U.S. Securities and Exchange Commission v. Patrick S. Carter et al, No. 8:2016cv02070 - Document 120 (C.D. Cal. 2021)
Court Description: FINAL JUDGMENT AS TO DEFENDANT PATRICK S. CARTER by Judge James V. Selna. IT IS HEREBY ORDERED, ADJUDGED, AND DECREED that Defendant is permanently restrained and enjoined from violating, directly or indirectly, Section 10(b) of the Securities Exc hange Act of 1934 (the "Exchange Act") [15 U.S.C. § 78j(b)] and Rule 10b-5 promulgated thereunder [17 C.F.R. § 240.10b-5], by using any means or instrumentality of interstate commerce, or of the mails, or of any facility of any na tional securities exchange, in connection with the purchase or sale of any security: IT IS FURTHER ORDERED, ADJUDGED, AND DECREED that Defendant is liable for disgorgement of $14,628,767.87, representing profits gained as a result of the cond uct alleged in the Complaint, together with prejudgment interest thereon in the amount of $1,317,461.04. Defendant shall satisfy this obligation by paying $15,946,228.91, to the Securities and Exchange Commission within 14 days after the entry of this Final Judgment. [SEE DOCUMENT FOR FURTHER DETAILS.] 119 (es)
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U.S. Securities and Exchange Commission v. Patrick S. Carter et al Doc. 120 Case 8:16-cv-02070-JVS-DFM Document 120 Filed 09/20/21 Page 1 of 7 Page ID #:1503 1 2 3 4 5 6 7 DOUGLAS M. MILLER (Cal. Bar No. 240398) Email: millerdou@sec.gov YOLANDA OCHOA (Cal. Bar No. 267993) Email: ochoay@sec.gov Attorneys for Plaintiff Securities and Exchange Commission Michele Wein Layne, Regional Director Alka N. Patel, Associate Regional Director Amy J. Longo, Regional Trial Counsel 444 S. Flower Street, Suite 900 Los Angeles, California 90071 Telephone: (323) 965-3998 Facsimile: (213) 443-1904 8 9 UNITED STATES DISTRICT COURT 10 CENTRAL DISTRICT OF CALIFORNIA 11 Southern Division 12 13 SECURITIES AND EXCHANGE COMMISSION, Plaintiff, 14 15 19 20 Defendants. 17 18 FINAL JUDGMENT AS TO DEFENDANT PATRICK S. CARTER vs. PATRICK S. CARTER, 808 RENEWABLE ENERGY CORPORATION, 808 INVESTMENTS, LLC, MARTIN J. KINCHLOE, PETER J. KIRKBRIDE, WEST COAST COMMODITIES, LLC, THOMAS A. FLOWERS, and T.A. FLOWERS LLC, 16 Case No. 8:16-cv-2070-JVS-DFM 21 22 23 24 25 26 27 28 Dockets.Justia.com Case 8:16-cv-02070-JVS-DFM Document 120 Filed 09/20/21 Page 2 of 7 Page ID #:1504 1 The Securities and Exchange Commission (“SEC” or “Commission”) having 2 filed a Complaint and Defendant Patrick S. Carter (“Defendant” or “Carter”) having 3 entered a general appearance; consented to the Court’s jurisdiction over Defendant 4 and the subject matter of this action; consented to entry of this Final Judgment without 5 admitting or denying the allegations of the Complaint (except as to jurisdiction and 6 except as otherwise provided herein in paragraph X); waived findings of fact and 7 conclusions of law; and waived any right to appeal from this Final Judgment: 8 I. IT IS HEREBY ORDERED, ADJUDGED, AND DECREED that Defendant is 9 10 permanently restrained and enjoined from violating, directly or indirectly, Section 11 10(b) of the Securities Exchange Act of 1934 (the “Exchange Act”) [15 U.S.C. § 12 78j(b)] and Rule 10b-5 promulgated thereunder [17 C.F.R. § 240.10b-5], by using 13 any means or instrumentality of interstate commerce, or of the mails, or of any 14 facility of any national securities exchange, in connection with the purchase or sale of 15 any security: 16 (a) to employ any device, scheme, or artifice to defraud; 17 (b) to make any untrue statement of a material fact or to omit to state a 18 material fact necessary in order to make the statements made, in the light 19 of the circumstances under which they were made, not misleading; or (c) 20 to engage in any act, practice, or course of business which operates or would operate as a fraud or deceit upon any person. 21 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 /// 1 Case 8:16-cv-02070-JVS-DFM Document 120 Filed 09/20/21 Page 3 of 7 Page ID #:1505 1 II. 2 IT IS HEREBY FURTHER ORDERED, ADJUDGED, AND DECREED that 3 Defendant is permanently restrained and enjoined from violating Section 17(a) of the 4 Securities Act of 1933 (the “Securities Act”) [15 U.S.C. § 77q(a)] in the offer or sale 5 of any security by the use of any means or instruments of transportation or 6 communication in interstate commerce or by use of the mails, directly or indirectly: 7 (a) to employ any device, scheme, or artifice to defraud; 8 (b) to obtain money or property by means of any untrue statement of a 9 material fact or any omission of a material fact necessary in order to 10 make the statements made, in light of the circumstances under which 11 they were made, not misleading; or 12 (c) to engage in any transaction, practice, or course of business which operates or would operate as a fraud or deceit upon the purchaser. 