Case 1:19-cv-05998-GHW-OTW Document 119 Filed 01/10/23 Page 1 of 18
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`USDC SDNY
`DOCUMENT
`ELECTRONICALLY FILED
`DOC #:
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`
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`(cid:20)(cid:18)(cid:20)(cid:19)(cid:18)(cid:21)(cid:19)(cid:21)(cid:21)
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`DATE FILED:
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`19 Civ. 5998 (GHW)(OTW)
`
`ECF Case
`
`UNITED STATES DISTRICT COURT
`SOUTHERN DISTRICT OF NEW YORK
`-------------------------------------------------------------- x
`SECURITIES AND EXCHANGE
`:
`COMMISSION,
`
`::
`
`:
`:
`Defendant.
`:
`-------------------------------------------------------------- x
`
`:
`:
`
`::
`
`Plaintiff,
`
`v.
`JASON SUGARMAN,
`
`FINAL JUDGMENT AS TO DEFENDANT JASON SUGARMAN
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`The Securities and Exchange Commission having filed an Amended Complaint and Jury
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`Demand (“Amended Complaint”) and Defendant Jason Sugarman having entered a general
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`appearance; consented to the Court’s jurisdiction over Defendant and the subject matter of this
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`action; consented to entry of this Final Judgment without admitting or denying the allegations of
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`the Amended Complaint (except as to jurisdiction and except as otherwise provided herein in
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`paragraph VIII); waived findings of fact and conclusions of law; and waived any right to appeal
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`from this 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 Rules 10b-5(a)
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`and (c) promulgated thereunder [17 C.F.R. §§ 240.10b-5(a) and (c)], by using any means or
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`instrumentality of interstate commerce, or of the mails, or of any facility of any national
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`securities exchange, in 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; or
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`Case 1:19-cv-05998-GHW-OTW Document 119 Filed 01/10/23 Page 2 of 18
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`(b)
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`to engage in any act, practice, or course of business which operates or
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`would 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 Judgment by personal service or otherwise: (a) Defendant’s officers,
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`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 Sections 17(a)(1) and (3) of the Securities
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`Act of 1933 (the “Securities Act”) [15 U.S.C. §§ 77q(a)(1) and (3)] in the offer or sale of any
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`security by the use of any means or instruments of transportation or communication in interstate
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`commerce or by use of the 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; or
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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 Judgment by personal service or otherwise: (a) Defendant’s officers,
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`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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`2
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`Case 1:19-cv-05998-GHW-OTW Document 119 Filed 01/10/23 Page 3 of 18
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`III.
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`IT IS HEREBY FURTHER ORDERED, ADJUDGED, AND DECREED that, pursuant
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`to Section 21(d)(2) of the Exchange Act [15 U.S.C. § 78u(d)(2)] and Section 20(e) of the
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`Securities Act [15 U.S.C. § 77t(e)], for a period of three years from the entry of this Final
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`Judgment, Defendant is prohibited from acting as an officer or director of any issuer that has a
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`class of securities registered pursuant to Section 12 of the Exchange Act [15 U.S.C. § 78l] or that
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`is required to file reports pursuant to Section 15(d) of the Exchange Act [15 U.S.C. § 78o(d)].
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`IV.
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`IT IS HEREBY FURTHER ORDERED, ADJUDGED, AND DECREED that Defendant
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`is liable for disgorgement of $7,157,232.19 as a result of the conduct alleged in the Amended
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`Complaint, together with prejudgment interest thereon in the amount of $1,317,703.82, and a
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`civil penalty in the amount of $1,789,308.05 pursuant to Section 20(d)(2) of the Securities
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`Act [15 U.S.C. § 78t(d)(2)] and Section 21(d)(3) of the Exchange Act [15 U.S.C. §
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`78u(d)(3)], for a total of $10,264,244.06. Defendant shall satisfy this obligation by paying
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`$7,698,183.04 to the Securities and Exchange Commission pursuant to the terms of the
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`payment schedule set forth in paragraph VI below after entry of this Final Judgment, and the
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`civil penalty and remaining portion of his prejudgment interest obligation of $2,566,061.02
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`(the “Remaining Amount”) by making the payments detailed in paragraph V below.
