Securities and Exchange Commission v. Kai Christian Petersen et al, No. 2:2019cv08334 - Document 53 (C.D. Cal. 2021)
Court Description: FINAL JUDGMENT AS TO DEFENDANT KAI CHRISTIAN PETERSEN by Judge John W. Holcomb 51 . IT IS HEREBY ORDERED, ADJUDGED, AND DECREED that Defendant ispermanently restrained and enjoined from violating Section 5 of the Securities Act [15 U.S.C. 7; 77e] by, directly or indirectly, in the absence of any applicable exemption: IT IS HEREBY FURTHER ORDERED, ADJUDGED, AND DECREED that Defendant is liable for disgorgement of $192,000, representing net profits gained as a result of the co nduct alleged in the Complaint, together with prejudgment interest thereon in the amount of $8,296, and a civil penalty in the amount of $100,000 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)]. (See document for further details) (yl)
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Securities and Exchange Commission v. Kai Christian Petersen et al Doc. 53 1 2 3 4 5 6 7 8 UNITED STATES DISTRICT COURT 9 CENTRAL DISTRICT OF CALIFORNIA 10 11 12 SECURITIES AND EXCHANGE COMMISSION, 13 Plaintiff, 14 15 16 17 18 19 vs. KAI CHRISTIAN PETERSEN; GIL BESERGLIK; and RAZ BESERGLIK, Defendants, Case No. 2:19-cv-08334-JWH-RAOx Hon. John W. Holcomb FINAL JUDGMENT AS TO DEFENDANT KAI CHRISTIAN PETERSEN SHRAGA HOLDINGS, LTD. and LEMBEX GLOBAL INVESTMENTS, LTD., Relief Defendants 20 21 22 23 24 25 26 27 28 Dockets.Justia.com 1 The Securities and Exchange Commission having filed a Complaint and 2 consented to the dismissal as to Defendant Kai Christian Petersen (“Defendant”) of 3 the First, Second, Third, Seventh, and Eighth Claims for Relief in the Complaint, but 4 not the Fourth, Fifth, and Sixth Claims for Relief in the Complaint; and Defendant 5 having entered a general appearance; consented to the Court’s jurisdiction over him 6 and the subject matter of this action; consented to entry of this Final Judgment 7 without admitting or denying the factual allegations of the Complaint (except as to 8 jurisdiction and except as otherwise provided herein); waived findings of fact and 9 conclusions of law; and waived any right to appeal from this Final Judgment: I. 10 11 IT IS HEREBY ORDERED, ADJUDGED, AND DECREED that Defendant is 12 permanently restrained and enjoined from violating Section 5 of the Securities Act 13 [15 U.S.C. § 77e] by, directly or indirectly, in the absence of any applicable 14 exemption: 15 (a) Unless a registration statement is in effect as to a security, making 16 use of any means or instruments of transportation or communication in 17 interstate commerce or of the mails to sell such security through the use or 18 medium of any prospectus or otherwise; 19 (b) Unless a registration statement is in effect as to a security, 20 carrying or causing to be carried through the mails or in interstate commerce, 21 by any means or instruments of transportation, any such security for the 22 purpose of sale or for delivery after sale; or 23 (c) Making use of any means or instruments of transportation or 24 communication in interstate commerce or of the mails to offer to sell or offer to 25 buy through the use or medium of any prospectus or otherwise any security, 26 unless a registration statement has been filed with the Commission as to such 27 security, or while the registration statement is the subject of a refusal order or 28 stop order or (prior to the effective date of the registration statement) any 2 1 public proceeding or examination under Section 8 of the Securities Act [15 2 U.S.C. § 77h]. 3 IT IS FURTHER ORDERED, ADJUDGED, AND DECREED that, as 4 provided in Federal Rule of Civil Procedure 65(d)(2), the foregoing paragraph also 5 binds the following who receive actual notice of this Final Judgment by personal 6 service or otherwise: (a) Defendant’s officers, agents, servants, employees, and 7 attorneys; and (b) other persons in active concert or participation with Defendant or 8 with anyone described in (a). II. 9 10 IT IS HEREBY FURTHER ORDERED, ADJUDGED, AND DECREED that 11 Defendant is permanently restrained and enjoined from violating, directly or 12 indirectly, Section 10(b) of the Securities Exchange Act of 1934 (the “Exchange 13 Act”) [15 U.S.C. § 78j(b)] and Rule 10b-5 promulgated thereunder [17 C.F.R. 14 § 240.10b-5], by using any means or instrumentality of interstate commerce, or of the 15 mails, or of any facility of any national securities exchange, in connection with the 16 purchase or sale of any security: 17 (a) to employ any device, scheme, or artifice to defraud; 18 (b) to make any untrue statement of a material fact or to omit to state a 19 material fact necessary in order to make the statements made, in the light of the 20 circumstances under which they were made, not misleading; or 21 (c) 22 would operate as a fraud or deceit upon any person. 