UNITED STATES DISTRICT COURT
EASTERN DISTRICT OF TENNESSEE
|COMMODITY FUTURES TRADING COMMISSION,||)||Civil Action No. 1:99-CV-138-EDGAR|
|)||CONSENT ORDER OF PERMANENT|
|)||INJUNCTION AND OTHER|
|)||EQUITABLE RELIEF AGAINST|
|EDWIN JAY SHELDON, ET AL.,||)||DEFENDANTS EDWIN JAY|
|)||SHELDON AND APPLIED CAPITAL|
1. On April 28, 1999, plaintiff Commodity Futures Trading Commission ("Commission") filed a complaint against defendants Edwin Jay Sheldon ("Sheldon"), Applied Capital Management, LLC. ("ACM"), and others, alleging violations of the Commodity Exchange Act ("Act"), as amended, 7 U.S.C. §§ 1 et seq. (1994), and the regulations promulgated thereunder, 17 C.F.R. § 1.1 et seq. (1999). On June 8, 1999, this Court entered a Consent Order of Preliminary Injunction And Other Equitable Relief against Sheldon and Applied Capital Management.
2. To effect settlement of this action without a trial on the merits or further judicial proceedings, Sheldon and ACM consent to this Consent Order Of Permanent Injunction And Other Equitable Relief Against Defendants Edwin Jay Sheldon and Applied Capital Management, LLC. ("Order"). Sheldon and ACM also: (1) acknowledge service upon them of the summons and complaint in this action; (2) admit this Court's personal and subject matter jurisdiction over them and this action; (3) admit that venue properly lies with this Court; and (4) waive the entry of findings of fact and conclusions of law in this action pursuant to Fed. R. Civ. P. 52, except as provided in Part II below.
3. By consenting to the entry of this Order, Sheldon and ACM neither admit nor deny the allegations of the Commission's complaint or the findings of fact made by this Court and contained in Part II below, except as to jurisdiction and venue. However, Sheldon and ACM agree and the parties to this Order intend that the allegations of the Commission's complaint and all of the findings of fact made by this Court and contained in Part II of this Order shall be taken as true and correct and be given preclusive effect without further proof only in any subsequent bankruptcy proceeding filed by, on behalf of, or against Sheldon or ACM for the purpose of determining whether their joint and several restitution obligation and/or other payments ordered herein are excepted from discharge. Sheldon and ACM also shall provide immediate notice of any bankruptcy proceeding filed by, on behalf of, or against any of them in the manner required by Part V, paragraph 1. of this Order.
4. Sheldon and ACM agree that: (1) they will not take any action or make or permit to be made any public statement denying, directly or indirectly, any finding or conclusion contained in this Order or creating, or tending to create, the impression that this Order is without a factual basis; and (2) no agent or employee of Sheldon or ACM acting under their authority or control shall take any action or make or permit to be made any public statement denying, directly or indirectly, any of the findings or conclusions in this Order or creating, or tending to create, the impression that this Order is without factual basis, and Sheldon and ACM shall undertake all steps necessary to assure that all of their agents and employees understand and comply with this agreement. Nothing in this provision affects Sheldon and ACM's: (1) testimonial obligations; or (2) rights to take legal positions in other proceedings to which the Commission is not a party.
5. Sheldon and ACM waive: (1) all claims that they may possess under the Equal Access to Justice Act ("EAJA"), 5 U.S.C. § 504 and 28 U.S.C. § 2412, as amended by Pub. L. No. 104-121, §§ 231-32, 110 Stat. 862-63, and Part 148 of the Commission's Regulations, 17 C.F.R. §§ 148.1 et seq., relating to or arising from this action and any right under EAJA to seek costs, fees, and other expenses relating to or arising from this proceeding; (2) any claim of Double Jeopardy based upon the institution of this proceeding or the entry in this proceeding of any order imposing a civil monetary penalty or any other relief; and (3) all rights of appeal from this Order.
