Securities and Exchange Commission v. Gregory Lamont Drake et al, No. 2:2020cv00405 - Document 88 (C.D. Cal. 2021)
Court Description: FINAL JUDGMENT AS TO DEFENDANT STEPHEN SCOTT MOLESKI by Judge Mark C. Scarsi, : Defendant Stephen Scott Moleski and his agents etc Defendant are permanently restrained and enjoined from violating, directly or indirectly, Section 15(a)(1) of the Exch ange Act [15 U.S.C. 78o(a)(1)]. Defendant is ordered to pay disgorgement of $ 206,524.57, representing net profits gained and net losses avoided as a result of the conduct alleged in the Complaint, together with prejudgment interest thereon in t he amount of $ 35,375.17. 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 disgor gement, pre-judgment interest, and civil penalty, totaling $ 426,946.74, 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).
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Securities and Exchange Commission v. Gregory Lamont Drake et al Doc. 88 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 SCOTT MOLESKI 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 Scott Moleski. The Court, having considered all the evidence 4 and arguments presented by the parties with regard to the Motion, Plaintiff’s 5 Memorandum of Points and Authorities in support of the Motion, all other 6 documents filed in support of the Motion, and the record in this action, finds that: 7 8 9 10 I. IT IS HEREBY ORDERED, ADJUDGED AND DECREED that the Commission’s Motion for Monetary Remedies as to Defendant Stephen Scott Moleski is GRANTED. 11 II. 12 IT IS HEREBY FURTHER ORDERED, ADJUDGED, AND DECREED 13 that Defendant is permanently restrained and enjoined from violating, directly or 14 indirectly, Section 15(a)(1) of the Exchange Act [15 U.S.C. § 78o(a)(1)] by using 15 any means or instrumentality of interstate commerce, or of the mails, or of any 16 facility of any national securities exchange, to effect transactions in, or induce or 17 attempt to induce the purchase or sale of, securities while not registered with the 18 Commission as a broker or dealer or while not associated with an entity registered 19 with the Commission as a broker or dealer. 20 IT IS FURTHER ORDERED, ADJUDGED, AND DECREED that, as 21 provided in Federal Rule of Civil Procedure 65(d)(2), the foregoing paragraph also 22 binds the following who receive actual notice of this Judgment by personal service 23 or otherwise: (a) Defendant’s officers, agents, servants, employees, and attorneys; 24 and (b) other persons in active concert or participation with Defendant or with 25 anyone described in (a). 26 27 28 III. IT IS HEREBY FURTHER ORDERED, ADJUDGED, AND DECREED that Defendant is permanently restrained and enjoined from, directly or indirectly, 1 1 including, but not limited to, through any entity owned or controlled by Defendant, 2 soliciting any person or entity to purchase or sell any security. 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 Judgment by personal service 6 or otherwise: (a) Defendant’s officers, agents, servants, employees, and attorneys; 7 and (b) other persons in active concert or participation with Defendant or with 8 anyone described in (a). 9 IV. 10 IT IS HEREBY FURTHER ORDERED, ADJUDGED, AND DECREED 11 that Defendant is ordered to pay disgorgement of $206,524.57, representing net 12 profits gained as a result of the conduct alleged in the Complaint, together with 13 prejudgment interest thereon in the amount of $35,375.17. The Court further 14 imposes a civil penalty in the amount of $195,047 pursuant to Section 21(d)(3) of 15 the Exchange Act, 15 U.S.C. § 78u(d)(3). Defendant shall satisfy these obligations 16 by paying the amount of disgorgement, pre-judgment interest, and civil penalty, 17 totaling $436,946.74, to the Securities and Exchange Commission within 30 days 18 after entry of this Final Judgment. 19 Defendant may transmit payment electronically to the Commission, which 20 will provide detailed ACH transfer/Fedwire instructions upon request. Payment 21 may also be made directly from a bank account via Pay.gov through the SEC 22 website at http://www.sec.gov/about/offices/ofm.htm. Defendant may also pay by 23 certified check, bank cashier’s check, or United States postal money order payable 24 to the Securities and 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 2 1 and shall be accompanied by a letter identifying the case title, civil action number, 2 and name of this Court; Stephen Scott Moleski as a defendant in this action; and 3 specifying that payment is made pursuant to this Final Judgment. 