update on the SEC case:
Pursuant to Rule 26-3 of the Nevada Local Rules, plaintiff Securities and
Exchange Commission (“SEC”) and Defendants CannaVest Corp. (“CannaVest”)
and Michael J. Mona, Jr. (“Mona”) submit the following interim status report.
Plaintiff SEC and defendants CannaVest and Mona recently reached a
tentative resolution of this action. Pursuant to the tentative resolution, CannaVest and Mona would consent to be permanently enjoined from future violations of the federal securities laws. In addition, CannaVest would consent to pay a civil penalty of $150,000 and Mona would consent to pay a civil penalty in the amount of $40,000, with both penalties payable in twelve monthly installments beginning
30 days after entry of the final judgment. In addition, Mona would consent to
reimburse CannaVest $10,000 pursuant to Section 304(a) of the Sarbanes-Oxley
Act of 2002, pursuant to the same payment schedule as the penalties. Mona would
also consent to being barred for five years from acting as an officer or director of
any public company.
The settlements are tentative because the defendants’ executed consent has
not yet been received by the SEC. In addition, only the SEC Commissioners in
Washington D.C. have the final authority to approve the settlement proposals.
Although the approval process typically takes several weeks, the SEC staff has
already begun the process of obtaining final approval for the settlements with
CannaVest and Mona and, assuming approval by the SEC Commissioners, the
SEC will submit the proposed settlements to the Court for its approval.
If the tentative settlement does not proceed, the SEC expects to file a motion
for summary judgment. The parties estimate that a trial of the matter would take 3-
5 court days. The parties considered but do not consent to trial by a magistrate
judge under 28 U.S.C. § 636(c) and F.R.C.P. 73 or the use of the Short Trial
Program. If the tentative settlement does not proceed, the parties will consider the
use of alternative dispute resolution processes.
