Case 2:15-cv-03528-JLL-JAD Document 8-1 Filed 08/11/15 Page 1 of 16 PagelD: 131 UNITED STATES DISTRICT COURT DISTRICT OF NEW JERSEY SECLI.RITIES AND EXCHANGE COMMISSION, Plaintiff, : 15 Civ. 3528 (JLL) against— AI)A4 S. G()TTBETTER, MITCHELL G. ADAM, and K. DAVID STEVENSON, Defendants, FINAL .JUI)GMFNT AS To DEFENI)ANT MITCHELL G. ADAM the Securities and Exchange Commission, having filed a Complaint and l)efendant Mitchell G. Adam (Deiendant”) having entered a general appearance; consented to the Court’s junsdiction over Defendant and the subject matter of this action; consented to entry of this Final Judgment; waived findings of fact and conclusions of law; and waived any right to appeal from this Final Judgment: IT IS HEREBY ORDERED, ADJUDGED. AND DECREED that Defendant is permanently restrained and enjoined from violating, directly or indirectly, Section 10(b) of the Securities Exchange Act of 1934 (the “Exchange Act’s) (15 U.S.C. § 78j(b)1 and Rule lOb-5 promulgated thereunder [17 C,F.R. § 240.lOb-5j, by using any means or instrumentality of interstate commerce, or of the mails, or of any facility of any national securities exchange, in connection with the purchase or sale of any security: (a) to employ any device, scheme, or arti lice to defraud; Case 2:15-cv-03528-JLL-JAD Document 9 Filed 08/11/15 Page 1 of 16 PageID: 147
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UNITED STATES DISTRICT COURT DISTRICT OF NEW … · while denying the allegations in the complaint or order for proceedings.” 17 CJLR. * 202.5 In corn pliance with this policy,
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Case 2:15-cv-03528-JLL-JAD Document 8-1 Filed 08/11/15 Page 1 of 16 PagelD: 131
UNITED STATES DISTRICT COURTDISTRICT OF NEW JERSEY
SECLI.RITIES AND EXCHANGE COMMISSION,
Plaintiff, : 15 Civ. 3528 (JLL)
against—
AI)A4 S. G()TTBETTER, MITCHELL G. ADAM,and K. DAVID STEVENSON,
Defendants,
FINAL .JUI)GMFNT AS To DEFENI)ANT MITCHELL G. ADAM
the Securities and Exchange Commission, having filed a Complaint and l)efendant
Mitchell G. Adam (Deiendant”) having entered a general appearance; consented to the Court’s
junsdiction over Defendant and the subject matter of this action; consented to entry of this Final
Judgment; waived findings of fact and conclusions of law; and waived any right to appeal from
this Final Judgment:
IT IS HEREBY ORDERED, ADJUDGED. AND DECREED that Defendant is
permanently restrained and enjoined from violating, directly or indirectly, Section 10(b) of the
Securities Exchange Act of 1934 (the “Exchange Act’s) (15 U.S.C. § 78j(b)1 and Rule lOb-5
promulgated thereunder [17 C,F.R. § 240.lOb-5j, by using any means or instrumentality of
interstate commerce, or of the mails, or of any facility of any national securities exchange, in
connection with the purchase or sale of any security:
(a) to employ any device, scheme, or arti lice to defraud;
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(b) to make any untrue statement of a material fact or to omit to state a material fuel
necessary in order to make the statements made, in the light of the circumstances
under which they were made, not misleading; or
(c) to engage in any act, practice, or course of business which operates or would
operate as a fraud or deceit upon any person.
[F [S FURTHER ORDERED, ADJUDGE1). AND DECREED that, as provided in
Federal Rule of Civil Procedure 65(d)(2), the lbrcgoing paragraph also binds the tbllowing who
receive actual notice of this Final Judgment by personal service or otherwise: (a) Defendant’s
officers, agents, servants, employees, and attorneys: and (b) other persons in active COncert or
partiL ipation with Defendant or with anyone described in (a).
H.
