Securities and Exchange Commission v. Emilio Francisco et al, No. 8:2016cv02257 - Document 301 (C.D. Cal. 2018)
Court Description: FINAL JUDGMENT AS TO DEFENDANT EMILIO FRANCISCO by Judge Cormac J. Carney, in favor of Securities and Exchange Commission against Emilio Francisco: IT IS HEREBY ORDERED, ADJUDGED, AND DECREED that Defendant is permanently restrained and enjoined. IT IS HEREBY FURTHER ORDERED, ADJUDGED, AND DECREED that Defendant is liable for disgorgement of $1,826,976.52, representing profits gained as a result of the conduct alleged in the First Amended Complaint, together with prejudgment interest ther eon in the amount of $116,866.83, and a civil penalty in the amount of $369,534.00 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). Defendant shall satisfy this obligation by paying $2,313,377.35 to the Securities and Exchange Commission within 14 days after entry of this Final Judgment. (see document for further details) Related to: Stipulation for Judgment 300 (bm)
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Securities and Exchange Commission v. Emilio Francisco et al Doc. 301 1 2 3 4 5 6 7 8 9 UNITED STATES DISTRICT COURT 10 CENTRAL DISTRICT OF CALIFORNIA 11 12 SOUTHERN DIVISION 13 SECURITIES AND EXCHANGE COMMISSION, 14 Plaintiff, 15 16 17 vs. Case No. 8:16-cv-02257-CJC-DFM FINAL JUDGMENT AS TO DEFENDANT EMILIO FRANCISCO EMILIO FRANCISCO, et al,, Defendants. 18 19 20 21 22 23 24 25 26 27 28 Dockets.Justia.com The Securities and Exchange Commission having filed a First Amended 1 2 Complaint and Defendant Emilio Francisco having entered a general appearance; 3 consented to the Court’s jurisdiction over Defendant and the subject matter of this 4 action; consented to entry of this Final Judgment without admitting or denying the 5 allegations of the First Amended Complaint (except as to jurisdiction and except as 6 otherwise provided herein in paragraph VIII); waived findings of fact and conclusions 7 of law; and waived any right to appeal from this Final Judgment: I. 8 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 any 13 means or instrumentality of interstate commerce, or of the mails, or of any facility of 14 any national securities exchange, in connection with the purchase or sale of any 15 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 IT IS FURTHER ORDERED, ADJUDGED, AND DECREED that, as provided 22 23 in Federal Rule of Civil Procedure 65(d)(2), the foregoing paragraph also binds the 24 following who receive actual notice of this Final 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 II. 1 2 IT IS HEREBY ORDERED, ADJUDGED, AND DECREED that Defendant is 3 permanently restrained and enjoined from, directly or indirectly, controlling any person 4 who violates Section 10(b) of the Exchange Act [15 U.S.C. § 78j(b)] and Rule 10b-5 5 promulgated thereunder [17 C.F.R. § 240.10b-5] by knowingly or recklessly providing 6 substantial assistance to an issuer that uses any means or instrumentality of interstate 7 commerce, or of the mails, or of any facility of any national securities exchange, in 8 connection with the purchase or sale of any security: 9 (a) to employ any device, scheme, or artifice to defraud; 10 (b) to make any untrue statement of a material fact or to omit to state a 11 material fact necessary in order to make the statements made, in the light 12 of the circumstances under which they were made, not misleading; or 13 (c) would operate as a fraud or deceit upon any person. 14 15 to engage in any act, practice, or course of business which operates or IT IS FURTHER ORDERED, ADJUDGED, AND DECREED that, as provided 16 in Federal Rule of Civil Procedure 65(d)(2), the foregoing paragraph also binds the 17 following who receive actual notice of this Final Judgment by personal service or 18 otherwise: (a) Defendant’s officers, agents, servants, employees, and attorneys; and 19 (b) other persons in active concert or participation with Defendant or with anyone 20 described in (a). III. 21 22 IT IS HEREBY FURTHER ORDERED, ADJUDGED, AND DECREED that 23 Defendant is permanently restrained and enjoined from violating Section 17(a) of the 24 Securities Act of 1933 (the “Securities Act”) [15 U.S.C. § 77q(a)] in the offer or sale of 25 any security by the use of any means or instruments of transportation or 26 communication in interstate commerce or by use of the mails, directly or indirectly: 27 (a) to employ any device, scheme, or artifice to defraud; 28 (b) to obtain money or property by means of any untrue statement of a 2 1 material fact or any omission of a material fact necessary in order to make 2 the statements made, in light of the circumstances under which they were 3 made, not misleading; or 4 (c) 5 operates or would operate as a fraud or deceit upon the purchaser. 