Opinion
Case No.: 18-cv-1895-AJB-LL
2021-02-03
SECURITIES AND EXCHANGE COMMISSION, Plaintiffs, v. RMR ASSET MANAGEMENT COMPANY, et al., Defendants.
Christian Schultz, Cori Michelle Shepherd, James E. Smith, Kevin Nick Guerrero, Michael Roessner, Warren Edward Greth, Jr., U.S. Securities and Exchange Commission, Washington, DC, for Plaintiffs. Robert Norman Knuts, Pro Hac Vice, Sher Tremonte LLP, New York, NY, Thomas D. Mauriello, Mauriello Law Firm APC, San Clemente, CA, for Defendants Jocelyn M. Murphy, Michael S. Murphy. Richard C. Gounaud, Chester, NJ, Pro Se.
Christian Schultz, Cori Michelle Shepherd, James E. Smith, Kevin Nick Guerrero, Michael Roessner, Warren Edward Greth, Jr., U.S. Securities and Exchange Commission, Washington, DC, for Plaintiffs.
Robert Norman Knuts, Pro Hac Vice, Sher Tremonte LLP, New York, NY, Thomas D. Mauriello, Mauriello Law Firm APC, San Clemente, CA, for Defendants Jocelyn M. Murphy, Michael S. Murphy.
Richard C. Gounaud, Chester, NJ, Pro Se.
ORDER GRANTING IN PART AND DENYING IN PART THE SEC'S MOTION FOR REMEDIES
Anthony J. Battaglia, United States District Judge
Before the Court is a motion for remedies filed by the Security Exchange Commission ("SEC"). (Doc. No. 138.) In its motion, the SEC requests remedies in the form of civil penalties and an injunction against Sean Murphy ("Mr. Murphy"), Jocelyn Murphy ("Ms. Murphy") (collectively, "the Murphys"), and Richard Gounaud ("Mr. Gounaud") (collectively, "Defendants"). For the reasons set forth, the Court GRANTS IN PART AND DENIES IN PART the SEC's motion for remedies.
I. BACKGROUND
The SEC commenced this action, alleging that for several years, Defendants violated Section 15(a)(1) of the Securities Exchange Act of 1934 ("Exchange Act") by acting as unregistered brokers when they bought and sold securities transactions, including new-issue municipal bonds, on behalf of RMR Asset Management Company ("RMR"). The SEC also alleged that Ms. Murphy violated Section 10(b) of the Exchange Act and Rule 10b-5 thereunder when she provided false information regarding her residence, while seeking to purchase new-issue municipal bonds, in order to obtain the highest priority for her orders.
On August 14, 2020, the Court granted the SEC's motion for summary judgment. (Doc. No. 137.) Specifically, the Court held that upon consideration of the relevant factors, Defendants were brokers as defined by Section 3(a)(4)(A) of the Exchange Act, and that there is no dispute that they did not register as brokers as required by Section 15(a) of the same. (Id. at 7.) The Court also held that there is no genuine issue of material fact that Ms. Murphy fraudulently obtained new issue bonds in violation of Section 10(b) and Rule 10b-5 by knowingly providing false zip codes to brokers to secure priority in obtaining bonds. (Id. at 8–10.) The Court thereafter directed the SEC to file a motion regarding the remedies sought in this matter. The instant motion followed.