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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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`3
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`Case 1:19-cv-05998-GHW-OTW Document 119 Filed 01/10/23 Page 4 of 18
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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; Jason Sugarman 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 shall hold the funds (collectively, the “Fund”) until further order of this
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`Court. The SEC may propose a plan to distribute the Fund subject to the Court’s approval, and
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`the Court shall retain jurisdiction over the administration of any distribution of the Fund.
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`The Commission may enforce the Court’s judgment for disgorgement and, subject to
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`paragraphs V and VI below, prejudgment interest by using all collection procedures authorized
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`by law, including, but not limited to, moving for civil contempt at any time after 30 days
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`following entry of this Final Judgment. Subject to paragraphs V and VI below, Defendant shall
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`pay post judgment interest on any amounts (excluding the Remaining Amount) due after 30 days
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`of entry of this Final Judgment pursuant to 28 U.S.C. § 1961.
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`The Commission may enforce the Court’s judgment for penalties, subject to paragraphs V
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`and VI below, by the use of all collection procedures authorized by law, including the Federal Debt
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`Collection Procedures Act, 28 U.S.C. § 3001 et seq., and moving for civil contempt for the
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`violation of any Court orders issued in this action. Subject to paragraphs V and VI below,
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`4
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`Case 1:19-cv-05998-GHW-OTW Document 119 Filed 01/10/23 Page 5 of 18
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`Defendant shall pay post judgment interest on any amounts (excluding the Remaining Amount) due
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`after 30 days of the entry of this Final Judgment pursuant to 28 U.S.C. § 1961.
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`V.
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`Defendant’s obligation to pay the Remaining Amount of $2,566,061.02 in prejudgment
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`interest and civil penalty shall be offset by the U.S. Dollar value of any cash payments made by
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`Defendant to the Joint Liquidators, appointed by the Bermuda Supreme Court on or before
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`December 18, 2020 as Joint Provisional Liquidators and on July 26, 2021 as permanent Joint
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`Liquidators to oversee the liquidation of VL Assurance (Bermuda) Ltd. (“VL Assurance”), Valor
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`Group Ltd. and Valor Management Ltd. for distribution to creditors pursuant to the Bermuda
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`Companies Act of 1981 and Section 17(7) of the Segregated Account Companies Act of 2000
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`(the “Bermuda Liquidation”) (or any other bankruptcy trustee, liquidator, or receiver appointed
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`in the Bermuda Liquidation). Within 10 days of any cash payments made by Defendant to the
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`Joint Liquidators, Defendant shall transmit photocopies of evidence of payment and case-
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`identifying information in a form acceptable to Commission staff.
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`If the Remaining Amount of $2,566,061.02 in prejudgment interest and civil penalty is
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`not offset in full by Defendant’s payments to the Joint Liquidators (or any other bankruptcy
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`trustee, liquidator, or receiver described above) within thirty (30) months of the entry of this
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`Final Judgment (plus any extensions of this period as set forth below), Defendant shall remit to
`
`the Commission the outstanding balance of the Remaining Amount of his prejudgment interest
`
`and civil penalty obligations, plus post judgment interest on the Remaining Amount pursuant to
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`28 U.S.C. § 196l, calculated as accruing from 30 days after entry of this Final Judgment. Failure
`
`to remit the cash payment due shall not void this Final Judgment, but the Commission retains its
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`right to pursue any outstanding amount of Defendant’s prejudgment interest and civil penalty
`
`obligations by use of all collection procedures authorized by law, including the Federal Debt
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`5
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`Case 1:19-cv-05998-GHW-OTW Document 119 Filed 01/10/23 Page 6 of 18
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`Collection Procedures Act, 28 U.S.C. § 3001, et seq., and moving for civil contempt for the
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`violation of any Court orders issued in this action. Upon good cause shown, the Commission
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`staff may, in its discretion, consent to one or more extensions, up to a total of an additional
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`eighteen (18) months, of the period within which Defendant must make payments to satisfy his
`
`obligations to pay the Remaining Amount, which consent shall not unreasonably be withheld.
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`Notwithstanding the foregoing, in the event that a legal action is pending against Defendant by
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`the Joint Liquidators (or any other bankruptcy trustee, liquidator, or receiver described above) at
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`the time any such extension is sought, the Commission staff will permit the requested extension
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`so long as the maximum additional period of eighteen months is not exceeded.
