5080656.4
EXHIBIT i
UNITED STATES DISTRICT COURT
EASTERN DISTRICT OF MISSOURI
EASTERN DIVISION
Scottrade, Inc., )
)
Plaintiff, )
)
y. ) CaseNo. 4:07-cv-01982 HEA
)
Modern Energy Corporation; )
First Public Securities Transfer )
Corporation; )
)
Defendants; )
)
Merrill Lynch, Pierce Fenner & )
Smith, Inc.; Ridge Clearing & Outsourcing )
Solutions, Inc.; Penson Financial Services, Inc., )
E*Trade Financial Corporation; TD Ameritrade,)
Clearing Services, Inc.; )
)
Relief Defendants. )
EPROPOSED1 JUDGMENT BY DEFAULT AGAINST DEFENDANTS MODERN
ENERGY CORPORATION, INCLUDING A PERMANENT INJUNCTION
Default having been properly entered by the Clerk against Defendants Modern Energy
Corporation and First Public Securities Transfer Corporation, and seven days notice having been
given to Modern Energy Corporation and First Public Securities Transfer Corporation of Plaintiff
Scottrade, Inc.'s application for entry of judgment by default, it is hereby adjudged and decreed:
(a) Modern Energy and its transfer agent, First Public Securities Transfer Corporation,
have not complied with and have violated the spirit and the letter of this Court's prior
judgments in this matter by, among other things, failing to return to the Depository Trust
Company ("DTC") or its nominee, CEDE & Company, certificates representing the
Modem Energy common shares delivered by to Modem Energy's transfer agent, First
Public, pursuant to what Modem Energy described as a "mandatory exchange" which this
Court subsequently determined to be a reverse stock split effected in violation of
Wyoming law and the anti-fraud provisions of the Securities Exchange Act of 1934, 15
U.S.C. §78j(b), and thus null and void;
(b) Based on this Court's prior judgments rendered in this matter, Scottrade's DTC
account should now reflect that it continues to own 29,797,165 of the 30,797,165 issued
and outstanding Modem Energy common shares Scottrade held through its DTC account
for the accounts of Scottrade customers on October 19, 2007, and the actions and
inactions of Modem Energy and First Public and those persons acting in active concert or
participation with them (including, but not limited to, David Korman a/k/a David Korem
a/k/a! Mark Pedley and Michael S. bane) have prevented DTC from causing Scottrade's
DTC account to reflect such holdings and rendered it impossible for Scottrade to deliver
any of said 29,797,165 Modem Energy Common shares to Scottrade's customers for
whose accounts Scottrade holds such shares;
(e) Modem Energy has violated and continues to violate the reporting requirements
imposed on it by the federal securities laws, specifically 15 U.S.C. §78l and 78m;
(d) Modem Energy does not now have, and since December 21, 2007 has not had a
properly constituted board of directors, properly appointed officers or employees, and no
action purportedly taken by Modem Energy at any time since December 21, 2007 was a
properly authorized action by Modem Energy, every such action having been taken,
instigated or directed by persons (including, but not limited to, an individual using the
name David Korman, and also known as David Korem and Mark Pedley, and another
5080656.4 2
individual named Michael S. bane) acting in Modem Energy's name but without any
authority to so act;
(e) Modem Energy has no substantial assets or legitimate business purpose, its shares are
valueless, and its purported existence as a corporate entity is being continued solely to
further the fraud launched with the announcement of the purported, but void, reverse
stock split.
Further, the Court finds that:
The actions (and inactions) and the threatened actions and inactions of Defendants
Modem Energy Corporation and First Public Securities Transfer Corporation, their actual (or
supposed) officers, agents, servants, employees and attorneys, and those persons who are in
active concert or participation with them or with their purported officers, agents, servants,
employees and attorneys, including David Korman a/k/a David Korem a/k/a Mark Pedley and
Michael S. bane, individually and as a representative of Western Investment Properties, Inc.,
pose a continuing threat and risk of irreparable harm to Plaintiff Scottrade, Inc., for which
Scottrade, Inc. has no adequate remedy at law. The harm threatened by the Defendants' actions
and those of their actual or supposed officers, agents, servants, employees and attorneys, and
those persons (including Messrs. Korman and bane) who are in active concert or participation
with them, includes, but is not limited to, the damage to Scottrade which would result if
Scottrade were directly or indirectly compelled by the fraudulent schemes being pursued by
Defendants Modem Energy Corporation and First Public Securities Transfer Corporation, their
actual (or supposed) officers, agents, servants, employees and attorneys, and those persons who
are in active concert or participation with them (including Messrs. Korman and bane and the
corporation known as Western Investment Properties, Inc. controlled by bane) to purchase
5080656.4 3
and/or deliver intrinsically valueless shares of Modern Energy common stock (and/or other
stocks purportedly distributed by Modern Energy and First Public to Modern Energy
shareholders as in-kind dividends) at artificially inflated prices, whether pursuant to demand by
any Scottrade customer for delivery of the Modern Energy shares shown in Scottrade's records,
or pursuant to any order, by arbitrators or other authorities, entered at the behest of any such
Scottrade customer.
Accordingly, Defendants Modern Energy Corporation, First Public Securities Transfer
Corporation, their respective actual or purported officers, agents, servants, employees and
attorneys, and pursuant to Rule 65(d), Fed.R.Civ.P. all other persons who are in active concert or
participation with any of them (including, but not limited to, David Korman, a/k/a David
Korem, a/k/a Mark Pedley, and Michael S. bane and Western Investment Properties, Inc.), are
hereby permanently enjoined from:
issuing any additional securities purporting to be issued by Modern Energy without
the express, prior approval of this Court;
transferring or purporting to transfer, of record, ownership of any securities
heretofore issued or purportedly issued by Modern Energy without the express, prior approval of
this Court;
issuing any further announcements, press releases, or other form of communication
with actual or purported shareholders of Modern Energy or the investing public and purporting to
be from or concerning Modern Energy without the prior express approval of this Court;
making any further postings to the website www.modernenergycorporatiion.com or to
any other website purporting to be a website of Modern Energy Corporation without the prior
express approval of this Court;
5080656.4 4
making any further filings with the Wyoming Secretary of State's office in the name
of Modem Energy Corporation without the prior express approval of this Court; or
taking any actions directly or indirectly intended to perpetuate the manipulative
scheme described in the Court's Summary Judgment and earlier Permanent Injunction issued in
this matter, true and correct copies of which are attached hereto and incorporated by reference,
including, but not limited to, prosecuting any arbitration or other proceeding against Scottrade
designed to compel Scottrade to deliver Modem Energy shares or to pay any damages for failing
to deliver such shares or taking any other actions which would directly or indirectly cause, force,
or result in Scottrade having to purchase or pay for any shares of Modem Energy or any other
issuer, shares of which were purportedly distributed to Modem Energy shareholders as dividends
on Modem Energy shares.
Dated this day of February, 2010
5080656.4 5
United States District Judge
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