Securities and Exchange Commission v. Vassallo et al, No. 2:2009cv00665 - Document 514 (E.D. Cal. 2014)
Court Description: AMENDED FINAL JUDGMENT AGAINST KENNETH KENITZER signed by Judge Lawrence K. Karlton on 7/8/2014. (Zignago, K.)
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Securities and Exchange Commission v. Vassallo et al 1 2 3 4 5 6 7 8 Doc. 514 JINA L. CHOI (NY Bar No. 2699718) MICHAEL S. DICKE (Cal. Bar No. 158187) LLOYD A. FARNHAM (Cal. Bar No. 202231) farnhaml@sec.gov MONIQUE C. WINKLER (Cal. Bar. No 213031) winklerm@sec.gov Attorneys for Plaintiff SECURITIES AND EXCHANGE COMMISSION 44 Montgomery Street, Suite 2800 San Francisco, California 94104 Telephone: (415) 705-2500 Facsimile: (415) 705-2501 9 UNITED STATES DISTRICT COURT 10 EASTERN DISTRICT OF CALIFORNIA 11 SACRAMENTO DIVISION 12 SECURITIES AND EXCHANGE COMMISSION, Case No. 2:09-CV-00665-LKK-DAD 13 Plaintiff, [AMENDED] FINAL JUDGMENT AGAINST KENNETH KENITZER 14 vs. 15 ANTHONY VASSALLO, et al. 16 Defendants. 17 18 This matter came on for hearing on the motion of plaintiff Securities and Exchange 19 Commission (“Commission”) for issuance of a final judgment against defendant Kenneth 20 Kenitzer. Having considered the papers and argument submitted in support of the motion, 21 there being no opposition, the Commission’s motion is hereby GRANTED, as follows: 22 I. 23 IT IS ORDERED THAT Kenitzer and his agents, servants, employees, attorneys, and 24 those persons in active concert or participation with any of them, who receive actual notice of 25 this Judgment, by personal service or otherwise, and each of them, are permanently restrained 26 and enjoined from, in the offer or sale of any securities, by the use of any means or 27 28 [AMENDED PROPOSED] FINAL JUDGMENT AGAINST KENNETH KENITZER 1 SEC V. VASSALLO, ET AL. CASE NO. 2:09-CV-00665-LKK-DAD Dockets.Justia.com 1 instruments of transportation or communication in interstate commerce or by the use of the 2 mails, directly or indirectly: 3 A. employing any device, scheme, or artifice to defraud; or 4 B. obtaining money or property by means of any untrue statement of a material 5 fact or any omission to state a material fact necessary in order to make the 6 statements made, in light of the circumstances under which they were made, 7 not misleading; or 8 C. engaging in any transaction, practice, or course of business which operates or would operate as a fraud or deceit upon the purchaser; 9 10 in violation of Section 17(a) of the Securities Act of 1933 (“Securities Act”) [15 U.S.C. § 11 77q(a)]. II. 12 13 IT IS FURTHER ORDERED THAT Kenitzer and his agents, servants, employees, 14 attorneys, and those persons in active concert or participation with any of them, who receive 15 actual notice of this Judgment, by personal service or otherwise, and each of them, are 16 permanently restrained and enjoined from, directly or indirectly, by the use of any means or 17 instrumentality of interstate commerce, or of the mails, or of any facility of any national 18 securities exchange: 19 A. employing any device, scheme, or artifice to defraud; 20 B. making any untrue statement of a material fact or omitting to state a material 21 fact necessary in order to make the statements made, in the light of the 22 circumstances under which they were made, not misleading; or 23 24 C. engaging in any act, practice, or course of business which operates or would operate as a fraud or deceit upon any person; 25 26 27 28 [AMENDED PROPOSED] FINAL JUDGMENT AGAINST KENNETH KENITZER 2 SEC V. VASSALLO, ET AL. CASE NO. 2:09-CV-00665-LKK-DAD 1 in connection with the purchase or sale of any security, in violation of Section 10(b) of the 2 Securities Exchange Act of 1934 (“Exchange Act”) [15 U.S.C. § 78j(b)] and Exchange Act 3 Rule 10b-5 [17 C.F.R. § 240.10b-5]. III. 4 5 IT IS FURTHER ORDERED, ADJUDGED, AND DECREED that Kenitzer shall pay 6 disgorgement of his ill-gotten gains in the amount of $43,288,725.08 plus prejudgment 7 interest of $874,048.92, for a total of $44,162,774.00. Defendant shall satisfy this obligation 8 by paying $44,162,774.00 to the Securities and Exchange Commission within 14 days after 9 entry of this Final Judgment. 10 Defendant may transmit payment electronically to the Commission, which will 11 provide detailed ACH transfer/Fedwire instructions upon request. Payment may also be 12 made directly from a bank account via Pay.gov through the SEC website at 13 http://www.sec.gov/about/offices/ofm.htm. Defendant may also pay by certified check, bank 14 cashier’s check, or United States postal money order payable to the Securities and Exchange 15 Commission, which shall be delivered or mailed to 16 17 18 Enterprise Services Center Accounts Receivable Branch 6500 South MacArthur Boulevard Oklahoma City, OK 73169 19 and shall be accompanied by a letter identifying the case title, civil action number, and name 20 of this Court; Kenneth Kenitzer as a defendant in this action; and specifying that payment is 21 made pursuant to this Final Judgment. 