13 14 IT IS FURTHER ORDERED, ADJUDGED, AND DECREED that, as 15 provided in Federal Rule of Civil Procedure 65(d)(2), the foregoing paragraph also 16 binds the following who receive actual notice of this Judgment by personal service or 17 otherwise: (a) Defendant’s officers, agents, servants, employees, and attorneys; and 18 (b) other persons in active concert or participation with Defendant or with anyone 19 described in (a). 20 21 III. IT IS HEREBY FURTHER ORDERED, ADJUDGED, AND DECREED that 22 Defendant is permanently restrained and enjoined from violating Section 5 of the 23 Securities Act [15 U.S.C. § 77e] by, directly or indirectly, in the absence of any 24 applicable exemption: 25 (a) Unless a registration statement is in effect as to a security, making use of 26 any means or instruments of transportation or communication in 27 interstate commerce or of the mails to sell such security through the use 28 or medium of any prospectus or otherwise; 2 Case 8:16-cv-02070-JVS-DFM Document 120 Filed 09/20/21 Page 4 of 7 Page ID #:1506 1 (b) Unless a registration statement is in effect as to a security, carrying or 2 causing to be carried through the mails or in interstate commerce, by any 3 means or instruments of transportation, any such security for the purpose 4 of sale or for delivery after sale; or 5 (c) Making use of any means or instruments of transportation or 6 communication in interstate commerce or of the mails to offer to sell or 7 offer to buy through the use or medium of any prospectus or otherwise 8 any security, unless a registration statement has been filed with the SEC 9 as to such security, or while the registration statement is the subject of a 10 refusal order or stop order or (prior to the effective date of the 11 registration statement) any public proceeding or examination under 12 Section 8 of the Securities Act [15 U.S.C. § 77h]. 13 IT IS FURTHER ORDERED, ADJUDGED, AND DECREED that, as 14 provided in Federal Rule of Civil Procedure 65(d)(2), the foregoing paragraph also 15 binds the following who receive actual notice of this Judgment by personal service or 16 otherwise: (a) Defendant’s officers, agents, servants, employees, and attorneys; and 17 (b) other persons in active concert or participation with Defendant or with anyone 18 described in (a). 19 IV. 20 IT IS HEREBY FURTHER ORDERED, ADJUDGED, AND DECREED that 21 Defendant is permanently restrained and enjoined from violating Section 15(a) of the 22 Exchange Act [15 U.S.C. § 78o(a)] by, directly or indirectly, in the absence of any 23 applicable exemption, making use of the mails or any means or instrumentality of 24 interstate commerce to effect any transactions in, or to induce or attempt to induce the 25 purchase or sale of, any security (other than an exempted security or commercial 26 paper, bankers’ acceptances, or commercial bills) unless registered in accordance 27 with Section 15(b) of the Exchange Act [15 U.S.C. § 78o(b)]. 28 IT IS FURTHER ORDERED, ADJUDGED, AND DECREED that, as 3 Case 8:16-cv-02070-JVS-DFM Document 120 Filed 09/20/21 Page 5 of 7 Page ID #:1507 1 provided in Federal Rule of Civil Procedure 65(d)(2), the foregoing paragraph also 2 binds the following who receive actual notice of this Judgment by personal service or 3 otherwise: (a) Defendant’s officers, agents, servants, employees, and attorneys; and 4 (b) other persons in active concert or participation with Defendant or with anyone 5 described in (a). 6 7 V. IT IS FURTHER ORDERED, ADJUDGED, AND DECREED that Defendant 8 is permanently restrained and enjoined from soliciting, accepting, or depositing any 9 monies from actual or prospective investors in connection with any offering of 10 securities, provided, however, that such injunction shall not prevent Defendant from 11 purchasing or selling securities listed on a national securities exchange for 12 Defendant’s own personal accounts. 13 14 VI. IT IS FURTHER ORDERED, ADJUDGED, AND DECREED that, pursuant 15 to Section 21(d)(2) of the Exchange Act [15 U.S.C. § 78u(d)(2)] and Section 20(e) of 16 the Securities Act [15 U.S.C. § 77t(e)], Defendant is prohibited from acting as an 17 officer or director of any issuer that has a class of securities registered pursuant to 18 Section 12 of the Exchange Act [15 U.S.C. § 78l] or that is required to file reports 19 pursuant to Section 15(d) of the Exchange Act [15 U.S.C. § 78o(d)]. 