II. LEGAL STANDARD
The Exchange Act authorizes the SEC to seek penalties and injunctive relief for violations of the Act. 15 U.S.C. § 78u(d). Civil penalties are "determined by the court in light of the facts and circumstances." Id. § 78u(d)(3) (B). The purposes of civil penalties are to punish the violator and deter future violations of the securities laws. SEC v. Indigenous Global Development Corp. , 2008 WL 8853722, at *17 (N.D. Cal. June 30, 2008) ; SEC v. CMKM Diamonds, Inc. , 635 F. Supp. 2d 1185, 1192 (D. Nev. 2009). These, in turn, "further the goals of ‘encouraging investor confidence, increasing the efficiency of financial markets, and promoting the stability of the securities industry.’ " SEC v. Spyglass Equity Sys. , Inc., 2012 WL 13008422, at *3 (C.D. Cal. Apr. 5, 2012) (quoting SEC v. Palmisano , 135 F.3d 860, 866 (2d Cir. 1998) ). Injunctions are appropriate where the SEC has shown a "reasonable likelihood of future violations of the securities laws." SEC v. Fehn , 97 F.3d 1276, 1295 (9th Cir. 1996). "The granting or denying of injunctive relief rests within the sound discretion of the trial court." Id. at 1295.
To determine whether to impose civil penalties or an injunction, courts evaluate the totality of the circumstances surrounding the defendant and his or her violations and consider several factors. See SEC v. Loomis , 17 F. Supp. 3d 1026, 1029–30 (E.D. Cal. 2014) (citing SEC v. Fehn , 97 F.3d 1276, 1295–96 (9th Cir. 1996) and SEC v. Murphy , 626 F.2d 633, 655 (9th Cir. 1980) ). Factors to consider are: "(1) the degree of scienter involved; (2) the isolated or recurrent nature of the infraction; (3) the defendant's recognition of the wrongful nature of his conduct; (4) the likelihood, because of defendant's professional occupation, that future violations might occur; (5) and the sincerity of his assurances against future violations." Fehn , 97 F.3d at 1295–96 (quoting Murphy , 626 F.2d at 655 ). III. DISCUSSION
In its motion, the SEC requests civil penalties and injunctions against Defendants for their respective violations of the Exchange Act. (Doc. No. 138-1.) The Court discusses the appropriateness of the remedies sought against each defendant in turn.
A. Mr. Gounaud's and Mr. Murphy's Section 15(a) Violations
i. Civil Penalties
The Exchange Act authorizes the Court to impose a monetary penalty against Defendants based upon either (i) specific statutory amounts multiplied by the number of violations committed, or (ii) the gross amount of his or her pecuniary gain. See 15 U.S.C. §§ 77t(d)(2), 78u(d)(3). In this case, the SEC seeks Tier 1 penalties against Mr. Gounaud and Mr. Murphy. The statute provides for Tier 1 penalties in an amount that "shall not exceed the greater of" $7,500 per violation (or $9,639 for acts occurring after November 2, 2015) or the gross amount of pecuniary gain to a defendant as a result of the violation. 15 U.S.C. § 78u(d)(3)(b)(i) ; 17 C.F.R. § 201.1001 ; 17 C.F.R. § 201.1001, Tbl. I. Of these two statutory alternatives, the SEC requests penalties of $7,500 for each month during which Mr. Gounaud and Mr. Murphy violated Section 15(a).
This refers to "Table I to 201.1001—Civil Monetary Penalty Inflation Adjustments for Violations From December 10, 1996, Through November 2, 2015."
Because Mr. Gounaud engaged in securities transactions as an unregistered broker from August 14, 2013 to May 4, 2017, a period of forty-six months, the SEC seeks $385,641 in civil penalties against Mr. Gounaud. And because Mr. Murphy engaged in securities transactions as an unregistered broker from November 28, 2011 to March 10, 2017, a period of sixty-five months, the SEC seeks $523,863 against Mr. Murphy. Contesting the appropriateness of the SEC's request, Defendants argue that the penalty amounts are unjust and inequitable when compared to their gross pecuniary gain and the sanctions imposed on other defendants in this action, and violative of the Excessive Fines Clause of the Eight Amendment to the U.S. Constitution. The Court disagrees.
