U.S. Securities and Exchange Commission v. Patrick S. Carter et al, No. 8:2016cv02070 - Document 9 (C.D. Cal. 2016)
Court Description: FINAL JUDGMENT AS TO THOMAS A. FLOWERS AND T.A. FLOWERS LLC by Judge James V. Selna. (see document for details). (dro)
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U.S. Securities and Exchange Commission v. Patrick S. Carter et al Doc. 9 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. 20 FINAL JUDGMENT AS TO THOMAS A. FLOWERS AND T.A. FLOWERS LLC PATRICK S. CARTER, 808 RENEWABLE ENERGY CORPORATION, 808 INVESTMENTS, LLC, MARTIN J. KINCHLOE, PETER KIRKBRIDE, WEST COAST COMMODITIES, LLC, THOMAS A. FLOWERS, and T.A. FLOWERS LLC 21 Case No. SACV 16-02070 JVS(DFMx) Defendants. 16 17 18 19 22 23 24 25 26 27 28 Dockets.Justia.com 1 The Securities and Exchange Commission (“SEC”) having filed a Complaint; 2 and Defendants Thomas A. Flowers and T.A. Flowers LLC (collectively, 3 “Defendants”) having entered a general appearance, consented to the Court’s 4 jurisdiction over Defendants and the subject matter of this action, consented to entry 5 of this Final Judgment without admitting or denying the allegations of the Complaint 6 (except as to jurisdiction and except as otherwise provided herein in paragraph IX), 7 waived findings of fact and conclusions of law, and waived any right to appeal from 8 this Final Judgment: 9 10 I. IT IS HEREBY ORDERED, ADJUDGED, AND DECREED that Defendants 11 are permanently restrained and enjoined from violating, directly or indirectly, Section 12 10(b) of the Securities Exchange Act of 1934 (the “Exchange Act”) [15 U.S.C. § 13 78j(b)] and Rule 10b-5 promulgated thereunder [17 C.F.R. § 240.10b-5], by using 14 any means or instrumentality of interstate commerce, or of the mails, or of any 15 facility of any national securities exchange, in connection with the purchase or sale of 16 any security: 17 (a) to employ any device, scheme, or artifice to defraud; 18 (b) to make any untrue statement of a material fact or to omit to state 19 a material fact necessary in order to make the statements made, in the light of 20 the circumstances under which they were made, not misleading; or 21 (c) to engage in any act, practice, or course of business which 22 operates or would operate as a fraud or deceit upon any person. 23 IT IS FURTHER ORDERED, ADJUDGED, AND DECREED that, as 24 provided in Federal Rule of Civil Procedure 65(d)(2), the foregoing paragraph also 25 binds the following who receive actual notice of this Final Judgment by personal 26 service or otherwise: (a) Defendants’ officers, agents, servants, employees, and 27 attorneys; and (b) other persons in active concert or participation with Defendants or 28 with anyone described in (a). 1 1 II. 2 IT IS HEREBY FURTHER ORDERED, ADJUDGED, AND DECREED that 3 Defendants are permanently restrained and enjoined from violating Section 17(a) of 4 the Securities Act of 1933 (the “Securities Act”) [15 U.S.C. § 77q(a)] in the offer or 5 sale 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 make the 10 statements made, in light of the circumstances under which they were made, 11 not misleading; or (c) 12 to engage in any transaction, practice, or course of business which 13 operates or would operate as a fraud or deceit upon the purchaser. 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 Final Judgment by personal 17 service or otherwise: (a) Defendants’ officers, agents, servants, employees, and 18 attorneys; and (b) other persons in active concert or participation with Defendants or 19 with anyone described in (a). 20 21 III. IT IS HEREBY FURTHER ORDERED, ADJUDGED, AND DECREED that 22 Defendants are 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 Final Judgment by personal 16 service or otherwise: (a) Defendants’ officers, agents, servants, employees, and 17 attorneys; and (b) other persons in active concert or participation with Defendants or 18 with anyone described in (a). 19 IV. 20 IT IS HEREBY FURTHER ORDERED, ADJUDGED, AND DECREED that 21 Defendants are permanently restrained and enjoined from violating Section 15(a) of 22 the Exchange Act [15 U.S.C. § 78o(a)] by, directly or indirectly, in the absence of 23 any 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 they are registered with the 27 SEC in accordance with subsection (b) of Section 15 of the Exchange Act (15 U.S.C. 28 § 78o(b)). 3 1 IT IS FURTHER ORDERED, ADJUDGED, AND DECREED that, as 2 provided in Federal Rule of Civil Procedure 65(d)(2), the foregoing paragraph also 3 binds the following who receive actual notice of this Final Judgment by personal 4 service or otherwise: (a) Defendants’ officers, agents, servants, employees, and 5 attorneys; and (b) other persons in active concert or participation with Defendants or 6 with anyone described in (a). 7 8 V. IT IS HEREBY FURTHER ORDERED, ADJUDGED, AND DECREED that 9 Defendants are permanently restrained and enjoined from soliciting, accepting, or 10 depositing any monies from actual or prospective investors in connection with any 11 offering of securities provided, however, that such injunction shall not prevent 12 Defendants from purchasing or selling securities listed on a national securities 13 exchange for Defendants’ own personal account. 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 Final Judgment by personal 17 service or otherwise: (a) Defendants’ officers, agents, servants, employees, and 18 attorneys; and (b) other persons in active concert or participation with Defendants or 19 with anyone described in (a). 