Opinion
Civil Action 1:22-cv-4674-LJL
06-08-2022
SECURITIES AND EXCHANGE COMMISSION, Plaintiff, v. GEORGE STUBOS, Defendant, and DORI-ANN STUBOS, Relief Defendant.
ORDER TO SHOW CAUSE AND TEMPORARY RESTRAINING ORDER FREEZING AND REPATRIATING ASSETS
LEWIS J. LIMAN, UNITED STATES DISTRICT JUDGE.
Having considered the ex parte application for a temporary restraining order freezing and repatriating assets filed by plaintiff Securities and Exchange Commission (“the Commission”), as well as the Complaint, the Commission's memorandum of law, the declaration of Trevor Donelan and its exhibits, and the declaration of Kathleen Shields made under Local Rule 6.1(d), the Court finds that the Commission has shown that: (1) it is reasonably likely to establish that George Stubos has directly or indirectly engaged in the violations alleged in the Complaint; (2) there is a likelihood that unless restrained and enjoined by Order of this Court, George and Dori-Ann Stubos may dissipate and conceal assets which could be subject to an order of disgorgement and prejudgment interest in this action; and (3) entry of an order repatriating George and Dori-Ann Stubos' assets to the United States is in the public interest. In consideration of the foregoing:
I.
IT IS HEREBY ORDERED that George and Dori-Ann Stubos show cause, if there be any, to this Court at 3 p.m. on June 17, 2022, why this Court should not enter an Order pursuant to Rule 65 of the Federal Rules of Civil Procedure, Section 20 of the Securities Act [15 U.S.C. §77t], and Section 21 of the Exchange Act [15 U.S.C. §78u]: (a) freezing their assets; and (b) requiring them to repatriate their assets held overseas. The hearing on June 17, 2022 will be held by telephone. Parties are directed to dial into the Court's teleconference line at 888-251-2909 and use access code 2123101. Any papers responding to the Commission's request for such an Order shall be filed by the earlier of: 1) one week after George and Dori-Ann Stubos are served with this Order to Show Cause and its supporting materials, or 2) June 14, 2022 at 5 p.m.
II.
IT IS HEREBY ORDERED that:
A. George and Dori-Ann Stubos, and each of their officers, agents, servants, employees and attorneys and those persons in active concert or participation with them who receive actual notice of this Order by personal service or otherwise, including facsimile transmission, electronic mail, or overnight delivery service, shall hold and retain funds and other assets of George and/or Dori-Ann Stubos presently held by them, for their direct or indirect benefit, under their direct or indirect control or over which they exercise actual or apparent investment or other authority (including assets held in the name of or for the benefit of George or Dori-Ann Stubos), in whatever form such assets may presently exist and wherever located, and shall prevent any withdrawal, sale, payment (including, but not limited to, any charges on any credit card or draws on any other credit arrangement)), transfer, dissipation, assignment, pledge, alienation, encumbrance, disposal, or diminution in value of any such funds or other assets, which are hereby frozen, including, but not limited to, real property located at 605 W. Crescent Dr., Palm Springs, CA 92262, and funds held in the following accounts:
Institution
Location
Possible Acct Name(s)
Possible Acct No(s)
Canaccord Genuity Corp.
Canada
George Stubos George Stubos George Stubos George Stubos George Stubos Stubos Capital Inc. Dori-Ann Stubos Dori-Ann Stubos Dori-Ann Stubos Dori-Ann Stubos
x 92V2 x 59A4 x 92A3 x 9252 x 35V1 x 04A1 x 69A8 x 69V2 x 34V1 x 23A0
Canadian Imperial Bank of Commerce
Canada
Stubos Capital Inc. Stubos Capital Inc.
x 1015 x 4417
B. The freeze imposed by this Order applies to assets having a total combined value of $14,000,000. To the extent the Commission is notified that assets it has frozen have a total combined value over $14,000,000, it shall take steps to lift any restraints imposed on assets valued over that amount.
C. All banks, brokerage, and other financial institutions (including but not limited to those listed in Paragraph II.A) and other persons or entities (including but not limited to payment processors, investors and/or promoters) that receive actual notice of this Order by personal service or otherwise, including via facsimile or email transmission, or overnight delivery service, holding any funds or other assets in the name, for the direct or indirect benefit, or under the direct or indirect control of George or Dori-Ann Stubos or over which George or Dori-Ann Stubos exercise actual or apparent investment or other authority, in whatever form such assets may presently exist and wherever located, shall hold and retain within their control and prohibit the withdrawal, removal, sale, payment (including, but not limited to, any charges on any credit card or draws on any other credit arrangement), transfer, dissipation, assignment, pledge, alienation, encumbrance, diminution in value, or other disposal of any such funds or other assets; and that such funds and assets are hereby frozen.
D. The Commission may file Notices of Lis Pendens, or any similar document that has the effect of clouding title, on all pieces of real property in which George or Dori-Ann Stubos has an interest. Should George and/or Dori-Ann Stubos wish to sell any piece of real property in which they have an interest, they shall give counsel for the Commission notice of the proposed sale before taking any action to market or sell the property, and shall also seek and obtain the concurrence of the Court before the sale. This order applies, but is not limited to, the property at 605 W. Crescent Dr., Palm Springs, CA 92262.
D. The above Paragraphs II.A and II.C shall immediately cease to apply to any assets located within the United States, including any bank, brokerage or other financial institution account, which becomes subject to any later order entered by any federal court as a result of proceedings which may be filed by the United States or any department or agency thereof under any federal civil or criminal forfeiture statute, to the extent such later order requires the transfer of any asset to the United States government.
IL
IT IS HEREBY FURTHER ORDERED that George and Dori-Ann Stubos, and each of their officers, agents, servants, employees and attorneys, and those persons in active concert or participation with them who receive actual notice of this Order by personal service or otherwise, including via facsimile or email transmission, or overnight delivery service, and each of them, shall, within five days of receiving actual notice of this Order, take such steps as are necessary to repatriate and deposit into the registry of the Court in an interest bearing account, any and all funds or assets that presently may be located outside of the United States that were obtained directly or indirectly from the trading described in the Complaint.
III.
IT IS HEREBY FURTHER ORDERED that the conditions set forth in the preceding paragraphs of this Order shall expire on June 20, 2022, but this temporal limitation is applied without prejudice to an extension (upon Plaintiff's motion).
IV.
IT IS HEREBY FURTHER ORDERED that service of this Order, and the Summons and Complaint, may be made by facsimile, mail, e-mail, delivery by commercial courier, or personally by any employee of the Commission who is not counsel of record in this matter, or special process server, or any other person, or in any other manner authorized by Rule 5 of the Federal Rules of Civil Procedure, or by publication. In particular, this Order may be served via email on George Stubos at gstubos@gmail.com and on Dori-Ann Stubos at dstubos@shaw.ca.