Securities and Exchange Commission v. Steven Ventre et al, No. 8:2018cv00323 - Document 11 (C.D. Cal. 2018)
Court Description: FINAL JUDGMENT as to Defendants Dedicated Sound and Audio, Inc. and Steven Ventre by Judge Andrew J. Guilford. The Securities and Exchange Commission ("SEC" or "Commission") having filed a Complaint and defendants Dedicated Soun d and Audio, Inc. ("DSA") and Steven Ventre ("Ventre") (together, "Defendants") having entered general appearances; consented to the Court's jurisdiction over Defendants and the subject matter of this action; conse nted to entry of this Final Judgment without admitting or denying the allegations of the Complaint (except as to jurisdiction and except as otherwise provided herein in paragraph VIII); waived findings of fact and conclusions of law; and waived any right to appeal from this Final Judgment: (see document for details). (MD JS-6, Case Terminated). (dro)
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Securities and Exchange Commission v. Steven Ventre et al 1 2 3 4 5 6 7 Doc. 11 DAVID J. VAN HAVERMAAT, Cal. Bar No. 175761 Email: vanhavermaatd@sec.gov PETER F. DEL GRECO, Cal. Bar No. 164925 Email: delgrecop@sec.gov Attorneys for Plaintiff Securities and Exchange Commission Michele Wein Layne, Regional Director John W. Berry, 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 JS -6 8 UNITED STATES DISTRICT COURT 9 CENTRAL DISTRICT OF CALIFORNIA 10 11 12 SECURITIES AND EXCHANGE COMMISSION, Plaintiff, 13 14 vs. 15 FINAL JUDGMENT AS TO DEFENDANTS DEDICATED SOUND AND AUDIO, INC. AND STEVEN VENTRE DEDICATED SOUND AND AUDIO, INC., and STEVEN VENTRE, 16 Case No.: 8:18-cv-323-AG (AGRx) Defendants. 17 18 19 20 21 22 23 24 25 26 27 28 Dockets.Justia.com 1 The Securities and Exchange Commission (“SEC” or “Commission”) having 2 filed a Complaint and defendants Dedicated Sound and Audio, Inc. (“DSA”) and 3 Steven Ventre (“Ventre”) (together, “Defendants”) having entered general 4 appearances; consented to the Court’s jurisdiction over Defendants and the subject 5 matter of this action; consented to entry of this Final Judgment without admitting or 6 denying the allegations of the Complaint (except as to jurisdiction and except as 7 otherwise provided herein in paragraph VIII); waived findings of fact and 8 conclusions of law; and waived any right to appeal from this Final Judgment: 9 I. 10 IT IS HEREBY ORDERED, ADJUDGED, AND DECREED that defendants 11 DSA and Ventre are permanently restrained and enjoined from violating, directly or 12 indirectly, Section 10(b) of the Securities Exchange Act of 1934 (the “Exchange 13 Act”) [15 U.S.C. § 78j(b)] and Rule 10b-5 promulgated thereunder [17 C.F.R. § 14 240.10b-5], by using any means or instrumentality of interstate commerce, or of the 15 mails, or of any facility of any national securities exchange, in connection with the 16 purchase or sale of 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 a 19 material fact necessary in order to make the statements made, in the light 20 of the circumstances under which they were made, not misleading; or 21 22 (c) to engage in any act, practice, or course of business which 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) DSA’s and Ventre’s officers, agents, servants, employees, 27 and attorneys; and (b) other persons in active concert or participation with DSA or 28 Ventre or with anyone described in (a). 1 1 II. 2 IT IS HEREBY FURTHER ORDERED, ADJUDGED, AND DECREED that 3 defendants DSA and Ventre are permanently restrained and enjoined from violating 4 Section 17(a) of the Securities Act of 1933 (the “Securities Act”) [15 U.S.C. § 5 77q(a)] in the offer or sale of any security by the use of any means or instruments of 6 transportation or communication in interstate commerce or by use of the mails, 7 directly or indirectly: 8 (a) to employ any device, scheme, or artifice to defraud; 9 (b) to obtain money or property by means of any untrue statement of a 10 material fact or any omission of a material fact necessary in order to 11 make the statements made, in light of the circumstances under which 12 they were made, not misleading; or 13 (c) to engage in any transaction, practice, or course of business which operates or would operate as a fraud or deceit upon the purchaser. 