20 VI. 21 IT IS HEREBY FURTHER ORDERED, ADJUDGED, AND DECREED that 22 Defendants are 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 VII. IT IS FURTHER ORDERED, ADJUDGED, AND DECREED that Defendants 4 1 are jointly and severally liable for disgorgement of $1,284,312.51, representing 2 profits gained as a result of the conduct alleged in the Complaint, together with 3 prejudgment interest thereon in the amount of $120,137. Defendants shall satisfy this 4 obligation by paying $1,404,449.51 to the Securities and Exchange Commission 5 within 14 days after entry of this Final Judgment. 6 Defendants may transmit payment electronically to the SEC, which will 7 provide detailed ACH transfer/Fedwire instructions upon request. Payment may also 8 be made directly from a bank account via Pay.gov through the SEC website at 9 http://www.sec.gov/about/offices/ofm.htm. Defendants may also pay by certified 10 check, bank cashier’s check, or United States postal money order payable to the 11 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; Thomas A. Flowers and T.A. Flowers LLC as defendants in 17 this action; and specifying that payment is made pursuant to this Final Judgment. 18 Defendants shall simultaneously transmit photocopies of evidence of payment 19 and case identifying information to the SEC’s counsel in this action. By making this 20 payment, Defendants relinquish all legal and equitable right, title, and interest in such 21 funds and no part of the funds shall be returned to Defendants. The Commission 22 shall send the funds paid pursuant to this Final Judgment to the United States 23 Treasury. 24 The SEC may enforce the Court’s judgment for disgorgement and prejudgment 25 interest by moving for civil contempt (and/or through other collection procedures 26 authorized by law) at any time after 14 days following entry of this Final Judgment. 27 Defendants shall pay post judgment interest on any delinquent amounts pursuant to 28 28 U.S.C. § 1961. 5 VIII. 1 IT IS FURTHER ORDERED, ADJUDGED, AND DECREED that Defendant 2 3 Thomas A. Flowers shall pay a civil penalty in the amount of $160,000 to the 4 Securities and Exchange SEC pursuant to Section 20(d) of the Securities Act [15 5 U.S.C. § 77t(d)] and Section 21(d)(3) of the Exchange Act [15 U.S.C. § 78u(d)(3)]. 6 Defendant shall make this payment within 14 days after entry of this Final Judgment. Defendant Thomas A. Flowers may transmit payment electronically to the 7 8 SEC, which will provide detailed ACH transfer/Fedwire instructions upon request. 9 Payment may also be made directly from a bank account via Pay.gov through the 10 SEC website at http://www.sec.gov/about/offices/ofm.htm. Defendant Thomas A. 11 Flowers may also pay by certified check, bank cashier’s check, or United States 12 postal money order payable to the Securities and Exchange Commission, which shall 13 be delivered or mailed to 14 Enterprise Services Center Accounts Receivable Branch 6500 South MacArthur Boulevard Oklahoma City, OK 73169 15 16 17 and shall be accompanied by a letter identifying the case title, civil action number, 18 and name of this Court; Thomas A. Flowers as a defendant in this action; and 19 specifying that payment is made pursuant to this Final Judgment. 20 Defendant Thomas A. Flowers shall simultaneously transmit photocopies of 21 evidence of payment and case identifying information to the SEC’s counsel in this 22 action. By making this payment, Defendant Thomas A. Flowers relinquishes all legal 23 and equitable right, title, and interest in such funds and no part of the funds shall be 24 returned to Defendant Thomas A. Flowers. The SEC shall send the funds paid 25 pursuant to this Final Judgment to the United States Treasury. Defendant Thomas A. 26 Flowers shall pay post-judgment interest on any delinquent amounts pursuant to 27 28 USC § 1961. 28 // 6 1 IX. IT IS FURTHER ORDERED, ADJUDGED, AND DECREED that, solely for 2 3 purposes of exceptions to discharge set forth in Section 523 of the Bankruptcy Code, 4 11 U.S.C. §523, the allegations in the complaint are true and admitted by Defendant 5 Thomas A. Flowers, and further, any debt for disgorgement, prejudgment interest, 6 civil penalty or other amounts due by Defendant Thomas A. Flowers under this Final 7 Judgment or any other judgment, order, consent order, decree or settlement 8 agreement entered in connection with this proceeding, is a debt for the violation by 9 Defendant Thomas A. Flowers of the federal securities laws or any regulation or 10 order issued under such laws, as set forth in Section 523(a)(19) of the Bankruptcy 11 Code, 11 U.S.C. §523(a)(19). 12 X. 13 IT IS FURTHER ORDERED, ADJUDGED, AND DECREED that the 14 Consent to Entry of Final Judgment by Thomas A. Flowers and the Consent to Entry 15 of Final Judgment by T.A. Flowers LLC are incorporated herein with the same force 16 and effect as if fully set forth herein, and that Defendants shall comply with all of the 17 undertakings and agreements set forth therein. 18 XI. 19 IT IS FURTHER ORDERED, ADJUDGED, AND DECREED that this Court 20 shall retain jurisdiction of this matter for the purposes of enforcing the terms of this 21 Final Judgment. 22 // 23 // 24 // 25 // 26 // 27 // 28 // 7 1 XII. 2 There being no just reason for delay, pursuant to Rule 54(b) of the Federal 3 Rules of Civil Procedure, the Clerk is ordered to enter this Final Judgment forthwith 4 and without further notice. 5 6 7 8 Dated: November 21, 2016 ____________________________________ UNITED STATES DISTRICT JUDGE 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 8
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