6. Sheldon and ACM consent to the continued jurisdiction of this Court for the purpose of enforcing the terms and conditions of this Order and for any other purposes relevant to this action.
7. Sheldon, individually and on behalf of ACM, agrees to cooperate fully with the Commission in the prosecution of its complaint in this action, in any ongoing investigations related to the subject matter of the complaint in this action, and in all other proceedings arising from such investigations by, among other things: (1) responding promptly, completely, and truthfully to any inquiries or requests for information and otherwise cooperating fully with discovery; (2) providing authentication of documents; (3) testifying completely and truthfully; and (4) not asserting privileges under the Fifth Amendment of the United States Constitution in connection with any testimony Sheldon is asked to provide.
8. Sheldon, individually and on behalf of ACM, affirms that he has read this Order and agrees to this Order voluntarily, and that no promise or threat of any kind has been made by the Commission or any member, officer, agent, or representative thereof, or by any other person, to induce his consent to this Order, other than as set forth specifically herein.
9. Sheldon and ACM acknowledge that this Court is not ordering payment of a civil monetary penalty pursuant to Section 6c(d) of the Act, 7 U.S.C. § 13a-1(d), or immediate payment of restitution, other than as required by paragraphs 1. and 2. of Part IV below, based upon the accuracy and completeness of Sheldon and ACM's sworn representations to the Commission concerning their financial condition. If at any time following the entry of this Order, the Commission obtains information indicating that any of Sheldon or ACM's representations to the Commission concerning their financial condition were fraudulent, misleading, inaccurate, or incomplete in any material respect as of the time such representations were made, the Commission may, in its sole discretion and without prior notice to Sheldon or ACM, petition this Court for an order requiring Sheldon and ACM immediately to pay full restitution or a civil monetary penalty. In connection with any such petition, the only issues shall be whether the financial information provided by Sheldon or ACM was fraudulent, misleading, inaccurate, or incomplete in any material respect as of the time such representations were made, and the amount of civil monetary penalty to be imposed. In its petition, the Commission may request that this Court consider all available remedies, including, but not limited to, ordering Sheldon and ACM to pay funds or transfer assets, directing the forfeiture of any assets, imposing sanctions for contempt of this Order, and/or the Commission may also request additional discovery. Sheldon and ACM shall not, by way of defense to such petition, challenge the validity of their consents to this Order, contest the allegations of the Commission's complaint or the findings or conclusions contained in this Order, contest the amount of restitution, or assert that payment of restitution or a civil monetary penalty should not be ordered.
10. This Court, being fully advised in the premises, finds that there is good cause for the entry of this Order and that there is no just reason for delay. This Court therefore directs the entry of findings of fact and a permanent injunction and other equitable relief, pursuant to Section 6c of the Act, 7 U.S.C. § 13a-1, as set forth herein.
FINDINGS OF FACT
1. In late 1997 in New York City, Sheldon met with Kenneth Duke ("Duke"), a Tennessee resident, to solicit Duke and others to invest in the Fair Haven Futures Fund, LLC. ("Fund"), a commodity pool managed by Sheldon's completely-controlled company, ACM. Mary Duke (Duke's wife), defendant Charles Edward Powell ("Powell"), and Wanda Duke (Powell's wife and Duke's sister), also attended this meeting.
2. At the meeting, Sheldon told Duke that over the past seven years of his commodity futures trading he had made a profit every month, with the only one exception being a small 0.02% monthly loss. Sheldon also told Duke that investors in the Fund would not lose more than ten to twelve percent of their investment capital because he would only invest between ten and twelve percent of their money in "world markets," meaning commodity futures contracts or options on commodity futures contracts, and would place the remainder in safe investments such as Treasury bills. Sheldon said that he would never trade more than fifteen percent of investor money in the futures markets without permission from investors. Sheldon also stated that Duke and other investors could expect a twenty percent monthly return from the Fund.
3. Sheldon's representations to Duke described in paragraph 2. above about his past trading record, the amount of investor funds at risk in the futures markets, and the profit potential of the Fund were false or misleading. Sheldon knew or recklessly disregarded that these statements were false or misleading.
