Securities and Exchange Commission v. Nancy M Tullos, No. 8:2008cv00242 - Document 6 (C.D. Cal. 2008)
Court Description: FINAL JUDGMENT by Judge Andrew J. Guilford as to DEFENDANT NANCY M. TULLOS: (MD JS-6, Case Terminated). I. IT IS HEREBY ORDERED, ADJUDGED, AND DECREED that Tullos and her agents, servants, employees, attorneys, and all persons in active concert or pa rticipation with them who receive actual notice of this Final Judgment by personal service or otherwise are permanently restrained and enjoined from violating Section 17(a)(3) of the Securities Act of 1933, 15 U.S.C. § 77q(a)(3), in the offer or sale of any security by the use of any means or instruments of transportation or communication in interstate commerce or by use of the mails, directly or indirectly, to obtain money or property by means of any untrue statement of a material fact or any omission of a material fact necessary in order to make the statements made, in light of the circumstances under which they were made, not misleading; or to engage in any transaction, practice, or course of business which operates or would operate as a fraud or deceit upon the purchaser. (See document for further details.) VII. IT IS FURTHER ORDERED, ADJUDGED, AND DECREED that Tullos is liable for disgorgement of $1,260,455.40, representing profits gained as a result of the conduct alleg ed in the Complaint, together with prejudgment interest thereon in the amount of $49,561.80, for a total of $1,310,017.20. Tullos shall be deemed to have disgorged the Disgorgement Amount on December 15, 2006, the date on which Broadcom Cor poration cancelled Tullos' exercisable options to buy Broadcom stock, which were valuedat $4.27 million at the time of cancellation. In the event that Tullos pursues any claim for relief from Broadcom for its cancellation of her exercisable options, Tullos shall exclude from any such claim all legal and equitable interest, title or right to obtain the Disgorgement Amount. III.IT IS FURTHER ORDERED, ADJUDGED, AND DECREED that Tullos shall pay a civil penalty in the amount of $100,0 00 pursuant to Section 20(d) of the Securities Act, 15 U.S.C. § 77t(d), and Section 21(d)(3) of the Exchange Act, 15 U.S.C. § 78u(d)(3). Tullos shall make this payment within ten (10) business days after entry of this Final Judgment by cert ified check, bank cashiers check, or United States postal money order payable to the Securities and Exchange Commission. The payment shall be delivered or mailed to the Office of Financial Management, Securities and Exchange Commission, Operations Ce nter, 6432 General Green Way, Mail Stop 0-3, Alexandria, Virginia 22312, and shall be accompanied by a letter identifying Nancy M. Tullos as a defendant in this action; setting forth the title and civil action number of this action and the name of th is Court; and specifying that payment is made pursuant to this Final Judgment. Tullos shall pay post-judgment interest on any delinquent amounts pursuant to 28 U.S.C. § 1961. The Commission shall remit the funds paid pursuant to this paragraph to the United States Treasury. (rla)
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Securities and Exchange Commission v. Nancy M Tullos Case 8:08-cv-00242-AG-MLG 1 2 3 4 5 6 7 8 9 Doc. 6 Document 6 Filed 03/10/2008 MOLLY WHITE, Cal. Bar No. 171448 E-mail: whitem@sec.gov MARSHALL S. SPRUNG, Cal. Bar No. 188253 E-mail: sprungm@sec.gov JUNLING MA, Cal. Bar No. 213241 E-mail: maj@sec.gov Page 1 of 6 JS-6 Attorneys for Plaintiff Securities and Exchange Commission Rosalind R. Tyson, Acting Regional Director Michele Wein Layne, Associate Regional Director Andrew G. Petillon, Associate Regional Director 5670 Wilshire Boulevard, 11th Floor Los Angeles, California 90036-3648 Telephone: (323) 965-3998 Facsimile: (323) 965-3908 10 UNITED STATES DISTRICT COURT CENTRAL DISTRICT OF CALIFORNIA 11 12 SOUTHERN DIVISION 13 14 15 16 SECURITIES AND EXCHANGE COMMISSION, 17 18 Plaintiff, Case No. SACV 08-242-AG(MLGx) FINAL JUDGMENT AS TO DEFENDANT NANCY M. TULLOS vs. 19 20 21 NANCY M. TULLOS, Defendant. 