Securities and Exchange Commission v. Anthony Todd Johnson et al, No. 5:2020cv01493 - Document 60 (C.D. Cal. 2021)
Court Description: FINAL JUDGMENT AS TO DEFENDANTS SMART INITIATIVES, LLC, VALLEY VIEW ENTERPRISES LLC, TARGET EQUITY LLC, ZABALA FARMS GROUP, LLC, GPA ENTERPRISES LLC AND GREEN BUD INITIATIVES LLC 54 by Judge Mark C. Scarsi: Defendants GPA Enterprises LLC, Green B ud Initiatives LLC, Smart Initiatives, LLC, Target Equity LLC, Valley View Enterprises LLC, Zabala Farms Group, LLC are permanently enjoined re violation of the Securities Act (SEE DOCUMENT FOR SPECIFICS). DEFENDANT GREEN BUD INITIATIVES, LLC shall pay, jointly and severally with co-defendants Anthony Todd Johnson and Jeremy Johnson, disgorgement of $2,776,726.00, representing net profits gained as a result of the conduct alleged in the Complaint, together with prejudgment interest thereon in the amount of $222,575.00 for a total of $2,999,301.00, which the Court finds is for the benefit of investors. (SEE DOCUMENT FOR COMPLIANCE REQUIREMENTS AND INSTRUCTIONS THEREIN). (lc)
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Securities and Exchange Commission v. Anthony Todd Johnson et al Doc. 60 1 2 3 4 5 6 7 8 UNITED STATES DISTRICT COURT 9 CENTRAL DISTRICT OF CALIFORNIA 10 11 12 13 SECURITIES AND EXCHANGE COMMISSION, Plaintiff, 14 15 vs. 16 ANTHONY TODD JOHNSON, et al., 17 Defendants. 18 Case No. 5:20-cv-01493-MCS-SHK [PROPOSED] FINAL JUDGMENT AS TO DEFENDANTS SMART INITIATIVES, LLC, VALLEY VIEW ENTERPRISES LLC, TARGET EQUITY LLC, ZABALA FARMS GROUP, LLC, GPA ENTERPRISES LLC AND GREEN BUD INITIATIVES LLC 19 20 The Securities and Exchange Commission having filed a Complaint and 21 Defendants Smart Initiatives, LLC, Valley View Enterprises LLC, Target Equity 22 LLC, Zabala Farms Group LLC, GPA Enterprises LLC and Green Bud Initiatives 23 LLC (collectively “Defendants”) having entered a general appearance; consented to 24 the Court’s jurisdiction over Defendants and the subject matter of this action; 25 consented to entry of this Judgment without admitting or denying the allegations of 26 the Complaint (except as to jurisdiction and except as otherwise provided herein in 27 paragraph VII); waived findings of fact and conclusions of law; and waived any right 28 to appeal from this Judgment: 1 Dockets.Justia.com 1 2 I. IT IS HEREBY ORDERED, ADJUDGED, AND DECREED that Defendants 3 are permanently restrained and enjoined from violating, directly or indirectly, Section 4 10(b) of the Securities Exchange Act of 1934 (the “Exchange Act”) [15 U.S.C. § 5 78j(b)] and Rule 10b-5 promulgated thereunder [17 C.F.R. § 240.10b-5], by using 6 any means or instrumentality of interstate commerce, or of the mails, or of any 7 facility of any national securities exchange, in connection with the purchase or sale of 8 any security: 9 (a) to employ any device, scheme, or artifice to defraud; 10 (b) to make any untrue statement of a material fact or to omit to state a 11 material fact necessary in order to make the statements made, in the light 12 of the circumstances under which they were made, not misleading; or 13 (c) to engage in any act, practice, or course of business which operates or would operate as a fraud or deceit upon any person. 14 15 IT IS FURTHER ORDERED, ADJUDGED, AND DECREED that, as 16 provided in Federal Rule of Civil Procedure 65(d)(2), the foregoing paragraph also 17 binds the following who receive actual notice of this Judgment by personal service or 18 otherwise: (a) Defendants’ officers, agents, servants, employees, and attorneys; and 19 (b) other persons in active concert or participation with Defendants or with anyone 20 described in (a). II. 21 22 IT IS HEREBY FURTHER ORDERED, ADJUDGED, AND DECREED that 23 Defendants are permanently restrained and enjoined from violating Section 17(a) of 24 the Securities Act of 1933 (the “Securities Act”) [15 U.S.C. § 77q(a)] in the offer or 25 sale of any security by the use of any means or instruments of transportation or 26 communication in interstate commerce or by use of the mails, directly or indirectly: 27 (a) to employ any device, scheme, or artifice to defraud; 28 (b) to obtain money or property by means of any untrue statement of a 2 1 material fact or any omission of a material fact necessary in order to 2 make the statements made, in light of the circumstances under which 3 they were made, not misleading; or 4 (c) to engage in any transaction, practice, or course of business which operates or would operate as a fraud or deceit upon the purchaser. 