14 15 IT IS FURTHER ORDERED, ADJUDGED, AND DECREED that, as 16 provided in Federal Rule of Civil Procedure 65(d)(2), the foregoing paragraph also 17 binds the following who receive actual notice of this Final Judgment by personal 18 service or otherwise: (a) DSA’s and Ventre’s officers, agents, servants, employees, 19 and attorneys; and (b) other persons in active concert or participation with DSA or 20 Ventre or with anyone described in (a). 21 22 III. IT IS HEREBY ORDERED, ADJUDGED, AND DECREED that defendants 23 DSA and Ventre are permanently restrained and enjoined from violating Section 5 of 24 the Securities Act [15 U.S.C. § 77e] by, directly or indirectly, in the absence of any 25 applicable exemption: 26 27 (a) Unless a registration statement is in effect as to a security, making use of any means or instruments of transportation or communication in 28 2 1 interstate commerce or of the mails to sell such security through the use 2 or medium of any prospectus or otherwise; 3 (b) Unless a registration statement is in effect as to a security, carrying or 4 causing to be carried through the mails or in interstate commerce, by any 5 means or instruments of transportation, any such security for the purpose 6 of sale or for delivery after sale; or 7 (c) Making use of any means or instruments of transportation or 8 communication in interstate commerce or of the mails to offer to sell or 9 offer to buy through the use or medium of any prospectus or otherwise 10 any security, unless a registration statement has been filed with the 11 Commission as to such security, or while the registration statement is the 12 subject of a refusal order or stop order or (prior to the effective date of 13 the registration statement) any public proceeding or examination under 14 Section 8 of the Securities Act [15 U.S.C. § 77h]. 15 IT IS FURTHER ORDERED, ADJUDGED, AND DECREED that, as 16 provided in Federal Rule of Civil Procedure 65(d)(2), the foregoing paragraph also 17 binds the following who receive actual notice of this Final Judgment by personal 18 service or otherwise: (a) DSA’s and Ventre’s officers, agents, servants, employees, 19 and attorneys, and (b) other persons in active concert or participation with DSA or 20 Ventre or with anyone described in (a). 21 22 IV. IT IS HEREBY FURTHER ORDERED, ADJUDGED, AND DECREED that: 23 (a) Defendant DSA is liable for a civil penalty in the amount of $250,000, and (b) 24 Defendant Ventre is liable for a civil penalty in the amount of $80,000, both pursuant 25 to Section 20(d) of the Securities Act, 15 U.S.C. § 77t(d), and Section 21(d)(3) of the 26 Exchange Act, 15 U.S.C. § 78u(d)(3). DSA shall satisfy its obligation by paying 27 $250,000 to the Securities and Exchange Commission pursuant to the terms of the 28 payment schedule set forth in paragraph V below, and Ventre shall satisfy its 3 1 obligation by paying $80,000 to the Securities and Exchange Commission pursuant to 2 the terms of the payment schedule set forth in paragraph VI below. 3 Defendants may transmit payment electronically to the Commission, which 4 will provide detailed ACH transfer/Fedwire instructions upon request. Payment may 5 also be made directly from a bank account via Pay.gov through the SEC website at 6 http://www.sec.gov/about/offices/ofm.htm. Defendants may also pay by certified 7 check, bank cashier’s check, or United States postal money order payable to the 8 Securities and Exchange Commission, which shall be delivered or mailed to 9 Enterprise Services Center 10 Accounts Receivable Branch 11 6500 South MacArthur Boulevard 12 Oklahoma City, OK 73169 13 and shall be accompanied by a letter identifying the case title, civil action number, 14 and name of this Court; DSA or Ventre as a defendant in this action; and specifying 15 that payment is made pursuant to this Final Judgment. 