Securities and Exchange Commission v. Bio Defense Corp., et al., No. 1:2012cv11669 - Document 157 (D. Mass. 2019)
Court Description: Judge Douglas P. Woodlock: FINAL JUDGMENT AS TO DEFENDANT JONATHAN MORRONE. (McDonagh, Christina)
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Securities and Exchange Commission v. Bio Defense Corp., et al. Doc. 157 UNITED STATES DISTRICT COURT DISTRICT OF MASSACHUSETTS SECURITIES AND EXCHANGE COMMISSION, ) ) ) ) ) ) ) ) ) ) ) ) Plaintiff, v. JONATHAN MORRONE, Defendant. CIVIL ACTION NO. 12-11669-DPW FINAL JUDGMENT AS TO DEFENDANT JONATHAN MORRONE September 6, 2019 WHEREAS, Plaintiff Securities and Exchange Commission (“Commission”) filed a Complaint, and defendant Jonathan Morrone (“Morrone”) answered the Complaint; WHEREAS, the Commission moved for summary judgment on its claims against Morrone, and the parties thereafter briefed and argued this motion; and WHEREAS, the Court has issued a Memorandum and Order granting the Commission’s motion for summary judgment against Morrone: I. IT IS HEREBY ORDERED, ADJUDGED, AND DECREED that Defendant Morrone is permanently restrained and enjoined from violating, directly or indirectly, Section 10(b) of the Securities Exchange Dockets.Justia.com 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. IT IS FURTHER ORDERED, ADJUDGED, AND DECREED that, as provided in Federal Rule of Civil Procedure 65(d)(2), the foregoing paragraph also binds the following who receive actual notice of this Final Judgment by personal service or otherwise: (a) Defendant Morrone’s officers, agents, servants, employees, and attorneys; and (b) other persons in active concert or participation with Defendant Morrone or with anyone described in (a). II. IT IS HEREBY FURTHER ORDERED, ADJUDGED, AND DECREED that 2 Defendant Morrone is permanently restrained and enjoined from violating Section 17(a) of the Securities Act of 1933 (the “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: (a) to employ any device, scheme, or artifice to defraud; or (b) to engage in any transaction, practice, or course of business which operates or would operate as a fraud or deceit upon the purchaser. IT IS FURTHER ORDERED, ADJUDGED, AND DECREED that, as provided in Federal Rule of Civil Procedure 65(d)(2), the foregoing paragraph also binds the following who receive actual notice of this Final Judgment by personal service or otherwise: (a) Defendant Morrone’s officers, agents, servants, employees, and attorneys; and (b) other persons in active concert or participation with Defendant Morrone or with anyone described in (a). III. IT IS HEREBY FURTHER ORDERED, ADJUDGED, AND DECREED that Defendant Morrone is permanently restrained and enjoined from violating Section 5 of the Securities Act [15 U.S.C. § 77e] by, 3 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 effective date of the registration statement) any public proceeding or examination under Section 8 of the Securities Act [15 U.S.C. § 77h]. 4 IT IS FURTHER ORDERED, ADJUDGED, AND DECREED that, as provided in Federal Rule of Civil Procedure 65(d)(2), the foregoing paragraph also binds the following who receive actual notice of this Final Judgment by personal service or otherwise: (a) Defendant Morrone’s officers, agents, servants, employees, and attorneys; and (b) other persons in active concert or participation with Defendant Morrone or with anyone described in (a). IV. IT IS HEREBY FURTHER ORDERED, ADJUDGED, AND DECREED that Defendant Morrone is permanently restrained and enjoined from violating Section 15(a) of the Securities Exchange Act of 1934 (the "Exchange Act") [15 U.S.C. § 78o(a)], by using the mails, or any means or instrumentality of interstate commerce, to effect transactions in, or to induce or attempt to induce the purchase or sale of, securities without being registered as a broker or dealer or associated with a registered broker or dealer in accordance with Section 15(b) of the Exchange Act, 15 U.S.C.