Securities and Exchange Commission v. Uulala, Inc. et al, No. 5:2021cv01307 - Document 13 (C.D. Cal. 2021)
Court Description: FINAL JUDGMENT AS TO DEFENDANT UULALA, INC. by Judge Jesus G. Bernal. IT IS HEREBY FURTHER ORDERED, ADJUDGED, AND DECREED that Defendant is liable for a civil penalty in the amount of $300,000 pursuant to Securities Act Section 20(d) [15 U.S.C. § 77t(d)] and Exchange Act Section 21(d) [15 U.S.C. § 78u(d)]. Related to: Stipulation for Settlement 4 . SEE DOCUMENT FOR FURTHER INFORMATION. (twdb)
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Securities and Exchange Commission v. Uulala, Inc. et al Doc. 13 Case 5:21-cv-01307-JGB-KK Document 13 Filed 08/18/21 Page 1 of 8 Page ID #:94 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 16 17 18 Case No. ED CV 21-01307-JGB-KKx FINAL JUDGMENT AS TO DEFENDANT UULALA, INC. vs. UULALA, INC., OSCAR GARCIA, AND MATTHEW LOUGHRAN, Defendants. 19 20 21 22 23 24 25 26 27 28 Dockets.Justia.com Case 5:21-cv-01307-JGB-KK Document 13 Filed 08/18/21 Page 2 of 8 Page ID #:95 1 The Securities and Exchange Commission having filed a Complaint and 2 Defendant Uulala, Inc. having entered a general appearance; consented to the Court’s 3 jurisdiction over Defendant and the subject matter of this action; consented to entry 4 of this Final Judgment without admitting or denying the allegations of the Complaint 5 (except as to jurisdiction); waived findings of fact and conclusions of law; and 6 waived any right to appeal from this Final Judgment: I. 7 8 IT IS HEREBY ORDERED, ADJUDGED, AND DECREED that Defendant is 9 permanently restrained and enjoined from violating, directly or indirectly, Section 10 10(b) of the Securities Exchange Act of 1934 (the “Exchange Act”) [15 U.S.C. § 11 78j(b)] and Rule 10b-5 promulgated thereunder [17 C.F.R. § 240.10b-5], by using 12 any means or instrumentality of interstate commerce, or of the mails, or of any 13 facility of any national securities exchange, in connection with the purchase or sale of 14 any security: 15 (a) to employ any device, scheme, or artifice to defraud; 16 (b) to make any untrue statement of a material fact or to omit to state a 17 material fact necessary in order to make the statements made, in the light of the 18 circumstances under which they were made, not misleading; or 19 (c) 20 would operate as a fraud or deceit upon any person. 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 Final Judgment by personal 24 service or otherwise: (a) Defendant’s officers, agents, servants, employees, and 25 attorneys; and (b) other persons in active concert or participation with Defendant or 26 with anyone described in (a). 27 28 to engage in any act, practice, or course of business which operates or II. IT IS HEREBY FURTHER ORDERED, ADJUDGED, AND DECREED that 1 Case 5:21-cv-01307-JGB-KK Document 13 Filed 08/18/21 Page 3 of 8 Page ID #:96 1 Defendant is permanently restrained and enjoined from violating Section 17(a) of the 2 Securities Act of 1933 (the “Securities Act”) [15 U.S.C. § 77q(a)] in the offer or sale 3 of any security by the use of any means or instruments of transportation or 4 communication in interstate commerce or by use of the mails, directly or indirectly: 5 (a) to employ any device, scheme, or artifice to defraud; 6 (b) to obtain money or property by means of any untrue statement of a 7 material fact or any omission of a material fact necessary in order to make the 8 statements made, in light of the circumstances under which they were made, 9 not misleading; or to engage in any transaction, practice, or course of business which 10 (c) 11 operates or would operate as a fraud or deceit upon the purchaser. 