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`If Defendant pays any portion of his civil penalty obligations to the Commission in
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`accordance with this paragraph V, the Commission shall hold the funds, together with any
`
`interest and income earned thereon (collectively, the “Fund”), pending further order of the Court.
`
`The Commission may propose a plan to distribute the Fund subject to the Court’s
`
`approval. Such a plan may provide that the Fund shall be distributed pursuant to the Fair Fund
`
`provisions of Section 308(a) of the Sarbanes-Oxley Act of 2002. The Court shall retain
`
`jurisdiction over the administration of any distribution of the Fund and the Fund may only be
`
`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 he is entitled to, nor shall he 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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`6
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`Case 1:19-cv-05998-GHW-OTW Document 119 Filed 01/10/23 Page 7 of 18
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`penalty in this action (“Penalty Offset”), except as provided in Paragraph V of this Final
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`Judgment. If the court in any Related Investor Action grants such a Penalty Offset other than as
`
`provided in Paragraph V of this Final Judgment, Defendant shall, within 30 days after entry of a
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`final order granting the Penalty Offset, notify the Commission’s counsel in this action and pay
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`the amount of the Penalty Offset to the United States Treasury or to a Fair Fund, as the
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`Commission directs. Such a payment shall not be deemed an additional civil penalty and shall
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`not be deemed to change the amount of the civil penalty imposed in this Judgment. For purposes
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`of this paragraph, a “Related Investor Action” means a private damages action brought against
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`Defendant by or on behalf of one or more investors or other alleged victims based on
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`substantially similar facts as alleged in the Amended Complaint in this action.
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`VI.
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`Jason Sugarman shall pay the total of disgorgement and that portion of prejudgment
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`interest due, $7,698,183.04, in three installment payments to the Commission according to the
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`following schedule: (1) $2,566,061.02, within ten (10) days of entry of this Final Judgment;
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`(2) $2,566,061.02 within 180 days thereafter; and (3) $2,566,061.00 within 365 days after
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`entry of this Final Judgment. Payments shall be deemed made on the date they are received by
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`the Commission and shall be applied first to post judgment interest, which accrues pursuant to
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`28 U.S.C. § 1961 on any unpaid amounts due after 30 days of the entry of Final Judgment.1
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`Prior to making the final payment set forth herein, Jason Sugarman shall contact the staff of
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`the Commission for the amount due for the final payment.
`
`If Jason Sugarman fails to make any payment by the date agreed and/or in the amount
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`1 For clarity, any post judgment interest associated with the Remaining Amount is only due to the extent the Remaining
`Amount is not offset by Defendant’s payments to the Joint Liquidators (or any other bankruptcy trustee, liquidator, or
`receiver) in accordance with paragraph V. And such post judgment interest on any Remaining Amount that is not
`offset in accordance with this provision is due on the date that such payment is made to the Commission under
`paragraph V.
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`7
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`Case 1:19-cv-05998-GHW-OTW Document 119 Filed 01/10/23 Page 8 of 18
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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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`VII.
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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, including, but not
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`limited to:
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`Defendant undertakes, on his own behalf and that of his immediate family, to forgo
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`taking or receiving, directly or indirectly, any monies from, or ownership interest in, Valor
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`Group Ltd. or its affiliates or subsidiaries resulting from the resolution of administrative
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`supervision, liquidation or bankruptcy proceedings, now pending or hereafter commenced.
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`VIII.
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`IT IS FURTHER ORDERED, ADJUDGED, AND DECREED that, solely for purposes of
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`exceptions to discharge set forth in Section 523 of the Bankruptcy Code, 11 U.S.C. § 523, the
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`allegations in the Amended Complaint are true and admitted by Defendant, and further, any debt
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`for disgorgement, prejudgment interest, civil penalty or other amounts due by Defendant under
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`this Final Judgment or any other judgment, order, consent order, decree or settlement agreement
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`entered in connection with this proceeding, is a debt for the violation by Defendant of the federal
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`securities laws or any regulation or order issued under such laws, as set forth in Section
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`523(a)(19) of the Bankruptcy Code, 11 U.S.C. § 523(a)(19).
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`8
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`Case 1:19-cv-05998-GHW-OTW Document 119 Filed 01/10/23 Page 9 of 18
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`IX.