4. Sheldon knew that Powell had solicited Duke and others to invest in the Fund. Sheldon further knew or should have known that Powell was not registered with the Commission as an associated person of a commodity pool operator.
5. During January 1998 and February 1998, Duke, Mary Duke, and other members of a limited partnership called the Alpha Group, L.L.P. ("Alpha Group") invested two hundred sixty-five thousand, four hundred dollars ($265,400) in the Fund.
6. Throughout 1998, Sheldon and ACM sent Duke and the Alpha Group letters and monthly account statements reporting the performance of the Fund. The monthly account statements were not signed and did not disclose the Fund's specific trading activity or fees. The letters and account statements represented that the Fund's net asset value increased from March 1998 through July 1998. However, during this time the Fund trading accounts sustained large losses. The increases in net asset value were a result of Sheldon and ACM's recording an account receivable for management fees from Powell and netting that receivable against the Fund's trading losses.
7. The fact that the Fund's net asset value was increasing as a result of the receivable from Powell instead of profitable trading in the futures markets was a material fact upon which reasonable investors would rely. Accordingly, Sheldon and ACM had a duty to disclose to investors the Fund's actual trading performance and the fact that the increases in the Fund's net asset value were based on management fees. However, Sheldon and ACM never disclosed these facts to investors during the period March 1998 through July 1998. Sheldon and ACM knew or recklessly disregarded that investors would have relied upon the Fund's actual trading performance and the circumstances surrounding the receivable from Powell in deciding whether to continue to invest in the Fund.
8. From March 1998 through July 1998, Ken and Mary Duke and members of the Alpha Group deposited an additional one hundred sixteen thousand, five hundred ninety-eight dollars ($116,598) into the Fund.
9. Throughout 1998, Ken and Mary Duke and the Alpha Group received total Fund redemptions of forty-seven thousand, eight hundred thirty-one dollars ($47,831).
10. In December 1998, Sheldon and ACM shut down the Fund.
11. Sheldon and ACM filed with the Commission and sent to investors the Fund's December 31, 1998 annual report. The annual report falsely states that the majority of the Fund's trading losses occurred in August 1998 and September 1998, when, in fact, the largest losses occurred from March 1998 through May 1998.
12. Ken and Mary Duke and the Alpha Group lost a total of three hundred thirty-four thousand, one hundred sixty-seven dollars ($334,167) by investing in the Fund. Ken and Mary Duke and the Alpha Group invested in the Fund in reliance upon Sheldon and ACM's false or misleading representations regarding (1) Sheldon's past trading performance, (2) the limited amount of money that would be invested in the commodity futures markets, (3) the profit potential of the Fund, and (4) the Fund's net asset value, as reflected in Sheldon and ACM's letters and account statements.
IT IS HEREBY ORDERED THAT:
1. Sheldon and ACM are permanently restrained, enjoined, and prohibited from directly or indirectly:
a. Cheating or defrauding or attempting to cheat or defraud other persons, or willfully making or causing to be made to other persons any false report or statement thereof, or willfully entering or causing to be entered for such persons any false record thereof, in or in connection with any order to make, or the making of, any contract of sale of any commodity for future delivery, made, or to be made, for or on behalf of any other person if such contract for future delivery is or may be used for (a) hedging any transaction in interstate commerce in such commodity or the products or byproducts thereof, or (b) determining the price basis of any transaction in interstate commerce in such commodity, or (c) delivering any such commodity sold, shipped, or received in interstate commerce for the fulfillment thereof, in violation of Section 4b(a)(i)-(ii) of the Act, 7 U.S.C. § 6b(a)(i)-(ii);
b. Employing any device, scheme, or artifice to defraud any client or participant or prospective client or participant, or engaging in any transaction, practice, or course of business which operates as a fraud or deceit upon any client or participant or prospective client or participant, by use of the mails or any means or instrumentality of interstate commerce, in violation of Section 4o(1) of the Act, 7 U.S.C. § 6o(1);
c. Being associated with a commodity pool operator ("CPO") in any capacity that involves the solicitation of funds for a commodity pool or the supervision of persons so engaged without being registered with the Commission and permitting a non-registered person to be associated with a CPO in any capacity that involves the solicitation of funds for a commodity pool or the supervision of persons so engaged if the CPO knew or should have known that such person was not registered, in violation of Section 4k(2) of the Act, 7 U.S.C. § 6k(2);
d. Failing to provide statements of account to customers in the form and manner prescribed by the Commission, in violation of Section 4n of the Act, 7 U.S.C. § 6n, and Sections 4.21 and 4.22 of the Regulations, 17 C.F.R. §§ 4.21 and 4.22; and
e. Knowingly making, or causing to be made, any statement in any application, report, or document required to be filed under the Act or the Regulations, which statement was false or misleading with respect to any material fact, or knowingly omitting any material fact required to be stated therein or necessary to make the statements therein not misleading, in violation of Section 9(a)(3) of the Act, 7 U.S.C. § 13(a)(3).