6 to engage in any transaction, practice, or course of business which IT IS FURTHER ORDERED, ADJUDGED, AND DECREED that, as provided 7 in Federal Rule of Civil Procedure 65(d)(2), the foregoing paragraph also binds the 8 following who receive actual notice of this Final Judgment by personal service or 9 otherwise: (a) Defendant’s officers, agents, servants, employees, and attorneys; and 10 (b) other persons in active concert or participation with Defendant or with anyone 11 described in (a). 12 IV. 13 IT IS FURTHER ORDERED that Defendant is permanently restrained and 14 enjoined from, directly or indirectly, including but not limited to, through an entity 15 owned or controlled by Defendant, participating in the issuance, purchase, offer, or 16 sale of any security, provided, however, that such injunction shall not prevent 17 Defendant from purchasing or selling securities for his own personal account. 18 IT IS FURTHER ORDERED, ADJUDGED, AND DECREED that, as provided 19 in Federal Rule of Civil Procedure 65(d)(2), the foregoing paragraph also binds the 20 following who receive actual notice of this Final Judgment by personal service or 21 otherwise: (a) Defendant’s officers, agents, servants, employees, and attorneys; and 22 (b) other persons in active concert or participation with Defendant or with anyone 23 described in (a). 24 V. 25 IT IS FURTHER ORDERED that Defendant is permanently restrained and 26 enjoined from, directly or indirectly, participating in the offer or sale of any security 27 which constitutes an investment in a “commercial enterprise” under the United States 28 Government EB-5 visa program administered by the United States Citizenship and 3 1 Immigration Service (“USCIS”), including engaging in activities with a broker, dealer, 2 or issuer, or a Regional Center designated by the USCIS, for purposes of issuing, 3 offering, trading, or inducing or attempting to induce the purchase or sale of any such 4 EB-5 investment. 5 IT IS FURTHER ORDERED, ADJUDGED, AND DECREED that, as provided 6 in Federal Rule of Civil Procedure 65(d)(2), the foregoing paragraph also binds the 7 following who receive actual notice of this Final Judgment by personal service or 8 otherwise: (a) Defendant’s officers, agents, servants, employees, and attorneys; and 9 (b) other persons in active concert or participation with Defendant or with anyone 10 11 12 described in (a). VI. IT IS HEREBY FURTHER ORDERED, ADJUDGED, AND DECREED that 13 Defendant is liable for disgorgement of $1,826,976.52, representing profits gained as a 14 result of the conduct alleged in the First Amended Complaint, together with 15 prejudgment interest thereon in the amount of $116,866.83, and a civil penalty in the 16 amount of $369,534.00 pursuant to Section 20(d) of the Securities Act, 15 U.S.C. § 17 77t(d), and Section 21(d)(3) of the Exchange Act, 15 U.S.C. § 78u(d)(3). Defendant 18 shall satisfy this obligation by paying $2,313,377.35 to the Securities and Exchange 19 Commission within 14 days after entry of this Final Judgment. 20 Defendant may transmit payment electronically to the Commission, which will 21 provide detailed ACH transfer/Fedwire instructions upon request. Payment may also 22 be made directly from a bank account via Pay.gov through the SEC website at 23 http://www.sec.gov/about/offices/ofm.htm. Defendant may also pay by certified 24 check, bank cashier’s check, or United States postal money order payable to the 25 Securities and Exchange Commission, which shall be delivered or mailed to 26 27 28 Enterprise Services Center Accounts Receivable Branch 6500 South MacArthur Boulevard Oklahoma City, OK 73169 4 1 and shall be accompanied by a letter identifying the case title, civil action number, and 2 name of this Court; Defendant’s name as a defendant in this action; and specifying that 3 payment is made pursuant to this Final Judgment. 