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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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`Dated:
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`(cid:45)(cid:68)(cid:81)(cid:88)(cid:68)(cid:85)(cid:92)(cid:3)(cid:20)(cid:19)
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`,
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`(cid:21)(cid:19)(cid:21)(cid:21)
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`
`UNITED STATES DISTRICT JUDGETTTTTTTTTTTTTTTTTTTTTTTEDEDEDEDEDEDDDDDDDEDDEDDDDEDEDDDDDDDDD STSTTSTSTSTSTSTSTSTTSTSTSTSTSTSSTSTSTSTSTSTSTSTSTTSTSTSSS ATATATATATAATATAATATATATATATATATATATAATATATAATATTTA ESEESEEEEEESEEEEEESESESESEESE DIDIIIIIIIIIIIIIIISTSTSSTSSSTSTRIC
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`9
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`Case 1:19-cv-05998-GHW-OTW Document 119 Filed 01/10/23 Page 10 of 18
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`UNITED STATES DISTRICT COURT
`SOUTHERN DISTRICT OF NEW YORK
`-------------------------------------------------------------- x
`SECURITIES AND EXCHANGE
`:
`COMMISSION,
`
`::
`
`:
`:
`
`::
`
`Plaintiff,
`
`v.
`JASON SUGARMAN,
`
`:
`:
`Defendant.
`:
`-------------------------------------------------------------- x
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`19 Civ. 5998 (GHW)(OTW)
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`ECF Case
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`CONSENT OF DEFENDANT JASON SUGARMAN
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`1.
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`Defendant Jason Sugarman (“Defendant”) acknowledges having been served
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`with the Amended Complaint and Jury Demand (“Amended Complaint”) in this action, enters a
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`general appearance, and admits the Court’s jurisdiction over Defendant and over the subject
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`matter of this action.
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`2.
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`Without admitting or denying the allegations of the Amended Complaint (except
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`as provided herein in paragraph 13 and except as to personal and subject matter jurisdiction,
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`which Defendant admits), Defendant hereby consents to the entry of the Judgment in the form
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`attached hereto (the “Final Judgment”) and incorporated by reference herein, which, among other
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`things:
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`(a)
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`permanently restrains and enjoins Defendant from violations of Section
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`10(b) of the Securities Exchange Act of 1934 (“Exchange Act”) [15
`
`U.S.C. § 78j(b)] and Rules 10b-5(a) and (c) thereunder [17 C.F.R. §
`
`240.10b-5(a) and (c)] and Sections 17(a)(1) and (3) of the Securities Act
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`of 1933 (“Securities Act”) [15 U.S.C. §§ 77q(a)(1) and (3)];
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`(b)
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`requires Defendant to comply with the undertakings set forth in this
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`Case 1:19-cv-05998-GHW-OTW Document 119 Filed 01/10/23 Page 11 of 18
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`Consent and incorporated in the Final Judgment;
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`(c)
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`for a period of three years from the entry of the Final Judgment, bars
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`Defendant from acting as an officer or director of any issuer that has a
`
`class of securities registered pursuant to Section 12 of the Exchange Act
`
`[15 U.S.C. § 78l] or that is required to file reports pursuant to Section
`
`15(d) of the Exchange Act [15 U.S.C. § 78o(d)];
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`(d)
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`orders Defendant to pay disgorgement in the amount of
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`$7,157,232.19, plus prejudgment interest thereon in the amount of
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`$1,317,703.82;
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`(e)
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`orders Defendant to pay a civil penalty in the amount of
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`$1,789,308.05 under Section 20(d)(2) of the Securities Act [15
`
`U.S.C. § 78t(d)(2)] and Section 21(d)(3) of the Exchange Act [15
`
`U.S.C. § 78u(d)(3)]; and
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`(f)
`
`orders that $2,566,061.02 of Defendant’s prejudgment interest and civil
`
`penalty obligations (the “Remaining Amount”) shall be offset by the
`
`U.S. Dollar value of any cash payments made by Defendant to the Joint
`
`Liquidators, appointed by the Bermuda Supreme Court on or before
`
`December 18, 2020 as Joint Provisional Liquidators and on July 26,
`
`2021 as permanent Joint Liquidators to oversee the liquidation of VL
`
