United States Securities and Exchange Commission v. Ghosn et al, No. 1:2019cv08798 - Document 21 (S.D.N.Y. 2019)
Court Description: FINAL JUDGMENT AS TO DEFENDANT GREGORY L. KELLY. 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 &qu ot;Exchange Act") [15 U.S.C. § 78j(b)] and Rule 10b-5 promulgated thereunder [17 C.F.R. § 240.10b-5], and from aiding and abetting violations of these provisions, by using any means or instrumentality of interstate commerce, or of t he mails, or of any facility of any national securities exchange, in connection with the purchase or sale of any security as further set forth in this Judgment. 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 person s in active concert or participation with Defendant or with anyone described in (a). IT IS FURTHER ORDERED, ADJUDGED, AND DECREED that, pursuant to Section 2l(d)(2) of the Exchange Act [15 U.S.C. § 78u(d)(2)], Defendant is prohibited, for fiv e (5) 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. § 781] or that is required to f ile reports pursuant to Section 15(d) of the Exchange Act [15 U.S.C. § 780(d)]. IT IS FURTHER ORDERED, ADJUDGED, AND DECREED that within 90 days after being served with a copy of this Final Judgment, Defendant shall pay a civil penalty in the amount of $100,000.00 to the Securities and Exchange Commission pursuant to Section 21(d)(3) of the Exchange Act [15 U.S.C. § 78u(d)(3)]. Payments must be made in one of the following ways as further set forth in this Judgment. IT IS FUR THER 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 allegations in the complaint are true and admitted by Defendant, and further, any de bt 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 f or 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). IT IS FURTHER ORDERED, ADJUDGED, AND DECREED t hat this Court shall retain jurisdiction of this matter for the purposes of enforcing the terms of this Final Judgment. 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., (Gregory L. Kelly terminated.) (Signed by Judge Alvin K. Hellerstein on 12/23/19) (yv)
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United States Securities and Exchange Commission v. Ghosn et al Doc. 21 USDCSDNY J)OCUMENT . ELECTRONICALLY FILED DOC#: _ _ _ _ _ __ 1--{1.Jo UNITED STATES DISTRICT COURT SOUTHERN DISTRICT OF NEW YORK UNITED STATES SECURITIES AND EXCHANGE COMMISSION, COMPLAINT [Securities Fraud] Plaintiff, 19-CV- ~19~ v. ECFCASE CARLOS GHOSN AND GREGORY L. KELLY, Defendants. FINAL JUDGMENT AS TO DEFENDANT GREGORY L. KELLY The Securities and Exchange Commission having filed a Complaint and Defendant Gregory L. Kelly, ("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 and except as otherwise provided herein in paragraph V); 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, directly or indirectly, Section l0(b) of the Securities Exchange Act of 1934 (the "Exchange Act") [15 U.S.C. § 78j(b)] and Rule l0b-5 promulgated thereunder [ 17 C.F.R. § 240.1 0b-5], and from aiding and abetting violations of these provisions, 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; Dockets.Justia.com Case 1:19-cv-08798-AKH Document 8 Filed 09/23/19 Page 2 of 4 (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). IL IT IS FURTHER ORDERED, ADJUDGED, AND DECREED that, pursuant to Section 2l(d)(2) of the Exchange Act [15 U.S.C. § 78u(d)(2)], Defendant is prohibited, for five (5) 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. § 781] or that is required to file reports pursuant to Section 15(d) of the Exchange Act [15 U.S.C. § 780(d)]. III. IT IS FURTHER ORDERED, ADJUDGED, AND DECREED that within 90 days after being served with a copy of this Final Judgment, Defendant shall pay a civil penalty in the amount of $100,000.00 to the Securities and Exchange Commission pursuant to Section 21(d)(3) of the Exchange Act [15 U.S.C. § 78u(d)(3)]. Payments must be made in one of the following ways: 2 Case 1:19-cv-08798-AKH Document 8 Filed 09/23/19 Page 3 of 4 (1) Respondent may transmit payment electronically to the Commission, which will provide detailed ACH transferIF edwire instructions upon request; (2) Respondent may make direct payment from a bank account via Pay.gov through the SEC website at http://www.sec.gov/about/offices/ofm.htm; or (3) Respondent may pay by certified check, bank cashier's check, or United States postal money order, made payable to the Securities and Exchange Commission and hand-delivered or mailed to: Enterprise Service Center Accounts Receivable Branch HQ Bldg., Room 181, AMZ-341 6500 South MacArthur Boulevard Oklahoma City, OK 73169 Payments by check or money order must be accompanied by a cover letter identifying Kelly as a Defendant in these proceedings, and the file number of these proceedings. A copy of the cover letter and check or money order must be sent to Associate Director Melissa Hodgman, Division of Enforcement, Securities and Exchange Commission, 100 F Street, NE, Washington, DC 20549. IV. 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 allegations in the 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) ofthe Bankruptcy Code, 11 U.S.C. §523(a)(19). 