22 Defendant shall simultaneously transmit photocopies of evidence of payment and case 23 identifying information to the Commission’s counsel in this action. By making this payment, 24 Defendant relinquishes all legal and equitable right, title, and interest in such funds and no 25 part of the funds shall be returned to Defendant. 26 The Commission shall hold the funds (collectively, the “Fund”) and may propose a 27 28 [AMENDED PROPOSED] FINAL JUDGMENT AGAINST KENNETH KENITZER 3 SEC V. VASSALLO, ET AL. CASE NO. 2:09-CV-00665-LKK-DAD 1 plan to distribute the Fund subject to the Court’s approval. The Court shall retain jurisdiction 2 over the administration of any distribution of the Fund. If the Commission staff determines 3 that the Fund will not be distributed, the Commission shall send the funds paid pursuant to 4 this Final Judgment to the United States Treasury. 5 The Commission may enforce the Court’s judgment for disgorgement and 6 prejudgment interest by moving for civil contempt (and/or through other collection 7 procedures authorized by law) at any time after 14 days following entry of this Final 8 Judgment. Defendant shall pay post judgment interest on any delinquent amounts pursuant to 9 28 U.S.C. § 1961. 10 Defendant is also subject to a restitution order of $43,288,725.08 in a separate 11 criminal proceeding, U.S. v. Kenitzer, 2:09-cr-00459-GEB (E.D. Cal.). All payments the 12 Defendant makes pursuant to that restitution order will be credited against his disgorgement 13 obligation under this Final Judgment. In addition, all payments made by Defendant Anthony 14 Vassallo, either pursuant to any order of disgorgement arising from this action or pursuant to 15 the restitution order in the criminal proceeding U.S. v. Vassallo, 2:09-cr-00179-GEB (E.D. 16 Cal.), will be credited against Kenitzer’s disgorgement obligation under this Final Judgment. IV. 17 18 IT IS FURTHER ORDERED, ADJUDGED, AND DECREED that Defendant shall 19 pay a civil penalty in the amount of $390,000 to the Securities and Exchange Commission 20 pursuant to 15 U.S.C. § 77t(d)(2) (Securities Act) and 15 U.S.C. § 78u(d) (Exchange Act). 21 Defendant shall make this payment within 14 days after entry of this Final Judgment. 22 Defendant may transmit payment electronically to the Commission, which will 23 provide detailed ACH transfer/Fedwire instructions upon request. Payment may also be 24 made directly from a bank account via Pay.gov through the SEC website at 25 http://www.sec.gov/about/offices/ofm.htm. Defendant may also pay by certified check, bank 26 cashier’s check, or United States postal money order payable to the Securities and Exchange 27 28 [AMENDED PROPOSED] FINAL JUDGMENT AGAINST KENNETH KENITZER 4 SEC V. VASSALLO, ET AL. CASE NO. 2:09-CV-00665-LKK-DAD 1 2 3 4 Commission, which shall be delivered or mailed to Enterprise Services Center Accounts Receivable Branch 6500 South MacArthur Boulevard Oklahoma City, OK 73169 5 and shall be accompanied by a letter identifying the case title, civil action number, and name 6 of this Court; Kenneth Kenitzer as a defendant in this action; and specifying that payment is 7 made pursuant to this Final Judgment. 8 Defendant shall simultaneously transmit photocopies of evidence of payment and case 9 identifying information to the Commission’s counsel in this action. By making this payment, 10 Defendant relinquishes all legal and equitable right, title, and interest in such funds and no 11 part of the funds shall be returned to Defendant. The Commission shall send the funds paid 12 pursuant to this Final Judgment to the United States Treasury. Defendant shall pay post- 13 judgment interest on any delinquent amounts pursuant to 28 USC § 1961. 14 15 V. IT IS FURTHER ORDERED, ADJUDGED, AND DECREED that the Consent of 16 Defendant Kenneth Kenitzer to Judgment of Permanent Injunction and Other Relief (Docket 17 No. 127) is incorporated herein with the same force and effect as if fully set forth herein, and 18 that Defendant shall comply with all of the undertakings and agreements set forth therein. 19 20 VI. IT IS FURTHER ORDERED, ADJUDGED, AND DECREED that this Court shall 21 retain jurisdiction of this matter for the purposes of enforcing the terms of this Final 22 Judgment. 23 24 VII. There being no just reason for delay, pursuant to Rule 54(b) of the Federal Rules of 25 Civil Procedure, the Clerk is ordered to enter this Final Judgment forthwith and without 26 further notice. 27 28 [AMENDED PROPOSED] FINAL JUDGMENT AGAINST KENNETH KENITZER 5 SEC V. VASSALLO, ET AL. CASE NO. 2:09-CV-00665-LKK-DAD 1 2 Date: July 8, 2014 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 [AMENDED PROPOSED] FINAL JUDGMENT AGAINST KENNETH KENITZER 6 SEC V. VASSALLO, ET AL. CASE NO. 2:09-CV-00665-LKK-DAD
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