Securities and Exchange Commission v. Robert S. Davis Jr. et al, No. 2:2018cv10481 - Document 199 (C.D. Cal. 2021)
Court Description: FINAL JUDGMENT AS TO DEFENDANT GREGORY A. KOCH 187 by Judge Fernando M. Olguin. IT IS ORDERED, ADJUDGED, AND DECREED that Koch is liable for disgorgement of $410,201.39 representing net profits gained as a result of the conduct alleged in t he Amended Complaint, together with prejudgment interest thereon in the amount of $61,981.92, jointly and severally with Defendant Koch Insurance Brokers, LLC; and a civil penalty in the amount of $100,000 pursuant to Section 20(d) of th e Securities Act of 1933 and Section 21(d)(3) of the Securities Exchange Act of 1934. Defendant shall satisfy this obligation by paying $572,183.31 to the Securities and Exchange Commission within 30 days after entry of this Final Judgment. (iv)
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Securities and Exchange Commission v. Robert S. Davis Jr. et al 1 2 3 4 5 6 7 8 Doc. 199 CHRISTINE NESTOR, Fla. Bar No. 597211 Email: nestorc@sec.gov STEPHANIE N. MOOT, Fla. Bar No. 30377 Email: moots@sec.gov ANDREW O. SCHIFF, Pa. Bar No. 43641 Email: schiffa@sec.gov Attorneys for Plaintiff Securities and Exchange Commission 801 Brickell Avenue, Suite 1950 Miami, FL 33131 Telephone: (305) 982-6300 Facsimile: (305) 516-4154 9 10 11 12 13 14 LOCAL COUNSEL DONALD W. SEARLES, Cal. Bar No. 135705 Email: searlesd@sec.gov Securities and Exchange Commission 444 S. Flower Street, Suite 900 Los Angeles, CA 90071 Telephone: (323) 965-3398 Facsimile: (213) 443-1904 15 UNITED STATES DISTRICT COURT CENTRAL DISTRICT OF CALIFORNIA 16 17 18 19 CV 18-10481 FMO (JCx) SECURITIES AND EXCHANGE COMMISSION, Plaintiff, 20 21 22 23 FINAL JUDGMENT AS TO DEFENDANT GREGORY A. KOCH vs. ROBERT DAVIS, JR., et al. 24 25 Defendants. 26 This cause comes before the Court upon the Unopposed Motion by Plaintiff 27 Securities and Exchange Commission for Entry of Final Judgments against Certain 28 Page 1 of 5 Dockets.Justia.com 1 Defendants (“Motion”). By the Consent attached hereto, and without admitting or denying 2 the allegations of the Amended Complaint (except as to subject matter and personal 3 jurisdiction, which are admitted, and except as provided in paragraph III herein), Gregory 4 A. Koch (“Koch” or “Defendant”) has: entered a general appearance; consented to entry of 5 this Final Judgment; waived findings of fact and conclusions of law; and waived any right 6 to appeal from this Final Judgment. The Court finds that good cause exists for entry of the 7 Final Judgment. Accordingly, the Commission’s Motion is GRANTED. The Court 8 further orders as follows: 9 I. 10 DISGORGEMENT, PREJUDGMENT INTEREST, AND CIVIL PENALTY 11 IT IS ORDERED, ADJUDGED, AND DECREED that Koch is liable for 12 disgorgement of $410,201.39 representing net profits gained as a result of the conduct 13 alleged in the Amended Complaint, together with prejudgment interest thereon in the 14 amount of $61,981.92, jointly and severally with Defendant Koch Insurance Brokers, LLC; 15 and a civil penalty in the amount of $100,000 pursuant to Section 20(d) of the Securities 16 Act of 1933 (“Securities Act”) and Section 21(d)(3) of the Securities Exchange Act of 1934 17 (“Exchange Act”). Defendant shall satisfy this obligation by paying $572,183.31 to the 18 Securities and Exchange Commission within 30 days after entry of this Final Judgment. 19 Defendant may transmit payment electronically to the Commission, which will 20 provide detailed ACH transfer/Fedwire instructions upon request. Payment may also be 21 made directly from a bank account via Pay.gov through the SEC website at 22 http://www.sec.gov/about/offices/ofm.htm. Defendant may also pay by certified check, 23 bank cashier’s check, or United States postal money order payable to the Securities and 24 Exchange Commission, which shall be delivered or mailed to 25 Enterprise Services Center 26 Accounts Receivable Branch 27 6500 South MacArthur Boulevard 28 Oklahoma City, OK 73169 Page 2 of 5 1 and shall be accompanied by a letter identifying the case title, civil action number, and 2 name of this Court; Koch as a defendant in this action; and specifying that payment is made 3 pursuant to this Final Judgment. 