First, there is no requirement that the Court consider the amount of penalties requested against the defendant's gross pecuniary gain. See SEC v. Brookstreet Sec. Corp. , 664 F. App'x 654, 656 n.2 (9th Cir. 2016) ("Nothing in the Act requires courts to impose penalties based on a wrongdoer's illicit gain or ability to pay."). The statute itself authorizes the Court to impose either a fixed dollar amount for each violation or the gross amount pecuniary gain. See 15 U.S.C. §§ 77t(d)(2), 78u(d)(3). As the SEC seeks civil penalties based on the fixed statutory amounts, the Court does not find it necessary to have, or consider evidence of, gross pecuniary gain. See, e.g., SEC v. Wu , 2017 WL 11518453, at *4 (N.D. Cal. Sept. 20, 2017) ("Because the SEC seeks only the fixed amount in this case, no evidence of [the defendant's] pecuniary gain is required.").
In any event, the record does not contain sufficient information to ascertain each defendant's gross pecuniary gain.
Second, the SEC seeks the same type of sanctions for Mr. Gounaud and Mr. Murphy, similarly situated defendants whom the Court has found to have violated Section 15(a). The Court is not persuaded that Mr. Gounaud's and Mr. Murphy's civil penalties should be measured against those of the other defendants in this action because those defendants entered into a pre-litigation settlement with the SEC, and thus, are not comparable to Mr. Gounaud and Mr. Murphy. Here, the requested penalties result from a judgment on the merits of the case. In contrast, the settling defendants consented to a final judgment without any finding of liability, and their penalties resulted from a bargained-for exchange. See also Brookstreet Sec. Corp. , 664 Fed. App'x at 656 n.2 ("[W]e eschew evaluating penalties in light of awards against other defendants because doing so inappropriately pushes the decision toward a mathematical bright-line.") (citation omitted). The Court further notes that although Defendants are entitled to litigate their case, they did so by presenting arguments without credible evidentiary support. (See, e.g. , Doc. No. 137 at 5 ("Defendants also argue that they were in a "partnership" with Riccardi. [ ] However, Defendants provide no evidence of this other than self-serving declarations.").) As such, the Court does not find that the settling defendants' civil penalty amounts are an appropriate benchmark for ascertaining the penalties appropriate here.
Third, the Court declines to find that the SEC's requested penalties violate the Excessive Fines Clause of the Eight Amendment. Other than conclusory asserting that the requested penalties are grossly disproportional to their violations, Defendants offered no explanation to support their position. (Doc. No. 160 at 24.) As stated in the Court's summary judgment order, Mr. Gounaud and Mr. Murphy engaged in unregistered broker activity for nearly four and six years, respectively. (Doc. No. 137 at 2.) The SEC explains that instead of counting each unlawful transaction that Mr. Gounaud and Mr. Murphy engaged in during those years, it proposes a "per month" calculation. Had the SEC elected a "per violation" calculation, Mr. Gounaud and Mr. Murphy would have been subjected to millions of dollars in penalties as a result of their partaking in thousands of unlawful trades on behalf of RMR. See, e.g., SEC v. Pattison , 2011 WL 723600, at *5 (N.D. Cal. Feb. 23, 2011) ("The Court may assess a penalty for each distinct violation[.]"); SEC v. AmeriFirst Funding, Inc. , 2008 WL 1959843, at *9 (N.D. Tex. May 5, 2008) ("[T]he court concludes that it should impose a $2,000 penalty for each investment that defendants received, because each such payment constitutes a separate violation of the securities laws."); SEC v. Coates , 137 F. Supp. 2d 413, 428-30 (S.D.N.Y. 2001) (assessing a $10,000 penalty for each of four separate, misleading statements to investors.).
The pinpoint page citations refer to the ECF-generated page numbers at the top of each filing.
