U.S. Securities and Exchange Commission v. Daniel R. Adams et al, No. 2:2019cv01412 - Document 65 (C.D. Cal. 2020)
Court Description: FINAL JUDGMENT AS TO DEFENDANT MICHAEL A. FLANDERS by Judge Fernando M. Olguin. 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 and Rule 10b-5 promulgated thereunder. (MD JS-6, Case Terminated). (iv)
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U.S. Securities and Exchange Commission v. Daniel R. Adams et al 1 2 3 4 5 6 7 8 Doc. 65 AMY JANE LONGO (Cal. Bar No. 198304) Email: longoa@sec.gov WILLIAM S. FISKE (Cal. Bar No. 123071) Email: fiskew@sec.gov DANIEL O. BLAU (Cal. Bar No. 305008) Email: blaud@sec.gov Attorneys for Plaintiff Securities and Exchange Commission Michele Wein Layne, Regional Director Amy Jane Longo, Regional Trial Counsel 444 S. Flower Street, Suite 900 Los Angeles, California 90071 Telephone: (323) 965-3998 Facsimile: (213) 443-1904 JS-6 9 UNITED STATES DISTRICT COURT 10 CENTRAL DISTRICT OF CALIFORNIA 11 Western Division 12 13 14 SECURITIES AND EXCHANGE COMMISSION, 15 Plaintiff, 16 17 18 19 20 vs. DANIEL ADAMS, MICHAEL A. FLANDERS, SPIDERWORX MEDIA LLC, and AN L.A. MINUTE LLC, Case No. 2:19-cv-01412-FMO-RAO FINAL JUDGMENT AS TO DEFENDANT MICHAEL A. FLANDERS Defendants. 21 22 23 24 25 26 27 28 1 Dockets.Justia.com 1 The Securities and Exchange Commission (the “Commission”) having filed a 2 Complaint and Defendant Michael A. Flanders (“Defendant”) having entered a 3 general appearance; consented to the Court’s jurisdiction over Defendant and the 4 subject matter of this action; consented to entry of this Final Judgment without 5 admitting or denying the allegations of the Complaint (except as to jurisdiction and 6 except as otherwise provided herein in paragraph VI); waived findings of fact and 7 conclusions of law; and waived any right to appeal from this Final Judgment: 8 I. 9 IT IS HEREBY ORDERED, ADJUDGED, AND DECREED that Defendant is 10 permanently restrained and enjoined from violating, directly or indirectly, Section 11 10(b) of the Securities Exchange Act of 1934 (the “Exchange Act”) [15 U.S.C. § 12 78j(b)] and Rule 10b-5 promulgated thereunder [17 C.F.R. § 240.10b-5], by using 13 any means or instrumentality of interstate commerce, or of the mails, or of any 14 facility of any national securities exchange, in connection with the purchase or sale of 15 any security: 16 (a) to employ any device, scheme, or artifice to defraud; 17 (b) to make any untrue statement of a material fact or to omit to state a 18 material fact necessary in order to make the statements made, in the light 19 of the circumstances under which they were made, not misleading; or 20 21 (c) to engage in any act, practice, or course of business which operates or would operate as a fraud or deceit upon any person. 22 IT IS FURTHER ORDERED, ADJUDGED, AND DECREED that, as 23 provided in Federal Rule of Civil Procedure 65(d)(2), the foregoing paragraph also 24 binds the following who receive actual notice of this Final Judgment by personal 25 service or otherwise: (a) Defendant’s officers, agents, servants, employees, and 26 attorneys; and (b) other persons in active concert or participation with Defendant or 27 with anyone described in (a). 28 2 1 II. 2 IT IS HEREBY FURTHER ORDERED, ADJUDGED, AND DECREED that 3 Defendant is permanently restrained and enjoined from violating Section 17(a) of the 4 Securities Act of 1933 (the “Securities Act”) [15 U.S.C. § 77q(a)] in the offer or sale 5 of any security by the use of any means or instruments of transportation or 6 communication in interstate commerce or by use of the mails, directly or indirectly: 7 (a) to employ any device, scheme, or artifice to defraud; 8 (b) to obtain money or property by means of any untrue statement of a 9 material fact or any omission of a material fact necessary in order to 10 make the statements made, in light of the circumstances under which 11 they were made, not misleading; or 12 13 (c) to engage in any transaction, practice, or course of business which operates or would operate as a fraud or deceit upon the purchaser. 