`Assurance (Bermuda) Ltd. (“VL Assurance”), Valor Group Ltd. and
`
`Valor Management Ltd. for distribution to creditors pursuant to the
`
`Bermuda Companies Act of 1981 and Section 17(7) of the Segregated
`
`Account Companies Act of 2000 (the “Bermuda Liquidation”) (or any
`
`2
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`Case 1:19-cv-05998-GHW-OTW Document 119 Filed 01/10/23 Page 12 of 18
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`other bankruptcy trustee, liquidator, or receiver appointed in the
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`Bermuda Liquidation). Within 10 days of any cash payments made by
`
`Defendant to the Joint Liquidators, Defendant shall transmit
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`photocopies of evidence of payment and case identifying information in
`
`a form acceptable to Commission staff. If the Remaining Amount of
`
`$2,566,061.02 in prejudgment interest and civil penalty is not offset in
`
`full by Defendant’s payments to the Joint Liquidators (or any other
`
`bankruptcy trustee, liquidator, or receiver described above) within
`
`thirty (30) months of the entry of Final Judgment (plus any extensions
`
`of this period as set forth below), Defendant shall remit to the
`
`Commission the outstanding balance of the Remaining Amount of his
`
`prejudgment interest and civil penalty obligations, plus post judgment
`
`interest on the Remaining Amount pursuant to 28 U.S.C. § 196l,
`
`calculated as accruing from 30 days after entry of this Final Judgment.
`
`Failure to remit the cash payment due shall not void this Final
`
`Judgment, but the Commission retains its right to pursue any
`
`outstanding amount of Defendant’s prejudgment interest and civil
`
`penalty obligations by use of all collection procedures authorized by
`
`law, including the Federal Debt Collection Procedures Act, 28 U.S.C. §
`
`3001, et seq., and moving for civil contempt for the violation of any
`
`Court orders issued in this action. Upon good cause shown, the
`
`Commission staff may, in its discretion, consent to one or more
`
`extensions, up to a total of an additional eighteen (18) months, of the
`
`3
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`Case 1:19-cv-05998-GHW-OTW Document 119 Filed 01/10/23 Page 13 of 18
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`period within which Defendant must make payments to satisfy his
`
`obligations to pay the Remaining Amount, which consent shall not
`
`unreasonably be withheld. Notwithstanding the foregoing, in the event
`
`that a legal action is pending against Defendant by the Joint Liquidators
`
`(or any other bankruptcy trustee, liquidator, or receiver described
`
`above) at the time any such extension is sought, the Commission staff
`
`will permit the requested extension so long as the maximum additional
`
`period of eighteen months is not exceeded. If Defendant pays any
`
`portion of his civil penalty obligations to the Commission, the
`
`Commission shall hold the funds, together with any interest and income
`
`earned thereon (collectively, the “Fund”), pending further order of the
`
`Court. The Commission may propose a plan to distribute the Fund
`
`subject to the Court’s approval. Such a plan may provide that the Fund
`
`shall be distributed pursuant to the Fair Fund provisions of Section
`
`308(a) of the Sarbanes-Oxley Act of 2002.
`
`The Court shall retain jurisdiction over the administration of any
`
`distribution of the Fund and the Fund may only be disbursed pursuant to
`
`an Order of the Court.
`
`3.
`
`Defendant acknowledges any portion of the civil penalty paid pursuant to the
`
`Final Judgment to the Commission may be distributed pursuant to the Fair Fund provisions of
`
`Section 308(a) of the Sarbanes-Oxley Act of 2002. Regardless of whether any such Fair Fund
`
`distribution is made, the civil penalty shall be treated as a penalty paid to the government for all
`
`purposes, including all tax purposes. To preserve the deterrent effect of the civil penalty,
`
`4
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`Case 1:19-cv-05998-GHW-OTW Document 119 Filed 01/10/23 Page 14 of 18
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`Defendant agrees that he shall not, after offset or reduction of any award of compensatory
`
`damages in any Related Investor Action based on Defendant’s payment of disgorgement in this
`
`action, argue that he is entitled to, nor shall he further benefit by, offset or reduction of such
`
`compensatory damages award by the amount of any part of Defendant’s payment of a civil
`
`penalty in this action (“Penalty Offset”), except as provided in Paragraph V of the Final
`
`Judgment. If the court in any Related Investor Action grants such a Penalty Offset other than as
`
`provided in Paragraph V of the Final Judgment, Defendant agrees that he shall, within 30 days
`
`after entry of a final order granting the Penalty Offset, notify the Commission’s counsel in this
`
`action and pay the amount of the Penalty Offset to the United States Treasury or to a Fair Fund,
`
`as the Commission directs. Such a payment shall not be deemed an additional civil penalty and
`
`shall not be deemed to change the amount of the civil penalty imposed in this action. For
`
`purposes of this paragraph, a “Related Investor Action” means a private damages action brought
`
`against Defendant by or on behalf of one or more investors or other alleged victims based on
`
`substantially similar facts as alleged in the Amended Complaint in this action.
