Securities and Exchange Commission v. Wayland et al, No. 8:2017cv01156 - Document 82 (C.D. Cal. 2019)

Court Description: FINAL JUDGMENT AS TO CAROL J. WAYLAND by Judge Andrew J. Guilford. The Court having considered the memoranda and evidence submitted by the SEC, and all other argument and evidence presented to it, and good cause appearing therefor, grants the SE C's Motion and enters this Final Judgment as to Carol J.Wayland ("Defendant"). IT IS FURTHER ORDERED, ADJUDGED, AND DECREED that Defendant is liable for disgorgement of $464,665, representing profits gained as a result of the co nduct alleged in the Complaint, together with prejudgment interest thereon in the amount of $64,057.72, and a civil penalty in the amount of $464,665 pursuant to Section 20(d) of the Securities Act and Section 21(d)(3) of the Exchange Act [15 U.S.C. §§ 77t(d), 78u(d)(3)]. Defendant shall satisfy this obligation by paying $993,377.72 to the Securities and Exchange Commission within 14 days after entry of this Final Judgment. (SEE DOCUMENT FOR FURTHER DETAILS.) (es)

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Securities and Exchange Commission v. Wayland et al Doc. 82 1 2 3 4 5 6 7 8 UNITED STATES DISTRICT COURT 9 CENTRAL DISTRICT OF 10 CALIFORNIA SOUTHERN DIVISION 11 12 13 14 SECURITIES AND EXCHANGE COMMISSION, 15 16 17 18 19 20 21 22 23 Plaintiff, Case No. 8:17-cv-01156-AG (DFMx) FINAL JUDGMENT AS TO CAROL J. WAYLAND vs. CAROL J. WAYLAND, JOHN C. MUELLER, KENTUCKYTENNESSEE 50 WELLS/400 BBLPD BLOCK, LIMITED PARTNERSHIP, HP OPERATIONS, LLC, C.A.R. LEASING, LLC, MITCHELL B. DOW, BARRY LISS, AND STEVE G. BLASKO, Defendants. 24 25 26 27 28 Dockets.Justia.com 1 This matter came before the Court upon Plaintiff Securities and Exchange 2 Commission’s (“SEC”) Motion for Summary Judgment against defendants Kentucky- 3 Tennessee 50 Wells/400 BBLPD Block, Limited Partnership, HP Operations, LLC, 4 C.A.R. Leasing, LLC, Carol J. Wayland, Mitchell B. Dow, Barry Liss, and Steve G. 5 Blasko, made pursuant to Federal Rule of Civil Procedure 56. The Court having 6 considered the memoranda and evidence filed by the parties, and all other argument 7 and evidence presented to it, and good cause appearing therefor, granted the SEC’s 8 Motion on April 8, 2019. 9 On April 18, 2019, the SEC submitted a Supplemental Memorandum of Points 10 and Authorities in support of its motion for permanent injunctions and civil penalties. 11 The Court having considered the memoranda and evidence submitted by the SEC, 12 and all other argument and evidence presented to it, and good cause appearing 13 therefor, grants the SEC’s Motion and enters this Final Judgment as to Carol J. 14 Wayland (“Defendant”). I. 15 16 IT IS HEREBY FURTHER ORDERED, ADJUDGED, AND DECREED that 17 Defendant is permanently restrained and enjoined from violating, directly or 18 indirectly, Section 10(b) of the Securities Exchange Act of 1934 (the “Exchange 19 Act”) [15 U.S.C. § 78j(b)] and Rule 10b-5 promulgated thereunder [17 C.F.R. 20 § 240.10b-5], by using any means or instrumentality of interstate commerce, or of the 21 mails, or of any facility of any national securities exchange, in connection with the 22 purchase or sale of any security: 23 (a) to employ any device, scheme, or artifice to defraud; 24 (b) to make any untrue statement of a material fact or to omit to state a 25 material fact necessary in order to make the statements made, in the light of the 26 circumstances under which they were made, not misleading; or 27 (c) 28 would operate as a fraud or deceit upon any person. to engage in any act, practice, or course of business which operates or 1 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) Defendant’s officers, agents, servants, employees, and 5 attorneys; and (b) other persons in active concert or participation with Defendant or 6 with anyone described in (a). 7 II. 8 IT IS HEREBY FURTHER ORDERED, ADJUDGED, AND DECREED that 9 Defendant is permanently restrained and enjoined from violating Section 17(a) of the 10 Securities Act of 1933 (the “Securities Act”) [15 U.S.C. § 77q(a)] in the offer or sale 11 of any security by the use of any means or instruments of transportation or 12 communication in interstate commerce or by use of the mails, directly or indirectly: 13 (a) to employ any device, scheme, or artifice to defraud; 14 (b) to obtain money or property by means of any untrue statement of a 15 material fact or any omission of a material fact necessary in order to make the 16 statements made, in light of the circumstances under which they were made, 17 not misleading; or 18 (c) 19 operates or would operate as a fraud or deceit upon the purchaser. 20 IT IS FURTHER ORDERED, ADJUDGED, AND DECREED that, as 21 provided in Federal Rule of Civil Procedure 65(d)(2), the foregoing paragraph also 22 binds the following who receive actual notice of this Final Judgment by personal 23 service or otherwise: (a) Defendant’s officers, agents, servants, employees, and 24 attorneys; and (b) other persons in active concert or participation with Defendant or 25 with anyone described in (a). 