Securities and Exchange Commission v. David Welch et al, No. 5:2017cv01968 - Document 139 (C.D. Cal. 2018)
Court Description: FINAL JUDGMENT AS TO NEW GLOBAL ENERGY INC. by Judge John F. Walter. IT IS HEREBY ORDERED, ADJUDGED, AND DECREED, that Defendant New Global Energy Inc. is permanently restrained and enjoined from violating Section 5 of the Securities Act of 1933. I T IS HEREBY FURTHER ORDERED, ADJUDGED, AND DECREED that Defendant New Global Energy Inc. is liable for disgorgement of $1,203,899.00, representing profits gained as a result of the conduct alleged in the Complaint, together with prejudgment interest thereon in the amount of $171,063.00, for a total of $1,374,962.00. (iv)
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Securities and Exchange Commission v. David Welch et al Doc. 139 1 2 3 4 NO JS-6 5 6 7 8 UNITED STATES DISTRICT COURT 9 CENTRAL DISTRICT OF CALIFORNIA 10 11 12 SECURITIES AND EXCHANGE COMMISSION, Hon. John F. Walter Plaintiff, 13 14 15 16 17 18 19 20 21 22 Case No. 5:17-cv-1968-JFW (AGRx) FINAL JUDGMENT AS TO NEW GLOBAL ENERGY INC. vs. DAVID HOWARD WELCH, MARC JAY BRYANT, JOHN CHARLES KNIGHT, PERRY DOUGLAS WEST, BIO-GLOBAL RESOURCES, INC., DIVERSIFIED EQUITIES, INC., DIVERSIFIED EQUITIES DEVELOPMENT, INC., and NEW GLOBAL ENERGY, INC., Defendants. 23 24 This matter came before the Court on the Plaintiff Securities and Exchange 25 Commission’s (“SEC” or “Commission”) unopposed motion for final judgment 26 pursuant to Federal Rule of Civil Procedure 54(b) as to Defendant New Global 27 Energy Inc. (“Defendant”). The Securities and Exchange Commission having filed a 28 Complaint and Defendant having entered a general appearance; consented to the Final Judgment as to New Global Energy Inc. 5:17-cv-1968-JFW 1 Dockets.Justia.com 1 Court’s jurisdiction over it and the subject matter of this action; consented to entry of 2 this Final Judgment without admitting or denying the allegations of the Complaint 3 (except as to jurisdiction); waived findings of fact and conclusions of law; and 4 waived any right to appeal from this Final Judgment: 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 I. IT IS HEREBY ORDERED, ADJUDGED, AND DECREED, that Defendant New Global Energy Inc. is permanently restrained and enjoined from violating Section 5 of the Securities Act of 1933 (“Securities Act”) [15 U.S.C. § 77e] by, directly or indirectly, in the absence of any applicable exemption: (a) Unless a registration statement is in effect as to a security, making use of any means or instruments of transportation or communication in interstate commerce or of the mails to sell such security through the use or medium of any prospectus or otherwise; (b) Unless a registration statement is in effect as to a security, carrying or causing to be carried through the mails or in interstate commerce, by any means or instruments of transportation, any such security for the purpose of sale or for delivery after sale; or (c) Making use of any means or instruments of transportation or communication in interstate commerce or of the mails to offer to sell or offer to buy through the use or medium of any prospectus or otherwise any security, unless a registration statement has been filed with the Commission as to such security, or while the registration statement is the subject of a refusal order or stop order or (prior to the effective date of the registration statement) any public proceeding or examination under Section 8 of the Securities Act [15 U.S.C. § 77h]. IT IS FURTHER ORDERED, ADJUDGED, AND DECREED, that, as provided in Federal Rule of Civil Procedure 65(d)(2), the foregoing paragraph also binds the following who receive actual notice of this Final Judgment by personal Final Judgment as to New Global Energy Inc. 5:17-cv-1968-JFW 2 1 service or otherwise: (a) Defendant’s officers, agents, servants, employees, and 2 attorneys; and (b) other persons in active concert or participation with Defendant or 3 with anyone described in (a). 4 5 II. IT IS HEREBY FURTHER ORDERED, ADJUDGED, AND DECREED that 6 Defendant New Global Energy Inc. is barred from participating in an offering of 7 penny stock, including engaging in activities with a broker, dealer, or issuer for 8 purposes of issuing, trading, or inducing or attempting to induce the purchase or sale 9 of any penny stock, with the right to apply for reentry after three years to the 10 appropriate self-regulatory organization, or if there is none, to the Commission. A 11 penny stock is any equity security that has a price of less than five dollars, except as 12 provided in Rule 3a51-1 under the Securities Exchange Act of 1934 (“Exchange 13 Act”) [17 C.F.R. 240.3a51-1]. 