22 23 24 25 26 27 28 Dockets.Justia.com Case 8:08-cv-00242-AG-MLG 1 Document 6 Filed 03/10/2008 Page 2 of 6 The Securities and Exchange Commission (the “Commission”) having filed 2 a Complaint and Defendant Nancy M. Tullos (“Tullos”) having entered a general 3 appearance; consented to the Court’s jurisdiction over Tullos and the subject 4 matter of this action; consented to entry of this Final Judgment without admitting 5 or denying the allegations of the Complaint (except as to jurisdiction); waived 6 findings of fact and conclusions of law; and waived any right to appeal from this 7 Final Judgment: 8 9 I. IT IS HEREBY ORDERED, ADJUDGED, AND DECREED that Tullos 10 and her agents, servants, employees, attorneys, and all persons in active concert or 11 participation with them who receive actual notice of this Final Judgment by 12 personal service or otherwise are permanently restrained and enjoined from 13 violating Section 17(a)(3) of the Securities Act of 1933 (the “Securities Act”), 15 14 U.S.C. § 77q(a)(3), in the offer or sale of any security by the use of any means or 15 instruments of transportation or communication in interstate commerce or by use 16 of the mails, directly or indirectly, to obtain money or property by means of any 17 untrue statement of a material fact or any omission of a material fact necessary in 18 order to make the statements made, in light of the circumstances under which they 19 were made, not misleading; or to engage in any transaction, practice, or course of 20 business which operates or would operate as a fraud or deceit upon the purchaser. 21 22 II. IT IS FURTHER ORDERED, ADJUDGED, AND DECREED that Tullos 23 and her agents, servants, employees, attorneys, and all persons in active concert or 24 participation with them who receive actual notice of this Final Judgment by 25 personal service or otherwise are permanently restrained and enjoined from 26 violating Section 13(b)(5) of the Securities Exchange Act of 1934 (the “Exchange 27 Act”), 15 U.S.C. § 78m(b)(5), by knowingly circumventing or knowingly failing to 28 implement a system of internal accounting controls or knowingly falsifying any -2- Case 8:08-cv-00242-AG-MLG Document 6 Filed 03/10/2008 Page 3 of 6 1 book, record or account described in Section 13(b)(2) of the Exchange Act, 15 2 U.S.C. § 78m(b)(2). III. 3 IT IS FURTHER ORDERED, ADJUDGED, AND DECREED that Tullos 4 5 and her agents, servants, employees, attorneys, and all persons in active concert or 6 participation with them who receive actual notice of this Final Judgment by 7 personal service or otherwise are permanently restrained and enjoined from aiding 8 and abetting any violation of Section 13(a) of the Exchange Act, 15 U.S.C. 9 § 78m(a), and Rules 12b-20, 13a-1 and 13a-13 thereunder, 17 C.F.R. §§ 240.12b- 10 20, 240.13a-1, and 240.13a-13, by knowingly providing substantial assistance to an 11 issuer which has a class of securities registered pursuant to Section 12 of the 12 Exchange Act, 15 U.S.C. § 78l, that files quarterly and annual reports with the 13 Commission on Forms 10-Q and Forms 10-K that fail to contain material 14 information necessary to make the required statements in the Forms 10-Q and 15 Forms 10-K, in light of the circumstances under which they are made, not 16 misleading. IV. 17 IT IS FURTHER ORDERED, ADJUDGED, AND DECREED that Tullos 18 19 and her agents, servants, employees, attorneys, and all persons in active concert or 20 participation with them who receive actual notice of this Final Judgment by 21 personal service or otherwise are permanently restrained and enjoined from aiding 22 and abetting any violation of Section 13(b)(2)(A) of the Exchange Act, 15 U.S.C. 23 § 78m(b)(2)(A), by knowingly providing substantial assistance to an issuer which 24 has a class of securities registered pursuant to Section 12 of the Exchange Act, 15 25 U.S.C. § 78l, or that is required to file reports pursuant to Section 15(d) of the 26 Exchange Act, 15 U.S.C. § 78o(d), in failing to make and keep books, records, and 27 /// 28 /// -3- Case 8:08-cv-00242-AG-MLG Document 6 Filed 03/10/2008 Page 4 of 6 1 accounts, which, in reasonable detail, accurately and fairly reflect the transactions 2 and disposition of the assets of the issuer. V. 3 IT IS FURTHER ORDERED, ADJUDGED, AND DECREED that Tullos 4 5 and her agents, servants, employees, attorneys, and all persons in active concert or 6 participation with them who receive actual notice of this Final Judgment by 7 personal service or otherwise are permanently restrained and enjoined from aiding 8 and abetting any violation of Section 13(b)(2)(B) of the Exchange Act, 15 U.S.C. 9 § 78m(b)(2)(B), by knowingly providing