3 Case 1:19-cv-08798-AKH Document 8 Filed 09/23/19 Page 4 of 4 V. 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. 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 Final Judgment forthwith and without further notice. Dated: t)2C. L~ {f)_k'I~~ UNITED STATES DISTRICT JUDGE 4 Case 1:19-cv-08798-AKH Document 8-1 Filed 09/23/19 Page 1 of 6 UNITED STATES DISTRICT COURT SOUTHERN DISTRICT OF NEW YORK UNITED STATES SECURITIES AND EXCHANGE COMMISSION, COMPLAINT [Securities Fraud} Plaintiff, 19-CV-_ _ ____, ( ) v. ECFCASE CARLOS GHOSN AND GREGORY L. KELLY, Defendants. CONSENT OF DEFENDANT GREGORY L. KELLY 1. Defendant Gregory L. Kelly ("Defendant") waives service of a summons and the complaint in this action, enters a general appearance, and admits the Court's jurisdiction over Defendant and over the subject matter of this action. 2. Without admitting or denying the allegations of the complaint (except as provided herein in paragraph 11 and except as to personal and subject matter jurisdiction, which Defendant admitc;), Defendant hereby consents to the entry of the final judgment in the form attached hereto (the "Final Judgment") and incorporated by reference herein, which, among other things: (a) pe1manently restrains and enjoins Defendant from violation of Section l0(b) of the Exchange Act [15 U.S.C. § 78j(b)] and SEC Rule l0b-5 (17 C.F.R. § 240.l0b-5], and from aiding and abetting violations of these provisions; (b) prohibits Defendant for five (5) years following the date of entry of this Final Judgment, pursuant to Section 2l(d)(2) of the Exchange Act [15 U.S.C. § 78u(d)(2)], from acting as an officer or director of any issuer that case 1:19-cv-08798-AKH Document 8-1 Filed 09/23/19 Page 2 of 6 has a class of securities registered pursuant to Section I 2 of the Exchange Act [15 U .S.C. § 78l] or that is required to file reports pursuant to Section l 5(d) of the Exchange Act [15 U.S.C. § 78o(d)J; and (c) orders Defendant to pay a civil monetary penalty in the amount of $100,000.00 within 90 days of the entry of this Final Judgment pursuant to Section 21(d)(3) of the Exchange Act [15 U.S.C. § 78u(d)(3)]. Payments must be made in one of the following ways: (1) RespQndeI)tmay transmit payment electronically to the Commissicm, which will provide detailed ACH tpansfet/Fedwire instructions upon.requ~st; (2) Resp<;m,;k:nt may tnake direct payment from a b.artk :account via Pay.gov through the SEC website at http:l/www;sec:gov/abbuf/officcslofi11.htm; or (3) Respon_dent may pay by certified c~eck;1 bank cashiet',s check:., or United StaJe~ po:st~l money order,, mad~. payable to the Secui'ities 'an,d Exch?nge Cmrunissien at1d fafod-delivt::red or mailed tb: Enterprise Service Center Accounts Receivable Branch HQ Bldg., Room 181, AMZ-341 6500 South MacArthur Boulevard Oklahoma City, OK 73169 Payments by check or money order must be accompanied by a cover letter identifying Kelly as a Defendant in these proceedings, and the file number of these proceedings. A copy of the cover letter and check or money order must be sent to Associate Director Melissa Hodgman, Division of Enforcement, Securities and Exchange Commission, 100 F Street, NE, Washington, DC 20549. 3. Defendant agrees that he shall not seek or accept, directly or indirectly, reimbursement or indemnification from any source, including but not limited to payment made pursuant to any insmance policy, with regard to any civil penalty amounts that Defendant pays pursuant to the Final Judgment, regardless of whether such penalty amounts or any part thereof 2 Case 1:19-cv-08798-AKH Document 8-1 Filed 09/23/19 Page 3 of 6 are added to a distribution fund or otherwise used for the benefit of investors. Defendant further agrees that he shall not claim, assert, or apply for a tax deduction or tax credit with regard to any federal, state, or local tax for any penalty amounts that Defendant pays pursuant to the Final Judgment, regardless of whether such penalty amounts or any part thereof are added to a distribution fund or otherwise used for the benefit of investors. 4. Defendant waives the entry of findings of fact and conclusions of law pursuant to Rule 52 of the Federal Rules of Civil Procedure. 5. Defendant waives the right, if any, to a jury trial and to appeal from the entry of the Final Judgment. 6. Defendant enters into this Consent voluntarily and represents that no threats, offers, promises, or inducements of any kind have been made by the Commission or any member, officer, employee, agent, or representative of the Commission to induce Defendant to enter into this Consent. 7. Defendant agrees that this Consent shall be incorporated into the Final Judgment with the same force and effect as if fully set fo1th therein. 8. Defendant will not oppose the enforcement of the Final Judgment on the ground, if any exists, that it fails to comply with Rule 65(d) of the Federal Rules of Civil Procedure, and hereby waives any objection based thereon. 