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). III. 18 19 IT IS HEREBY FURTHER ORDERED, ADJUDGED, AND DECREED that 20 Defendant is permanently restrained and enjoined from violating Section 5 of the 21 Securities Act [15 U.S.C. § 77e] by, directly or indirectly, in the absence of any 22 applicable exemption: 23 (a) Unless a registration statement is in effect as to a security, making use of 24 any means or instruments of transportation or communication in 25 interstate commerce or of the mails to sell such security through the use 26 or medium of any prospectus or otherwise; 27 28 (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 2 Case 5:21-cv-01307-JGB-KK Document 13 Filed 08/18/21 Page 4 of 8 Page ID #:97 1 means or instruments of transportation, any such security for the purpose 2 of sale or for delivery after sale; or 3 (c) Making use of any means or instruments of transportation or 4 communication in interstate commerce or of the mails to offer to sell or 5 offer to buy through the use or medium of any prospectus or otherwise 6 any security, unless a registration statement has been filed with the 7 Commission as to such security, or while the registration statement is the 8 subject of a refusal order or stop order or (prior to the effective date of 9 the registration statement) any public proceeding or examination under Section 8 of the Securities Act [15 U.S.C. § 77h]. 10 11 IT IS FURTHER ORDERED, ADJUDGED, AND DECREED that, as 12 provided in Federal Rule of Civil Procedure 65(d)(2), the foregoing paragraph also 13 binds the following who receive actual notice of this Final Judgment by personal 14 service or otherwise: (a) Defendant’s officers, agents, servants, employees, and 15 attorneys; and (b) other persons in active concert or participation with Defendant or 16 with anyone described in (a). IV. 17 IT IS FURTHER ORDERED, ADJUDGED, AND DECREED that pursuant to 18 19 Section 21(d)(5) of the Exchange Act [15 U.S.C. § 78u(d)(5)], Defendant is 20 permanently restrained and enjoined from participating, directly or indirectly, in any 21 unregistered offering of securities, including any digital asset security. 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 Final Judgment by personal 25 service or otherwise: (a) Defendant’s officers, agents, servants, employees, and 26 attorneys; and (b) other persons in active concert or participation with Defendant or 27 with anyone described in (a). 28 /// 3 Case 5:21-cv-01307-JGB-KK Document 13 Filed 08/18/21 Page 5 of 8 Page ID #:98 1 V. 2 IT IS HEREBY FURTHER ORDERED, ADJUDGED, AND 3 DECREED that Defendant is liable for a civil penalty in the amount of $300,000 4 pursuant to Securities Act Section 20(d) [15 U.S.C. § 77t(d)] and Exchange Act 5 Section 21(d) [15 U.S.C. § 78u(d)]. Defendant shall satisfy this obligation by paying 6 $300,000 to the Securities and Exchange Commission within 30 days after entry of 7 this Final Judgment. 8 Defendant may transmit payment electronically to the Commission, which will 9 provide detailed ACH transfer/Fedwire instructions upon request. Payment may also 10 be made directly from a bank account via Pay.gov through the SEC website at 11 http://www.sec.gov/about/offices/ofm.htm. Defendant may also pay by certified 12 check, bank cashier’s check, or United States postal money order payable to the 13 Securities and Exchange Commission, which shall be delivered or mailed to 14 15 16 Enterprise Services Center Accounts Receivable Branch 6500 South MacArthur Boulevard Oklahoma City, OK 73169 17 and shall be accompanied by a letter identifying the case title, civil action number, 18 and name of this Court; Uulala, Inc., as a defendant in this action; and specifying that 19 payment is made pursuant to this Final Judgment. 20 Defendant shall simultaneously transmit photocopies of evidence of payment 21 and case identifying information to the Commission’s counsel in this action. By 22 making this payment, Defendant relinquishes all legal and equitable right, title, and 23 interest in such funds and no part of the funds shall be returned to Defendant. 24 The Commission may enforce the Court’s judgment for penalties by the use of 25 all collection procedures authorized by law, including the Federal Debt Collection 26 Procedures Act, 28 U.S.C. § 3001 et seq., and moving for civil contempt for the 27 violation of any Court orders issued in this action. Defendant shall pay post 28 judgment interest on any amounts due after 30 days of the entry of this Final 4 Case 5:21-cv-01307-JGB-KK Document 13 Filed 08/18/21 Page 6 of 8 Page ID #:99 1 Judgment pursuant to 28 U.S.C. § 1961. The Commission shall hold the funds, 2 together with any interest and income earned thereon (collectively, the “Fund”), 3 pending further order of the Court. 