5 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 or 9 otherwise: (a) Defendants’ officers, agents, servants, employees, and attorneys; and 10 (b) other persons in active concert or participation with Defendants or with anyone 11 described in (a). III. 12 13 IT IS HEREBY FURTHER ORDERED, ADJUDGED, AND DECREED that 14 Defendants are permanently restrained and enjoined from violating Section 5 of the 15 Securities Act [15 U.S.C. § 77e] by, directly or indirectly, in the absence of any 16 applicable exemption: 17 (a) Unless a registration statement is in effect as to a security, making use of 18 any means or instruments of transportation or communication in 19 interstate commerce or of the mails to sell such security through the use 20 or medium of any prospectus or otherwise; 21 (b) Unless a registration statement is in effect as to a security, carrying or 22 causing to be carried through the mails or in interstate commerce, by any 23 means or instruments of transportation, any such security for the purpose 24 of sale or for delivery after sale; or 25 (c) Making use of any means or instruments of transportation or 26 communication in interstate commerce or of the mails to offer to sell or 27 offer to buy through the use or medium of any prospectus or otherwise 28 any security, unless a registration statement has been filed with the 3 1 Commission as to such security, or while the registration statement is the 2 subject of a refusal order or stop order or (prior to the effective date of 3 the registration statement) any public proceeding or examination under 4 Section 8 of the Securities Act [15 U.S.C. § 77h]. 5 IT IS FURTHER ORDERED, ADJUDGED, AND DECREED that, as 6 provided in Federal Rule of Civil Procedure 65(d)(2), the foregoing paragraph also 7 binds the following who receive actual notice of this Judgment by personal service or 8 otherwise: (a) Defendants’ officers, agents, servants, employees, and attorneys; and 9 (b) other persons in active concert or participation with Defendants or with anyone 10 described in (a). IV. 11 12 IT IS HEREBY FURTHER ORDERED, ADJUDGED, AND DECREED that 13 Defendant Green Bud Initiatives LLC is permanently restrained and enjoined from 14 violating, directly or indirectly, Section 15(a) of the Exchange Act, 15 U.S.C. § 15 78o(a), which makes it unlawful for any broker or dealer which is either a person 16 other than a natural person or a natural person, to make use of the mails or any means 17 or instrumentality of interstate commerce to effect any transactions in, or to induce or 18 attempt to induce the purchase or sale of, any security (other than an exempted 19 security or commercial paper, bankers’ acceptances, or commercial bills) unless such 20 broker or dealer is registered in accordance with Section 15(b) of the Exchange Act, 21 15 U.S.C. § 78o(b). 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 Judgment by personal service or 25 otherwise: (a) Defendant’s officers, agents, servants, employees, and attorneys; and 26 (b) other persons in active concert or participation with Defendant or with anyone 27 described in (a). 28 4 1 2 V. IT IS HEREBY FURTHER ORDERED, ADJUDGED, AND DECREED that 3 Defendant Green Bud Initiatives LLC shall pay, jointly and severally with co- 4 defendants Anthony Todd Johnson and Jeremy Johnson, disgorgement of 5 $2,776,726.00, representing net profits gained as a result of the conduct alleged in the 6 Complaint, together with prejudgment interest thereon in the amount of $222,575.00 7 for a total of $2,999,301.00, which the Court finds is for the benefit of investors. 