2. Sheldon and ACM are permanently restrained, enjoined, and prohibited from:
a. trading on or subject to the rules of any contract market;
b. engaging in, controlling, or directing the trading for any commodity interest account for or on behalf of any other person or entity, whether by power of attorney or otherwise; and
c. applying for registration or seeking exemption from registration with the Commission in any capacity, and engaging in any activity requiring such registration or exemption from registration, or acting as a principal, agent, or officer of any person registered, exempted from registration or required to be registered with the Commission. This includes, but is not limited to, soliciting, accepting or receiving any funds, revenue, or other property from any person, giving advice for compensation, or soliciting prospective customers, related to the purchase or sale of any commodity futures or options on commodity futures contracts.
3. The injunctive provisions of this Order shall be binding upon Sheldon and ACM, any person insofar as he or she is acting in the capacity of officer, agent, servant, or attorney of Sheldon or ACM, and any person who receives actual notice of this Order by personal service or otherwise insofar as he or she is acting in active concert or participation with Sheldon or ACM.
IT IS FURTHER ORDERED THAT:
1. Restitution: Sheldon and ACM shall make full restitution to the Fund investors identified in Exhibit A to the motion for the entry of this Order. Full restitution shall amount to $334,167, plus prejudgment interest of $36,636 for the period December 19, 1998 through April 30, 2000. Sheldon and ACM are jointly and severally liable for payment of this restitution. In satisfaction of their obligation, they shall make payments as described within paragraph 2. of this Part IV over a period of five (5) years from the entry of this Order. Exhibit A includes the Commission's calculation of the total amount of restitution owed each investor. Omission from Exhibit A shall in no way limit the ability of any Fund investor from seeking recovery from Sheldon or ACM or any other person or entity. Further, the amounts contained in Exhibit A shall not limit the ability of any Fund investor from proving that a greater amount is owed from Sheldon or ACM or any other person or entity, and nothing herein shall be construed in any way to limit or abridge the rights of any Fund investor that exist under state or common law.
2. Payment of Restitution: Restitution shall be made as follows:
a. Within ten (10) calendar days of the entry of this Order, Sheldon and ACM shall pay $14,670, which sum shall include payment of the entire balance of account 720-22556 at Discover Brokerage Direct, to an account designated by a Monitor identified in subparagraph b. below.
b. The National Futures Association shall be designated as Monitor for the period beginning with the date of entry of this Order and continuing until distribution of the last payment called for by this Order, or until restitution is paid in full and distributed, whichever occurs first.
c. The Monitor shall distribute the payments described in subparagraph a. above pro rata to the Fund investors identified in Exhibit A. The Monitor, in its discretion, may require investors, prior to receiving payment, to provide a sworn statement and documentation verifying the amount of the investor's loss.
