Case 2:22-cv-03287 Document 2-1 Filed 05/31/22 Page 1 of 8 PageID: 33
`Case 2:22-cv-03287 Document 2-1 Filed 05/31/22 Page 1 of 8 PagelD: 33
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`EXHIBIT 1
`EXHIBIT 1
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`Case 2:22-cv-03287 Document 2-1 Filed 05/31/22 Page 2 of 8 PageID: 34
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`UNITED STATES DISTRICT COURT
`DISTRICT OF NEW JERSEY
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`2:22-cv-03287 (____)
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`Defendants.
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`SECURITIES AND EXCHANGE COMMISSION,
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`Plaintiff,
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`v.
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`MARC S. SCHESSEL and
`SCWORX CORP.,
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`FINAL JUDGMENT AS TO DEFENDANT SCWORX CORP.
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`The Securities and Exchange Commission having filed a Complaint and Defendant
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`SCWorx Corp. having entered a general appearance; consented to the Court’s jurisdiction over
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`Defendant and the subject matter of this action; consented to entry of this Final Judgment
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`without admitting or denying the allegations of the Complaint (except as to jurisdiction); waived
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`findings of fact and conclusions of law; and waived any right to appeal from this Final Judgment:
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`I.
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`IT IS HEREBY ORDERED, ADJUDGED, AND DECREED that Defendant is
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`permanently restrained and enjoined from violating, directly or indirectly, Section 10(b) of the
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`Securities Exchange Act of 1934 (the “Exchange Act”) [15 U.S.C. § 78j(b)] and Rule 10b-5
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`promulgated thereunder [17 C.F.R. § 240.10b-5], by using any means or instrumentality of
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`interstate commerce, or of the mails, or of any facility of any national securities exchange, in
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`connection with the purchase or sale of any security:
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`(a)
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`to employ any device, scheme, or artifice to defraud;
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`(b)
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`to make any untrue statement of a material fact or to omit to state a material fact
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`necessary in order to make the statements made, in the light of the circumstances
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`under which they were made, not misleading; or
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`(c)
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`to engage in any act, practice, or course of business which operates or would
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`operate as a fraud or deceit upon any person.
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`IT IS FURTHER ORDERED, ADJUDGED, AND DECREED that, as provided in
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`Federal Rule of Civil Procedure 65(d)(2), the foregoing paragraph also binds the following who
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`receive actual notice of this Final Judgment by personal service or otherwise: (a) Defendant’s
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`officers, agents, servants, employees, and attorneys; and (b) other persons in active concert or
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`participation with Defendant or with anyone described in (a).
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`II.
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`IT IS HEREBY FURTHER ORDERED, ADJUDGED, AND DECREED that Defendant
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`is permanently restrained and enjoined from violating Section 17(a) of the Securities Act of 1933
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`(the “Securities Act”) [15 U.S.C. § 77q(a)] in the offer or sale of any security by the use of any
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`means or instruments of transportation or communication in interstate commerce or by use of the
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`mails, directly or indirectly:
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`(a)
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`(b)
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`to employ any device, scheme, or artifice to defraud;
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`to obtain money or property by means of any untrue statement of a material fact
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`or any omission of a material fact necessary in order to make the statements
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`made, in light of the circumstances under which they were made, not misleading;
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`or
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`(c)
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`to engage in any transaction, practice, or course of business which operates or
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`would operate as a fraud or deceit upon the purchaser.
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`IT IS FURTHER ORDERED, ADJUDGED, AND DECREED that, as provided in
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`Federal Rule of Civil Procedure 65(d)(2), the foregoing paragraph also binds the following who
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`receive actual notice of this Final Judgment by personal service or otherwise: (a) Defendant’s
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`officers, agents, servants, employees, and attorneys; and (b) other persons in active concert or
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`participation with Defendant or with anyone described in (a).
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`III.
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`IT IS HEREBY FURTHER ORDERED, ADJUDGED, AND DECREED that Defendant
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`is liable for disgorgement of $471,000, representing net profits gained as a result of the conduct
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`alleged in the Complaint, together with prejudgment interest thereon in the amount of
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`$32,761.56, and a civil penalty in the amount of $125,000 pursuant to pursuant to Section 20 of
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`the Securities Act [15 U.S.C. § 77t] and Section 21(d) of the Exchange Act [15 U.S.C. § 78u(d)].
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`Defendant shall satisfy this obligation by paying $125,000 to the Securities and Exchange
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`Commission pursuant to the terms of the payment schedule set forth in paragraph IV below after
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`entry of this Final Judgment. The payment of disgorgement and prejudgment interest shall be
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`deemed satisfied by the transfer by Defendant, no later than 30 days after the entry of the Class
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`Distribution Order in the class action Yannes v. SCWorx Corp., et al., 1:20-cv-03349 (S.D.N.Y.),
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`of shares of SCWorx’s common stock, valued at $600,000 at the time of issuance to authorized
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`claimants in the settlement, provided that the Class Distribution Order is entered within 365 days
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`from the entry of this Final Judgment. If Defendant does not transfer shares of its common
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`stock, valued at $600,000 at the time of issuance to authorized claimants in the class action
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`settlement within 365 days from the entry of this Final Judgment, Defendant shall remit to the
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`Commission the full amount of disgorgement and prejudgment interest within 395 days from the
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`entry of this Final Judgment.