8 Defendant shall satisfy this obligation by paying for aforementioned sums to the 9 Securities and Exchange Commission with 30 days after entry of this Final Judgment. 10 Defendant may transmit payment electronically to the Commission, which will 11 provide detailed ACH transfer/Fedwire instructions upon request. Payment may also 12 be made directly from a bank account via Pay.gov through the SEC website at 13 http://www.sec.gov/about/offices/ofm.htm. Defendant may also pay by certified 14 check, bank cashier’s check, or United States postal money order payable to the 15 Securities and Exchange Commission, which shall be delivered or mailed to 16 Enterprise Services Center 17 Accounts Receivable Branch 18 6500 South MacArthur Boulevard 19 Oklahoma City, OK 73169 20 and shall be accompanied by a letter identifying the case title, civil action number, 21 and name of this Court; Jeremy Johnson as a defendant in this action; and specifying 22 that payment is made pursuant to this Final Judgment. 23 Defendant shall simultaneously transmit photocopies of evidence of payment 24 and case identifying information to the Commission’s counsel in this action. By 25 making this payment, Defendant relinquishes all legal and equitable right, title, and 26 interest in such funds and no part of the funds shall be returned to Defendant. 27 28 The Commission may enforce the Court’s judgment for disgorgement and prejudgment interest by using all collection procedures authorized by law, including, 5 1 but not limited to, moving for civil contempt at any time after 30 days following entry 2 of this Final Judgment. 3 4 5 Defendant shall pay post judgment interest on any amounts due after 30 days of the entry of this Final Judgment pursuant to 28 U.S.C. § 1961. The Commission shall hold the funds (collectively, the “Fund”) until further 6 order of this Court. The SEC may propose a plan to distribute the Fund subject to the 7 Court’s approval, and the Court shall retain jurisdiction over the administration of 8 any distribution of the Fund. 9 The Commission may propose a plan to distribute the Fund subject to the 10 Court’s approval. Such a plan may provide that the Fund shall be distributed 11 pursuant to the Fair Fund provisions of Section 308(a) of the Sarbanes-Oxley Act of 12 2002. The Court shall retain jurisdiction over the administration of any distribution 13 of the Fund and the Fund may only be disbursed pursuant to an Order of the Court. 14 VI. 15 IT IS FURTHER ORDERED, ADJUDGED, AND DECREED that the 16 Consent is incorporated herein with the same force and effect as if fully set forth 17 herein, and that Defendant shall comply with all of the undertakings and agreements 18 set forth therein. VII. 19 20 IT IS FURTHER ORDERED, ADJUDGED, AND DECREED that, solely for 21 purposes of exceptions to discharge set forth in Section 523 of the Bankruptcy Code, 22 11 U.S.C. § 523, the allegations in the complaint are true and admitted by Defendant, 23 and further, any debt for disgorgement, prejudgment interest, civil penalty or other 24 amounts due by Defendant under this Judgment or any other judgment, order, consent 25 order, decree or settlement agreement entered in connection with this proceeding, is a 26 debt for the violation by Defendant of the federal securities laws or any regulation or 27 order issued under such laws, as set forth in Section 523(a)(19) of the Bankruptcy 28 Code, 11 U.S.C. §523(a)(19). 6 1 2 VIII. 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 Judgment. 5 IX. 6 There being no just reason for delay, pursuant to Rule 54(b) of the Federal 7 Rules of Civil Procedure, the Clerk is ordered to enter this Final Judgment forthwith 8 and without further notice. 9 10 Dated: January 28, 2021 11 ________________________________ 12 MARK C. SCARSI UNITED STATES DISTRICT JUDGE 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 7
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