UNITED STATES DISTRICT COURT
SOUTHERN DISTRICT OF FLORIDA
|COMMODITY FUTURES TRADING COMMISSION,||)||CASE NO. 00-6885-CIV-ZLOCH.|
|Plaintiff,||)||September 11, 2000|
|NATIONAL BULLION AND COIN, INC., d/b/a||)|
|NATIONAL BULLION & COIN SERVICES, INC.,||)|
|CAPITAL CREDIT MANAGEMENT & FINANCE, INC.,||)|
|JOSEPH B. FLANIGAN, and LAWRENCE COLMAN,||)|
PERMANENT INJUNCTION AND ENTRY OF FINAL JUDGMENT BY DEFAULT AGAINST DEFENDANTS NATIONAL BULLION AND COIN, INC. AND CAPITAL CREDIT MANAGEMENT & FINANCE, INC.
THIS MATTER is before the Court upon the Plaintiff, the Commodity Future Trading Commission's (hereinafter "'the CFTC") Motion For Order Of Permanent Injunction And Entry Of Final Judgment By Default Against Defendants National Bullion And Coin, Inc. And Capital Credit Management & Finance, Inc. (DE 91). On June 29, 2000, Defendants National Bullion And Coin, Inc., d/b/a National Bullion & Coin Services, Inc. (hereinafter "NBC") and Capital Credit Management & Finance, Inc. (hereinafter "CCMF") were duly served with a copy of the summons, Complaint and the Court's Statutory Restraining. Order. The Court held an evidentiary hearing on July 17, 2000 at which documentary evidence, live witness testimony and oral argument was presented. The Defendants NBC and CCMF failed to appear on July 17, 2000 to show cause why a preliminary injunction should not be entered, or to file a Notice of Appearance by counsel of record. On July 25, 2000, the Court issued two Orders Entering Default (DE Nos. 34 and 33) as to Defendants NBC and CCMF.
The Court has carefully considered the Complaint, the plaintiff's written submissions and the evidence in the record to date, and, being otherwise fully advised in the premises, hereby GRANTS the CFTC's Motion for Permanent Injunction and Entry of Final Judgment by Default Against Defendants National Bullion and Coin, Inc. and Capital Credit Management & Finance, Inc. (DE 41), and enters separate Findings of Fact and Conclusions of Law finding NBC and CCMF liable as to all violations as alleged in the Complaint. The Findings of Fact and Conclusions of Law are incorporated herein by reference. Accordingly, the Court now issues the following Order of Permanent Injunction and Final Judgment by Default against NBC and CCMF as to all issues of liability, and further orders that Plaintiff submit evidence and argument as to the appropriate civil monetary penalties, restitution and disgorgement to be made by NBC and CCMF.
THE COURT HEREBY FINDS AS FOLLOWS:
1. This Court has jurisdiction over the subject matter of this action and NBC and CCMF pursuant to Section 6c of the Act, 7 U.S.C. § 13a-1, which authorizes the CFTC to seek injunctive relief against any person whenever it shall appear that such person has engaged, is engaged or is about to engage in any act or practice constituting a violation of any provision of the Act or any rule, regulation or order thereunder.
2. Venue properly lies with this Court pursuant to Section 6c (e) of the Act, 7 U.S.C. § 13a-1, in that Defendants NBC and CCMF are found in, inhabit and transacted business in the Southern District of Florida, and the acts and practices in violation of the Act occurred within this district, among other places.
Accordingly, after due consideration, it is ORDERED AND ADJUDGED as follows:
I. PROHIBITED CONDUCT
NBC and CCMF, and any other person insofar as he or she is acting in the capacity of an officer, agent, servant, employee or attorney of NBC or CCMF, and any person who receives actual notice of this order by personal service or otherwise insofar as he or she is acting in concert or participation with NBC or CCMF by, in or in connection with orders to make, or the making of, contracts of sale of any commodity for future delivery, made, or to be made, for or on behalf of any other persons, where such contracts for future delivery were or could be used for the purposes set forth in Section 4b (a) of the Act, 7 U.S.C. § 6b(a), are permanently restrained and enjoined from violating Section 4b(a)(i)-(iii) of the Act, 7 U.S.C. § 6b(a)(i)-(iii), by:
A. Cheating or defrauding or attempting to cheat or defraud other persons; .
B. willfully making or causing to be made to other persons false reports or statements thereof, or willfully entering or causing to be entered for other persons false records thereof; and