`
`4.
`
`Defendant agrees that he shall not seek or accept, directly or indirectly,
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`reimbursement or indemnification from any source, including but not limited to payment made
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`pursuant to any insurance policy, with regard to any civil penalty amounts that Defendant pays
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`pursuant to the Final Judgment, regardless of whether such penalty amounts or any part thereof
`
`are added to a distribution fund or otherwise used for the benefit of investors. Defendant further
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`agrees that he shall not claim, assert, or apply for a tax deduction or tax credit with regard to any
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`federal, state, or local tax for any penalty amounts that Defendant pays pursuant to the Final
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`Judgment, regardless of whether such penalty amounts or any part thereof are added to a
`
`distribution fund or otherwise used for the benefit of investors.
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`5
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`Case 1:19-cv-05998-GHW-OTW Document 119 Filed 01/10/23 Page 15 of 18
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`5.
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`Defendant undertakes, on his own behalf and that of his immediate family, to
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`forgo taking or receiving, directly or indirectly, any monies from, or ownership interest in, Valor
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`Group Ltd. or its affiliates or subsidiaries resulting from the resolution of administrative
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`supervision, liquidation or bankruptcy proceedings, now pending or hereafter commenced.
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`6.
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`Defendant waives the entry of findings of fact and conclusions of law pursuant
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`to Rule 52 of the Federal Rules of Civil Procedure.
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`7.
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`Defendant waives the right, if any, to a jury trial and to appeal from the entry of
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`the Final Judgment.
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`8.
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`Defendant enters into this Consent voluntarily and represents that no threats,
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`offers, promises, or inducements of any kind have been made by the Commission or any
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`member, officer, employee, agent, or representative of the Commission to induce Defendant to
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`enter into this Consent.
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`9.
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`Defendant agrees that this Consent shall be incorporated into the Final Judgment
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`with the same force and effect as if fully set forth therein.
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`10.
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`Defendant will not oppose the enforcement of the Final Judgment on the ground,
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`if any exists, that it fails to comply with Rule 65(d) of the Federal Rules of Civil Procedure, and
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`hereby waives any objection based thereon.
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`11.
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`Defendant waives service of the Final Judgment and agrees that entry of the
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`Judgment by the Court and filing with the Clerk of the Court will constitute notice to Defendant
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`of its terms and conditions. Defendant further agrees to provide counsel for the Commission,
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`within thirty days after the Final Judgment is filed with the Clerk of the Court, with an affidavit
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`or declaration stating that Defendant has received and read a copy of the Final Judgment.
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`6
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`

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`Case 1:19-cv-05998-GHW-OTW Document 119 Filed 01/10/23 Page 16 of 18
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`12.
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`Consistent with 17 C.F.R. § 202.5(f), this Consent resolves only the claims
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`asserted against Defendant in this civil proceeding. Defendant acknowledges that no promise or
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`representation has been made by the Commission or any member, officer, employee, agent, or
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`representative of the Commission with regard to any criminal liability that may have arisen or
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`may arise from the facts underlying this action or immunity from any such criminal liability.
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`Defendant waives any claim of Double Jeopardy based upon the settlement of this proceeding,
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`including the imposition of any remedy or civil penalty herein. Defendant further acknowledges
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`that the Court's entry of a permanent injunction may have collateral consequences under federal
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`or state law and the rules and regulations of self-regulatory organizations, licensing boards, and
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`other regulatory organizations. Such collateral consequences include, but are not limited to, a
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`statutory disqualification with respect to membership or participation in, or association with a
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`member of, a self-regulatory organization. This statutory disqualification has consequences that
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`are separate from any sanction imposed in an administrative proceeding. In addition, in any
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`disciplinary proceeding before the Commission based on the entry of the injunction in this
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`action, Defendant understands that he shall not be permitted to contest the factual allegations of
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`the Amended Complaint in this action.