IT IS HEREBY FURTHER ORDERED, ADJUDGED, ANI) DECREED that Defendant
is permanently barred from participating in an offering of penny stock, including engaging in
activities with a broker, dealer, or issuer for purposes of issuing, trading, or inducing or
attempting to induce the purchase or sale of any penny stock. A penny stock is any equity
security that has a price of less than live dollars, except as provided in Rule 3a51-l under the
E.ixchame Act [17 C.F,R. 240.3a5 I-l.
111.
IT iS FURTFIER ORDERED, ADJUDGED, AND DECREED that the Consent is
incorporated herein with the same force and effect as if fully set forth herein, and that Defendant
shall comply with all of the undertakings and agreements set forth therein.
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I V
IS Uk I III’R 0RD1 RU), ADJUDGED AND DE( REEl) that thk Court ‘ball retain
r. t do’ nawr ib; tIc poroc N ‘titiflcin’ the nn, of this I mat iud!4nlr fit.
0 201
UNI D STATES DISTRICT JUDGE
3
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I [El) STATES DISTRICT COURT1)1 Si kICT OF NEW JERSEY
Plaintiff, : 15 Civ. 3528 JLL
igainst—
\J)A ‘4 S. (u1rrBETTKR, MITChElL C. ADAM,md K DAY II) STEVENSoN,
I )efend aids.
CONSENT OF DEFENDANT MITChELL G. AUA1
I)cf3ndant Mitchell (i. Adam (I)efendant) w&ves servicc fa suipmons anc the
complaint in this action, enters a general appearance, an consents to the Court’s jurisdiction
n er 1)efendant and over the subject matter of this action.
2. njtI( 2() 5, Defendant pleaded guilty to an lnformtn in jdwyL
Jtteh:II,( n:\i, 15 Cr. 3l(Jt L) (DNJ.) charging bli with one
count of conspiracy to commit securities and mail fraud, in violation of Title 1$, United States
:od § 3 11, In connection with that plea, Deferdant adrntted the facts set out in tl transcript
1n iea tloeuton that is attached as Exhibit A to this Consent. This Consent shall remain in
fuN foic. nJ effect regardless of the existence or outcome of any further proceed4ngs in
Sitrcs v. Adam.
l)efendant hereby consents to the entry of the final Judgment in the form attached
Nereto phe FinaI .Judgment) and incorporated by reference herein, which, among other things:
(a) permanently restrains and enjoins Defendant from vtolatin of Sceion
lO(b’t of the Securities Exclange Act of 1934 (“Exchange Acfl [15
1
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U.S.C. ft 78j(b)j, and Rule 106.5 thereunder [17 C.P.R. §240.106.5):
and
(b) permanently restrains and enjoin Defendant from participating in any
offering of penny stock pursuont to Section 2l(dX6) of the xchango Act
[15 U.S.C. * lBu(d)(6)I.
‘I. Defendant waives the entry of findings of fact an4 conclusicyve of law pursuant to
Rek. 5 ! ni the l’ede:al Rules of Civil Procedure.
‘1 l)etcndant waives the right, If any, to a jury triçl and to appcaf from the entry of
he mu Judgment.
6. Defendant enters into this Consent voluntarily and represents that no threats,
otwas, promises, or inducements of any kind have been made by the Commission or any
member, officer, employee, agent or representative of the Commission to induce Defendant to
InIO IIILO this Consent.
7. Defendant agrees that this Consent shall be incorporated into the Final Judgment
with the ‘iino force and effect as if fully set forth therein.
8. I)cfendant will not oppose the enforcement of the Final Judgment on the ground,
it any exists, that it fails to comply with Rule 65(d) of the Federal Rules of Civil Proceduie, and
hereby waives .‘ny objection based thereon.
9. 1)efendant waives service of the Final Judgment and agrees that entry of the Final
Judgment by the Court and filing with the Clerk of the Court will constitute notice to Defendant
ot it ternis and conditions. Defendant further agrees to provide counsel for the Commission,
vithin Ihitty days after the Final Judgment Is filed with the Clerk of the Court, with an affidavit
or dcclaration stating that Defendant has received and read a copy of the Final Judgment.
