Opinion
Case No. CV 10-6835 RGK (JCGx)
08-30-2011
SECURITIES AND EXCHANGE COMMISSION, Plaintiff, v. LADP ACQUISITION, INC.; WILLIAM A. GOLDSTEIN and MARC E. BERCOON, Defendants.
ORDER GRANTING MOTION BY PLAINTIFF SECURITIES
AND EXCHANGE COMMISSION FOR SUMMARY JUDGMENT
AND FINAL JUDGMENT AS TO DEFENDANTS LADP
ACQUISITION, INC.; WILLIAM A. GOLDSTEIN AND MARC E. BERCOON
This matter having come before the Court on Plaintiff Securities and Exchange Commission's Motion For Summary Judgment As To Disgorgement And Civil Penalties Against Defendants LADP Acquisition, Inc., William A. Goldstein, And Marc E. Bercoon; the Defendants previously having admitted the Court's jurisdiction over each of them and over the subject matter of this action and consented to the entry of a Judgment Of Permanent Injunction And Other Relief as to each of them, which Judgments were entered as to each of the Defendants (Docket Nos. 52-54); and the Court having considered the motion by the Securities and Exchange Commission ("Commission"), and all papers and arguments submitted regarding that motion:
I.
IT IS HEREBY ORDERED, ADJUDGED AND DECREED that the Commission's Motion For Summary Judgment As To Disgorgement And Penalties Against Defendants LADP Acquisition, Inc., William A. Goldstein, And Marc E. Bercoon is GRANTED.
II.
IT IS FURTHER ORDERED, ADJUDGED AND DECREED that Defendants and Defendants' officers, agents, servants, employees, attorneys-in-fact, 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.
III.
IT IS FURTHER ORDERED, ADJUDGED AND DECREED that Defendants and Defendants' officers, agents, servants, employees, attorneys-in-fact, 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 (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.
IV.
IT IS FURTHER ORDERED, ADJUDGED AND DECREED that Defendants and Defendants' officers, agents, servants, employees, attorneys-in-fact, 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 effective date of the registration statement) any public proceeding or examination under Section 8 of the Securities Act, 15 U.S.C. § 77h.
V.
IT IS FURTHER ORDERED, ADJUDGED, AND DECREED that Defendants are jointly and severally liable for disgorgement of $3,192,735, which represents profits gained in connection with the Defendants' offering of securities as alleged in the Complaint, and prejudgment interest thereon of $267,477.61, for a total of $3,460,212.61. Defendants shall satisfy this obligation by paying $3,460,212.61 within 14 days after entry of this Final Judgment by certified check, bank cashier's check, or United States postal money order payable to the Clerk of this Court, together with a cover letter identifying the Defendant 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 such payment and letter to the Commission's counsel in this action. By making payments pursuant to this Final Judgment, the Defendants relinquish all legal and equitable right, title, and interest in such funds, and no part of the funds shall be returned to the Defendants. Pursuant to Local Rule 67-1, the Clerk shall deposit the funds into an interest bearing account. These funds, together with any funds paid by any financial institution or brokerage firm pursuant to paragraph VI of this Final Judgment in partial satisfaction of this Final Judgment, and 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 Local Rule 67-2, the Clerk is authorized and directed, without further order of this Court, to deduct from the income earned on the money in the Fund a fee not to exceed the amount prescribed by the Judicial Conference of the United States. The Commission may propose a plan to distribute the Fund subject to the Court's approval. Defendants 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, except as otherwise ordered by this Court, the previously ordered freeze placed on all monies and assets (with an allowance for necessary and reasonable living expenses to be granted only upon good cause shown by application to the Court with notice to and an opportunity for the Commission to be heard) in all accounts at any bank, financial institution or brokerage firm, all certificates of deposit, and other funds or assets, held in the name of, for the benefit of, and/or over which account authority is held by any of the Defendants or any entity affiliated with any of the Defendants, remains in full force and effect, except to the extent that all funds and assets held in any such accounts shall be disgorged by the financial institution or brokerage firm holding the account in partial satisfaction of this Final Judgment, such accounts including but not limited to, the accounts set forth below:
+-----------------------------------------------------------------------------+ ¦Institution ¦Account name/signatories ¦Account number ¦ +---------------------------------+--------------------------+----------------¦ ¦Alpha Bank and Trust ¦Marc E. Bercoon ¦Account number ¦ ¦ ¦ ¦unknown ¦ +---------------------------------+--------------------------+----------------¦ ¦Bank of North Georgia ¦JCN Holdings, Inc. ¦00100001767 ¦ +---------------------------------+--------------------------+----------------¦ ¦Bank of North Georgia ¦William A. Goldstein C. ¦100019090 ¦ ¦ ¦John Dean ¦ ¦ +---------------------------------+--------------------------+----------------¦ ¦Mesirow Financial ¦Marc E. Bercoon ¦Account number ¦ ¦ ¦ ¦unknown ¦ +---------------------------------+--------------------------+----------------¦ ¦Mesirow Financial ¦Marc E. Bercoon IRA ¦88016593 ¦ +---------------------------------+--------------------------+----------------¦ ¦RBC Wealth Management (fka RBC ¦ ¦ ¦ ¦Dain, fka Reliance Securities ¦Marc E. Bercoon ¦820-03610 ¦ ¦LLC) ¦ ¦ ¦ +---------------------------------+--------------------------+----------------¦ ¦RBC Wealth Management (fka RBC ¦ ¦ ¦ ¦Dain, fka Reliance Securities ¦Marc E. Bercoon ¦832-00867 ¦ ¦LLC) ¦ ¦ ¦ +---------------------------------+--------------------------+----------------¦ ¦RBC Wealth Management (fka RBC ¦ ¦ ¦ ¦Dain, fka Reliance Securities ¦WAG Holdings LLC ¦832-00814 ¦ ¦LLC) ¦ ¦ ¦ +---------------------------------+--------------------------+----------------¦ ¦RBC Wealth Management (fka RBC ¦ ¦ ¦ ¦Dain, fka Reliance Securities ¦William A. Goldstein ¦820-03936 ¦ ¦LLC) ¦ ¦ ¦ +---------------------------------+--------------------------+----------------¦ ¦RBC Wealth Management (fka RBC ¦ ¦ ¦ ¦Dain, fka Reliance Securities ¦William A. Goldstein ¦815-01513 ¦ ¦LLC) ¦ ¦ ¦ +---------------------------------+--------------------------+----------------¦ ¦RBC Wealth Management (fka RBC ¦ ¦ ¦ ¦Dain, fka Reliance Securities ¦William A. Goldstein ¦832-00323 ¦ ¦LLC) ¦ ¦ ¦ +---------------------------------+--------------------------+----------------¦ ¦RBC Wealth Management (fka RBC ¦ ¦ ¦ ¦Dain, fka Reliance Securities ¦William A. Goldstein ¦832-00322 ¦ ¦LLC) ¦ ¦ ¦ +---------------------------------+--------------------------+----------------¦ ¦Suntrust Bank ¦Find.com Acquisition Inc. ¦1000096485494 ¦ +---------------------------------+--------------------------+----------------¦ ¦Suntrust Bank ¦Marc E. Bercoon Rhonda ¦8815069235 ¦ ¦ ¦Bercoon ¦ ¦ +-----------------------------------------------------------------------------+
+-----------------------------------------------------------------------------+ ¦Institution ¦Account name/signatories ¦Account number ¦ +------------------------------+----------------------------+-----------------¦ ¦Suntrust Bank ¦Marc E. Bercoon ¦0008815069243 ¦ +------------------------------+----------------------------+-----------------¦ ¦Suntrust Bank ¦NPORTA Inc. ¦0008801042733 ¦ +------------------------------+----------------------------+-----------------¦ ¦TD Ameritrade ¦Marc E. Bercoon ¦Account number ¦ ¦ ¦ ¦unknown ¦ +------------------------------+----------------------------+-----------------¦ ¦Wells Fargo Bank NA (fka ¦Find.com Acquisition Inc. ¦20000043566570 ¦ ¦Wachovia Bank) ¦ ¦ ¦ +------------------------------+----------------------------+-----------------¦ ¦Wells Fargo Bank NA (fka ¦HMRZ Consulting ¦2000032231382 ¦ ¦Wachovia Bank) ¦ ¦ ¦ +------------------------------+----------------------------+-----------------¦ ¦Wells Fargo Bank NA (fka ¦IBAR Management Group ¦2000042167912 ¦ ¦Wachovia Bank) ¦ ¦ ¦ +------------------------------+----------------------------+-----------------¦ ¦Wells Fargo Bank NA (fka ¦LADP Acquisition Inc. ¦2000043566936 ¦ ¦Wachovia Bank) ¦ ¦ ¦ +------------------------------+----------------------------+-----------------¦ ¦Wells Fargo Bank NA (fka ¦LADP Acquisition Inc. ¦2000044678506 ¦ ¦Wachovia Bank) ¦ ¦ ¦ +------------------------------+----------------------------+-----------------¦ ¦Wells Fargo Bank NA (fka ¦LADP LLC ¦2000043566172 ¦ ¦Wachovia Bank) ¦ ¦ ¦ +------------------------------+----------------------------+-----------------¦ ¦Wells Fargo Bank NA (fka ¦LADP LLC ¦2000057392536 ¦ ¦Wachovia Bank) ¦ ¦ ¦ +------------------------------+----------------------------+-----------------¦ ¦Wells Fargo Bank NA (fka ¦Marc E. Bercoon ¦1010287139149 ¦ ¦Wachovia Bank) ¦ ¦ ¦ +------------------------------+----------------------------+-----------------¦ ¦Wells Fargo Bank NA (fka ¦Marc E. Bercoon William A. ¦1100005945328 ¦ ¦Wachovia Bank) ¦Goldstein ¦ ¦ +------------------------------+----------------------------+-----------------¦ ¦Wells Fargo Bank NA (fka ¦Marc E. Bercoon ¦3000209898489 ¦ ¦Wachovia Bank) ¦ ¦ ¦ +------------------------------+----------------------------+-----------------¦ ¦Wells Fargo Bank NA (fka ¦Marc E. Bercoon ¦4737023988168328 ¦ ¦Wachovia Bank) ¦ ¦ ¦ +------------------------------+----------------------------+-----------------¦ ¦Wells Fargo Bank NA (fka ¦RA Rothman William A. ¦1010258391709 ¦ ¦Wachovia Bank) ¦Goldstein ¦ ¦ +------------------------------+----------------------------+-----------------¦ ¦Wells Fargo Bank NA (fka ¦SEO Holdings LLC ¦2000043566392 ¦ ¦Wachovia Bank) ¦ ¦ ¦ +------------------------------+----------------------------+-----------------¦ ¦Wells Fargo Bank NA (fka ¦SEO Holdings LLC ¦4828802619087019 ¦ ¦Wachovia Bank) ¦ ¦ ¦ +------------------------------+----------------------------+-----------------¦ ¦Wells Fargo Bank NA (fka ¦SEO Holdings LLC ¦4828803051909017 ¦ ¦Wachovia Bank) ¦ ¦ ¦ +-----------------------------------------------------------------------------+
+------------------------------------------------------------------------------+ ¦Institution ¦Account name/signatories ¦Account number ¦ +------------------------------+------------------------------+----------------¦ ¦Wells Fargo Bank NA (fka ¦Willfind LLC ¦20000042167705 ¦ ¦Wachovia Bank) ¦ ¦ ¦ +------------------------------+------------------------------+----------------¦ ¦Wells Fargo Bank NA (fka ¦William A. Goldstein Ray ¦3000218306593 ¦ ¦Wachovia Bank) ¦Alyssa Rothman ¦ ¦ +------------------------------------------------------------------------------+ The financial institutions and/or brokerage firms shall comply with this Final Judgment by paying any funds held, and by liquidating any securities held and paying all proceeds from such liquidation, within 14 days after notice of entry of this Final Judgment, by certified check, bank cashier's check, or United States postal money order payable to the Clerk of the Court, together with a cover letter identifying the account number from which the funds are being paid and the account name(s); 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. The financial institution and/or brokerage firm shall simultaneously transmit photocopies of such payment and letter to the Commission's counsel in this action. As set forth in paragraph V of this Final Judgment, any payments made pursuant to this paragraph shall be included in the Fund, and held in an interest bearing account until further order of the Court. Notice of entry of this Final Judgment may be effected by the Commission causing delivery of a copy of the Final Judgment to the financial institution or brokerage firm by United States mail, overnight delivery service, email, telefacsimile or hand delivery.
VII.
IT IS FURTHER ORDERED, ADJUDGED, AND DECREED that Defendant Goldstein shall pay a third tier civil penalty in the amount of $150,000 and Defendant Bercoon shall pay a third tier civil penalty in the amount of $150,000 pursuant to Section 20(d) of the Securities Act, 15 U.S.C. § 77t(d), and Section 21(d)(3) of the Exchange Act, 15 U.S.C. § 78u(d)(3). Defendants Goldstein and Bercoon shall each make their required payment within 14 days after entry of this Final Judgment by certified check, bank cashier's check, or United States postal money order payable to the Securities and Exchange Commission. The payment shall be delivered or mailed to the Office of Financial Management, Securities and Exchange Commission, Operations Center, 6432 General Green Way, Mail Stop 0-3, Alexandria, Virginia 22312, and shall be accompanied by a letter identifying the respective defendant making the payment and identifying him 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. A copy of the letter and payment shall be simultaneously served on counsel for the Commission in this action. Defendants shall pay post-judgment interest on any delinquent amounts pursuant to 28 U.S.C. § 1961. The Commission shall remit the funds paid pursuant to this paragraph to the United States Treasury.
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.
IX.
IT IS FURTHER ORDERED, ADJUDGED AND DECREED that, there being no just reason for delay, the Clerk of the Court is hereby directed, pursuant to Rule 54(b) of the Federal Rules of Civil Procedure, to enter this Final Judgment forthwith.
HONORABLE R. GARY KLAUSNER
UNITED STATES DISTRICT JUDGE