20 21 VII. IT IS HEREBY FURTHER ORDERED, ADJUDGED, AND DECREED that 22 Defendant is permanently barred from participating in an offering of penny stock, 23 including engaging in activities with a broker, dealer, or issuer for purposes of 24 issuing, trading, or inducing or attempting to induce the purchase or sale of any penny 25 stock. A penny stock is any equity security that has a price of less than five dollars, 26 except as provided in Rule 3a51-1 under the Exchange Act [17 C.F.R. 240.3a51-1]. 27 28 VIII. IT IS FURTHER ORDERED, ADJUDGED, AND DECREED that Defendant 4 Case 8:16-cv-02070-JVS-DFM Document 120 Filed 09/20/21 Page 6 of 7 Page ID #:1508 1 is liable for disgorgement of $$14,628,767.87, representing profits gained as a result 2 of the conduct alleged in the Complaint, together with prejudgment interest thereon in 3 the amount of $1,317,461.04. Defendant shall satisfy this obligation by paying 4 $15,946,228.91, to the Securities and Exchange Commission within 14 days after the 5 entry of this Final Judgment. 6 Defendant may transmit payment electronically to the Commission, which 7 will provide detailed ACH transfer/Fedwire instructions upon request. Payment 8 may also be made directly from a bank account via Pay.gov through the SEC 9 website at http://www.sec.gov/about/offices/ofm.htm. Defendant may also pay by 10 certified check, bank cashier’s check, or United States postal money order payable 11 to the Securities and Exchange Commission, which shall be delivered or mailed to 12 13 14 Enterprise Services Center Accounts Receivable Branch 6500 South MacArthur Boulevard Oklahoma City, OK 73169 15 and shall be accompanied by a letter identifying the case title, civil action number, 16 and name of this Court; Patrick S. Carter as a defendant in this action; and specifying 17 that payment is made pursuant to this Final Judgment. 18 Defendant shall simultaneously transmit photocopies of evidence of payment 19 and case identifying information to the Commission’s counsel in this action. By 20 making this payment, Defendant relinquishes all legal and equitable right, title, and 21 interest in such funds and no part of the funds shall be returned to Defendant. The 22 Commission shall send the funds paid pursuant to this Final Judgment to the United 23 States Treasury. 24 The Commission may enforce the Court’s judgment for disgorgement and 25 prejudgment interest by moving for civil contempt (and/or through other collection 26 procedures authorized by law) at any time after 14 days following entry of this Final 27 Judgment. Defendant shall pay post judgment interest on any delinquent amounts 28 pursuant to 28 U.S.C. § 1961. 5 Case 8:16-cv-02070-JVS-DFM Document 120 Filed 09/20/21 Page 7 of 7 Page ID #:1509 1 IX. 2 IT IS FURTHER ORDERED, ADJUDGED, AND DECREED that the 3 Consent of Defendant Patrick S. Carter to Entry of Judgment is incorporated herein 4 with the same force and effect as if fully set forth herein, and that Defendant shall 5 comply with all of the undertakings and agreements set forth therein. 6 X. 7 IT IS FURTHER ORDERED, ADJUDGED, AND DECREED that, for 8 purposes of exceptions to discharge set forth in Section 523 of the Bankruptcy Code, 9 11 U.S.C. §523, the allegations in the complaint are true and admitted by Defendant, 10 and further, any debt for disgorgement, prejudgment interest, civil penalty or other 11 amounts due by Defendant under this Judgment or any other judgment, order, consent 12 order, decree or settlement agreement entered in connection with this proceeding, is a 13 debt for the violation by Defendant of the federal securities laws or any regulation or 14 order issued under such laws, as set forth in Section 523(a)(19) of the Bankruptcy 15 Code, 11 U.S.C. §523(a)(19). 16 17 XI. IT IS FURTHER ORDERED, ADJUDGED, AND DECREED that this Court 18 shall retain jurisdiction of this matter for the purposes of enforcing the terms of this 19 Judgment. 20 XII. 21 There being no just reason for delay, pursuant to Rule 54(b) of the Federal 22 Rules of Civil Procedure, the Clerk is ordered to enter this Judgment forthwith and 23 without further notice. 24 25 26 27 Dated: September 20, 2021 HON. JAMES V. SELNA UNITED STATES DISTRICT JUDGE 28 6
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