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`13.
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`Defendant understands and agrees to comply with the terms of 17 C.F.R.
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`§ 202.5(e), which provides in part that it is the Commission's policy “not to permit a defendant or
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`respondent to consent to a judgment or order that imposes a sanction while denying the
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`allegations in the complaint or order for proceedings,” and “a refusal to admit the allegations is
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`equivalent to a denial, unless the defendant or respondent states that he neither admits nor denies
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`the allegations.” As part of Defendant’s agreement to comply with the terms of Section 202.5(e),
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`Defendant: (i) will not take any action or make or permit to be made any public statement
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`7
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`

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`Case 1:19-cv-05998-GHW-OTW Document 119 Filed 01/10/23 Page 17 of 18
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`denying, directly or indirectly, any allegation in the Amended Complaint or creating the
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`impression that the Amended Complaint is without factual basis; (ii) will not make or permit to
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`be made any public statement to the effect that Defendant does not admit the allegations of the
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`Amended Complaint, or that this Consent contains no admission of the allegations, without also
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`stating that Defendant does not deny the allegations; (iii) upon the filing of this Consent,
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`Defendant hereby withdraws any papers filed in this action to the extent that they deny any
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`allegation in the Amended Complaint; and (iv) stipulates solely for purposes of exceptions to
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`discharge set forth in Section 523 of the Bankruptcy Code, 11 U.S.C. § 523, that the allegations
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`in the Amended Complaint are true, and further, that any debt for disgorgement, prejudgment
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`interest, civil penalty or other amounts due by Defendant under the Final Judgment or any other
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`judgment, order, consent order, decree or settlement agreement entered in connection with this
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`proceeding, is a debt for the violation by Defendant of the federal securities laws or any
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`regulation or order issued under such laws, as set forth in Section 523(a)(19) of the Bankruptcy
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`Code, 11 U.S.C. § 523(a)(19). If Defendant breaches this agreement, the Commission may
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`petition the Court to vacate the Final Judgment and restore this action to its active docket.
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`Nothing in this paragraph affects Defendant’s: (i) testimonial obligations; or (ii) right to take
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`legal or factual positions in litigation or other legal proceedings in which the Commission is not
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`a party.
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`14.
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`Defendant hereby waives any rights under the Equal Access to Justice Act, the
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`Small Business Regulatory Enforcement Fairness Act of 1996, or any other provision of law to
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`seek from the United States, or any agency, or any official of the United States acting in his or
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`her official capacity, directly or indirectly, reimbursement of attorney’s fees or other fees,
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`expenses, or costs expended by Defendant to defend against this action. For these purposes,
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`8
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`

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`Case 1:19-cv-05998-GHW-OTW Document 119 Filed 01/10/23 Page 18 of 18
`Case 1:19-cv-05998-GHW-OTW Document 119 Filed 01/10/23 Page 18 of 18
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`Defendant agrees that Defendantis not the prevailing party in this action since the parties have
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`reached a good faith settlement.
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`15.
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`Defendant agrees to waiveall objections, including but not limited to
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`constitutional,
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`timeliness, and procedural objections, to the administrative proceeding that will be
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`instituted when the judgmentis entered.
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`16.
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`Defendant agrees that the Commission maypresent the Final Judgment to the
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`Court for signature and entry without further notice.
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`17.
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`Defendant agrees that this Court shall retain jurisdiction over this matter for the
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`purpose of enforcing the terms of the Final Judgment.
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`Dated: 10[3¢fron @.
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`
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`On_OCsvec 251
`yx
`Se
`me, personally appeared before mme‘and acknowledged executing the foregoing
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`Consent.
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`Approvedas to form:
`
`f é
`LE
`VONAALA,
`Notary Public
`Commission expires: Maron 7, 20--~
`
`3?
`i Vf
`\Yv AR,
`
`7
`
`=
`
`
`
`
`TAMMERA OKUMOTO
`Notary Pubiic - California
`
`Los Angeles County
`
`David Zinn
`Williams & Connolly LLP
`680 Maine Avenue. S.W.
`Washington, D.C. 20024
`
`Attorney for Defendant
`
`