9. Defendant waives service of the Final Judgment and agrees that entry of the Final Judgment by the Court and filing with the Clerk of the Court will constitute notice to Defendant of its terms and conditions. Defendant further agrees to provide counsel for the Commission, within thirty days after the Final Judgment is filed with the Clerk of the Court, with an affidavit or declaration stating that Defendant has received and read a copy of the Final Judgment. 3 case 1:19-cv-08798-AKH Document 8-1 Filed 09/23/19 Page 4 of 6 10, Consistent with 17 C.F.R. 202.S(t), this Consent resolves only the claims asserted against Defendant in this civil proceeding. Defendant acknowledges that no promise or representation has been made by the Commission or any member, officer, employee, agent, or representative of the Commission with regard to any criminal liability that may have arisen or may arise from the facts underlying this action or immunity from any such criminal liability. Defendant waives any claim of Double Jeopardy based upon the settlement of this proceeding, including the imposition of any remedy or civil penalty herein. Defendant further acknowledges that the Court's entry of a permanent injunction may have collateral consequences under federal or state law and the rules and regulations of self-regulatory organizations, licensing boards, and other regulatory organizations. Such collateral consequences include, but are not limited to, a statutory disqualification with respect to membership or participation in, or association with a member of, a self-regulatory organization. This statutory disqualification has consequences that are separate from any sanction imposed in an administrative proceeding. In addition, in any disciplinary proceeding before the Commission based on the entry of the injunction in this action, Defendant understands that he shall not be permitted to contest the factual allegations of the complaint in this action. 11. Defendant understands and agrees to comply with the tenus of 17 C.F.R. § 202.S(e), which provides in pait that it is the Commission's policy "not to permit a defendant or respondent to consent to a judgment or order that imposes a sanction while denying the allegations in the complaint or order for proceedings," and "a refusal to admit the allegations is equivalent to a denial, unless the defendant or respondent states that he neither admits nor denies the allegations." As part of Defendant's agreement to comply with the terms of Section 202.5(e), Defendant: (i) will not take any action or make or permit to be made any public statement 4 case 1:19-cv-08798-AKH Document 8-1 Filed 09/23/19 Page 5 of 6 denying, directly or indirectly, any allegation in the complaint or creating the impression that the complaint is without factual basis; (ii) will not make or permit to be made any public statement to the effect that Defendant does not admit the allegations of the complaint, or that this Consent contains no admission of the allegations, without also stating that Defendant does not deny the allegations; (iii) upon the filing of this Consent, Defendant hereby withdraws any papers filed in this action to the extent that they deny any allegation in the complaint; and (iv) stipulates solely for purposes of exceptions to discharge set forth in Section 523 of the Bankruptcy Code, 11 U.S.C. §523, that the allegations in the complaint are true, and further, that any debt for disgorgement, prejudgment interest, civil penalty or other amounts due by Defendant under the 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)(l9) of the Bankruptcy Code, I 1 U.S.C. §523(a)(19). If Defendant breaches this agreement, the Commission may petition the Comt to vacate the Final Judgment and restore this action to its active docket. Nothing in this paragraph affects Defendant's: (i) testimonial obligations; or (ii) right to take legal or factual positions in litigation or other legal proceedings in which the Commission is not a party, including but not limited to in the related criminal action in Japan. 12. Defendant hereby waives any rights under the Equal Access to Justice Act, the Small Business Regulatory Enforcement Fairness Act of 1996, or any other provision of law to seek from the United States, or any agency, or any official of the United States acting in his or her official capacity, directly or indirectly, reimbursement of attorney's fees or other fees, expenses, or costs expended by Defendant to defend against this action. For these purposes, 5 case 1:19-cv-08798-AKH Document 8-1 Filed 09/23/19 Page 6 of 6 Def~ndant agrees that Defendant is not the prevailing party in this action since the parties have reached a good faith settlement. 13. Defendant agrees that the Commission may present the Final Judgment to the Court for signature and entry without further notice. 14. Defendant agrees that this Court shall retain jurisdiction over this matter for the purpose of enforcing the terms of the Final Judgment. . Harwell; Jr. Neal arwell, PLC , 1201 De1nonbreun Street, Suite 1000 Nashville, 1N 37203 (615) 244-1713 Attomey for Defendant 6
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