Securities and Exchange Commission v. Radjabli et al, No. 2:2021cv01761 - Document 8 (D.S.C. 2021)
Court Description: FINAL JUDGMENT as to Defendants: It is ordered that the Defendants shall pay the total of disgorgement, prejudgment interest, and civil penalty due of $600,000 in 3 installments to the Commission according to the Schedule set forth in this Order. (vdru, )
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Securities and Exchange Commission v. RadjabliDate et al 2:21-cv-01761-MBS Filed 07/19/21 Entry Number 8 Page 1 of 11 Doc. 8 UNITED STATES DISTRICT COURT DISTRICT OF SOUTH CAROLINA CHARLESTON DIVISION SECURITIES AND EXCHANGE COMMISSION, Civil Action No. 2:21-cv-01761-MBS Plaintiff, v. EDGAR M. RADJABLI, APIS CAPITAL MANAGEMENT, LLC, and MY LOAN DOCTOR, LLC, Defendants. FINAL JUDGMENT AS TO DEFENDANTS EDGAR M. RADJABLI, APIS CAPITAL MANAGEMENT LLC, AND MY LOAN DOCTOR LLC The Securities and Exchange Commission having filed a Complaint and Defendants Radjabli, Apis Capital Management LLC (“Apis Capital”), and My Loan Doctor LLC (“Loan Doctor”) (collectively “Defendants”) having entered general appearances; consented to the Court’s jurisdiction over Defendants and the subject matter of this action; consented to entry of this Final Judgment without admitting or denying the allegations of the Complaint (except as to jurisdiction); 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 Defendants 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 1 Dockets.Justia.com 2:21-cv-01761-MBS Date Filed 07/19/21 Entry Number 8 Page 2 of 11 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) Defendants’ officers, agents, servants, employees, and attorneys; and (b) other persons in active concert or participation with Defendants or with anyone described in (a). II. IT IS HEREBY FURTHER ORDERED, ADJUDGED, AND DECREED that Defendants are 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 2 2:21-cv-01761-MBS (c) Date Filed 07/19/21 Entry Number 8 Page 3 of 11 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) Defendants’ officers, agents, servants, employees, and attorneys; and (b) other persons in active concert or participation with Defendants or with anyone described in (a). III. IT IS HEREBY FURTHER ORDERED, ADJUDGED, AND DECREED that Defendants Radjabli and Loan Doctor 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 3 2:21-cv-01761-MBS Date Filed 07/19/21 Entry Number 8 Page 4 of 11 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 receive actual notice of this Final Judgment by personal service or otherwise: (a) Defendants Radjabli’s and Loan Doctor’s officers, agents, servants, employees, and attorneys; and (b) other persons in active concert or participation with Defendants Radjabli and Loan Doctor or with anyone described in (a). IV. IT IS HEREBY FURTHER ORDERED, ADJUDGED, AND DECREED that Defendants Radjabli and Apis Capital are permanently restrained and enjoined from violating Section 14(e) of the Exchange Act [15 U.S.C. § 78n(e)] and Rule 14e-8 [17 C.F.R. § 240.14e-8] promulgated thereunder, in connection with any tender offer or request or invitation for tenders, from engaging in any fraudulent, deceptive, or manipulative act or practice, by publicly announcing plans to make a tender offer that has not yet been commenced: (a) without the intention to commence the offer within a reasonable time and complete the offer; (b) intending, directly or indirectly, for the announcement to manipulate the market price of the stock of the bidder or subject company; or (c) without the reasonable belief that they will have the means to purchase securities to complete the offer. 4 2:21-cv-01761-MBS Date Filed 07/19/21 Entry Number 8 Page 5 of 11 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) Defendants Radjabli’s and Apis Capital’s officers, agents, servants, employees, and attorneys; and (b) other persons in active concert or participation with Defendants Radjabli and Apis Capital or with anyone described in (a). V. IT IS FURTHER ORDERED, ADJUDGED, AND DECREED that Defendants Radjabli and Apis Capital are permanently restrained and enjoined from violating, directly or indirectly, Section 206(4) of the Advisers Act [15 U.S.C. § 80b-6(4)] and Rule 206(4)-8 [17 C.F.R. § 275.206(4)-8] adopted thereunder by, while acting as an investment adviser to a pooled investment vehicle, (i) making any untrue statement of material fact or omitting to state a material fact necessary to make the statements made, in the light of the circumstances under which they were made, not misleading to any investor or prospective investor in the pooled investment vehicle; or (ii) otherwise engaging in any act, practice, or course of business that is fraudulent, deceptive, or manipulative with respect to any investor or prospective investor in the pooled investment vehicle. IT IS 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) Defendants Radjabli’s and Apis Capital’s officers, agents, servants, employees, and attorneys; and (b) other persons in active concert or participation with Defendants Radjabli and Apis Capital or with anyone described in (a). 