4 Defendant shall simultaneously transmit photocopies of evidence of 5 payment and case identifying information to the Commission’s counsel in this 6 action. By making this payment, Defendant relinquishes all legal and equitable 7 right, title, and interest in such funds and no part of the funds shall be returned to 8 Defendant. 9 The Commission shall hold the funds (collectively, the “Fund”) until further 10 order of this Court. The SEC may propose a plan to distribute the Fund subject to 11 the Court’s approval, and the Court shall retain jurisdiction over the administration 12 of any distribution of the Fund. 13 The Commission may enforce the Court’s judgment for disgorgement and 14 prejudgment interest by using all collection procedures authorized by law, 15 including, but not limited to, moving for civil contempt at any time after 30 days 16 following entry of this Final Judgment. 17 The Commission may enforce the Court’s judgment for penalties by the use 18 of all collection procedures authorized by law, including the Federal Debt 19 Collection Procedures Act, 28 U.S.C. § 3001 et seq., and moving for civil 20 contempt for the violation of any Court orders issued in this action. Defendant 21 shall pay post judgment interest on any amounts due after 30 days of the entry of 22 this Final Judgment pursuant to 28 U.S.C. § 1961. The Commission shall hold the 23 funds, together with any interest and income earned thereon (collectively, the 24 “Fund”), pending further order of the Court. 25 The Commission may propose a plan to distribute the Fund subject to the 26 Court’s approval. Such a plan may provide that the Fund shall be distributed 27 pursuant to the Fair Fund provisions of Section 308(a) of the Sarbanes-Oxley Act 28 of 2002. The Court shall retain jurisdiction over the administration of any 3 1 distribution of the Fund and the Fund may only be disbursed pursuant to an Order 2 of the Court. 3 Regardless of whether any such Fair Fund distribution is made, amounts 4 ordered to be paid as civil penalties pursuant to this Judgment shall be treated as 5 penalties paid to the government for all purposes, including all tax purposes. To 6 preserve the deterrent effect of the civil penalty, Defendant shall not, after offset or 7 reduction of any award of compensatory damages in any Related Investor Action 8 based on Defendant’s payment of disgorgement in this action, argue that he is 9 entitled to, nor shall he further benefit by, offset or reduction of such compensatory 10 damages award by the amount of any part of Defendant’s payment of a civil 11 penalty in this action (“Penalty Offset”). If the court in any Related Investor 12 Action grants such a Penalty Offset, Defendant shall, within 30 days after entry of 13 a final order granting the Penalty Offset, notify the Commission’s counsel in this 14 action and pay the amount of the Penalty Offset to the United States Treasury or to 15 a Fair Fund, as the Commission directs. Such a payment shall not be deemed an 16 additional civil penalty and shall not be deemed to change the amount of the civil 17 penalty imposed in this Judgment. For purposes of this paragraph, a “Related 18 Investor Action” means a private damages action brought against Defendant by or 19 on behalf of one or more investors based on substantially the same facts as alleged 20 in the Complaint in this action. 21 22 V. IT IS HEREBY FURTHER ORDERED, ADJUDGED, AND DECREED 23 that, solely for purposes of exceptions to discharge set forth in Section 523 of the 24 Bankruptcy Code, 11 U.S.C. §523, the allegations in the complaint are true and 25 admitted by Defendant, and further, any debt for disgorgement, prejudgment 26 interest, civil penalty or other amounts due by Defendant under this Final 27 Judgment or any other judgment, order, consent order, decree or settlement 28 agreement entered in connection with this proceeding, is a debt for the violation by 4 1 Defendant of the federal securities laws or any regulation or order issued under 2 such laws, as set forth in Section 523(a)(19) of the Bankruptcy Code, 11 U.S.C. 3 §523(a)(19). 4 5 VI. IT IS HEREBY FURTHER ORDERED, ADJUDGED, AND DECREED 6 that this Court shall retain jurisdiction of this matter for the purposes of enforcing 7 the terms of this Final Judgment. 8 9 VII. There being no just reason for delay, pursuant to Rule 54(b) of the Federal 10 Rules of Civil Procedure, the Clerk is ordered to enter this Final Judgment 11 forthwith and without further notice. 12 13 Dated: October 7, 2021 14 MARK C. SCARSI UNITED STATES DISTRICT JUDGE 15 16 17 18 19 20 21 22 23 24 25 26 27 28 5
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