U.S. Securities and Exchange Commission v. Patrick S. Carter et al, No. 8:2016cv02070 - Document 139 (C.D. Cal. 2023)
Court Description: FINAL JUDGMENT AS TO DEFENDANT 808 RENEWABLE ENERGY CORPORATION 137 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 Exchange 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 national securities exchange, in connection with the purchase or sale of any security: IT IS FURTHER ORDERED, ADJUDGED, AND DECREED that Defendant is jointly and severally liable with defendant Patrick S. Carter for disgorgeme nt of $14,628,767.87, representing profits gained as a result of the conduct alleged in the Complaint, together with prejudgment interest thereon in the amount of $1,317,461.04, and a civil penalty in the amount of $775,000 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). Defendant shall satisfy this obligation by paying $16,721,228.91, to the Securities and Exchange Commission within 14 days after the entry of this Final Judgment. [SEE DOCUMENT FOR FURTHER INFORMATION.] (es)
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U.S. Securities and Exchange Commission v. Patrick S. Carter et al Doc. 139 1 2 3 4 5 6 7 8 UNITED STATES DISTRICT COURT 9 CENTRAL DISTRICT OF CALIFORNIA 10 Southern Division 11 12 SECURITIES AND EXCHANGE COMMISSION, 13 Plaintiff, 14 15 vs. 19 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, 20 Defendants. 16 17 18 Case No. 8:16-cv-2070-JVS-DFM FINAL JUDGMENT AS TO DEFENDANT 808 RENEWABLE ENERGY CORPORATION [137] 21 22 23 24 25 26 27 28 Dockets.Justia.com This matter came before the Court on the Securities and Exchange 1 2 Commission’s (“SEC”) Motion for Default Judgment against defendant 808 3 Renewable Energy Corporation (“Defendant”). The Court having considered the 4 SEC’s Complaint, the Motion, the supporting Memorandum of Points and 5 Authorities, the supporting declaration and exhibits, and the other evidence and 6 argument presented to the Court, finds that the SEC’s motion is GRANTED. 7 I. IT IS HEREBY ORDERED, ADJUDGED, AND DECREED that Defendant is 8 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 18 of the circumstances under which they were made, not misleading; or (c) 19 to engage in any act, practice, or course of business which operates or would operate as a fraud or deceit upon any person. 20 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 Judgment by personal service or 24 otherwise: (a) Defendant’s officers, agents, servants, employees, and attorneys; and 25 (b) other persons in active concert or participation with Defendant or with anyone 26 described in (a). 27 /// 28 1 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 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 20 IV. IT IS FURTHER ORDERED, ADJUDGED, AND DECREED that Defendant 21 is permanently restrained and enjoined from soliciting, accepting, or depositing any 22 monies from actual or prospective investors in connection with any offering of 23 securities, provided, however, that such injunction shall not prevent Defendant from 24 purchasing or selling securities listed on a national securities exchange for 25 Defendant’s own personal accounts. 26 27 28 V. IT IS HEREBY FURTHER ORDERED, ADJUDGED, AND DECREED that Defendant is permanently barred from participating in an offering of penny stock, 3 1 including engaging in activities with a broker, dealer, or issuer for purposes of 2 issuing, trading, or inducing or attempting to induce the purchase or sale of any penny 3 stock. A penny stock is any equity security that has a price of less than five dollars, 4 except as provided in Rule 3a51-1 under the Exchange Act [17 C.F.R. 240.3a51-1]. 5 6 VI. IT IS FURTHER ORDERED, ADJUDGED, AND DECREED that Defendant 7 is jointly and severally liable with defendant Patrick S. Carter for disgorgement of 8 $14,628,767.87, representing profits gained as a result of the conduct alleged in the 9 Complaint, together with prejudgment interest thereon in the amount of 10 $1,317,461.04, and a civil penalty in the amount of $775,000 pursuant to Section 11 20(d) of the Securities Act [15 U.S.C. § 77t(d)] and Section 21(d)(3) of the Exchange 12 Act [15 U.S.C. § 78u(d)(3). Defendant shall satisfy this obligation by paying 13 $16,721,228.91, to the Securities and Exchange Commission within 14 days after the 14 entry of this Final Judgment. 