2
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10 Consistent with 17 C.P.R. * 202.5(1), this Consent resolves only the claims.t,c’rtd .igainst Defendant in this civil proceeding. Defendant acknowledges that no promise oricptesentation has been wade by the Commission or any member, officer, employee, agent. ortepresentative of the Commission with regard to any criminal liability that may have atmen ormay arise from the facts underlying this action or immunity from any such criminal liability.
Di’c,idant Waives any claim of Double Jeopardy based upon the settlement of this proceeding,including the imposition of any remedy or civil penalty herein. Defendant further acknowledgesthat the Couit’s entry of a permanent injunction may have collateral consequences undos lederidor ‘date law and the rules and regulations of self-regulatory organizations, licensing boards, andother regulatory organizations. Such collateral consequences include, but arc not limited to. astatutory disqualification with respect to membership or participation in, or association with amemner of, a self-regulatory organization. This statutory disqualification has consequences thatare scpasatc ham any sanction imposed in an administrative proceeding. In addition, in anydisciplinary proceeding before the Commission based on the entry of the injunction in this
;iciit’n, Defendant understands that he shall not be permitted to contest the factual allegations ofthe complaint in Ibis action.
II Defendant understands and agrees to comply with the Commission’s policy “notto pet mit a defendant or respondent to consent to a judgment or order that imposes a sanction
while denying the allegations in the complaint or order for proceedings.” 17 CJLR. * 202.5 Incornpliance with this policy, Defendant acknowledges the guilty plea for related criminal
ionduct described in paragraph 2 above, and agrees: (i) not tab any action or make or permit tobe made any public statement denying, directly or indirectly, any allegation in the complaint or
wcating the impression that the complaint Is without factual basis; and (ii) that upon the filing of
3
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this C. assent, Defendant hereby withdraws any papers filed in this action to the extent that they
ley In) allegation in the complaint. If Defendant breaches this agreement, the Commission
may pc’ition the Court to vacate the Pinal Judgment and restore this action to its active docket
Nothini, in this paragraph aiThets Defendant’s: (i) testimonial obligatjons or (ii) right to take
te.al us factual positions in litigation or othet legal proceedings in which the Commission is not
a put.
12 Defendant hereby waives any rights under the Equal Access to Justice Act, the
‘mmli Bu%lness Regulatory Enforcement Pairness Act of 1996, or any other provision of law to
seck tram the United States, or any agency, or any official of the United States acting in his or
bc’s official capacity, directly or indirectly, reimbursement of attorney’s foes or other fees,
e4peuses, or costs expended by Defendant to defend against this action. For these purposes.
Defendant agrees that Defendant is not the prevailing party in this action since the parties have
wdvis’d a good faith settlement
13. In connection with this action and any related judicial or administrative
procceding en investigation commenced by the Commission or to which the Commission is a
party l)cfendant (I) agrees to appear and be Interviewed by Commission staff at such times and
Plac% as the staff requests upon reasonable notice; (ii) will accept service by snail, or facsimile
‘rsinsmis.sion, or email of notices or subpoenas Issued by the Commission for documents or
testimony as depositions, hearings, or trials, or in connection with any related investigation by
(nininission statf (iii) appoints Defendant’s undersigned attorney as agent to receive service of
such sotices and subpoenas; (iv) with respect to such notices and subpoenas, waives the
te’ ritorisi limits on service contained in Rule 45 of the Federal Rules of Civil Procedure and any
applicable local rules, provided that the party requesting the testimony reimburses Detendant%
4
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navel, lodging, and subsistence expenses at the then-prevailing US. Government per diem rates:
nd (v) consents to personal jurisdiction over Defendant in any United States District Court for
purposes of enforcing any such subpoena.
14, Defendant agrees that the Commission may present the Final Judgment to the
Corn i for signature and entry without further notice.
15. Defendant agrees that this Court shalt retain jurisdiction over this matter for the
purpose of enforcing the terms of the Final Judgmei.
Dated:
_______
Mitchell G. Adam
On Y /,2015, , a person known to me,personally appeared before me and acknowledged executing the foregoing Consent.