d. Thereafter, for the following five years through year 2005, Sheldon and ACM together shall make an annual payment ("Annual Payment") to an account designated by the Monitor of (1) a percentage of their combined adjusted gross income (as defined by the Internal Revenue Code) earned or received by Sheldon and ACM during the previous calendar year, plus (2) all other cash receipts, cash entitlements, or proceeds of non-cash assets (not to include tax refunds, except for the refund received in 2000) received by Sheldon and ACM during the previous calendar year. The Annual Payment shall be made on or before June 30 of each calendar year, starting in calendar year 2001, and continuing for five (5) years through 2005, or until Sheldon and ACM make full restitution, whichever occurs sooner.
e. Sheldon and ACM shall provide to the Monitor a sworn Financial Disclosure Statement and complete copies of their signed federal income tax returns, including all schedules and attachments thereto (e.g., IRS Forms W-2) and Forms 1099, as well as any filings they are required to submit to any state tax or revenue authority, on or before May 15 of each calendar year, or as soon thereafter as the same are filed, for a period of five (5) years after the entry of this Order or until they make full restitution, whichever occurs sooner. If, during the same time period, Sheldon elects to file a joint tax return, he shall provide all documents called for by this subparagraph f., including the signed and filed joint tax return, plus a draft individual tax return prepared on IRS form 1040 containing a certification by a licensed certified public accountant that the "Income" section (currently lines 7-22 of the form 1040) truly, accurately, and completely reflects all of his income, that the "Adjusted Gross Income" section (currently lines 23-33 of the form 1040) truly, accurately, and completely identifies all deductions that he has a right to claim, and that the deductions contained in the "Adjusted Gross Income" section are equal to or less than 50% of the deductions that he is entitled to claim on the joint tax return; provided, however, that Sheldon may claim 100% of the deductions contained in the "Adjusted Gross Income" section that are solely his. Such individual tax return shall include all schedules and attachments thereto (e.g., IRS Forms W-2) and Forms 1099, as well as any filings required to be submitted to any state tax or revenue authority.
f. Based on the information contained in Sheldon and ACM's Financial Disclosure Statement and their tax returns, the Monitor shall calculate the Annual Payment to be made by Sheldon and ACM for years 2001 through 2005. On or before June 15 of each year, starting in calendar year 2001, the Monitor shall send written notice to Sheldon and ACM with instructions to make the Annual Payment by June 30 to an account designated by the Monitor. The Monitor shall then disburse any payment made by Sheldon and ACM to Fund investors in the appropriate amounts, unless, in his sole discretion, based upon the amount of funds available for distribution, the Monitor decides to defer distribution. If, at the end of the five year payment period, any of the Annual Payments has not been distributed or remains unclaimed, the Monitor shall either: (1) distribute the funds to Fund investors; (2) make a recommendation to the Commission providing for distribution of the funds to any other individual whose funds were solicited, received, or disposed of by any other defendant in this matter; or (3) make a recommendation to the Commission that the funds become a civil monetary payment pursuant to Section 6c(d) of the Act, 7 U.S.C. § 13a-1(d). Any of the Annual Payments that become a civil monetary payment shall be paid to the Commodity Futures Trading Commission for deposit to the United States Treasury, and addressed to Dennese Posey, or her successor, Division of Trading and Markets, Commodity Futures Trading Commission, 1155 21st Street, N.W., Washington D.C. 20581, under cover of a letter that identifies Sheldon and ACM and the name and docket number of this proceeding. A copy of the cover letter and the form of payment shall be simultaneously transmitted to Phyllis J. Cela, Acting Director, Division of Enforcement, Commodity Futures Trading Commission, or her successor, at the following address: 1155 21st Street, N.W., Washington D.C. 20581.
g. The Annual Payment will be determined as follows:
|Where Adjusted Gross Income Plus Net Cash Receipts Total:||Percent of total to be paid by Sheldon and ACM to persons listed in Exhibit A is:|
|$50,000.00 up to and including $100,000.00||30% of the amount above $50,000.00|
|Above $100,000.00||$15,000.00 (which represents 30% of the amount between $50,000.00 and $100,000.00) plus 40% of the amount above $100,000.00.|
h. Sheldon and ACM shall cooperate fully and expeditiously with the Monitor and the Commission in carrying out all of their duties with respect to restitution. They shall cooperate fully with the Monitor and the Commission in explaining their financial income and earnings, status of assets, financial statements, asset transfers, and tax returns, and shall provide any information as may be required by the Commission and/or the Monitor in administering the restitution obligation. Furthermore, Sheldon and ACM shall provide such additional information and documents with respect thereto as may be requested by the Commission and/or the Monitor.