C. willfully deceiving or attempting to deceive other persons by any means whatsoever.
IT IS FURTHER ORDERED AND ADJUDGED that NBC and CCMF, any other person acting in the capacity of an officer, agent, servant, employee or attorney of NBC or CCMF, and any person who receives actual notice of this Order by personal service or otherwise insofar as he or she is acting in concert or participation with NBC or CCMF are permanently restrained and enjoined from offering to enter into, entering into, executing, confirming the execution of, or conducting any office and/or business for purposes of soliciting and/or accepting orders for, or otherwise dealing in transactions in, or in connection with, contracts for the purchase or sale of a commodity for future delivery, or options thereon in violation of Section 4(a) of the Act, 7 U.S.C. § 6(a), when:
A. Such transactions have not been conducted on or subject to the rules of a board of trade which has been designated by the CFTC as a "contract market" for such commodity; and
B. such contracts have not been executed or conducted by or through a member of such contract market.
IT IS FURTHER ORDERED AND ADJUDGED that NBC and CCMF, any person acting in the capacity of an officer, agent, servant, employee or attorney of NBC or CCMF, and any person who receives actual notice of this order by personal service or otherwise insofar as he or she is acting in concert or participation with NBC or CCMF, are permanently restrained and enjoined from directly or indirectly soliciting or accepting any new customers for commodity futures or commodity options trading or soliciting or accepting any new deposits of funds from existing customers.
IT IS FURTHER ORDERED AND ADJUDGED that NBC and CCMF are permanently restrained and enjoined from:
A. Acting in any capacity, including in an exempt capacity, as, a futures commission merchant, commodity pool operator, commodity trading advisor, introducing broker, floor broker, floor trader or associated person or other agent of any such entity, as defined under the Act;
B. Seeking application for registration with the CFTC in any capacity at any time in the future;
C. Soliciting or accepting any new customer or participant in connection with commodity futures or options trading, including but not limited to:
1. Soliciting or accepting orders from others for the purchase or sale of commodity future contracts or options for the purchase or sale of commodity futures contracts;
2. Soliciting or accepting money, securities, or property from others for the purpose of trading commodity futures contracts or options on commodity futures contracts;
3. Soliciting or accepting funds from others for instruction, direction or guidance including providing classes on futures or options trading strategies, or disseminating information for compensation relating to commodity futures or options trading; and
4. Filing a petition in bankruptcy without providing this Court and the CFTC with notice by Certified Mail of such filing.
V. MONETARY JUDGMENT
IT IS FURTHER ORDERED AND ADJUDGED that judgment for civil monetary penalties, restitution and disgorgement is entered in favor of the CFTC and against NBC and CCMF, jointly and severally, and that the CFTC shall, within ninety t90) days of the date of this Order, present the Court with evidence and argument supporting any requested final amounts of civil monetary penalties, restitution and disgorgement. Within ninety (90) days of the date of this Order, the CFTC shall also present the Court with a Proposed Order of Judgment on Civil Monetary Penalties, Restitution and Disgorgement as to NBC and CCMF. It is further Ordered that NBC and CCMF may also submit evidence solely on the issue of civil monetary penalties, restitution and disgorgement, no later than ten (10) days after service by the CFTC of its required filing. Any civil monetary penalties, disgorgement or restitution imposed by this Court against Defendants CCMF and NBC shall not extinguish the liability of the remaining Defendants in this action including, but not limited to, liability for civil monetary penalties, restitution or disgorgement regarding any violations found by the Court to have occurred.
VI. ASSET FREEZE
IT IS FURTHER ORDERED AND ADJUDGED that the asset freeze pursuant to this Court's Order of Preliminary Injunction (DE 36) shall remain in full force and effect until further Order of this Court.
VII. PERMANENT RECEIVER
IT IS FURTHER ORDERED AND ADJUDGED that Gerald B. Wald shall continue as permanent Receiver with the full powers of an equity receiver for NBC and CCMF (hereinafter the "Receivership Defendants"?, and their affiliates, subsidiaries and all of the funds, properties, premises, accounts and other assets directly or indirectly owned, beneficially or otherwise, by the Receivership Defendants. The Receiver shall:
A. Assume full control of the Receivership Defendants by removing Defendants Colman and Flanigan, and any officer, independent contractor, employee, or agent of the Receivership Defendants, from control and management of the affairs of the Receivership Defendants;
B. Take exclusive custody, control, and possession of all the funds, property, mail and other assets of, in the possession of, or under the control of the Receivership Defendants, wherever situated. The Receiver shall have full power to sue for, collect, receive and take possession of all goods, chattels, rights, credits, moneys, effects, land, leases, books, records, work papers, and records of accounts, including computer-maintained information, and other papers and documents of the Receivership Defendants, including documents related to customers or clients whose interests are now held by or under the direction, possession, custody or control of the Receivership Defendants;
C. Take all steps necessary to secure the business premises of the Receivership Defendants, including but not limited to premises located at 5950 W. Oakland Park Blvd, Suite 201, Fort Lauderdale, Florida, 33313 and any and all other premises under the control of the Receivership Defendants;
D. Preserve, hold and manage all Receivership assets, and perform all acts necessary to preserve the value of those assets, in order to prevent any loss, damage or injury to customers or clients.
