New Bankruptcy Opinion: Securities and Exchange Commission v. CalPACIFIC EQUITY GROUP, LLC – Dist. Court, CD California, 2015

SECURITIES AND EXCHANGE COMMISSION, Plaintiff,

v.

CALPACIFIC EQUITY GROUP, LLC, DANIEL R. BAKER, and DEMOSTHENES DRITSAS, Defendants.

Case No. CV-14-5754-JFW-AGR.

United States District Court, C.D. California.

July 28, 2015.

ORDER ON PLAINTIFF’S MOTION TO SET DISGORGEMENT AND CIVIL PENALTY AGAINST DEFENDANT DEMOSTHENES DRITSAS AND FINAL JUDGMENT AGAINST DEMOSTHENES DRITSAS

JOHN F. WALTER, District Judge.

THIS MATTER is before the Court on Plaintiff Securities and Exchange Commission’s Motion To Set Disgorgement And Civil Penalty Against Demosthenes Dritsas (DE 22). The Court having reviewed the Motion and the record, and being otherwise fully advised in the premises, it is:

ORDERED AND ADJUDGED that the Motion is GRANTED. Final Judgment against Defendant Demosthenes Dritsas is entered as follows:

I.

PAYMENT OF DISGORGEMENT, PREJUDGMENT INTEREST AND A CIVIL PENALTY

IT IS ORDERED AND ADJUDGED that Dritsas is liable for disgorgement of $82,525, representing profits gained as a result of the conduct alleged in the Complaint, together with prejudgment interest of $6,399.38, and a civil penalty of $150,000 pursuant to Section 20(d) of the Securities Act of 1933 [15 U.S.C. § 77t(d)] and Section 21(d)(3) of the Securities Exchange Act of 1934 [15 U.S.C. § 78u(d)]. Dritsas shall satisfy this obligation by paying $238,924.38 to the Securities and Exchange Commission within 14 days after entry of this Final Judgment.

Dritsas may transmit payment electronically to the Commission, which will provide detailed ACH transfer/Fedwire instructions upon request. Payment may also be made directly from a bank account via Pay.gov through the SEC website at http://www.sec.gov/about/offices/ofm.htm. Dritsas may also pay by certified check, bank cashier’s check, or United States postal money order payable to the Securities and Exchange Commission, which shall be delivered or mailed to

Enterprise Services Center
Accounts Receivable Branch
6500 South MacArthur Boulevard
Oklahoma City, OK 73169

and shall be accompanied by a letter identifying the case title, civil action number, and name of this Court; Demosthenes Dritsas as a defendant in this action; and specifying that payment is made pursuant to this Final Judgment.

Dritsas shall simultaneously transmit photocopies of evidence of payment and case identifying information to Robert K. Levenson, Miami Regional Office, 801 Brickell Ave., Suite 1800, Miami, FL, 33131, the Commission’s counsel in this action. By making this payment, Dritsas relinquishes all legal and equitable right, title, and interest in such funds and no part of the funds shall be returned to him.

The Commission may enforce the Court’s judgment for disgorgement and prejudgment interest by moving for civil contempt (and/or through other collection procedures authorized by law) at any time after 14 days following entry of this Final Judgment. Dritsas shall pay post judgment interest on any delinquent amounts pursuant to 28 U.S.C. § 1961. 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. If the Commission staff determines that the Fund will not be distributed, the Commission shall send the funds paid pursuant to this Final Judgment to the United States Treasury.

II.

BANKRUPTCY NONDISCHARGEABILITY

IT IS FURTHER ORDERED AND ADJUDGED that, solely for purposes of exceptions to discharge set forth in Section 523 of the Bankruptcy Code, 11 U.S.C. §523, the allegations in the complaint are true and admitted by Dritsas, and further, any debt for disgorgement, prejudgment interest, civil penalty or other amounts due by Dritsas under this Final Judgment or any other judgment, order, consent order, decree or settlement agreement entered in connection with this proceeding, is a debt for the violation by Dritsas of the federal securities laws or any regulation or order issued under such laws, as set forth in Section 523(a)(19) of the Bankruptcy Code, 11 U.S.C. §523(a)(19).

III.

RETENTION OF JURISDICTION

IT IS FURTHER ORDERED AND ADJUDGED that this Court shall retain jurisdiction of this matter for the purposes of enforcing the terms of this Final Judgment.

IV.

RULE 54(b)

There being no just reason for delay, pursuant to Rule 54(b) of the Federal Rules of Civil Procedure, the Clerk is ordered to enter this Final Judgment forthwith and without further notice.

DONE AND ORDERED.

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