23 IT IS FURTHER ORDERED, ADJUDGED, AND DECREED that, as 24 provided in Federal Rule of Civil Procedure 65(d)(2), the foregoing paragraph also 25 binds the following who receive actual notice of this Final Judgment by personal 26 service or otherwise: (a) Defendant’s officers, agents, servants, employees, and 27 attorneys; and (b) other persons in active concert or participation with Defendant or 28 with anyone described in (a). to engage in any act, practice, or course of business which operates or 3 III. 1 2 IT IS FURTHER ORDERED, ADJUDGED, AND DECREED that Defendant 3 is permanently restrained and enjoined from , directly or indirectly, unless Defendant 4 is registered with the SEC in accordance with Section 15(b) of the Securities 5 Exchange Act of 1934 (the “Exchange Act”) [15 U.S.C. § 78o(b)], and in the absence 6 of any applicable exemption, acting as a broker-dealer in the United States or 7 otherwise making use of the mails or any means or instrumentality of interstate 8 commerce to effect any transactions in, or to induce or attempt to induce the purchase 9 or sale of, binary options or any other security (other than an exempted security or 10 commercial paper, bankers’ acceptances, or commercial bills) in the United States, in 11 violation of Section 15(a) of the Exchange Act [15 U.S.C. § 78o(a)]. 12 IT IS FURTHER ORDERED, ADJUDGED, AND DECREED that, as 13 provided in Federal Rule of Civil Procedure 65(d)(2), the foregoing paragraph also 14 binds the following who receive actual notice of this Final Judgment by personal 15 service or otherwise: (a) Defendant’s officers, agents, servants, employees, and 16 attorneys; and (b) other persons in active concert or participation with Defendant or 17 with anyone described in (a). 18 IV. 19 IT IS HEREBY FURTHER ORDERED, ADJUDGED, AND DECREED that, 20 pursuant to Section 21(d)(5) of the Exchange Act [15 U.S.C. § 78u(d)(5)], Defendant 21 is permanently restrained and enjoined from directly or indirectly, including but not 22 limited to, through any entity he owns, operates, manages or controls, engaging in 23 any activity for the purpose of: (a) inducing or attempting to induce the purchase or 24 sale of binary options, securities-based swaps, or other securities, over the Internet or 25 via email or other forms of electronic communication; (b) causing any person or 26 entity to engage in any activity for the purpose of inducing or attempting to induce 27 the purchase or sale of binary options, securities-based swaps, or other securities, 28 over the Internet or via email or other forms of electronic communication; or 4 1 (c) deriving compensation from any activity inducing or attempting to induce the 2 purchase or sale of binary options, securities-based swaps, or other securities, over 3 the Internet or via email or other forms of electronic communication. This injunction, 4 however, shall not prohibit Defendant from buying or selling securities for his own 5 personal account. 6 IT IS FURTHER ORDERED, ADJUDGED, AND DECREED that, as 7 provided in Federal Rule of Civil Procedure 65(d)(2), the foregoing paragraph also 8 binds the following who receive actual notice of this Final Judgment by personal 9 service or otherwise: (a) Defendant’s officers, agents, servants, employees, and 10 attorneys; and (b) other persons in active concert or participation with Defendant or 11 with anyone described in (a). V. 12 13 IT IS HEREBY FURTHER ORDERED, ADJUDGED, AND DECREED that 14 Defendant is liable for disgorgement of $192,000, representing net profits gained as a 15 result of the conduct alleged in the Complaint, together with prejudgment interest 16 thereon in the amount of $8,296, and a civil penalty in the amount of $100,000 17 pursuant to Section 20(d) of the Securities Act [15 U.S.C. § 77t(d)] and 18 Section 21(d)(3) of the Exchange Act [15 U.S.C. § 78u(d)(3)]. Defendant shall 19 satisfy this obligation by paying $300,296 to the Securities and Exchange 20 Commission pursuant to the terms of the payment schedule set forth in paragraph VI 21 below after entry of this Final Judgment. 22 Defendant may transmit payment electronically to the Commission, which will 23 provide detailed ACH transfer/Fedwire instructions upon request. Payment may also 24 be made directly from a bank account via Pay.gov through the SEC website at 25 http://www.sec.gov/about/offices/ofm.htm. Defendant may also pay by certified 26 check, bank cashier’s check, or United States postal money order payable to the 27 Securities and Exchange Commission, which shall be delivered or mailed to 28 5 1 Enterprise Services Center 2 Accounts Receivable Branch 3 6500 South MacArthur Boulevard 4 Oklahoma City, OK 73169 5 and shall be accompanied by a letter identifying the case title, civil action number, 6 and name of this Court; Kai Christian Petersen as a defendant in this action; and 7 specifying that payment is made pursuant to this Final Judgment. 8 9 Defendant shall simultaneously transmit photocopies of evidence of payment and case identifying information to the Commission’s counsel in this action. By 10 making this payment, Defendant relinquishes all legal and equitable right, title, and 11 interest in such funds and no part of the funds shall be returned to Defendant. 12 The Commission may enforce the Court’s judgment for disgorgement and 13 prejudgment interest by using all collection procedures authorized by law, including 14 but not limited to, moving for civil contempt at any time after 30 days following entry 15 of this Final Judgment. 