Given the number of securities transactions Mr. Gounaud and Mr. Murphy performed as an unregistered broker and the maximum amount of penalties contemplated by statute and case law, the Court does not find that the SEC's request is excessive. Rather, the Court finds that a "per month" calculation is a reasonable starting place and sufficiently accounts for the long-term nature of Mr. Gounaud's and Mr. Murphy's violations. Having considered Defendants' arguments against the proposed Section 15(a) penalties, the Court applies the aforementioned factor-based test to determine whether to impose the full amount of civil penalties requested or a lesser portion thereof.
a. First Factor
As to the first factor, "the degree of scienter involved," Murphy , 626 F.2d at 655, the Court acknowledges that a Section 15(a) violation does not require proof of scienter. This factor therefore weighs in favor of a reduced penalty.
b. Second Factor
Turning to the second factor, "the isolated or recurrent nature of the infraction," id. , Other than the Section 15(a) violation, Mr. Gounaud and Mr. Murphy have no prior history of violating the Exchange Act. Thus, the Court finds that this factor weighs in favor of a reduced penalty.
c. Third Factor
The third factor, "the defendant's recognition of the wrongful nature of his conduct," id. , Mr. Gounaud has not admitted any wrongdoing. In fact, he states, "I do not believe that I intentionally, wilfully [sic] or negligently violate[d] the Exchange Act 1934 or any Securities and Exchange Commission Rules." (Doc. No. 157 at 1.) Mr. Murphy also has not recognized the wrongful nature of his conduct and continues to dispute any wrongdoing. (Doc. No. 160-2 at 5 ("... I do not understand why my business arrangement with Mr. Ricardi and RMR required me to register as a broker-dealer[.]").) As such, the Court finds that Mr. Gounaud's and Mr. Murphy's failure to recognize the wrongfulness of their conduct and accept responsibility weighs in favor of a full penalty. SEC v. Gowrish , 2011 WL 2790482, *5 (N.D. Cal. Jul. 14, 2011) ("A person's ‘lack of remorse’ can be ‘apparent in’ the person's ‘continued insistence on the validity of his’ conduct that has been found to be a violation of the Securities and Exchange Act.") (citing Fehn , 97 F.3d at 1296 ).
d. Fourth Factor
Next, the Court turns to the fourth factor, "the likelihood, because of defendant's professional occupation, that future violations might occur." Murphy , 626 F.2d at 655. Although Mr. Gounaud is a sophisticated investor and securities trader, he states that since ceasing his business with RMR in 2017, "[h]e has had no activity at all in the securities market since then" and "has no intention of trading securities in the future." (Doc. No. 157 at 14.) On balance, the Court finds this factor weighs in favor of a reduced penalty against Mr. Gounaud.
As to Mr. Murphy, he is also a sophisticated investor and securities trader, and he states in his declaration that he continues to have a securities trading business, funded by capital from his wife's family and trading profits. (Doc. No. 160-2 at 5.) Thus, this factor weighs in favor of a full penalty against Mr. Murphy.
e. Fifth Factor
Moving to the fifth and last factor set forth in Murphy , "the sincerity of [the defendant's] assurances against future violations," 626 F.2d at 655, Mr. Gounaud states, "of course the defendant will never violate this or any securities rule again, nor does he intend to be in any position to violate any rule." (Doc. No. 157 at 4.) Similarly, Mr. Murphy attests that "he never intended to violate any provision of the federal securities laws and will do everything possible to make sure no one can ever accuse me of such a violation again." (Doc. No. 160-2 at 6.) The sincerity of their assurances, however, are weakened in part by their failure to completely recognize the wrongfulness of their past conduct. See SEC v. Sabrdaran , 252 F. Supp. 3d 866, 909 (N.D. Cal. 2017) ("Promising to stop doing wrong while denying any wrongdoing is the wrong way to establish that wrongdoing will not reoccur."). However, as the Court has already considered the defendants' equivocation as to the nature of their conduct, the Court considers this factor to be neutral. Lastly, Defendants assert that in determining the amount of civil penalties to impose, the Court should consider their ability to pay. (Doc. Nos. 157 at 15; 160 at 25.) However, other than self-prepared charts and declarations, Defendants have not submitted any objective supporting documentation to evidence their financial situation. See, e.g., SEC v. Universal Exp. Inc. , 646 F. Supp. 2d 552, 565 (S.D.N.Y. 2009) (even if the court considered "ability to pay" in determining remedies, defendant's "self-serving and conclusory assertions" were insufficient to support his claim of financial hardship). See also Brookstreet Sec. Corp. , 664 F. App'x at 656 n.2 ("Nothing in the Act requires courts to impose penalties based on a wrongdoer's illicit gain or ability to pay."). Accordingly, the Court does not find this factor influential in its overall analysis.