4 Defendant shall simultaneously transmit photocopies of evidence of payment and 5 case identifying information to the Commission’s counsel in this action. By making this 6 payment, Defendant relinquishes all legal and equitable right, title, and interest in such 7 funds and no part of the funds shall be returned to Defendant. 8 The Commission may enforce the Court’s judgment for disgorgement and 9 prejudgment interest by using all collection procedures authorized by law, including, but 10 not limited to, moving for civil contempt at any time after 30 days following entry of this 11 Final Judgment. 12 The Commission may enforce the Court’s judgment for penalties by the use of all 13 collection procedures authorized by law, including the Federal Debt Collection Procedures 14 Act, 28 U.S.C. § 3001 et seq., and moving for civil contempt for the violation of any Court 15 orders issued in this action. Defendant shall pay post judgment interest on any amounts 16 due after 30 days of the entry of this Final Judgment pursuant to 28 U.S.C. § 1961. The 17 Commission shall hold the funds, together with any interest and income earned thereon 18 (collectively, the “Fund”), pending further order of the Court. 19 The Commission may propose a plan to distribute the Fund subject to the Court’s 20 approval. Such a plan may provide that the Fund shall be distributed pursuant to the Fair 21 Fund provisions of Section 308(a) of the Sarbanes-Oxley Act of 2002. The Court shall 22 retain jurisdiction over the administration of any distribution of the Fund and the Fund may 23 only be disbursed pursuant to an Order of the Court. 24 Regardless of whether any such Fair Fund distribution is made, amounts ordered to 25 be paid as civil penalties pursuant to this Judgment shall be treated as penalties paid to the 26 government for all purposes, including all tax purposes. To preserve the deterrent effect 27 of the civil penalty, Defendant shall not, after offset or reduction of any award of 28 compensatory damages in any Related Investor Action based on Defendant’s payment of Page 3 of 5 1 disgorgement in this action, argue that he is entitled to, nor shall he further benefit by, 2 offset or reduction of such compensatory damages award by the amount of any part of 3 Defendant’s payment of a civil penalty in this action (“Penalty Offset”). If the court in any 4 Related Investor Action grants such a Penalty Offset, Defendant shall, within 30 days after 5 entry of a final order granting the Penalty Offset, notify the Commission’s counsel in this 6 action and pay the amount of the Penalty Offset to the United States Treasury or to a Fair 7 Fund, as the Commission directs. Such a payment shall not be deemed an additional civil 8 penalty and shall not be deemed to change the amount of the civil penalty imposed in this 9 Judgment. For purposes of this paragraph, a “Related Investor Action” means a private 10 damages action brought against Defendant by or on behalf of one or more investors based 11 on substantially the same facts as alleged in the Complaint in this action. 12 II. 13 INCORPORATION OF CONSENT 14 IT IS FURTHER ORDERED, ADJUDGED, AND DECREED that the Consent 15 is incorporated herein with the same force and effect as if fully set forth herein, and that 16 Koch shall comply with all of the undertakings and agreements set forth therein. 17 III. 18 BANKRUPTCY NONDISCHARGEABILITY 19 IT IS FURTHER ORDERED, ADJUDGED, AND DECREED that, solely for 20 purposes of exceptions to discharge set forth in Section 523 of the Bankruptcy Code, 11 21 U.S.C. §523, the allegations in the complaint are true and admitted by Defendant, and 22 further, any debt for disgorgement, prejudgment interest, civil penalty or other amounts 23 due by Defendant under this Final Judgment or any other judgment, order, consent order, 24 decree or settlement agreement entered in connection with this proceeding, is a debt for the 25 violation by Defendant of the federal securities laws or any regulation or order issued under 26 such laws, as set forth in Section 523(a)(19) of the Bankruptcy Code, 11 U.S.C. 27 §523(a)(19). 28 Page 4 of 5
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