"If you can present a reputable link or cite to a document (or preferably law) that states that a "Judge MUST find that a violation of the Misleading and Deceptive Practices (aka fraud) section of the code occurred" in order to approve a settlement, then please do so."
Is the Court simply acting to "approve a settlement" without regard to the wording of the judgment and the law cited therein?
The terms of both Final Judgments for the most part indicate that the defendants "are permanently restrained and enjoined from violating" multiple sections of the Exchange Act, with reference to the appropriate paragraphs of the US Code. Obviously those sanctions only make sense to non-lawyers if the defendants had previously acted to violate those securities laws. I specifically avoided pointing to those terms in my post in order to avoid a discussion of the lack of logic involved in requiring defendants not to do something that they haven't done.
Instead I directed my comments to the terms of the Final Judgments involving fines and director and officer bans, the wording of which I found compelling. Excerpts follow:
Final Judgment as to JBI:
"IT IS HEREBY FURTHER ORDERED, ADJUDGED AND DECREED that Defendant is liable for a civil penalty in the amount of $150,000 civil penalty pursuant to Section 20(d) of the Securities Act [15 U.S.C. § 77(t)(d)] and Section 21(d)(3) of the Exchange Act [15 U.S.C. §78u(d)(3)]."
Final Judgment as to Bordynuik:
"IT IS HEREBY FURTHER ORDERED, ADJUDGED AND DECREED that Defendant is liable for a civil penalty in the amount of $110,000 civil penalty pursuant to Section 20(d) of the Securities Act [15 U.S.C. § 77(t)(d)] and Section 21(d)(3) of the Exchange Act [15 U.S.C. §78u(d)(3)]."
"IT IS HEREBY FURTHER ORDERED, ADJUDGED AND DECREED that pursuant to Section 20(e) of the Securities Act [15 U.S.C. § 77(e)] and Section 21(d)(2) of the Exchange Act[15 U.S.C. § 78u(d)(2)], Defendant is prohibited from acting as an officer or director of any issuer that has a class of securities registered under Section 12 of the Exchange Act [15 U.S.C. §
778l] or that is required to file reports pursuant to Section 15(d) of the Exchange Act [15 U.S.C. §78o(d)]."
I ask again:
Is the Court simply acting to approve a settlement without regard to the wording of the judgment and the law cited therein?
The words "liable" and "prohibited" and the fact that the sanctions are "pursuant to" specific regulations suggest to me that the function of the Court is not to be a potted plant capable of signing its name but rather that the Judge's signature provides an assurance that the Judgment, HIS JUDGMENT, comports with the cited regulations.
According to the Final Judgment the defendants became "liable" for a civil fine or "prohibited" from acting as an officer or director "pursuant to" the laws cited therein, not because they simply agreed to those terms. If that were the case there would be no need to cite the laws and the defendants instead of being "liable" for the fines and "prohibited" from serving in the stated positions would have merely agreed that the stated payments are acceptable, he was willing to waive service as an officer or director and the document would be entitled "Final Agreement" or "Final Settlement" instead of Final Judgment.
"Though tough for some to grasp, without evidence before the court, there can be no factual findings."
What is tough for me to grasp is the value of the Judge's signature on a Final Judgment if it is not to assure that its terms and wording comport with the law.
ps. Your assertion that "there can be no factual findings" by the court, whether technically correct or not, shouldn't deter you from addressing the facts, as it appears to have. The defendants chose to accept fines and a director ban in order to avoid confronting them in my opinion, contrary to your belief that it was simply a sensible business decision. (Whatever happened to "looking forward to vigorously defending itself in court, where the Company believes it will prevail on the merits."? I submit that the merits were absent, leading them to reconsider that bit of bravado.)
In case you have forgotten the facts I'll repeat them:
The company reflected an asset in their financial statements at a value of $10,000,000 which they acquired for shares having a value of $1,000,000 and which the company itself admitted in a public filing 6 months later was totally worthless.
The company used those financial statements as part of the documentation provided to participants in two funding efforts.....Private Investments in the Public Equities of the company.
But can it core A apple?
Yes Ralph, of course it can core A apple.