During the January 21, 2021 motion hearing, the Court raised concerns over the sufficiency of Defendants' financial hardship evidence. None of them explained the deficiency or offered to supplement the record.
Based on the foregoing, the Court finds that the balance of factors tips slightly in favor of a reduced penalty for Mr. Gounaud and Mr. Murphy. Thus, the Court exercises its discretion to reduce the SEC's requested civil penalties. Accordingly, the Court finds that $308,512.80 in civil penalties against Mr. Gounaud is appropriate, and that $419,090.40 in civil penalties against Mr. Murphy is appropriate.
The Court notes that it offered the parties an opportunity to present how much the requested penalties should be reduced by, should the Court be inclined to reduce the amount. None of the parties took a specific position on the issue. As the balance of factors do not overwhelmingly favor a reduction, the Court finds that a modest twenty percent reduction is reasonable.
ii. Injunction
In addition, the SEC requests injunctions against Mr. Gounaud and Mr. Murphy, enjoining them from future violations of Section 15(a). (Doc. No. 138-1 at 12.) The SEC also seeks to enjoin them for a period of ten years, from opening or maintaining any brokerage account without providing the brokerage firm a copy of the Complaint and Final Judgment in this case. (Id. at 19.) Because whether an injunction is appropriate entails the same factor analysis previously analyzed in the civil penalties section, the Court incorporates its prior analysis herein. However, as the determinative question for purposes on an injunction is whether the SEC has demonstrated a "reasonable likelihood of future violations of the securities laws," Fehn , 97 F.3d at 1295, the Court affords special consideration and weight to the likelihood of future violations factor.
Focusing then on the factor of "the likelihood, because of defendant's professional occupation, that future violations might occur," Murphy , 626 F.2d at 655, the Court reiterates that Mr. Murphy is a sophisticated investor and securities trader, who continues to operate a securities trading business. See supra § III.A.i.d; see also (Doc. No. 160-2 at 5). This factor therefore weighs overwhelmingly in favor of an injunction. Consequently, considering the previously analyzed factors and giving due weight to the likelihood of future violations, the Court finds that the SEC has shown a "reasonable likelihood of future violations of the securities laws," Fehn , 97 F.3d at 1295. As such, imposing an injunction against Mr. Murphy is appropriate in this case. For the same reasons, the Court finds that the SEC's request to enjoin Mr. Murphy, for a period of ten years, from opening or maintaining any brokerage account without providing the brokerage firm a copy of the Complaint and Final Judgment in this case, is also appropriate. Given the imposition of civil penalties against Mr. Murphy, however, the Court exercises its discretion to reduce the duration of this injunction to five years. The Court finds this period of time is reasonable under the circumstances and sufficient for the SEC to effectively police future misconduct.
The Court disagrees with Defendants' position that the proposed injunction against future Section 15(a) violations is not sufficiently specific to put Defendants on notice of what is prohibited. The Court explained in its summary judgment decision the reasons for how their conduct of engaging in securities transactions on behalf of others without being registered placed them in violation of Section 15(a). This therefore puts Defendants on notice against unregistered trading for others in the future.
Moreover, to the extent that Mr. Murphy argues that the SEC's earlier press releases regarding its civil enforcement action against him caused his brokerage firms to believe that he engaged in fraud, as opposed to the failure to register as a broker-dealer, the Court notes that his furnishing of the Complaint and Final Judgment to his current and future broker firms would make the latter clear. (Doc. No. 160-2 at 4–5.)