15 Defendant may transmit payment electronically to the Commission, which 16 will provide detailed ACH transfer/Fedwire instructions upon request. Payment 17 may also be made directly from a bank account via Pay.gov through the SEC 18 website at http://www.sec.gov/about/offices/ofm.htm. Defendant may also pay by 19 certified check, bank cashier’s check, or United States postal money order payable 20 to the Securities and Exchange Commission, which shall be delivered or mailed to 21 22 23 Enterprise Services Center Accounts Receivable Branch 6500 South MacArthur Boulevard Oklahoma City, OK 73169 24 and shall be accompanied by a letter identifying the case title, civil action number, 25 and name of this Court; 808 Renewable Energy Corporation as a defendant in this 26 action; and specifying that payment is made pursuant to this Final Judgment. 27 28 Defendant shall simultaneously transmit photocopies of evidence of payment and case identifying information to the Commission’s counsel in this action. By 4 1 making this payment, Defendant relinquishes all legal and equitable right, title, and 2 interest in such funds and no part of the funds shall be returned to Defendant. 3 The Commission may enforce the Court’s judgment for disgorgement and 4 prejudgment interest by using all collection procedures authorized by law, including, 5 but not limited to, moving for civil contempt at any time after 30 days following entry 6 of this Final Judgment. 7 The Commission may enforce the Court’s judgment for penalties by the use of 8 all collection procedures authorized by law, including the Federal Debt Collection 9 Procedures Act, 28 U.S.C. § 3001 et seq., and moving for civil contempt for the 10 violation of any Court orders issued in this action. Defendant shall pay post 11 judgment interest on any amounts due after 30 days of the entry of this Final 12 Judgment pursuant to 28 U.S.C. § 1961. The Commission shall hold the funds, 13 together with any interest and income earned thereon (collectively, the “Fund”), 14 pending further order of the Court. 15 The Commission may propose a plan to distribute the Fund subject to the 16 Court’s approval. Such a plan may provide that the Fund shall be distributed 17 pursuant to the Fair Fund provisions of Section 308(a) of the Sarbanes-Oxley Act of 18 2002. The Court shall retain jurisdiction over the administration of any distribution 19 of the Fund and the Fund may only be disbursed pursuant to an Order of the Court. 20 Regardless of whether any such Fair Fund distribution is made, amounts 21 ordered to be paid as civil penalties pursuant to this Judgment shall be treated as 22 penalties paid to the government for all purposes, including all tax purposes. To 23 preserve the deterrent effect of the civil penalty, Defendant shall not, after offset or 24 reduction of any award of compensatory damages in any Related Investor Action 25 based on Defendant’s payment of disgorgement in this action, argue that it is entitled 26 to, nor shall it further benefit by, offset or reduction of such compensatory damages 27 award by the amount of any part of Defendant’s payment of a civil penalty in this 28 action (“Penalty Offset”). If the court in any Related Investor Action grants such a 5 1 Penalty Offset, Defendant shall, within 30 days after entry of a final order granting 2 the Penalty Offset, notify the Commission’s counsel in this action and pay the amount 3 of the Penalty Offset to the United States Treasury or to a Fair Fund, as the 4 Commission directs. Such a payment shall not be deemed an additional civil penalty 5 and shall not be deemed to change the amount of the civil penalty imposed in this 6 Judgment. For purposes of this paragraph, a “Related Investor Action” means a 7 private damages action brought against Defendant by or on behalf of one or more 8 investors based on substantially the same facts as alleged in the Complaint in this 9 action. 10 11 VII. IT IS FURTHER ORDERED, ADJUDGED, AND DECREED that this Court 12 shall retain jurisdiction of this matter for the purposes of enforcing the terms of this 13 Judgment. 14 VIII. 15 There being no just reason for delay, pursuant to Rule 54(b) of the Federal 16 Rules of Civil Procedure, the Clerk is ordered to enter this Judgment forthwith and 17 without further notice. 18 19 20 21 Dated: July 25, 2023 ____________________________________ HON. JAMES V. SELNA UNITED STATES DISTRICT JUDGE 22 23 24 25 26 27 28 6
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