14 III. 15 16 IT IS HEREBY FURTHER ORDERED, ADJUDGED, AND DECREED that 17 Defendant New Global Energy Inc. is liable for disgorgement of $1,203,899.00, 18 representing profits gained as a result of the conduct alleged in the Complaint, 19 together with prejudgment interest thereon in the amount of $171,063.00, for a total 20 of $1,374,962.00. Based on Defendant New Global Energy Inc.’s sworn 21 representations in its Statement of Financial Condition dated October 4, 2018, and 22 other documents and information submitted to the Commission, however, the Court is 23 not ordering New Global Energy to pay a civil penalty and payment of all 24 disgorgement and prejudgment interest is waived. The determination not to impose a 25 civil penalty and to waive payment of disgorgement and prejudgment interest is 26 contingent upon the accuracy and completeness of New Global Energy Inc.’s 27 Statement of Financial Condition. If at any time following the entry of this Final 28 Judgment the Commission obtains information indicating that New Global Energy Final Judgment as to New Global Energy Inc. 5:17-cv-1968-JFW 3 1 Inc.’s representations to the Commission concerning its assets, income, liabilities, or 2 net worth were fraudulent, misleading, inaccurate, or incomplete in any material 3 respect as of the time such representations were made, the Commission may, at its 4 sole discretion and without prior notice to Defendant, petition the Court for an order 5 requiring Defendant to pay the unpaid portion of the disgorgement, pre-judgment and 6 post-judgment interest thereon, and the maximum civil penalty allowable under the 7 law. In connection with any such petition, the only issue shall be whether the 8 financial information provided by Defendant was fraudulent, misleading, inaccurate, 9 or incomplete in any material respect as of the time such representations were made. 10 In its petition, the Commission may move this Court to consider all available 11 remedies, including, but not limited to, ordering Defendant to pay funds or assets, 12 directing the forfeiture of any assets, or sanctions for contempt of this Final 13 Judgment. The Commission may also request additional discovery. Defendant may 14 not, by way of defense to such petition: (1) challenge the validity of the Consent or 15 this Final Judgment; (2) contest the allegations in the Complaint filed by the 16 Commission; (3) assert that payment of disgorgement, pre-judgment and post- 17 judgment interest or a civil penalty should not be ordered; (4) contest the amount of 18 disgorgement and pre-judgment and post-judgment interest; (5) contest the 19 imposition of the maximum civil penalty allowable under the law; or (6) assert any 20 defense to liability or remedy, including, but not limited to, any statute of limitations 21 defense. Defendant shall also pay post-judgment interest on any delinquent amounts 22 pursuant to 28 U.S.C. § 1961. 23 24 IV. IT IS HEREBY FURTHER ORDERED, ADJUDGED, AND DECREED that 25 Defendant New Global Energy Inc.’s Consent is incorporated herein with the same 26 force and effect as if fully set forth herein, and that it shall comply with all of the 27 undertakings and agreements set forth therein, including, but not limited to, the 28 Final Judgment as to New Global Energy Inc. 5:17-cv-1968-JFW 4 1 undertakings to: 2 (a) Accept the return of 1,000,000 shares of New Global Energy Inc. 3 common stock from Perry Douglas West and cancel the common shares by returning 4 them to treasury stock within 30 days of filing of the Consent; (b) 5 Cancel the May 2, 2016 Stock Option Agreement which provided Perry 6 Douglas West with options to purchase 1,000,000 shares of New Global Energy Inc. 7 at $0.30 per share, with the agreement to cancel the Stock Option Agreement to be 8 signed within 30 days of the filing of the Consent; (c) 9 Enter into a written agreement with Perry Douglas West in which he 10 waives payment of $400,292.00 in legal fees that the company owes to him for legal 11 services, with the agreement to be signed within 30 days of the filing of the Consent; 12 and 13 (d) Certify, in writing, compliance with the undertakings set forth above. 14 The certification shall identify the undertakings, provide written evidence of 15 compliance in the form of a narrative, and be supported by exhibits sufficient to 16 demonstrate compliance. The Commission staff may make reasonable requests for 17 further evidence of compliance, and Defendant agrees to provide such evidence. 18 Defendant shall submit the certification and supporting material to Kurt L. Gottschall, 19 Assistant Regional Director, 1961 Stout Street Suite 1700, Denver, Colorado 80294, 20 no later than sixty (60) days from the date of the completion of the undertakings. 21 22 23 24 25 V. IT IS HEREBY FURTHER ORDERED, ADJUDGED, AND DECREED that this Court shall retain jurisdiction of this matter for purposes of enforcing the terms of this Judgment. 26 27 28 Final Judgment as to New Global Energy Inc. 5:17-cv-1968-JFW 5 1 VI. 2 There being no just reason for delay, pursuant to Rule 54(b) of the Federal 3 Rules of Civil Procedure, the Clerk is ordered to enter this Judgment forthwith and 4 without further notice. 5 Dated: 12/26/19 6 7 _______________________________ JOHN F. WALTER UNITED STATES DISTRICT JUDGE 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 Final Judgment as to New Global Energy Inc. 5:17-cv-1968-JFW 6
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