3. Third Party Beneficiaries: Pursuant to Fed. R. Civ. P. 71, the Fund investors are explicitly made intended third party beneficiaries of this Order and, after the date the last payment called for by this Order is due, may enforce obedience of this Order to obtain satisfaction of any portion of the restitution obligation which has not been paid by Sheldon or ACM, to ensure continued compliance with any provision of this Order, and to hold Sheldon or ACM in default and/or contempt for any past violation of any provision of this Order.
4. Collateral Agreements: Sheldon or ACM shall immediately notify the Commission and the Monitor if he or ACM makes or has previously made any agreement with any Fund investor obligating any payments to that investor outside of the plan set forth in this Order. Sheldon and ACM also shall provide immediate evidence of any payments made pursuant to such agreement in the manner required by Part V, paragraph 1.
5. Default: Any failure by Sheldon or ACM to carry out any of the terms, conditions, or obligations under any paragraph of this Order shall constitute an Event of Default under this Order. If any Event of Default occurs and, if capable of being cured, is not cured within ten (10) calendar days following the Commission's (or its designee) mailing of notice of such Event of Default to Sheldon or ACM, the Commission (or its designee) and/or the Fund investors shall be entitled to:
a. an order granting immediate payment of restitution in the amount of $334,167, plus prejudgment interest of $36,636;
b. petition the Court to consider all available remedies including, but not limited to, imposing sanctions for contempt of this Order;
c. enforce and take all legal steps necessary to satisfy the Permanent Injunction and otherwise declare the terms and conditions contained in this Order null, void, and without legal force;
d. pursue Sheldon or ACM for any and all additional claims and causes of action of any nature, in law or in equity, which the Commission or the Fund investors have, may have, or may have had against Sheldon or ACM; and/or
e. use any statement heretofore or hereafter made by Sheldon or ACM as evidence against them.
Sheldon and ACM expressly agree and this Court orders that upon the occurrence of an Event of Default, they will be barred: (1) from asserting any defense, including expiration of any statute of limitations, waiver, estoppel, or laches, where such defense is based on the alleged failure of the Commission or any Fund investor to pursue such claims or causes of action during the pendency of this civil action, during the negotiation of Sheldon and ACM's agreement to this Order, or while this Order remains in effect; and/or (2) from objecting to, defending against, or otherwise disputing the non-dischargeability of their obligations, including their obligations under this Order.
6. Reliance On Financial Disclosure: Based upon the sworn representations of Sheldon and ACM to the Commission regarding their financial condition, this Court is not ordering payment of restitution, other than as required by paragraphs 1. and 2. of this Part IV, or a civil monetary penalty pursuant to Section 6c(d) of the Act, 7 U.S.C. § 13a-1(d). The determination not to order immediate payment of restitution, other than as required by paragraphs 1. and 2. above, or a civil monetary penalty is contingent upon the accuracy and completeness of the Financial Disclosure Statement and other evidence provided by Sheldon and ACM regarding their financial condition. If at any time following the entry of this Order, the Commission obtains information indicating that any of Sheldon or ACM's representations to the Commission concerning their financial condition were fraudulent, misleading, inaccurate, or incomplete in any material respect as of the time such representations were made, the Commission may, in its sole discretion and without prior notice to Sheldon or ACM, petition this Court for an order requiring Sheldon and ACM immediately to pay full restitution or a civil monetary penalty. In connection with any such petition, the only issues shall be whether the financial information provided by Sheldon or ACM was fraudulent, misleading, inaccurate, or incomplete in any material respect as of the time such representations were made, and the amount of civil monetary penalty to be imposed. In its petition, the Commission may request that this Court consider all available remedies, including, but not limited to, ordering Sheldon and ACM to pay funds or transfer assets, directing the forfeiture of any assets, imposing sanctions for contempt of this Order, and/or the Commission may also request additional discovery. Sheldon and ACM shall not, by way of defense to such petition, challenge the validity of their consents to this Order, contest the allegations of the Commission's complaint or the findings or conclusions contained in this Order, contest the amount of restitution, or assert that payment of restitution or a civil monetary penalty should not be ordered.