14 IT IS FURTHER ORDERED, ADJUDGED, AND DECREED that, as 15 provided in Federal Rule of Civil Procedure 65(d)(2), the foregoing paragraph also 16 binds the following who receive actual notice of this Final Judgment by personal 17 service or otherwise: (a) Defendant’s officers, agents, servants, employees, and 18 attorneys; and (b) other persons in active concert or participation with Defendant or 19 with anyone described in (a). 20 III. 21 IT IS HEREBY FURTHER ORDERED, ADJUDGED, AND DECREED that 22 Defendant is liable for disgorgement of $28,500, representing profits gained as a 23 result of the conduct alleged in the Complaint, together with prejudgment interest 24 thereon in the amount of $4,354.20, and a civil penalty in the amount of $28,500 25 pursuant to Section 20(d) of the Securities Act [15 U.S.C. § 77t(d)], and Section 26 21(d)(3) of the Exchange Act [15 U.S.C. § 78u(d)(3)]. Defendant shall satisfy this 27 obligation by paying $61,354.20 to the Securities and Exchange Commission within 28 365 days after entry of this Final Judgment. 3 1 Defendant may transmit payment electronically to the Commission, which will 2 provide detailed ACH transfer/Fedwire instructions upon request. Payment may also 3 be made directly from a bank account via Pay.gov through the SEC website at 4 http://www.sec.gov/about/offices/ofm.htm. Defendant may also pay by certified 5 check, bank cashier’s check, or United States postal money order payable to the 6 Securities and Exchange Commission, which shall be delivered or mailed to: 7 8 9 Enterprise Services Center Accounts Receivable Branch 6500 South MacArthur Boulevard Oklahoma City, OK 73169 10 11 and shall be accompanied by a letter identifying the case title, civil action number, 12 and name of this Court; Michael A. Flanders as a defendant in this action; and 13 specifying that payment is made pursuant to this Final Judgment. 14 Defendant shall simultaneously transmit photocopies of evidence of payment 15 and case identifying information to the Commission’s counsel in this action. By 16 making this payment, Defendant relinquishes all legal and equitable right, title, and 17 interest in such funds and no part of the funds shall be returned to Defendant. 18 The Commission shall hold the funds (collectively, the “Fund”) and may 19 propose a plan to distribute the Fund subject to the Court’s approval. The Court shall 20 retain jurisdiction over the administration of any distribution of the Fund. If the 21 Commission staff determines that the Fund will not be distributed, the Commission 22 shall send the funds paid pursuant to this Final Judgment to the United States 23 Treasury. 24 The Commission may enforce the Court’s judgment for disgorgement, 25 prejudgment interest, and civil penalties by moving for civil contempt (and/or 26 through other collection procedures authorized by law) at any time after 365 days 27 following entry of this Final Judgment. Defendant shall pay post judgment interest 28 on any delinquent amounts pursuant to 28 U.S.C. § 1961. 4 1 2 IV. IT IS FURTHER ORDERED, ADJUDGED, AND DECREED that the 3 Consent is incorporated herein with the same force and effect as if fully set forth 4 herein, and that Defendant shall comply with all of the undertakings and agreements 5 set forth therein. 6 V. 7 IT IS FURTHER ORDERED, ADJUDGED, AND DECREED that, solely for 8 purposes of exceptions to discharge set forth in Section 523 of the Bankruptcy Code, 9 11 U.S.C. §523, the allegations in the complaint are true and admitted by Defendant, 10 and further, any debt for disgorgement, prejudgment interest, civil penalty or other 11 amounts due by Defendant under this Judgment or any other judgment, order, consent 12 order, decree or settlement agreement entered in connection with this proceeding, is a 13 debt for the violation by Defendant of the federal securities laws or any regulation or 14 order issued under such laws, as set forth in Section 523(a)(19) of the Bankruptcy 15 Code, 11 U.S.C. §523(a)(19). 16 17 18 VI. IT IS FURTHER ORDERED, ADJUDGED, AND DECREED that this Court 19 shall retain jurisdiction of this matter for the purposes of enforcing the terms of this 20 Final Judgment. 21 22 Dated: May 29, 2020 23 24 25 26 /s/ FERNANDO M. OLGUIN UNITED STATES DISTRICT JUDGE 27 28 5
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