16 The Commission may enforce the Court’s judgment for penalties by the use of 17 all collection procedures authorized by law, including the Federal Debt Collection 18 Procedures Act, 28 U.S.C. § 3001 et seq., and moving for civil contempt for the 19 violation of any Court orders issued in this action. Defendant shall pay post judgment 20 interest on any amounts due after 30 days of the entry of this Final Judgement 21 pursuant to 28 U.S.C. § 1961. The Commission shall hold the funds, together with 22 any interest and income earned thereon (collectively, the “Fund”), pending further 23 order of the Court. 24 The Commission may propose a plan to distribute the Fund subject to the 25 Court’s approval. Such a plan may provide that the Fund shall be distributed 26 pursuant to the Fair Fund provisions of Section 308(a) of the Sarbanes-Oxley Act of 27 2002. The Court shall retain jurisdiction over the administration of any distribution 28 of the Fund and the Fund may only be disbursed pursuant to an Order of the Court. 6 1 Regardless of whether any such Fair Fund distribution is made, amounts 2 ordered to be paid as civil penalties pursuant to this Judgment shall be treated as 3 penalties paid to the government for all purposes, including all tax purposes. To 4 preserve the deterrent effect of the civil penalty, Defendant shall not, after offset or 5 reduction of any award of compensatory damages in any Related Investor Action 6 based on Defendant’s payment of disgorgement in this action, argue that he is entitled 7 to, nor shall he further benefit by, offset or reduction of such compensatory damages 8 award by the amount of any part of Defendant’s payment of a civil penalty in this 9 action (“Penalty Offset”). If the court in any Related Investor Action grants such a 10 Penalty Offset, Defendant shall, within 30 days after entry of a final order granting 11 the Penalty Offset, notify the Commission’s counsel in this action and pay the amount 12 of the Penalty Offset to the United States Treasury or to a Fair Fund, as the 13 Commission directs. Such a payment shall not be deemed an additional civil penalty 14 and shall not be deemed to change the amount of the civil penalty imposed in this 15 Judgment. For purposes of this paragraph, a “Related Investor Action” means a 16 private damages action brought against Defendant by or on behalf of one or more 17 investors based on substantially the same facts as alleged in the Complaint in this 18 action. 19 VI. 20 Defendant shall pay the total of disgorgement, prejudgment interest, and 21 penalty due of $300,296 in installments to the Commission according to the 22 following schedule: (1) at least $100,000, within ten days of entry of this Final 23 Judgment; and (2) the remaining amount due (consisting of no less than $200,296 and 24 any post judgment interest as provided for below) paid within two years from the 25 entry of this Final Judgment. Payments shall be deemed made on the date they are 26 received by the Commission and shall be applied first to post judgment interest, 27 which accrues pursuant to 28 U.S.C. § 1961 on any unpaid amounts due after 30 days 28 of the entry of Final Judgment. Payments from Defendant will then apply to paying 7 1 off the penalty amount. Once Defendant fully satisfies the penalty amount, additional 2 payments will apply to satisfying Defendant’s disgorgement and prejudgment interest 3 obligations. Prior to making the final payment set forth herein, Defendant shall 4 contact the Commission’s staff for the amount due for the final payment. 5 If Defendant fails to make any payment by the date agreed and/or in the 6 amount agreed according to the schedule set forth above, all outstanding payments 7 under this Final Judgment, including post-judgment interest, minus any payments 8 made, shall become due and payable immediately at the discretion of the 9 Commission’s staff without further application to the Court. VII. 10 11 IT IS FURTHER ORDERED, ADJUDGED, AND DECREED that the 12 Consent of Defendant is incorporated herein with the same force and effect as if fully 13 set forth herein, and that Defendant shall comply with all of the undertakings and 14 agreements set forth therein. VIII. 15 16 IT IS FURTHER ORDERED, ADJUDGED, AND DECREED that, solely for 17 purposes of exceptions to discharge set forth in Section 523 of the Bankruptcy Code, 18 11 U.S.C. § 523, the allegations in the complaint are true and admitted by Defendant, 19 and further, any debt for disgorgement, prejudgment interest, civil penalty or other 20 amounts due by Defendant under this Final Judgment or any other judgment, order, 21 consent order, decree or settlement agreement entered in connection with this 22 proceeding, is a debt for the violation by Defendant of the federal securities laws or 23 any regulation or order issued under such laws, as set forth in Section 523(a)(19) of 24 the Bankruptcy Code, 11 U.S.C. § 523(a)(19). 25 IX. 26 IT IS FURTHER ORDERED, ADJUDGED, AND DECREED that the First, 27 Second, Third, Seventh, and Eighth Claims for Relief are dismissed as to Defendant 28 with prejudice. 8 X. 1 2 IT IS FURTHER ORDERED, ADJUDGED, AND DECREED that this Court 3 shall retain jurisdiction of this matter for the purposes of enforcing the terms of this 4 Final Judgment. 5 IT IS SO ORDERED. 6 7 8 Dated: April 20, 2021 John W. Holcomb UNITED STATES DISTRICT JUDGE 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 9
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