7. Transfer of Assets: Neither Sheldon nor ACM shall transfer or cause others to transfer funds or other property to the custody, possession, or control of any members of Sheldon's family or any other person for the purpose of concealing such funds from this Court, the Commission, the Monitor, or any Fund investor until restitution has been paid in full.
IT IS FURTHER ORDERED THAT:
1. Notices: All notices required by this Order shall be sent by certified mail, return receipt requested, as follows:
a. Notice to Commission:
Director, Division of Enforcement
Commodity Futures Trading Commission
1155 21st St. NW
Washington, DC 20581
b. Notice to Monitor:
Vice President, Compliance
National Futures Association
200 West Madison Street
Chicago, IL 60606
c. Notice to defendants Sheldon and ACM:
Edwin Jay Sheldon
181 Long Hill Road
Little Falls, NJ 07424
In the event that Sheldon or ACM changes their residential or business telephone number(s) and/or address(es) at any time, they shall provide written notice of the new number(s) and/or address(es) to the Monitor and to the Commission within ten (10) calendar days thereof.
2. Entire Agreement and Amendments: This Order incorporates all of the terms and conditions of the settlement among the parties hereto. Nothing shall serve to amend or modify this Order in any respect whatsoever, unless: (1) reduced to writing; (2) signed by all parties hereto; and (3) approved by order of this Court.
3. Waiver: The failure of any party hereto or of any Fund investor at any time or times to require performance of any provision hereof shall in no manner affect the right of such party at a later time to enforce the same or any other provision of this Order. No waiver in one or more instances of the breach of any provision contained in this Order shall be deemed to be or construed as a further or continuing waiver of such breach or waiver of the breach of any other provision of this Order.
4. Successors and Assigns: This Order shall inure to the benefit of and be binding upon the successors, assigns, heirs, beneficiaries, and administrators of the parties hereto.
5. Acknowledgements: Upon being served with copies of this Order after entry by this Court, Sheldon shall sign an acknowledgment of such service, individually and on behalf of ACM, and serve such acknowledgment on this Court and the Commission within seven (7) calendar days.
Upon being served with copies of this Order after entry by the Court, the Commission shall serve a copy of the Order upon the Monitor and all persons identified in Exhibit A within seven (7) calendar days.
6. Expiration of Prior Orders: Upon the entry of this Order, all terms and conditions of this Court's April 28, 1999 Ex Parte Statutory Restraining Order Freezing Assets, Preserving Books And Records, And Allowing Commission Staff Access To Books And Records And Order Granting Leave To Conduct Expedited Discovery and June 8, 1999 Consent Order Of Preliminary Injunction And Other Equitable Relief Against Sheldon And Applied Capital Management, LLC shall expire as to defendants Sheldon and ACM.
7. Invalidation: If any provision of this Order, or the application of any provisions or circumstances is held invalid, the remainder of this Order and the application of the provision to any other person or circumstance shall not be affected by the holding.
8. Jurisdiction of this Court: This Court shall retain jurisdiction of this cause to assure compliance with this Order and for all other purposes related to this action.
Done and Ordered this 27th day of September 2000, at Chattanooga, Tennessee.
R. ALLAN EDGAR
UNITED STATES DISTRICT JUDGE
and Approved for Entry
Edwin Jay Sheldon,
Dated: _______________, 2000
Lloyd E. Friesen
Commodity Futures Trading
Dated: _______________, 2000