§ 78o(b). IT IS FURTHER ORDERED, ADJUDGED, AND DECREED that, as provided in Federal Rule of Civil Procedure 65(d)(2), the foregoing paragraph also binds the following who receive actual notice of this Final Judgment by personal service or otherwise: (a) Defendant Morrone’s officers, agents, servants, employees, 5 and attorneys; and (b) other persons in active concert or participation with Defendant Morrone or with anyone described in (a). V. IT IS HEREBY FURTHER ORDERED, ADJUDGED, AND DECREED that Defendant Morrone is liable for disgorgement of $607,928.42, representing profits gained from his unlawful conduct, together with prejudgment interest thereon in the amount of $183,104.40, for a total of $791,032.82. Defendant shall satisfy this obligation by paying $791,032.82 to the Commission within 14 days after entry of this Final Judgment. Defendant Morrone may transmit payment electronically to the Commission, which will provide detailed ACH transfer/Fedwire instructions upon request. Payment may also be made directly from a bank account via Pay.gov through the SEC website at http://www.sec.gov/about/offices/ofm.htm. Defendant may also pay by certified check, bank cashier’s check, or United States postal money order payable to the Commission, which shall be delivered or mailed to Enterprise Services Center Accounts Receivable Branch 6500 South MacArthur Boulevard Oklahoma City, OK 73169 and shall be accompanied by a letter identifying the case title, civil action number, and name of this Court; Jonathan Morrone as 6 a defendant in this action; and specifying that payment is made pursuant to this Final Judgment. Defendant shall simultaneously transmit photocopies of evidence of payment and case identifying information to the Commission’s counsel in this action. By making this payment, Defendant relinquishes all legal and equitable right, title, and interest in such funds and no part of the funds shall be returned to Defendant. The Commission shall hold the funds (collectively, the “Fund”) and may propose a plan to distribute the Fund subject to the Court’s approval. The Court shall retain jurisdiction over the administration of any distribution of the Fund. If the Commission staff determines that the Fund will not be distributed, the Commission shall send the funds paid pursuant to this Final Judgment to the United States Treasury. 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 14 days following entry of this Final Judgment. Defendant shall pay post judgment interest on any delinquent amounts pursuant to 28 U.S.C. § 1961. VI. IT IS FURTHER ORDERED, ADJUDGED, AND DECREED that Defendant Morrone shall pay a civil penalty in the amount of $607,928.42 7 to the Commission pursuant to Section 20(d) of the Securities Act [15 U.S.C. § 77t(d)] and Section 21(d)(3) of the Securities Exchange Act [15 U.S.C. § 78u(d)(3)]. Defendant Morrone shall make this payment within 14 days after entry of this Final Judgment. Defendant Morrone may transmit payment electronically to the Commission, which will provide detailed ACH transfer/Fedwire instructions upon request. Payment may also be made directly from a bank account via Pay.gov through the SEC website at http://www.sec.gov/about/offices/ofm.htm. Defendant Morrone may also pay by certified check, bank cashier’s check, or United States postal money order payable to the Securities and Exchange Commission, which shall be delivered or mailed to Enterprise Services Center Accounts Receivable Branch 6500 South MacArthur Boulevard Oklahoma City, OK 73169 and shall be accompanied by a letter identifying the case title, civil action number, and name of this Court; Jonathan Morrone as a defendant in this action; and specifying that payment is made pursuant to this Final Judgment. Defendant Morrone shall simultaneously transmit photocopies of evidence of payment and case identifying information to the Commission’s counsel in this action. By making this payment, Defendant Morrone relinquishes all legal and equitable right, 8 title, and interest in such funds and no part of the funds shall be returned to Defendant. The Commission shall send the funds paid pursuant to this Final Judgment to the United States Treasury. Defendant Morrone shall pay post-judgment interest on any delinquent amounts pursuant to 28 USC § 1961. VII. IT IS FURTHER ORDERED, ADJUDGED, AND DECREED that, pursuant to Section 21(d)(2) of the Exchange Act [15 U.S.C. § 78u(d)(2)] and Section 20(e) of the Securities Act [15 U.S.C. § 77t(e)], Defendant Morrone is prohibited from acting as an officer or director of any issuer that has a class of securities registered pursuant to Section 12 of the Exchange Act [15 U.S.C. § 78l] or that is required to file reports pursuant to Section 15(d) of the Exchange Act [15 U.S.C. § 78o(d)]. VIII. 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. /s/ Douglas P. Woodlock_________ DOUGLAS P. WOODLOCK UNITED STATES DISTRICT JUDGE 9
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