substantial assistance to an issuer which 10 has a class of securities registered pursuant to Section 12 of the Exchange Act, 15 11 U.S.C. § 78l, or that is required to file reports pursuant to Section 15(d) of the 12 Exchange Act, 15 U.S.C. § 78o(d), in failing to devise and maintain a system of 13 internal accounting controls sufficient to provide reasonable assurances that 14 (i) transactions are executed in accordance with management’s general or specific 15 authorization; (ii) transactions are recorded as necessary (I) to permit preparation 16 of financial statements in conformity with generally accepted accounting principles 17 or any other criteria applicable to such statements, and (II) to maintain 18 accountability for assets; (iii) access to assets is permitted only in accordance with 19 management’s general or specific authorization; and (iv) the recorded 20 accountability for assets is compared with the existing assets at reasonable 21 intervals and appropriate action is taken with respect to any differences. VI. 22 IT IS FURTHER ORDERED, ADJUDGED, AND DECREED that Tullos 23 24 and her agents, servants, employees, attorneys, and all persons in active concert or 25 participation with them who receive actual notice of this Final Judgment by 26 personal service or otherwise are permanently restrained and enjoined from 27 violating Rule 13b2-1 of the Exchange Act, 17 C.F.R. § 240.13b2-1, by, directly or 28 /// -4- Case 8:08-cv-00242-AG-MLG Document 6 Filed 03/10/2008 Page 5 of 6 1 indirectly, falsifying or causing to be falsified, any book, record or account subject 2 to Section 13(b)(2)(A) of the Exchange Act, 15 U.S.C. § 78m(b)(2)(A). 3 VII. 4 IT IS FURTHER ORDERED, ADJUDGED, AND DECREED that Tullos is 5 liable for disgorgement of $1,260,455.40, representing profits gained as a result of 6 the conduct alleged in the Complaint, together with prejudgment interest thereon in 7 the amount of $49,561.80, for a total of $1,310,017.20 (the “Disgorgement 8 Amount”). Tullos shall be deemed to have disgorged the Disgorgement Amount 9 on December 15, 2006, the date on which Broadcom Corporation (“Broadcom”) 10 cancelled Tullos’ exercisable options to buy Broadcom stock, which were valued 11 at $4.27 million at the time of cancellation. In the event that Tullos pursues any 12 claim for relief from Broadcom for its cancellation of her exercisable options, 13 Tullos shall exclude from any such claim all legal and equitable interest, title or 14 right to obtain the Disgorgement Amount. 15 16 VIII. IT IS FURTHER ORDERED, ADJUDGED, AND DECREED that Tullos 17 shall pay a civil penalty in the amount of $100,000 pursuant to Section 20(d) of the 18 Securities Act, 15 U.S.C. § 77t(d), and Section 21(d)(3) of the Exchange Act, 15 19 U.S.C. § 78u(d)(3). Tullos shall make this payment within ten (10) business days 20 after entry of this Final Judgment by certified check, bank cashier’s check, or 21 United States postal money order payable to the Securities and Exchange 22 Commission. The payment shall be delivered or mailed to the Office of Financial 23 Management, Securities and Exchange Commission, Operations Center, 6432 24 General Green Way, Mail Stop 0-3, Alexandria, Virginia 22312, and shall be 25 accompanied by a letter identifying Nancy M. Tullos as a defendant in this action; 26 setting forth the title and civil action number of this action and the name of this 27 Court; and specifying that payment is made pursuant to this Final Judgment. 28 Tullos shall pay post-judgment interest on any delinquent amounts pursuant to 28 -5- Case 8:08-cv-00242-AG-MLG Document 6 Filed 03/10/2008 Page 6 of 6 1 U.S.C. § 1961. The Commission shall remit the funds paid pursuant to this 2 paragraph to the United States Treasury. 3 IX. 4 IT IS FURTHER ORDERED, ADJUDGED, AND DECREED that the 5 Consent is incorporated herein with the same force and effect as if fully set forth 6 herein, and that Tullos shall comply with all of the undertakings and agreements 7 set forth therein. 8 X. 9 IT IS FURTHER ORDERED, ADJUDGED, AND DECREED that this 10 Court shall retain jurisdiction of this matter for the purposes of enforcing the terms 11 of this Final Judgment. 12 13 14 15 Dated:March 10, 2008 __________________________________ UNITED STATES DISTRICT JUDGE 16 17 18 19 20 21 22 23 24 25 26 27 28 -6-
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