4 The Commission may propose a plan to distribute the Fund subject to the 5 Court’s approval. Such a plan may provide that the Fund shall be distributed 6 pursuant to the Fair Fund provisions of Section 308(a) of the Sarbanes-Oxley Act of 7 2002. The Court shall retain jurisdiction over the administration of any distribution 8 of the Fund and the Fund may only be disbursed pursuant to an Order of the Court. 9 Regardless of whether any such Fair Fund distribution is made, amounts 10 ordered to be paid as civil penalties pursuant to this Judgment shall be treated as 11 penalties paid to the government for all purposes, including all tax purposes. To 12 preserve the deterrent effect of the civil penalty, Defendant shall not, after offset or 13 reduction of any award of compensatory damages in any Related Investor Action 14 based on Defendant’s payment of disgorgement in this action, argue that it is entitled 15 to, nor shall it further benefit by, offset or reduction of such compensatory damages 16 award by the amount of any part of Defendant’s payment of a civil penalty in this 17 action (“Penalty Offset”). If the court in any Related Investor Action grants such a 18 Penalty Offset, Defendant shall, within 30 days after entry of a final order granting 19 the Penalty Offset, notify the Commission’s counsel in this action and pay the amount 20 of the Penalty Offset to the United States Treasury or to a Fair Fund, as the 21 Commission directs. Such a payment shall not be deemed an additional civil penalty 22 and shall not be deemed to change the amount of the civil penalty imposed in this 23 Judgment. For purposes of this paragraph, a “Related Investor Action” means a 24 private damages action brought against Defendant by or on behalf of one or more 25 investors based on substantially the same facts as alleged in the Complaint in this 26 action. 27 28 VI. IT IS FURTHER ORDERED, ADJUDGED, AND DECREED that the 5 Case 5:21-cv-01307-JGB-KK Document 13 Filed 08/18/21 Page 7 of 8 Page ID #:100 1 Consent is incorporated herein with the same force and effect as if fully set forth 2 herein, and that Defendant shall comply with all of the undertakings and agreements 3 set forth therein, including, but not limited to, the undertakings to: 4 (i) Permanently disable all UULA and EUULA tokens in its possession or 5 control within 10 days of the entry of the final judgment, including any 6 UULA or EUULA tokens owned by, beneficially owned by, or held in 7 the name of Oscar Garcia or Matthew Loughran; (ii) 8 Publish notice of the final judgment on Uulala’s website and social media channels, in a form not unacceptable to Commission staff, within 9 10 days of the entry of the final judgment; 10 (iii) 11 Issue requests to remove UULA and EUULA tokens from any further 12 trading on all digital asset trading platforms where UULA or EUULA 13 tokens are or may be trading, including any that Uulala previously 14 contacted to request trading of UULA or EUULA tokens, and publish 15 notice of such requests on Uulala’s website and social media channels, 16 in a form not unacceptable to Commission staff, within 10 days of the 17 entry of the final judgment; and (iv) 18 Certify, in writing, compliance with the undertakings set forth above. 19 The certification shall identify the undertakings, provide written 20 evidence of compliance in the form of a narrative, and be supported by 21 exhibits sufficient to demonstrate compliance. The Commission staff 22 may make reasonable requests for further evidence of compliance, and 23 Defendant agrees to provide such evidence. Defendant shall submit the 24 certification and supporting material to Victoria A. Levin, Assistant 25 Director, Division of Enforcement, with a copy to the Office of Chief 26 Counsel of the Enforcement Division, no later than sixty (60) days from 27 the date of the completion of the undertakings. 28 /// 6 Case 5:21-cv-01307-JGB-KK Document 13 Filed 08/18/21 Page 8 of 8 Page ID #:101 VII. 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 VIII. 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: August 18, 2021 11 ___________________________________ 12 Jesus G. Bernal, U.S. District Judge 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 7
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