLink&vr=3.0&findType=Y&cite=15%2B%2Bu%2Es%2Ec%2E%2B%2B%2B%2B78o&clientid=USCourts


  

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acceptances, or commercial bills) unless it is registered with the Commission as a 

broker or dealer in accordance with Section 15(b) of the Exchange Act [15 U.S.C. § 

78o(b)], or associated with a broker or dealer registered with the Commission in 

accordance with Section 15(b) of the Exchange Act. 

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 20(b) of the Securities Act [15 U.S.C. § 77t(b)] and Sections 21(d)(1) and 

21(d)(5) of the Exchange Act [15 U.S.C. §§ 78u(d)(1), (d)(5)], Defendant is 

permanently restrained and enjoined from, directly or indirectly, including, but not 

limited to, through any entity owned or controlled by Defendant, participating in the 

issuance, purchase, offer, or sale of any securities. 

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). 

V. 

IT IS FURTHER ORDERED, ADJUDGED, AND DECREED that the 

Consent of Defendant Rari Capital, Inc. 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. 

Case 2:24-cv-07967-PA-MAA     Document 15     Filed 09/19/24     Page 4 of 5   Page ID
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https://www.westlaw.com/Link/Document/FullText?rs=USCLink&vr=3.0&findType=Y&cite=FRCP++65%28d%29%282%29&clientid=USCourts
https://www.westlaw.com/Link/Document/FullText?rs=USCLink&vr=3.0&findType=Y&cite=FRCP++65%28d%29%282%29&clientid=USCourts
https://www.westlaw.com/Link/Document/FullText?rs=USCLink&vr=3.0&findType=Y&cite=15%2B%2Bu%2Es%2Ec%2E%2B%2B%2B78o&clientid=USCourts
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https://www.westlaw.com/Link/Document/FullText?rs=USCLink&vr=3.0&findType=Y&cite=15%2B%2Bu%2Es%2Ec%2E%2B%2B%2B%2B77t&clientid=USCourts
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VI. 

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. 

VII. 

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: 
Percy Anderson

UNITED STATES DISTRICT JUDGE 

Case 2:24-cv-07967-PA-MAA     Document 15     Filed 09/19/24     Page 5 of 5   Page ID
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PercyAnderson
Date

PercyAnderson
2