Contrary to the Defendants' position, the disclosure requirement is not unprecedented or unreasonable, as evidenced by the other defendants in this action consenting to the same injunction. (Doc. No. 138-1 at 14 n.5.)
Accordingly, an injunction from future Section 15(a) violations, and the injunction relating to disclosure of this litigation for a period of five years is warranted against Mr. Murphy. See, e.g., SEC v. Mogler , 2020 WL 1065865, at *11 (D. Ariz. Mar. 5, 2020) (granting "an injunction against [the defendant] to permanently enjoin him from violating Section 15(a) of the Exchange Act and Section 5 of the Securities Act is appropriate in this case.") As to Mr. Gounaud, he is approaching 70 years old, has no intention of trading securities in the future. Thus, the Court finds that an injunction is not warranted against Mr. Gounaud.
B. Ms. Murphy's Section 15(a), Section 10(b), and Rule 10b-5 Violations
Turning to Ms. Murphy, the SEC seeks $1,761,920 in Tier 2 fraud civil penalties against her for violating Section 10(b) and Rule 10b-5 thereunder. (Doc. No. 138-1 at 11.) Although Ms. Murphy also violated Section 15(a), the SEC does not seek separate monetary penalties for those violations, believing that the requested fraud penalties sufficiently encompass the entirety of her misconduct. (Id. at 12.) For violations involving fraud, the statute provides for Tier 2 penalties in an amount that shall not exceed the greater of $80,000 per violation (or $96,384 for acts occurring after November 2, 2015) or the gross pecuniary gain to the defendant. 15 U.S.C. § 78u(d)(3)(b)(ii). Because the Court found that Ms. Murphy "fraudulently obtained new issue bonds in violation of Section 10(b) and Rule 10b-5," the SEC is within its right to request Tier 2 "per violation" fraud penalties for the twenty-one municipal securities offerings in which she fraudulently provided false zip codes. (Doc. No. 137 at 10.) And as the Court previously found, Defendants' arguments that the penalty requested should be measured against the gross pecuniary gain, creates disparity in judgments among the former defendants in this action, and violates the Eight Amendment are unavailing. See supra § III.A.i.
Considering the relevant factors in Ms. Murphy's case, see Murphy , 626 F.2d at 655, the Court finds that the first factor—degree of scienter—weighs in favor of the SEC's requested penalties. Ms. Murphy knowingly provided false zip codes in municipal offerings, knowing that doing so would secure the highest priority for her orders. (Doc. No. 137 at 9–10.) Knowing is a high degree of scienter.
As to the second factor, "the isolated or recurrent nature of the infraction," Murphy , 626 F.2d at 655, Ms. Murphy's material misrepresentation was not an isolated incident. She provided false zip codes in connection with at least twenty-one municipal securities offerings. (Doc. No. 138-3.) She also engaged in unregistered broker activity for nearly six years, performing thousands of securities transactions. Given the number of Ms. Murphy's infractions, the Court finds that this factor weighs in favor of imposing the penalties requested.
Regarding the third factor, the defendant's recognition of the wrongful nature of her conduct, Ms. Murphy wrote in her declaration that she "now fully understand[s] that even misrepresentations that seem small at the time can never be justified." (Doc. No. 160-8 at 4.) However, it is not lost on the Court that throughout this litigation, Ms. Murphy maintained the position that there was nothing wrong about her lying about her zip code to gain priority for municipal bonds. (Id. at 3; Doc. No. 137 at 9.) The Court therefore finds this factor to be neutral.