4 Defendant shall simultaneously transmit photocopies of evidence of payment 5 and case identifying information to the Commission’s counsel in this action. By 6 making this payment, Defendant relinquishes all legal and equitable right, title, and 7 interest in such funds and no part of the funds shall be returned to Defendant. 8 The Commission may enforce the Court’s judgment for disgorgement and 9 prejudgment interest by moving for civil contempt (and/or through other collection 10 procedures authorized by law) at any time after 14 days following entry of this Final 11 Judgment. Defendant shall pay post judgment interest on any delinquent amounts 12 pursuant to 28 U.S.C. § 1961. The Commission shall hold the funds, together with any 13 interest and income earned thereon (collectively, the “Fund”), pending further order of 14 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 pursuant 17 to the Fair Fund provisions of Section 308(a) of the Sarbanes-Oxley Act of 2002. The 18 Court shall retain jurisdiction over the administration of any distribution of the Fund. 19 If the Commission staff determines that the Fund will not be distributed, the 20 Commission shall send the funds paid pursuant to this Final Judgment to the United 21 States Treasury. 22 Regardless of whether any such Fair Fund distribution is made, amounts ordered 23 to be paid as civil penalties pursuant to this Judgment shall be treated as penalties paid 24 to the government for all purposes, including all tax purposes. To preserve the 25 deterrent effect of the civil penalty, Defendant shall not, after offset or reduction of any 26 award of compensatory damages in any Related Investor Action based on Defendant’s 27 payment of disgorgement in this action, argue that he is entitled to, nor shall he further 28 benefit by, offset or reduction of such compensatory damages award by the amount of 5 1 any part of Defendant’s payment of a civil penalty in this action (“Penalty Offset”). If 2 the court in any Related Investor Action grants such a Penalty Offset, Defendant shall, 3 within 30 days after entry of a final order granting the Penalty Offset, notify the 4 Commission’s counsel in this action and pay the amount of the Penalty Offset to the 5 United States Treasury or to a Fair Fund, as the Commission directs. Such a payment 6 shall not be deemed an additional civil penalty and shall not be deemed to change the 7 amount of the civil penalty imposed in this Judgment. For purposes of this paragraph, 8 a “Related Investor Action” means a private damages action brought against Defendant 9 by or on behalf of one or more investors based on substantially the same facts as 10 alleged in the Complaint in this action. VII. 11 12 IT IS FURTHER ORDERED, ADJUDGED, AND DECREED that the Consent 13 is incorporated herein with the same force and effect as if fully set forth herein, and 14 that Defendant shall comply with all of the undertakings and agreements set forth 15 therein. 16 VIII. 17 IT IS FURTHER ORDERED, ADJUDGED, AND DECREED that, solely for 18 purposes of exceptions to discharge set forth in Section 523 of the Bankruptcy Code, 19 11 U.S.C. §523, the allegations in the complaint are true and admitted by Defendant, 20 and further, any debt for disgorgement, prejudgment interest, civil penalty or other 21 amounts due by Defendant under this Final Judgment or any other judgment, order, 22 consent order, decree or settlement agreement entered in connection with this 23 proceeding, is a debt for the violation by Defendant of the federal securities laws or 24 any regulation or order issued under such laws, as set forth in Section 523(a)(19) of the 25 Bankruptcy Code, 11 U.S.C. §523(a)(19). 26 27 28 IX. IT IS FURTHER ORDERED, ADJUDGED, AND DECREED that this Court shall retain jurisdiction of this matter for the purposes of enforcing the terms of this 6 1 Final Judgment. X. 2 3 There being no just reason for delay, pursuant to Rule 54(b) of the Federal Rules 4 of Civil Procedure, the Clerk is ordered to enter this Final Judgment forthwith and 5 without further notice. 6 7 8 Dated: October 4, 2018 HON. CORMAC J. CARNEY UNITED STATES DISTRICT JUDGE 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 7
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