5 2:21-cv-01761-MBS Date Filed 07/19/21 Entry Number 8 Page 6 of 11 VI. 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)], Defendant Radjabli is permanently restrained and enjoined from, directly or indirectly, including, but not limited to, through any entity controlled by him: (i) participating in the issuance, purchase, offer, or sale of any security, or (ii) engaging in activities for purposes of inducing or attempting to induce the purchase or sale of any security; provided, however, that such injunction shall not prevent Defendant Radjabli from purchasing or selling securities listed on a national securities exchange 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 Radjabli’s officers, agents, servants, employees, and attorneys; and (b) other persons in active concert or participation with Defendant Radjabli or with anyone described in (a). VII. IT IS HEREBY FURTHER ORDERED, ADJUDGED, AND DECREED that Defendant Radjabli is permanently barred from participating in an offering of penny stock, including engaging in activities with a broker, dealer, or issuer for purposes of issuing, trading, or inducing or attempting to induce the purchase or sale of any penny stock. A penny stock is any equity security that has a price of less than five dollars, except as provided in Rule 3a51-1 under the Exchange Act [17 C.F.R. 240.3a51-1]. VIII. IT IS HEREBY FURTHER ORDERED, ADJUDGED, AND DECREED that Defendants 6 2:21-cv-01761-MBS Date Filed 07/19/21 Entry Number 8 Page 7 of 11 are liable for disgorgement of $162,800, representing net profits gained as a result of the conduct alleged in the Complaint, together with prejudgment interest thereon in the amount of $17,870, and a civil penalty in the amount of $419,330 as follows: (a) Defendants Radjabli and Apis Capital are jointly and severally liable for disgorgement of $162,800, plus prejudgment interest of $17,870, and a civil penalty of $177,800 pursuant to Sections 20(d) of the Securities Act, 21(d)(3) of the Exchange Act, and 209(e) of the Advisers Act, for a total of $358,470; and (b) Defendants Radjabli and Loan Doctor are jointly and severally liable for an additional civil penalty of $241,530 pursuant to Sections 20(d) of the Securities Act and 21(d)(3) of the Exchange Act. Defendants shall satisfy these obligations by paying a total of $600,000 plus any post judgment interest that may accrue to the Securities and Exchange Commission pursuant to the terms of the payment schedule set forth in paragraph IX below. Defendants 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. Defendants 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; Radjabli, Apis Capital and Loan Doctor as Defendants in this action; and specifying 7 2:21-cv-01761-MBS Date Filed 07/19/21 Entry Number 8 Page 8 of 11 that payment is made pursuant to this Final Judgment. Defendants shall simultaneously transmit photocopies of evidence of payment and case identifying information to the Commission’s counsel in this action. By making this payment, Defendants relinquishes all legal and equitable right, title, and interest in such funds and no part of the funds shall be returned to Defendants. The Commission may enforce the Court’s judgment for disgorgement and prejudgment interest by using all collection procedures authorized by law, including, but not limited to, moving for civil contempt at any time after 30 days following entry of this Final Judgment. The Commission may enforce the Court’s judgment for penalties by the use of all collection procedures authorized by law, including the Federal Debt Collection Procedures Act, 28 U.S.C. § 3001 et seq., and moving for civil contempt for the violation of any Court orders issued in this action. Defendants shall pay post judgment interest on any amounts due after 30 days of the entry of this Final Judgment pursuant to 28 U.S.C. § 1961. The Commission shall hold the funds, together with any interest and income earned thereon (collectively, the “Fund”), pending further order of the Court. The Commission may propose a plan to distribute the Fund subject to the Court’s approval. Such a plan may provide that the Fund shall be distributed pursuant to the Fair Fund provisions of Section 308(a) of the Sarbanes-Oxley Act of 2002. The Court shall retain jurisdiction over the administration of any distribution of the