16 Defendants shall simultaneously transmit photocopies of evidence of payment 17 and case identifying information to the Commission’s counsel in this action. By 18 making this payment, Defendants relinquish all legal and equitable right, title, and 19 interest in such funds and no part of the funds shall be returned to Defendants. 20 Defendants shall pay post judgment interest on any delinquent amounts 21 pursuant to 28 U.S.C. § 1961. The Commission shall hold the funds, together with 22 any interest and income earned thereon (collectively, the “Fund”), pending further 23 order of the Court. 24 The Commission may propose a plan to distribute the Fund subject to the 25 Court’s approval. Such a plan may provide that the Fund shall be distributed 26 pursuant to the Fair Fund provisions of Section 308(a) of the Sarbanes-Oxley Act of 27 2002. The Court shall retain jurisdiction over the administration of any distribution 28 of the Fund. If the Commission staff determines that the Fund will not be distributed, 4 1 the Commission shall send the funds paid pursuant to this Final Judgment to the 2 United States Treasury. 3 Regardless of whether any such Fair Fund distribution is made, amounts 4 ordered to be paid as civil penalties pursuant to this Judgment shall be treated as 5 penalties paid to the government for all purposes, including all tax purposes. To 6 preserve the deterrent effect of the civil penalty, Defendants shall not, after offset or 7 reduction of any award of compensatory damages in any Related Investor Action 8 based on either Defendant’s payment of disgorgement in this action, argue that it is 9 entitled to, nor shall it further benefit by, offset or reduction of such compensatory 10 damages award by the amount of any part of either Defendant’s payment of a civil 11 penalty in this action (“Penalty Offset”). If the court in any Related Investor Action 12 grants such a Penalty Offset, Defendants shall, within 30 days after entry of a final 13 order granting the Penalty Offset, notify the Commission’s counsel in this action and 14 pay the amount of the Penalty Offset to the United States Treasury or to a Fair Fund, 15 as the Commission directs. Such a payment shall not be deemed an additional civil 16 penalty and shall not be deemed to change the amount of the civil penalty imposed in 17 this Judgment. For purposes of this paragraph, a “Related Investor Action” means a 18 private damages action brought against either Defendant by or on behalf of one or 19 more investors based on substantially the same facts as alleged in the Complaint in 20 this action. 21 22 V. IT IS HEREBY FURTHER ORDERED, ADJUDGED, AND DECREED that 23 defendant DSA shall pay to the SEC its civil penalty of $250,000 in 12 installments 24 according to the following schedule: 25 (1) $20,833.33 within 360 days of entry of this Final Judgment; 26 (2) $20,833.33 within 390 days of entry of this Final Judgment; 27 (3) $20,833.33 within 420 days of entry of this Final Judgment; 28 (4) $20,833.33 within 450 days of entry of this Final Judgment; 5 1 (5) $20,833.33 within 480 days of entry of this Final Judgment; 2 (6) $20,833.33 within 510 days of entry of this Final Judgment; 3 (7) $20,833.33 within 540 days of entry of this Final Judgment; 4 (8) $20,833.33 within 570 days of entry of this Final Judgment; 5 (9) $20,833.33 within 600 days of entry of this Final Judgment; 6 (10) $20,833.33 within 630 days of entry of this Final Judgment; 7 (11) $20,833.33 within 660 days of entry of this Final Judgment; and 8 (12) $20,833.37 within 690 days of entry of this Final Judgment. 9 Payments shall be deemed made on the date they are received by the SEC and shall 10 be applied first to post-judgment interest, which accrues pursuant to 28 U.S.C. § 1961 11 on any unpaid amounts due after 14 days of the entry of Final Judgment. Prior to 12 making the final payment set forth herein, DSA shall contact the staff of the SEC for 13 the amount due for the final payment. 