E. Prevent the withdrawal or misapplication of funds entrusted to the Receivership Defendants, and otherwise protect the interests of customers or clients;
F. Manage and administer the Receivership Defendants by performing all acts incidental thereto that the Receiver deems appropriate, including hiring or dismissing any and all personnel or suspending operations;
G. Collect all money owed to the Receivership Defendants;
H. Initiate, defend, compromise, adjust, intervene in, dispose of, or become a party to any actions or proceedings in state, federal or foreign courts necessary to preserve or increase the assets of the Receivership Defendants or to carry out his duties pursuant to this Order. The Receiver is vested with the authority to bring suit for recovery of assets of the receivership estate against all parties to whom assets may have been fraudulently transferred. The Receiver is also vested with the authority to bring suit and, seek recovery from any person or entity who may otherwise share responsibility for the injuries suffered by customers of the Receivership Defendants. For this purpose, the Receiver may file such actions in the name of the Receivership Defendants or as class actions in the name of and on behalf of customers of the Receivership Defendants;
I. Choose, engage and employ attorneys, -accountants, appraisers, and other independent contractors and technical specialists, as the Receiver deems advisable or necessary in the performance of duties and responsibilities under the authority granted by this Order;
J. Issue subpoenas to obtain documents and records pertaining to the Receivership, and conduct discovery in this action on behalf of the Receivership estate;
K. Open one or more bank accounts as designated depositories for funds of the Receivership Defendants. The Receiver shall deposit all funds of the Receivership Defendants in such designated accounts and shall make all payments and disbursements from the Receivership estate from such accounts;
L. Make payments and disbursements from the Receivership estate that are necessary or advisable for carrying out the directions of, or exercising the authority granted by, this Order. The Receiver shall apply to the Court for prior approval of any payment of any debt or obligation incurred by the Receivership Defendants prior to the date of entry of this Order, except for payments that the Receiver deems necessary or advisable to secure assets of the Receivership Defendants;
M. Liquidate all assets-of the Receivership Defendants, and all assets transferred to the Receiver in accordance with the terms of this Order;
N. Formulate a plan for distribution of the assets of the Receivership Defendants and all other assets obtained by the Receiver pursuant to the authority vested in him by this Order, to customers of the Receivership Defendants and to administer the distribution of such assets pursuant to this and any further Order of this Court; and
O. Execute all bills of sale and deeds to personal and real property belonging to or coming into the possession of the Receivership Defendants.
IT IS FURTHER ORDERED AND ADJUDGED that, immediately upon service of this order upon them, NBC and CCMF, any of their officers, agents, servants, employees and attorneys, and persons in active concert or participation with them who receive actual notice of this Order by personal service or otherwise, and all other persons or entities served with a copy of this Order, shall immediately or within such time as permitted by the Receiver in writing, deliver over to the Receiver:
A. Possession and custody of all funds, assets, and other property owned directly, beneficially or otherwise, wherever situated, of the Receivership Defendants;
B. Possession and custody- of documents of the Receivership Defendants, including but not limited to, all books and records of accounts, all financial and accounting records, balance sheets, income statements, bank records (including monthly statements, canceled checks, records. of wire transfers, and check registers), client lists, title documents and other papers;
C. Possession and custody of all precious metals, other commodities, funds and other assets held in the name of or belonging to members of the public now held by the Receivership Defendants;
D. All keys, computer passwords, entry codes, and combinations' to locks necessary to gain or to secure access to any of the assets or documents of the Receivership Defendants, including but not limited to, access to the Receivership Defendants' business premises, means of communication, accounts, computer systems, safes or other property; and
E. Information identifying the accounts, employees, properties or other assets or obligations of the Receivership Defendants, wherever located.
