Securities and Exchange Commission v. Gregory Lamont Drake et al, No. 2:2020cv00405 - Document 87 (C.D. Cal. 2021)
Court Description: FINAL JUDGMENT AS TO DEFENDANT STEPHEN KENNETH GROSSMAN by Judge Mark C. Scarsi, : Defendant Stephen Kenneth Grossman and his agents etc Defendant are permanently restrained and enjoined from violating, directly or indirectly, Section 15(a)(1) of th e Exchange Act [15 U.S.C. 78o(a)(1)]. Defendant is ordered to pay disgorgement of $289,078.74, representing net profits gained and net losses avoided as a result of the conduct alleged in the Complaint, together with prejudgment interest there on in the amount of $49,515.71. The Court further imposes a civil penalty in the amount of $195,047.00 pursuant to Section 21(d)(3) of the Exchange Act, 15 U.S.C. 78u(d)(3). Defendant shall satisfy these obligations by paying the amount of disgorgement, pre-judgment interest, and civil penalty, totaling $533,641.45, to the Securities and Exchange Commission within 30 days after entry of this Final Judgment. (SEE DOCUMENT FOR OTHER SPECIFICS AND COMPLIANCE REQUIREMENTS AND DEADLINES). (lc) Modified on 10/7/2021 (lc). Modified on 10/7/2021 (smo).
Download PDF
<![CDATA[
Securities and Exchange Commission v. Gregory Lamont Drake et al Doc. 87 1 2 3 4 5 6 7 UNITED STATES DISTRICT COURT 8 CENTRAL DISTRICT OF CALIFORNIA 9 10 11 12 SECURITIES AND EXCHANGE COMMISSION, 13 14 15 Plaintiff, 19 20 Defendants. 17 18 FINAL JUDGMENT AS TO DEFENDANT STEPHEN KENNETH GROSSMAN vs. GREGORY LAMONT DRAKE, an individual; STEPHEN KENNETH GROSSMAN, an individual; STEPHEN SCOTT MOLESKI, an individual; JASON DAVID ST. AMOUR, an individual; and DAVID ALAN WOLFSON, an individual, 16 Case No.: 2:20-cv-00405-MCS-PLA 21 22 23 24 25 26 27 28 Dockets.Justia.com 1 This matter came before the Court on plaintiff United States Securities and 2 Exchange Commission’s (“Commission’s”) Motion for Monetary Remedies as to 3 Defendant Stephen Kenneth Grossman. The Court, having considered all the 4 evidence and arguments presented by the parties with regard to the Motion, 5 Plaintiff’s Memorandum of Points and Authorities in support of the Motion, all 6 other documents filed in support of the Motion, and the record in this action, finds 7 that: 8 I. 9 IT IS HEREBY ORDERED, ADJUDGED AND DECREED that the 10 Commission’s Motion for Monetary Remedies as to Defendant Stephen Kenneth 11 Grossman is GRANTED. 12 II. 13 IT IS HEREBY FURTHER ORDERED, ADJUDGED, AND DECREED 14 that Defendant is permanently restrained and enjoined from violating, directly or 15 indirectly, Section 15(a)(1) of the Exchange Act [15 U.S.C. § 78o(a)(1)] by using 16 any means or instrumentality of interstate commerce, or of the mails, or of any 17 facility of any national securities exchange, to effect transactions in, or induce or 18 attempt to induce the purchase or sale of, securities while not registered with the 19 Commission as a broker or dealer or while not associated with an entity registered 20 with the Commission as a broker or dealer. 21 IT IS FURTHER ORDERED, ADJUDGED, AND DECREED that, as 22 provided in Federal Rule of Civil Procedure 65(d)(2), the foregoing paragraph also 23 binds the following who receive actual notice of this Judgment by personal service 24 or otherwise: (a) Defendant’s officers, agents, servants, employees, and attorneys; 25 and (b) other persons in active concert or participation with Defendant or with 26 anyone described in (a). 27 /// 28 /// 1 1 2 III. IT IS HEREBY FURTHER ORDERED, ADJUDGED, AND DECREED 3 that Defendant is permanently restrained and enjoined from, directly or indirectly, 4 including, but not limited to, through any entity owned or controlled by Defendant, 5 soliciting any person or entity to purchase or sell any security. 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 Judgment by personal service 9 or otherwise: (a) Defendant’s officers, agents, servants, employees, and attorneys; 10 and (b) other persons in active concert or participation with Defendant or with 11 anyone described in (a). 12 IV. 13 IT IS HEREBY FURTHER ORDERED, ADJUDGED, AND DECREED 14 that Defendant is ordered to pay disgorgement of $289,078.74, representing net 15 profits gained and net losses avoided as a result of the conduct alleged in the 16 Complaint, together with prejudgment interest thereon in the amount of 17 $49,515.71. The Court further imposes a civil penalty in the amount of $195,047 18 pursuant to Section 21(d)(3) of the Exchange Act, 15 U.S.C. § 78u(d)(3). 19 Defendant shall satisfy these obligations by paying the amount of disgorgement, 20 pre-judgment interest, and civil penalty, totaling $533,641.45, to the Securities and 21 Exchange Commission within 30 days after entry of this Final Judgment. 22 Defendant may transmit payment electronically to the Commission, which 23 will provide detailed ACH transfer/Fedwire instructions upon request. Payment 24 may also be made directly from a bank account via Pay.gov through the SEC 25 website at http://www.sec.gov/about/offices/ofm.htm. Defendant may also pay by 26 certified check, bank cashier’s check, or United States postal money order payable 27 to the Securities and Exchange Commission, which shall be delivered or mailed to 28 /// 2 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; Stephen Kenneth Grossman as a defendant in this action; 7 and specifying that payment is made pursuant to this Final Judgment. 