14 If DSA fails to make any payment by the date agreed and/or in the amount 15 agreed according to the schedule set forth above, all outstanding payments owed by 16 DSA under this Final Judgment, including post-judgment interest, minus any 17 payments made, shall become due and payable immediately at the discretion of the 18 staff of the SEC without further application to the Court. 19 VI. 20 IT IS HEREBY FURTHER ORDERED, ADJUDGED, AND DECREED that 21 defendant Ventre shall pay to the SEC its civil penalty of $80,000 in 12 installments 22 according to the following schedule: 23 (1) $6,666.67 within 360 days of entry of this Final Judgment; 24 (2) $6,666.67 within 390 days of entry of this Final Judgment; 25 (3) $6,666.67 within 420 days of entry of this Final Judgment; 26 (4) $6,666.67 within 450 days of entry of this Final Judgment; 27 (5) $6,666.67 within 480 days of entry of this Final Judgment; 28 (6) $6,666.67 within 510 days of entry of this Final Judgment; 6 1 (7) $6,666.67 within 540 days of entry of this Final Judgment; 2 (8) $6,666.67 within 570 days of entry of this Final Judgment; 3 (9) $6,666.67 within 600 days of entry of this Final Judgment; 4 (10) $6,666.67 within 630 days of entry of this Final Judgment; 5 (11) $6,666.67 within 660 days of entry of this Final Judgment; and 6 (12) $6.666.63 within 690 days of entry of this Final Judgment. 7 Payments shall be deemed made on the date they are received by the SEC and shall 8 be applied first to post-judgment interest, which accrues pursuant to 28 U.S.C. § 1961 9 on any unpaid amounts due after 14 days of the entry of Final Judgment. Prior to 10 making the final payment set forth herein, Ventre shall contact the staff of the SEC 11 for the amount due for the final payment. 12 If Ventre fails to make any payment by the date agreed and/or in the amount 13 agreed according to the schedule set forth above, all outstanding payments owed by 14 Ventre under this Final Judgment, including post-judgment interest, minus any 15 payments made, shall become due and payable immediately at the discretion of the 16 staff of the SEC without further application to the Court. 17 VII. 18 IT IS FURTHER ORDERED, ADJUDGED, AND DECREED that the 19 Consent of Defendant Dedicated Sound and Audio, Inc. and Steven Ventre to Entry 20 of Final Judgment is incorporated herein with the same force and effect as if fully set 21 forth herein, and that Defendants shall comply with all of the undertakings and 22 agreements set forth therein. 23 VIII. 24 IT IS FURTHER ORDERED, ADJUDGED, AND DECREED that, for 25 purposes of exceptions to discharge set forth in Section 523 of the Bankruptcy Code, 26 11 U.S.C. §523, the allegations in the complaint are true and admitted by Defendant, 27 and further, any debt for disgorgement, prejudgment interest, civil penalty or other 28 amounts due by Defendants under this Final Judgment or any other judgment, order, 7 1 consent order, decree or settlement agreement entered in connection with this 2 proceeding, is a debt for the violation by Defendants of the federal securities laws or 3 any regulation or order issued under such laws, as set forth in Section 523(a)(19) of 4 the Bankruptcy Code, 11 U.S.C. §523(a)(19). 5 6 IX. IT IS FURTHER ORDERED, ADJUDGED, AND DECREED that this Court 7 shall retain jurisdiction of this matter for the purposes of enforcing the terms of this 8 Final Judgment. 9 X. 10 There being no just reason for delay, pursuant to Rule 54(b) of the Federal 11 Rules of Civil Procedure, the Clerk is ordered to enter this Final Judgment forthwith 12 and without further notice. 13 14 15 16 Dated: March 02, 2018 ____________________________________ HON. ANDREW J. GUILFORD UNITED STATES DISTRICT JUDGE 17 18 19 20 21 22 23 24 25 26 27 28 8
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