Case 1:19-cv-05244-AKH Document 90 Filed 10/21/20 Page 1 of 5
`Case 1:19-cv-05244-AKH Document 89-2 Filed 10/20/20 Page 2 of 6
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`UNITED STATES DISTRICT COURT
`SOUTHERN DISTRICT OF NEW YORK
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`U.S. SECURITIES AND EXCHANGE
`COMMISSION,
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`Plaintiff,
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`Case No. 19-cv-5244 (AKH)
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`vs.
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`KIK INTERACTIVE INC.
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`Defendant.
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`FINAL JUDGMENT AS TO DEFENDANT KIK INTERACTIVE INC.
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`The U.S. Securities and Exchange Commission ("Commission") having filed a
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`Complaint and Defendant Kik Interactive Inc. having entered a general appearance; consented to
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`the Court's jurisdiction over Defendant and the subject matter of this action; consented to entry
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`of this Final Judgment; and waived any right to appeal from this Final Judgment and any other
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`ruling in the above-captioned matter; and
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`The Court having previously issued an Opinion and Order dated September 30, 2020,
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`granting summary judgment in favor of the Commission and against Defendant with respect to
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`the Commission's claim under the Securities Act of 1933 (the "Securities Act") Section 5 [ 15
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`USC§ 77e] (Opinion and Order, ECF No. 88):
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`I.
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`IT IS HEREBY ORDERED, ADWDGED, AND DECREED that Defendant is
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`permanently restrained and enjoined from violating Section 5 of the Securities Act [ 15 US. C. §
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`77e] by, directly or indirectly, in the absence of any applicable exemption:
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`(a)
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`Unless a registration statement is in effect as to a security, making use of any
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`means or instruments of transportation or communication in interstate commerce
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`or of the mails to sell such security through the use or medium of any prospectus
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`or otherwise;
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`(b)
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`Unless a registration statement is in effect as to a security, carrying or causing to
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`be carried through the mails or in interstate commerce, by any means or
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`instruments of transportation, any such security for the purpose of sale or for
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`delivery after sale; or
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`( c)
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`Making use of any means or instruments of transportation or communication in
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`interstate commerce or of the mails to offer to sell or offer to buy through the use
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`or medium of any prospectus or otherwise any security, unless a registration
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`statement has been filed with the Commission as to such security, or while the
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`registration statement is the subject of a refusal order or stop order or (prior to the
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`effective date of the registration statement) any public proceeding or examination
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`under Section 8 of the Securities Act [15 USC.§ 77h].
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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 FURTHER ORDERED, ADJUDGED, AND DECREED that pursuant to Section
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`21(d)(5) of the Exchange Act [15 USC.§ 78u(d)(5)], with respect to the three trillion Kin
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`tokens issued by Defendant to itself on September 26, 2017 and any new "cryptocurrency,"
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`"digital coin," "digital token," or similar digital asset issued or transferred using distributed
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`ledger technology (the "Covered Assets"), Defendant, for a period of three years beginning on
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`the date of entry of this Final Judgment, shall give to the Commission forty-five (45) days '
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`notice before Defendant participates, directly or indirectly, in an issuance, offer, sale or transfer
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`of any Covered Asset. Nothing in this paragraph requires, or should be construed to require,
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`Defendant to seek the Commission's approval or consent prior to issuing, offering, selling, or
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`transferring any Covered Asset encompassed by this paragraph, nor should this paragraph be
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`construed to require Defendant to provide the Commission with any information beyond the
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`notice contemplated herein. Defendant shall transmit the notice required by this paragraph to the
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`Commission's counsel ofrecord in this action.
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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, ADWDGED, AND DECREED that Defendant
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`is liable for a civil penalty in the amount of $5,000,000 pursuant to Section 20( d) of the
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`Securities Act [15 U.S.C. § 77t(d)]. Defendant shall satisfy this obligation by paying $5 ,000,000
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`to the Securities and Exchange Commission within 30 days after 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; Kik Interactive Inc. as a defendant in this action; and specifying that payment is made
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`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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`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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`IT IS FURTHER ORDERED, ADWDGED, 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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`Dated: {2c::f. ~ , 2020
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