SEC, et al v. Custable, et al, No. 1:2003cv02182 - Document 327 (N.D. Ill. 2009)
Court Description: MOTION by Plaintiff Securities and Exchange Commission for judgment by consent against Defendants Robert Blagman, Richard Bailey, Pacel Corporation and Marshall Holdings International Ltd. (f/k/a "Gateway Distributors, Ltd.") (Attach ments: # 1 Exhibit 1. Consent of Robert Blagman to Final Judgment, # 2 Exhibit 2. Consent of Richard Bailey to Final Judgment, # 3 Exhibit 3. Consent of Pacel Corporation to Final Judgment, # 4 Exhibit 4. Consent of Marshall Holdings International, Ltd. to Final Judgment, # 5 Certificate of Service)(Levine, Steven)
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SEC, et al v. Custable, et al Doc. 327 Att. 3 Dockets.Justia.com UNITED STATES DISTRICT COURT NORTHERN DISTRICT OF ILLINOIS __________________________________________ : UNITED STATES SECURITIES : AND EXCHANGE COMMISSION, : : Plaintiff, : : Civil Action No: 03 C 2182 v. : : FRANK J. CUSTABLE, JR., et al., : Judge Gottschall : Defendants. : __________________________________________: Magistrate Judge Valdez FINAL JUDGMENT AS TO DEFENDANT PACEL CORPORATION Plaintiff, the United States Securities and Exchange Commission (“SEC” or “Commission”), having filed a Second Amended Complaint and defendant Pacel Corporation (“Defendant”) having entered a general appearance; consented to the Court’s jurisdiction over Defendant and the subject matter of this action; consented to entry of this Final Judgment without admitting or denying the allegations of the Second Amended Complaint (except as to jurisdiction, which Defendant admits); waived findings of fact and conclusions of law; and waived any right to appeal from this Final Judgment: I. [PERMANENT INJUNCTION PROHIBITING VIOLATIONS OF SECTION 10(b) OF EXCHANGE ACT AND RULE 10b-5 THEREUNDER] IT IS HEREBY ORDERED, ADJUDGED, AND DECREED that Defendant and its officers, directors, subsidiaries, affiliates, successors, agents, servants, employees, attorneys, and all persons in active concert or participation with them who receive actual notice of this Final Judgment by personal service or otherwise are permanently restrained and enjoined from violating, directly or indirectly, Section 10(b) of the Securities Exchange Act of 1934 (the "Exchange Act") [15 U.S.C. § 78j(b)] and Rule 10b-5 promulgated thereunder [17 C.F.R. § 240.10b-5], by using any means or instrumentality of interstate commerce, or of the mails, or of any facility of any national securities exchange, in connection with the purchase or sale of any security: (a) to employ any device, scheme, or artifice to defraud; (b) to make any untrue statement of a material fact or to omit to state a material fact necessary in order to make the statements made, in the light of the circumstances under which they were made, not misleading; or (c) to engage in any act, practice, or course of business which operates or would operate as a fraud or deceit upon any person. II. [PERMANENT INJUNCTION PROHIBITING VIOLATIONS OF SECTION 17(a) OF SECURITIES ACT] IT IS FURTHER ORDERED, ADJUDGED, AND DECREED that Defendant and its officers, directors, subsidiaries, affiliates, successors, agents, servants, employees, attorneys, and all persons in active concert or participation with them who receive actual notice of this Final Judgment by personal service or otherwise are permanently restrained and enjoined from violating Section 17(a) of the Securities Act of 1933 (“Securities Act”) [15 U.S.C. § 77q(a)] in the offer or sale of any security by the use of any means or instruments of transportation or communication in interstate commerce or by use of the mails, directly or indirectly: (1) to employ any device, scheme, or artifice to defraud; (2) to obtain money or property by means of any untrue statement of a material fact or any omission of a material fact necessary in order to make the statements made, in light of the circumstances under which they were made, not misleading; or 2 (3) to engage in any transaction, practice, or course of business which operates or would operate as a fraud or deceit upon the purchaser. III. [PERMANENT INJUNCTION PROHIBITING VIOLATIONS OF SECTION 5 OF SECURITIES ACT] IT IS FURTHER ORDERED, ADJUDGED, AND DECREED that Defendant and its officers, directors, subsidiaries, affiliates, successors, agents, servants, employees, attorneys, and all persons in active concert or participation