Opinion
Donald W. Searles, Cal Bar No. 135705, C. Dabney O'Riordan, Cal. Bar No. 205158, Attorneys for Plaintiff, Securities and Exchange Commission, Rosalind R. Tyson, Regional Director, John M. McCoy III, Associate Regional Director, Los Angeles, California.
FINAL JUDGMENT RE DISGORGEMENT AND CIVIL PENALTIES AGAINST JERRY E. BENSON
OTIS D. WRIGHT, II District Judge.
The Securities and Exchange Commission having filed a Complaint and Defendant Jerry E. Benson having entered a general appearance; consented to the Court's jurisdiction over Defendant and the subject matter of this action; consented to entry this Court's Judgment dated February 4, 2010, and consented to entry of this Final Judgment Re Disgorgement and Civil Penalties, 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 Judgment:
I.
IT IS HEREBY ORDERED, ADJUDGED, AND DECREED that Defendant is liable for disgorgement of $2.3 million, representing profits gained as a result of the conduct alleged in the Complaint, together with prejudgment interest thereon in the amount of $205,372.05, for a total of $2,505,372.05. 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. In response to any such civil contempt motion by the Commission, the defendant may assert any legally permissible defense. Defendant shall satisfy this obligation by paying making payment, by certified check, bank cashier's check, or United States postal money order payable to Dennis Murphy, the Court-appointed Receiver in this action. The payment shall be delivered or mailed to Mr. Murphy 630 N. Rosemead Blvd., Suite 100, Pasadena, California 91107. In the event the Receiver is discharged in this case, and Defendant has not paid the ordered disgorgement in full, future payments shall be made by the Defendant to the Clerk of this Court, together with a cover letter identifying Jerry Benson 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 such payments, 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 Clerk shall deposit the funds into an interest bearing account pursuant to Local Rule 67-2. 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 Local Rule 67-2, the Clerk is authorized and directed, without further order of this Court, to deduct from the income earned on the Fund a registry fee not to exceed the amount prescribed by the Judicial Conference of the United States. Defendant shall also pay post-judgment interest on any delinquent amounts pursuant to 28 U.S.C. § 1961.
II.
In partial satisfaction of his disgorgement obligation, Defendant is further ordered to transfer to the Court-appointed Receiver in this action the following property:
a. With respect to the $20,000 being held in the attorney trust account of the Law Office of Stephen L. Belgum (the "Funds"), Defendant shall execute that certain Stipulation Among Receiver, Defendant Jerry E. Benson and the Law Office of Stephen L. Belgum for Order Authorizing Payment of Insurance Proceeds to Receiver.
In exchange for Defendant's transfer of the aforementioned funds to the Court-appointed Receiver, the Court credits the Defendant with partial payment of his disgorgement obligation in the amount of $20,000.00, which the Securities and Exchange Commission believes is the fair market value of the aforementioned property.
III.
IT IS FURTHER ORDERED, ADJUDGED, AND DECREED that Defendant shall pay a civil penalty in the amount of $130,000 pursuant to Section 21(d)(3) of the Exchange Act. Defendant shall make this 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 Jerry Benson 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 pay post-judgment interest on any delinquent amounts pursuant to 28 USC § 1961. The Commission shall remit the funds paid pursuant to this paragraph to the United States Treasury.
IV.
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.
V.
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 Judgment.
VI.
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 Judgment forthwith and without further notice.