IT IS FURTHER ORDERED AND ADJUDGED that NBC and CCMF shall cooperate fully with and assist the Receiver. This cooperation and assistance shall include, but not be limited to, providing any information to the Receiver that the Receiver deems necessary to exercising the authority and discharging the responsibilities of the Receiver under this Order; providing any password required to access any computer or electronic files in any medium; providing the combination to any safe, and advising all persons who owe money to the Receivership Defendants that all debts should be paid directly to the Receiver.
IT IS FURTHER ORDERED AND ADJUDGED that within five (5) business days following the service of this Order, NBC and CCMF each shall, if they have not done so already:
A. Provide counsel for the CFTC and the Receiver with a full accounting of all assets and liabilities of the Receivership Defendants by completing, signing, and serving on the CFTC and the Receiver the "Financial Disclosure Statement" (CFTC form 177) attached to this Order;
B. Provide counsel for the CFTC and the Receiver with a full accounting of all funds, documents, and assets held outside of the United States which are (1) titled in the name, individually or jointly, of a Receivership Defendant; or (2) held by any person or entity for the benefit of such Defendant; or (3) under such Defendant's direct or indirect control, whether jointly-or singly;
C. Transfer to the territory of the United States and deliver to the Receiver all funds, documents, and assets located in foreign countries which are (1) titled in the name individually or jointly of a Receivership Defendant; or (2) held by any person or entity for the benefit of such Defendant; or (3) under such Defendant's direct or indirect control, whether jointly or singly; and
D. Provide counsel for the CFTC and the Receiver access to all records of accounts or assets of the Defendants held by financial institutions located outside the territorial United States by signing the Consent to Release of Financial Records attached to this Order.
IT IS FURTHER ORDERED AND ADJUDGED that except by leave of the Court, during the pendency of the Receivership ordered herein, NBC and CCMF and all other persons and entities be and hereby are stayed from taking any action to establish or enforce any claim, right or interest for, against, on behalf of, in, or in the name of, the Receivership Defendants, the Receiver, the Receivership assets, or the Receiver's duly authorized agents acting in their capacities as such, including but not limited to, the following actions:
A. Commencing, prosecuting, litigating or enforcing any suit, except that actions may be filed to toll any applicable statute of limitations;
B. Accelerating the due date of any obligation or claimed obligation, enforcing any lien upon, or taking or attempting to take possession of, or retaining possession of, property of the Receivership Defendants or any property claimed by the Receivership Defendants, or attempting to foreclose, forfeit, alter or terminate any of the Receivership Defendants' interests in property, whether such acts are part of a judicial proceeding or otherwise;
C. Using self-help or executing or issuing, or causing the execution or issuance of any court attachment, subpoena, replevin, execution or other process for the purpose of impounding or taking possession of or interfering with, or creating or enforcing a lien upon any property, wherever located, owned by or in the possession of the Receivership Defendants, or the Receiver, or any agent of the Receiver; and
D. Doing any act or thing to interfere with the Receiver's taking control, possession or management of the property subject to the Receivership, or to in any way interfere with the Receiver or the duties of the Receiver; or to interfere with the exclusive jurisdiction of this Court over the property and assets of the Receivership Defendants.
This Paragraph does not stay the commencement or continuation of an action or proceeding by a governmental unit to enforce such governmental unit's police or regulatory power.
IT IS FURTHER ORDERED AND ADJUDGED that the Receiver and all personnel hired by the Receiver as herein authorized, including counsel to the Receiver, are entitled to reasonable compensation for the performance of duties pursuant to this Order and for the cost of actual out-of-pocket expenses incurred by them, from the assets now held by, or in the possession or control of, or which may be received by, the Receivership Defendants. The Receiver shall file with the Court and serve on the parties periodic requests for the payment of such reasonable compensation with the first such request filed no more than sixty (60) days after the date of this Order. The Receiver shall not increase the hourly rates used as the bases for such fee applications without prior approval of the Court.
IT IS FURTHER ORDERED AND ADJUDGED that, pursuant to 28 U.S.C. § 759, the Receiver shall maintain the bond which the Court required the Receiver to file pursuant to the Preliminary Injunction and the Ex Parte Statutory Restraining Order previously entered in this case.
IT IS FURTHER ORDERED AND ADJUDGED that all banks, brokers, savings and loans, escrow agents, title companies, trusts, broker-dealers, other financial institutions or any other persons or entities which are served with a copy of this Order shall cooperate with all reasonable requests of the Receiver relating to implementation of this Order, including transferring funds at the Receiver's direction, allowing the Receiver access to safe deposit boxes, and producing records related to the Receivership Defendants' accounts.