with them who receive actual notice of this Final Judgment by personal service or otherwise are permanently restrained and enjoined from violating Section 5 of the Securities Act [15 U.S.C. § 77e] by, directly or indirectly, in the absence of any applicable exemption: (a) Unless a registration statement is in effect as to a security, making use of any means or instruments of transportation or communication in interstate commerce or of the mails to sell such security through the use or medium of any prospectus or otherwise; (b) Unless a registration statement is in effect as to a security, carrying or causing to be carried through the mails or in interstate commerce, by any means or instruments of transportation, any such security for the purpose of sale or for delivery after sale; or (c) Making use of any means or instruments of transportation or communication in interstate commerce or of the mails to offer to sell or offer to buy through the use or medium of any prospectus or otherwise any security, unless a registration statement has been filed with the Commission as to such security, or while the registration statement is the subject of a refusal order or stop order or (prior to the 3 effective date of the registration statement) any public proceeding of examination under Section 8 of the Securities Act [15 U.S.C. § 77h]. IV. [MONETARY RELIEF] IT IS HEREBY FURTHER ORDERED, ADJUDGED, AND DECREED that Defendant is liable for disgorgement of $200,000, representing profits gained as a result of the conduct alleged in the Complaint, together with prejudgment interest thereon in the amount of $96,459, for a total of $296,459. The Commission may enforce the Court’s judgment for disgorgement and prejudgment interest by moving for civil contempt (and/or through other collection procedures authorized by law) at any time after ten days following entry of this Final Judgment. In response to any such civil contempt motion by the Commission, Defendant may assert any legally permissible defense. Payments under this paragraph shall be made to the Clerk of this Court, together with a cover letter identifying Pacel Corp. as a defendant in this action; setting forth the title and civil action number of this action and the name of this Court; and specifying that payment is made pursuant to this Final Judgment. Defendant shall simultaneously transmit photocopies of each such payment and letter to the Commission’s counsel in this action. Defendant relinquishes all legal and equitable right, title, and interest in such payments, and no part of the funds shall be returned to Defendant. The Clerk shall deposit the funds into an interest bearing account with the Court Registry Investment System ("CRIS") or any other type of interest bearing account that is utilized by the Court. These funds, together with any interest and income earned thereon (collectively, the “Fund”), shall be held in the interest bearing account until further order of the Court. In accordance with 28 U.S.C. § 1914 and the guidelines set by the Director of the Administrative Office of the United States Courts, the Clerk is directed, 4 without further order of this Court, to deduct from the income earned on the money in the Fund a fee equal to ten percent of the income earned on the Fund. Such fee shall not exceed that authorized by the Judicial Conference of the United States. The Commission may propose a plan to distribute the Fund subject to the Court’s approval. Defendant shall pay post-judgment interest on any delinquent amounts pursuant to 28 USC § 1961. V. [INCORPORATION OF CONSENT OF DEFENDANT] IT IS FURTHER ORDERED, ADJUDGED AND DECREED that the Consent of Defendant, filed in conjunction with the SEC’s motion for entry of this Final Judgment, is incorporated in this Final Judgment with the same force and effect as if fully set forth herein, and that Defendant shall comply with all of the undertakings and agreements set forth therein. VI. [RETENTION OF JURISDICTION] 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 Final Judgment. VII. [RULE 54(b) CERTIFICATION] There being no just reason for delay, pursuant to Rule 54(b) of the Federal Rules of Civil Procedure, the Clerk is ordered to enter this Final Judgment forthwith and without further notice. 5 SO ORDERED: ____________________________________ UNITED STATES DISTRICT JUDGE Dated: _________, 2009 6
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