26 27 28 to engage in any transaction, practice, or course of business which III. IT IS HEREBY FURTHER ORDERED, ADJUDGED, AND DECREED that Defendant is permanently restrained and enjoined from violating Section 5 of the 2 1 Securities Act [15 U.S.C. § 77e] by, directly or indirectly, in the absence of any 2 applicable exemption: 3 (a) Unless a registration statement is in effect as to a security, making use of 4 any means or instruments of transportation or communication in 5 interstate commerce or of the mails to sell such security through the use 6 or medium of any prospectus or otherwise; 7 (b) Unless a registration statement is in effect as to a security, carrying or 8 causing to be carried through the mails or in interstate commerce, by any 9 means or instruments of transportation, any such security for the purpose of sale or for delivery after sale; or 10 11 (c) Making use of any means or instruments of transportation or 12 communication in interstate commerce or of the mails to offer to sell or 13 offer to buy through the use or medium of any prospectus or otherwise 14 any security, unless a registration statement has been filed with the 15 Commission as to such security, or while the registration statement is the 16 subject of a refusal order or stop order or (prior to the effective date of 17 the registration statement) any public proceeding or examination under 18 Section 8 of the Securities Act [15 U.S.C. § 77h]. 19 IT IS FURTHER ORDERED, ADJUDGED, AND DECREED that, as 20 provided in Federal Rule of Civil Procedure 65(d)(2), the foregoing paragraph also 21 binds the following who receive actual notice of this Final Judgment by personal 22 service or otherwise: (a) Defendant’s officers, agents, servants, employees, and 23 attorneys; and (b) other persons in active concert or participation with Defendant or 24 with anyone described in (a). 25 IV. 26 IT IS HEREBY FURTHER ORDERED, ADJUDGED, AND DECREED that 27 Defendant is permanently restrained and enjoined from violating Section 15(a) of the 28 Exchange Act [15 U.S.C. § 78o(a)], in connection with the purchase or sale of a 3 1 security, by the use of means or instrumentalities or interstate commerce, of the 2 mails, or of the facilities of a national securities exchange, directly or indirectly 3 effecting transactions in, or inducing or attempting to induce the purchase or sale of, 4 securities without being registered with the SEC, or affiliated with a broker-dealer 5 registered with the SEC. 6 IT IS FURTHER ORDERED, ADJUDGED, AND DECREED that, as 7 provided in Federal Rule of Civil Procedure 65(d)(2), the foregoing paragraph also 8 binds the following who receive actual notice of this 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). V. 12 13 IT IS FURTHER ORDERED, ADJUDGED, AND DECREED that Defendant 14 is liable for disgorgement of $464,665, representing profits gained as a result of the 15 conduct alleged in the Complaint, together with prejudgment interest thereon in the 16 amount of $64,057.72, and a civil penalty in the amount of $464,665 pursuant to 17 Section 20(d) of the Securities Act and Section 21(d)(3) of the Exchange Act [15 18 U.S.C. §§ 77t(d), 78u(d)(3)]. Defendant shall satisfy this obligation by paying 19 $993,377.72 to the Securities and Exchange Commission within 14 days after entry 20 of this Final Judgment. 21 Defendant may transmit payment electronically to the Commission, which will 22 provide detailed ACH transfer/Fedwire instructions upon request. Payment may also 23 be made directly from a bank account via Pay.gov through the SEC website at 24 http://www.sec.gov/about/offices/ofm.htm. Defendant may also pay by certified 25 check, bank cashier’s check, or United States postal money order payable to the 26 Securities and Exchange Commission, which shall be delivered or mailed to 27 28 Enterprise Services Center Accounts Receivable Branch 6500 South MacArthur Boulevard 4 1 Oklahoma City, OK 73169 2 and shall be accompanied by a letter identifying the case title, civil action number, 3 and name of this Court; Carol J. Wayland as a defendant in this action; and specifying 4 that payment is made pursuant to this Final Judgment. 5 Defendant shall simultaneously transmit photocopies of evidence of payment 6 and case identifying information to the Commission’s counsel in this action. By 7 making this payment, Defendant relinquishes all legal and equitable right, title, and 8 interest in such funds and no part of the funds shall be returned to Defendant. The 9 Commission shall send the funds paid pursuant to this Final Judgment to the United 10 11 States Treasury. The Commission may enforce the Court’s judgment for disgorgement and 12 prejudgment interest by moving for civil contempt (and/or through other collection 13 procedures authorized by law) at any time after 14 days following entry of this Final 14 Judgment. Defendant shall pay post judgment interest on any delinquent amounts 15 pursuant to 28 U.S.C. § 1961. 16 17 VI. 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 Carol J. Wayland of the federal securities 24 laws or any regulation or order issued under such laws, as set forth in Section 25 523(a)(19) of the Bankruptcy Code, 11 U.S.C. §523(a)(19). 26 27 28 5 VII. 1 2 IT IS FURTHER ORDERED, ADJUDGED, AND DECREED that this Court 3 shall retain jurisdiction of this matter for the purposes of enforcing the terms of this 4 Final Judgment. 5 VIII. 6 There being no just reason for delay, pursuant to Rule 54(b) of the Federal 7 Rules of Civil Procedure, the Clerk is ordered to enter this Final Judgment forthwith 8 and without further notice. 9 10 11 12 Dated: May 7, 2019 ____________________________________ __ ______________ ______________________ _ HON. ANDREW J. J. GUILFORD GUILFORD UNITED STATES DISTRICT JUDGE 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 6

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