XV. LIQUIDATION AND DISTRIBUTION OF ASSETS
IT IS FURTHER ORDERED AND ADJUDGED that the Receiver shall, as soon as is practicable, liquidate all remaining assets of NBC and CCMF and deposit the proceeds of the liquidation into the Receivership bank account.
XVI. MAINTENANCE OF AND ACCESS TO RECORDS
IT IS FURTHER ORDERED AND ADJUDGED that NBC and CCMF and all persons or entities who receive notice of this order by personal service or otherwise, are restrained and enjoined from directly or indirectly destroying, mutilating, erasing, altering, concealing or disposing of, in any manner, directly or indirectly, any documents that relate to the business practices or business or personal finances of any Defendant.
IT IS FURTHER ORDERED AND ADJUDGED that representatives of the CFTC be immediately allowed to inspect the books, records, and other documents of the Defendants and their agents including, but not limited to, paper documents, electronically stored data, tape recordings, and computer discs, wherever they may be situated and whether they are in the possession of the Defendants or others, and to copy said documents, data and records, either on or off the premises where they may be situated.
XVIII. SERVICE OF ORDER
IT IS FURTHER ORDERED AND ADJUDGED that copies of this Order may be served by any means, including facsimile transmission, upon any financial institution or other entity or person that may have possession, custody, or control of any documents or assets of any Defendant that may be subject to any provision of this Order.
IT IS FURTHER ORDERED AND ADJUDGED that within seven (7) days after entry of this order of the Court that Defendant Colman, as President of the Receivership Defendants, shall serve on the CFTC a signed acknowledgment that he has been served with this Order.
IT IS FURTHER ORDERED AND ADJUDGED that until January 1, 2005, Defendant Colman, as President of the Receivership Defendants, shall notify the CFTC of any change of his residential address or employment status within thirty (30) days of said change.
XXI. SERVICE ON THE CFTC
IT IS FURTHER ORDERED AND ADJUDGED that Defendant Colman, as President of the Receivership Defendants, shall serve all notices required by this Order, and other materials on the CFTC by delivering a copy to Michael Solinsky, Senior Trial Attorney, Division of Enforcement, Commodity Futures Trading Commission, 1155 21st Street, N.W., Washington, D.C. 20581.
XXII. SEVERABILITY AND RETENTION OF JURISDICTION
IT IS FURTHER ORDERED AND ADJUDGED that if the application of any provision or circumstance of this Order is held invalid, the remainder of the Order and the application of the provision to any other person or circumstance shall not be affected by the holding.
IT IS FURTHER ORDERED AND ADJUDGED that this Court shall retain jurisdiction of this action, and of any ancillary or supplemental actions hereto, in order to, among other things, implement and carry out the terms of all orders, judgments, and decrees that may be entered herein, including those that may be necessary to assure compliance with this Order for Permanent Injunction and Entry of Final Judgment by Default Against Defendants National Bullion and Coin, Inc. and Capital Credit Management & Finance, Inc.
DONE AND ORDERED, in Chambers at Fort Lauderdale, Broward County, Florida this 11th day of September 2000, at 10:55 A.M.
WILLIAM J. ZLOCH
Chief United States District Judge
Michael Solinsky, Esq.
Gerald B. Wald, Esq.
Lawrence Colman, Pro Se
Joseph B. Flanigan, Pro Se
National Bullion & Coin, Inc.
Capital Credit Management Finance, Inc.
CONSENT TO RELEASE OF FINANCIAL RECORDS
I,____________________, do hereby direct any financial or brokerage institution, business entity, or bank or trust company at which I have an account of any kind upon which I am authorized to draw, and its officers, employees and agents, to disclose all information and deliver copies of all documents of every nature in your possession or control which relate to said bank accounts to any attorney of the Commodity Futures Trading Commission, and to give evidence relevant thereto, in the matter of Commodity Futures Trading Commission v. National Bullion and Coin, Inc., d/b/a/ National Bullion & Coin, Services, Inc., Capital Credit Management & Finance, Inc., Joseph B. Flanigan and Lawrence Colman, 00-6885-CIV-ZLOCH, now pending before the United States District Court for the Southern District of Florida, and this shall be irrevocable authority for so doing. This direction is intended to apply to the laws of countries other than the United States which restrict or prohibit the disclosure or bank information without the consent of the holder of the account, and shall be construed as consent with respect thereto, and the same shall apply to any of the bank accounts for which I may be a relevant principal.
Dated: _____________, 2000