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`Defendant may transmit payment electronically to the Commission, which will provide
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`detailed ACH transfer/Fedwire instructions upon request. Payment may also be made directly
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`from a bank account via Pay.gov through the SEC website at
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`http://www.sec.gov/about/offices/ofm.htm. Defendant may also pay by certified check, bank
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`cashier’s check, or United States postal money order payable to the Securities and Exchange
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`Commission, which shall be delivered or mailed to
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`Enterprise Services Center
`Accounts Receivable Branch
`6500 South MacArthur Boulevard
`Oklahoma City, OK 73169
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` and shall be accompanied by a letter identifying the case title, civil action number, and name of
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`this Court; [Defendant’s name] as a defendant in this action; and specifying that payment is
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`made pursuant to this Final Judgment.
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`Defendant shall simultaneously transmit photocopies of evidence of payment and case
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`identifying information to the Commission’s counsel in this action. By making this payment,
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`Defendant relinquishes all legal and equitable right, title, and interest in such funds and no part
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`of the funds shall be returned to Defendant.
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`If Defendant does not transfer shares of its common stock, valued at $600,000 at the time
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`of issuance to authorized claimants in the class action settlement within 365 days from the entry
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`of this Final Judgment, the Commission may enforce the Court’s judgment for disgorgement and
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`prejudgment interest by using all collection procedures authorized by law, including, but not
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`limited to, moving for civil contempt at any time after 30 days following entry of the Class
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`Distribution Order, or 395 days following entry of this Final Judgment.
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`The Commission may enforce the Court’s judgment for penalties by the use of all
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`collection procedures authorized by law, including the Federal Debt Collection Procedures Act,
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`28 U.S.C. § 3001 et seq., and moving for civil contempt for the violation of any Court orders
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`issued in this action. Defendant shall pay post judgment interest on any amounts due after 30
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`days of the entry of this Final Judgment pursuant to 28 U.S.C. § 1961. The Commission shall
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`hold the funds, together with any interest and income earned thereon (collectively, the “Fund”),
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`pending further order of the Court.
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`The Commission may propose a plan to distribute the Fund subject to the Court’s
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`approval. Such a plan may provide that the Fund shall be distributed pursuant to the Fair Fund
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`provisions of Section 308(a) of the Sarbanes-Oxley Act of 2002. The Court shall retain
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`jurisdiction over the administration of any distribution of the Fund and the Fund may only be
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`disbursed pursuant to an Order of the Court.
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`Regardless of whether any such Fair Fund distribution is made, amounts ordered to be
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`paid as civil penalties pursuant to this Judgment shall be treated as penalties paid to the
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`government for all purposes, including all tax purposes. To preserve the deterrent effect of the
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`civil penalty, Defendant shall not, after offset or reduction of any award of compensatory
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`damages in any Related Investor Action based on Defendant’s payment of disgorgement in this
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`action, argue that it is entitled to, nor shall it further benefit by, offset or reduction of such
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`compensatory damages award by the amount of any part of Defendant’s payment of a civil
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`penalty in this action (“Penalty Offset”). If the court in any Related Investor Action grants such
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`a Penalty Offset, Defendant shall, within 30 days after entry of a final order granting the Penalty
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`Offset, notify the Commission’s counsel in this action and pay the amount of the Penalty Offset
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`to the United States Treasury or to a Fair Fund, as the Commission directs. Such a payment shall
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`not be deemed an additional civil penalty and shall not be deemed to change the amount of the
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`civil penalty imposed in this Judgment. For purposes of this paragraph, a “Related Investor
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`Action” means a private damages action brought against Defendant by or on behalf of one or
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`more investors based on substantially the same facts as alleged in the Complaint in this action.
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`IV.
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`SCWorx Corp. shall pay the penalty due of $125,000 in 4 installments to the Commission
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`according to the following schedule: (1) $31,250, within 14 days of entry of this Final
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`Judgment; (2) $31,250, within 120 days of entry of this Final Judgment; (3) $31,250, within 240
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`days of entry of this Final Judgment; and (4) $31,250, within 365 days of entry of this Final
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`Judgment. Payments shall be deemed made on the date they are received by the Commission
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`and shall be applied first to post-judgment interest, which accrues pursuant to 28 U.S.C. § 1961
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`on any unpaid amounts due after 30 days of the entry of Final Judgment. Prior to making the
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`final payment set forth herein, SCWorx Corp. shall contact the staff of the Commission for the
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`amount due for the final payment.
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`If SCWorx Corp. fails to make any payment by the date agreed and/or in the amount
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`agreed according to the schedule set forth above, all outstanding payments under this Final
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`Judgment, including post-judgment interest, minus any payments made, shall become due and
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`payable immediately at the discretion of the staff of the Commission without further application
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`to the Court.
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`V.
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`IT IS FURTHER ORDERED, ADJUDGED, AND DECREED that the Consent is
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`incorporated herein with the same force and effect as if fully set forth herein, and that Defendant
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`shall comply with all of the undertakings and agreements set forth therein.
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`VI.
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`IT IS FURTHER ORDERED, ADJUDGED, AND DECREED that this Court shall retain
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`jurisdiction of this matter for the purposes of enforcing the terms of this Final Judgment.
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`There being no just reason for delay, pursuant to Rule 54(b) of the Federal Rules of Civil
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`VII.
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`Procedure, the Clerk is ordered to enter this Final Judgment forthwith and without further notice.
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`Dated: ______________, _____
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`____________________________________
`UNITED STATES DISTRICT JUDGE
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