Securities and Exchange Commission v. Sharma et al, No. 1:2018cv02909 - Document 60 (S.D.N.Y. 2022)
Court Description: FINAL JUDGMENT AS TO DEFENDANT ROBERT FARKAS: The Securities and Exchange Commission having filed an Amended Complaint and Defendant Robert Farkas 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; waived findings of fact and conclusions of law; and waived any right to appeal from this Final Judgment. IT IS HEREBY ORDERED, ADJUDGED, AND DECREED that Defendant is p ermanently 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 as set forth in that order. 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's off icers, agents, servants, employees, and attorneys; and (b) other persons in active concert or participation with Defendant or with anyone described in (a). IT IS FURTHER ORDERED, ADJUDGED, AND DECREED that Defendant is liable for disgorgement o f $347,062.58, representing net profits gained as a result of the conduct alleged in the Amended Complaint, together with prejudgment interest thereon in the amount of $47,846.39, for a total of $394,908.97, which is deemed satis fied by the Preliminary Order of Forfeiture and Money Judgment entered against the defendant in the amount of $36,088,960 in United States v. Farkas, 18-Cr. 340-03 (S.D.N.Y.) (LGS) (Dkt. No. 433) (the "Criminal Proceeding"), a nd the approximately $4,422,383.45 in possession of the United States, which represents the proceeds from appreciation in the market price of 100,000 Ether units that the Federal Bureau of Investigation seized in 2018 from the defendants&# 039; digital Ether wallet address since Defendants personally obtained them; and further orders that in the event that no final order of forfeiture is entered in the Criminal Proceeding and/or any portion of the money judgment in the Crimina l Proceeding is vacated and/or reduced, Defendant shall receive a credit towards his $394,908.97 disgorgement obligation, for any amounts ordered to be paid in the Criminal Proceeding. The difference between the $394,908.97 and the am ount ordered in the Criminal Proceeding shall become due and payable fourteen (14) days after entry of the Final Judgment, or fourteen (14) days after entry of the mandate vacating and/or reducing amount due in the Criminal Proceeding, whiche ver is later. 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. 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. (Signed by Judge Denise L. Cote on 5/17/2022) (ate)
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Securities and Exchange Commission v. Sharma et al Doc. 60 Case 1:18-cv-02909-DLC Document 60 Filed 05/17/22 Page 1 of 6 UNITED STATES DISTRICT COURT SOUTHERN DISTRICT OF NEW YORK SECURITIES AND EXCHANGE COMMISSION, Plaintiff, 18 CIV. 02909 (DLC) v. SOHRAB (“SAM”) SHARMA, ROBERT FARKAS, and RAYMOND TRAPANI, Defendants. FINAL JUDGMENT AS TO DEFENDANT ROBERT FARKAS The Securities and Exchange Commission having filed an Amended Complaint and Defendant Robert Farkas 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; waived findings of fact and conclusions of law; and waived any right to appeal from this Final Judgment: I. IT IS HEREBY ORDERED, ADJUDGED, AND DECREED that Defendant is 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; 1 Dockets.Justia.com Case 1:18-cv-02909-DLC Document 60 Filed 05/17/22 Page 2 of 6 (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’s officers, agents, servants, employees, and attorneys; and (b) other persons in active concert or participation with Defendant or with anyone described in (a). II. IT IS HEREBY FURTHER ORDERED, ADJUDGED, AND DECREED that Defendant 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; (b) 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 (c) to engage in any transaction, practice, or course of business which operates or would operate as a fraud or deceit upon the purchaser. 2 Case 1:18-cv-02909-DLC Document 60 Filed 05/17/22 Page 3 of 6 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’s officers, agents, servants, employees, and attorneys; and (b) other persons in active concert or participation with Defendant or with anyone described in (a). III. IT IS HEREBY FURTHER ORDERED, ADJUDGED, AND DECREED that Defendant is permanently restrained and enjoined from violating Sections 5(a) and (c) of the Securities Act [15 U.S.C. § 77e(a) and (c)] 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; or (b) 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]. 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 3 Case 1:18-cv-02909-DLC Document 60 Filed 05/17/22 Page 4 of 6 receive actual notice of this Final Judgment by personal service or otherwise: (a) Defendant’s officers, agents, servants, employees, and attorneys; and (b) other persons in active concert or participation with Defendant or with anyone described in (a). IV. IT IS FURTHER ORDERED, ADJUDGED, AND DECREED that pursuant to Section 21(d)(5) of the Exchange Act [15 U.S.C. § 78u(d)(5)], that Defendant is permanently restrained and enjoined from participating, directly or indirectly, in any offering of securities, including any digital asset security; provided, however, that such injunction shall not prevent Defendant from purchasing or selling securities for his own personal account. 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’s officers, agents, servants, employees, and attorneys; and (b) other persons in active concert or participation with Defendant or with anyone described in (a). V. 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 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)]. VI. IT IS FURTHER ORDERED, ADJUDGED, AND DECREED that Defendant is liable 4 Case 1:18-cv-02909-DLC Document 60 Filed 05/17/22 Page 5 of 6 for disgorgement of $347,062.58, representing net profits gained as a result of the conduct alleged in the Amended Complaint, together with prejudgment interest thereon in the amount of $47,846.39, for a total of $394,908.97, which is deemed satisfied by the Preliminary Order of Forfeiture and Money Judgment entered against the defendant in the amount of $36,088,960 in United States v. Farkas, 18-Cr. 340-03 (S.D.N.Y.) (LGS) (Dkt. No. 433) (the “Criminal Proceeding”), and the approximately $4,422,383.45 in possession of the United States, which represents the proceeds from appreciation in the market price of 100,000 Ether units that the Federal Bureau of Investigation seized in 2018 from the defendants’ digital Ether wallet address since Defendants personally obtained them; and further orders that in the event that no final order of forfeiture is entered in the Criminal Proceeding and/or any portion of the money judgment in the Criminal Proceeding is vacated and/or reduced, Defendant shall receive a credit towards his $394,908.97 disgorgement obligation, for any amounts ordered to be paid in the Criminal Proceeding. The difference between the $394,908.97 and the amount ordered in the Criminal Proceeding shall become due and payable fourteen (14) days after entry of the Final Judgment, or fourteen (14) days after entry of the mandate vacating and/or reducing amount due in the Criminal Proceeding, whichever is later. VII. IT IS FURTHER ORDERED, ADJUDGED, AND DECREED that the Consent is incorporated herein 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. VIII. IT IS FURTHER ORDERED, ADJUDGED, AND DECREED that, solely for purposes of exceptions to discharge set forth in Section 523 of the Bankruptcy Code, 11 U.S.C. § 523, the 5 Case 1:18-cv-02909-DLC Document 60 Filed 05/17/22 Page 6 of 6
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