Fund and the Fund may only be disbursed pursuant to an Order of the Court. Regardless of whether any such Fair Fund distribution is made, amounts ordered to be paid as civil penalties pursuant to this Judgment shall be treated as penalties paid to the government for all purposes, including all tax purposes. To preserve the deterrent effect of the civil penalty, 8 2:21-cv-01761-MBS Date Filed 07/19/21 Entry Number 8 Page 9 of 11 Defendants shall not, after offset or reduction of any award of compensatory damages in any Related Investor Action based on Defendants’ payment of disgorgement in this action, argue that he or it is entitled to, nor shall he or it further benefit by, offset or reduction of such compensatory damages award by the amount of any part of Defendants’ payment of a civil penalty in this action (“Penalty Offset”). If the court in any Related Investor Action grants such a Penalty Offset, Defendants shall, within 30 days after entry of a final order granting the Penalty Offset, notify the Commission’s counsel in this action and pay the amount of the Penalty Offset to the United States Treasury or to a Fair Fund, as the Commission directs. Such a payment shall not be deemed an additional civil penalty and shall not be deemed to change the amount of the civil penalty imposed in this Judgment. For purposes of this paragraph, a “Related Investor Action” means a private damages action brought against Defendants by or on behalf of one or more investors based on substantially the same facts as alleged in the Complaint in this action. IX. Defendants shall pay the total of disgorgement, prejudgment interest, and civil penalty due of $600,000 in 3 installments to the Commission according to the following schedule: (1) $300,000 within 30 days of entry of this Final Judgment; (2) $150,000 within 180 days of the entry of this Final Judgment; and (3) $150,000 within 365 days of the entry of this Final Judgment. During the pendency of this payment plan, up to $125,000 of the $600,000 total amount ordered to be paid may be offset in an amount equal to payments made by Defendants to the Bureau of Consumer Financial Protection’s (“CFPB”) Civil Penalty Fund in connection with CFPB v. My Loan Doctor LLC and Radjabli, 20-cv-05159 (S.D.N.Y.). Payments to the Commission shall be deemed made on the date they are received by the Commission and shall be applied first to post judgment interest, which accrues pursuant to 28 U.S.C. § 1961 on any unpaid amounts due after 9 2:21-cv-01761-MBS Date Filed 07/19/21 Entry Number 8 Page 10 of 11 30 days of the entry of Final Judgment. Following the payment of post-judgment interest, payments made pursuant to this judgment shall be applied first to penalties of Apis Capital and Radjabli and then to penalties of Loan Doctor and Radjabli, until they are paid in full. For any payments made to the CFPB for which an offset is sought as described in this paragraph, payments shall be deemed made on the date a Defendant notifies the Commission of such CFPB payments and the date, amount and form thereof. Prior to making the final payment set forth herein, Defendants shall contact the staff of the Commission for the amount due for the final payment. If Defendants fail to make any payment by the date agreed and/or in the amount agreed according to the schedule set forth above, all outstanding payments under this Final Judgment, including post-judgment interest, minus any payments made, shall become due and payable immediately at the discretion of the staff of the Commission without further application to the Court. X. 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 allegations in the complaint are true and admitted by Defendant Radjabli, and further, any debt for disgorgement, prejudgment interest, civil penalty or other amounts due by Defendant Radjabli under this Final Judgment or any other judgment, order, consent order, decree or settlement agreement entered in connection with this proceeding, is a debt for the violation by Defendant Radjabli of the federal securities laws or any regulation or order issued under such laws, as set forth in Section 523(a)(19) of the Bankruptcy Code, 11 U.S.C. §523(a)(19). 10 2:21-cv-01761-MBS Date Filed 07/19/21 Entry Number 8 Page 11 of 11 XI. IT IS FURTHER ORDERED, ADJUDGED, AND DECREED that the Consent of each Defendant is incorporated herein with the same force and effect as if fully set forth herein, and that Defendants shall comply with all of the undertakings and agreements set forth therein. XII. 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/ Margaret B. Seymour Senior United States District Judge Charleston, South Carolina July 19, 2021 11
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