Next is the fourth factor, "the likelihood, because of defendant's professional occupation, that future violations might occur." Murphy , 626 F.2d at 655. While Ms. Murphy claims that she has no intention of opening securities trading accounts in the future, she also indicates that she may change her mind depending on whether her "personal circumstances change in the future" and whether "it makes financial sense for [her] to attempt to open a securities brokerage account. (Doc. No. 160-8 at 4.) Moreover, the Murphys have not completely stepped out of the securities business as Mr. Murphy continues to engage in securities transactions using capital from Ms. Murphy's family. Ms. Murphy's equivocation regarding her future in the securities business coupled with her family's continued involvement in it, signals to the Court a likelihood that Ms. Murphy may renew her professional trading and that future violations might occur. As such, the Court finds that this factor weighs in favor of the requested penalties.
Moving to the final factor set forth in Murphy , "the sincerity of [the defendant's] assurances against future violations," 626 F.2d at 655, Ms. Murphy states in her declaration that she will never again provide false information to anyone in connection with any future securities transactions and will ensure that no one can accuse her of violating federal securities law. (Doc. No. 160-8 at 5.) However, given Ms. Murphy's less-than-full appreciation of the wrongfulness of her conduct, the Court finds this factor to be neutral.
Lastly, the Court reiterates that because Defendants have not substantiated their claims of financial hardship with any objective evidence, the Court does not find their bald assertions of inability to pay to be consequential to its analysis. The relevant factors therefore weigh in favor of imposing the full penalty. Thus, in light of the foregoing and the seriousness of Ms. Murphy's violation, the Court finds that imposing the SEC's requested $1,761,920 in civil fraud penalties against Ms. Murphy is appropriate in this case. See Sec. & Exch. Comm'n v. Spyglass Equity Sys., Inc. , 2012 WL 13008422, at *3 (C.D. Cal. Apr. 5, 2012) ("The purposes of civil penalties are to punish the individual violator as well as deter future violations and thereby further the goals of "encouraging investor confidence, increasing the efficiency of financial markets, and promoting the stability of the securities industry.") Next, as with Mr. Gounaud and Mr. Murphy, the SEC also requests the Court to enjoin Ms. Murphy for a period of ten years, from opening or maintaining any brokerage account without providing the brokerage firm a copy of the Complaint and Final Judgment in this case. The SEC also seeks to enjoin her from further violations of Section 15(a), and violations of Section 10(b) and Rule 10b-5.
Considering the factors previously analyzed and incorporated herein, the Court finds that there is a "reasonable likelihood of future violations of the securities laws" Fehn , 97 F.3d at 1295, and injunctions are therefore warranted. Again, the Court notes that Ms. Murphy's equivocation regarding whether she will return to the securities business coupled with her family's continued involvement in it, suggests that she may renew her professional trading and that future violations might occur. The Court thus finds it appropriate to impose injunctions against Ms. Murphy, enjoining her from further violations of Section 15(a), Section 10(b), and Rule 10b-5. However, given the amount of civil penalties imposed against her, the Court will, as it did with Mr. Murphy, exercise its discretion to reduce the duration of the injunction requiring disclosure of the Complaint and Final Judgment in this litigation to five years.
IV. CONCLUSION
Accordingly, based on the foregoing, the Court GRANTS IN PART AND DENIES IN PART the SEC's motion for remedies. (Doc. No. 138.) In sum, as to Mr. Gounaud, the Court reduces the SEC's requested civil penalties amount to $308,512.80 and declines to impose an injunction against him. As to Mr. Murphy, the Court reduces the SEC's requested civil penalties amount to $419,090.40 and imposes a permanent injunction against future Section 15(a) violations and a five-year injunction to disclose a copy of the Complaint and Final Judgment in this case to brokerage firms with which he engages. As to Ms. Murphy, the Court imposes the full amount of the SEC's requested civil fraud penalties, $1,761,920.00, and imposes a permanent injunction against future violations of Section 15(a), Section 10(b), and Rule 10b-5, and a five-year injunction to disclose a copy of the Complaint and Final Judgment in this case to brokerage firms with which she engages.
IT IS ORDERED that no later than February 16, 2021, the SEC submit a revised proposed final judgment against each defendant, incorporating the remedies found to be appropriate and reasonable for each, as discussed in this Order.