8 Defendant shall simultaneously transmit photocopies of evidence of 9 payment and case identifying information to the Commission’s counsel in this 10 action. By making this payment, Defendant relinquishes all legal and equitable 11 right, title, and interest in such funds and no part of the funds shall be returned to 12 Defendant. 13 The Commission shall hold the funds (collectively, the “Fund”) until further 14 order of this Court. The SEC may propose a plan to distribute the Fund subject to 15 the Court’s approval, and the Court shall retain jurisdiction over the administration 16 of any distribution of the Fund. 17 The Commission may enforce the Court’s judgment for disgorgement and 18 prejudgment interest by using all collection procedures authorized by law, 19 including, but not limited to, moving for civil contempt at any time after 30 days 20 following entry of this Final Judgment. 21 The Commission may enforce the Court’s judgment for penalties by the use 22 of all collection procedures authorized by law, including the Federal Debt 23 Collection Procedures Act, 28 U.S.C. § 3001 et seq., and moving for civil 24 contempt for the violation of any Court orders issued in this action. Defendant 25 shall pay post judgment interest on any amounts due after 30 days of the entry of 26 this Final Judgment pursuant to 28 U.S.C. § 1961. The Commission shall hold the 27 funds, together with any interest and income earned thereon (collectively, the 28 “Fund”), pending further order of the Court. 3 1 The Commission may propose a plan to distribute the Fund subject to the 2 Court’s approval. Such a plan may provide that the Fund shall be distributed 3 pursuant to the Fair Fund provisions of Section 308(a) of the Sarbanes-Oxley Act 4 of 2002. The Court shall retain jurisdiction over the administration of any 5 distribution of the Fund and the Fund may only be disbursed pursuant to an Order 6 of the Court. 7 Regardless of whether any such Fair Fund distribution is made, amounts 8 ordered to be paid as civil penalties pursuant to this Judgment shall be treated as 9 penalties paid to the government for all purposes, including all tax purposes. To 10 preserve the deterrent effect of the civil penalty, Defendant shall not, after offset or 11 reduction of any award of compensatory damages in any Related Investor Action 12 based on Defendant’s payment of disgorgement in this action, argue that he is 13 entitled to, nor shall he further benefit by, offset or reduction of such compensatory 14 damages award by the amount of any part of Defendant’s payment of a civil 15 penalty in this action (“Penalty Offset”). If the court in any Related Investor 16 Action grants such a Penalty Offset, Defendant shall, within 30 days after entry of 17 a final order granting the Penalty Offset, notify the Commission’s counsel in this 18 action and pay the amount of the Penalty Offset to the United States Treasury or to 19 a Fair Fund, as the Commission directs. Such a payment shall not be deemed an 20 additional civil penalty and shall not be deemed to change the amount of the civil 21 penalty imposed in this Judgment. For purposes of this paragraph, a “Related 22 Investor Action” means a private damages action brought against Defendant by or 23 on behalf of one or more investors based on substantially the same facts as alleged 24 in the Complaint in this action. 25 26 V. IT IS HEREBY FURTHER ORDERED, ADJUDGED, AND DECREED 27 that, solely for purposes of exceptions to discharge set forth in Section 523 of the 28 Bankruptcy Code, 11 U.S.C. §523, the allegations in the complaint are true and 4 1 admitted by Defendant, and further, any debt for disgorgement, prejudgment 2 interest, civil penalty or other amounts due by Defendant under this Final 3 Judgment or any other judgment, order, consent order, decree or settlement 4 agreement entered in connection with this proceeding, is a debt for the violation by 5 Defendant of the federal securities laws or any regulation or order issued under 6 such laws, as set forth in Section 523(a)(19) of the Bankruptcy Code, 11 U.S.C. 7 §523(a)(19). 8 9 VI. IT IS HEREBY FURTHER ORDERED, ADJUDGED, AND DECREED 10 that this Court shall retain jurisdiction of this matter for the purposes of enforcing 11 the terms of this Final Judgment. 12 13 VII. There being no just reason for delay, pursuant to Rule 54(b) of the Federal 14 Rules of Civil Procedure, the Clerk is ordered to enter this Final Judgment 15 forthwith and without further notice. 16 17 Dated: October 7, 2021 18 MARK C. SCARSI UNITED STATES DISTRICT JUDGE 19 20 21 22 23 24 25 26 27 28 5
]]>
Some case metadata and case summaries were written with the help of AI, which can produce inaccuracies. You
should read the full case before relying on it for legal research purposes.
This site is protected by reCAPTCHA and the Google
Privacy Policy and
Terms of Service apply.
