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Securities and Exchange Commission v. Medical Capital Holdings

August 17, 2009

SECURITIES AND EXCHANGE COMMISSION, PLAINTIFF,
v.
MEDICAL CAPITAL HOLDINGS, INC.; MEDICAL CAPITAL CORPORATION; MEDICAL PROVIDER FUNDING CORPORATION VI; SIDNEY M. FIELD; AND JOSEPH J. LAMPARIELLO, DEFENDANTS.



The opinion of the court was delivered by: Hon. David O. Carter United States District Judge

[PROPOSED] PRELIMINARY INJUNCTION AND ORDER APPOINTING A PERMANENT RECEIVER

This matter came to be heard on August 17, 2009, at 8:30 a.m., upon the Court's August 3, 2009 Temporary Restraining Order and Orders: (1) Freezing Assets, (2) Appointing a Temporary Receiver, (3) Prohibiting the Destruction of Documents, (4) Granting Expedited Discovery, and (5) Requiring Accountings; and Order to Show Cause re Preliminary Injunction and Appointment of a Permanent Receiver("TRO").

The Court has considered all of the evidence filed by Plaintiff Securities and Exchange Commission ("Commission") in its Ex Parte Application for a Temporary Restraining Order and Orders: (1) Freezing Assets, (2) Appointing a Temporary Receiver, (3) Prohibiting the Destruction of Documents, (4) Granting Expedited Discovery, and (5) Requiring Accountings; and Order to Show Cause re Preliminary Injunction and Appointment of a Permanent Receiver(the "Application"); Defendants' Emergency Ex Parte Application Requesting Additional Time to Respond to Ex Parte Application by Securities and Exchange Commission for Temporary Restraining Order and Related Relief; Declaration of Joseph J. Lampariello; Declaration of Sirena P. Castillo, filed July 20, 2009; Plaintiff's July 21, 2009 Application for Reinstatement of Temporary Restraining Order and Related Relief;; Defendants' July 22, 2009 Opposition to Application by Securities and Exchange Commission for Temporary Restraining Order; the July 22, 2009 Supplemental Declaration of Joseph J. Lampariello in Opposition to Application for Temporary Restraining Order; July 22, 2009 Declaration of Thomas R. Fazio in Opposition to Ex Parte Application for Temporary Restraining Order; Defendants' Objections to Evidence Submitted by Securities and Exchange Commission in Support of Temporary Restraining Order; Plaintiff's Reply Memorandum in Support of Application for Temporary Restraining Order and Related Relief; Declaration of David. R. Zaro in Response to Ex Parte Application for Temporary Restraining Order; Defendants Sidney M. Field and Joseph J. Lampariello's Opposition to Preliminary Injunction and Appointment of Permanent Receiver, filed August 10, 2009; Memorandum of Wells Fargo Bank, National Association, in Limited Opposition to Temporary Restraining Order, Preliminary Injunction and Appointment of a Permanent Receiver, filed August 10, 2009; the 10 Day Report and Accounting of Receiver Thomas A. Seaman, filed August 12, 2009; and Plaintiff's Reply Memorandum in Support of Preliminary Injunction and Appointment of Permanent Receiver, as well as argument and evidence introduced at the hearing on August 17, 2009, and based upon the entire record in this case, the Court finds:

A. This Court has jurisdiction over the parties to, and the subject matter of, this action.

B. Good cause exists to believe that defendants Medical Capital Holdings, Inc. ("MCHI"), Medical Capital Corporation ("MCC"), Medical Provider Funding Corporation VI ("MP VI), Sidney M. Field ("Field"), and Joseph J. Lampariello ("Lampariello"), and each of them, have engaged in, are engaging in, and are about to engage in transactions, acts, practices and courses of business that constitute violations of Section 17(a) of the Securities Act of 1933 ("Securities Act"), 15 U.S.C. §§ 77q(a), Section 10(b) of the Securities Exchange Act of 1934 ("Exchange Act"), 15 U.S.C. § 78j(b), and Rule 10b-5 thereunder, 17 C.F.R. § 240.10b-5.

C. The Commission has demonstrated a probability of success on the merits in this action.

D. Good cause exists to believe that Defendants will continue to engage in such violations to the immediate and irreparable loss and damage to investors and to the general public unless they are restrained and enjoined.

Accordingly,

I. IT IS HEREBY ORDERED that the Commission's Application for a Preliminary Injunction against defendants MCHI, MCC, MP VI, Field, and Lampariello and Appointment of a Permanent Receiver is GRANTED.

II. IT IS FURTHER ORDERED that defendants MCHI, MCC, MP VI, Field, and Lampariello, and their officers, agents, servants, employees, attorneys, subsidiaries and affiliates, and those persons in active concert or participation with any of them, who receive actual notice of this Order, by personal service or otherwise, and each of them, be and hereby are temporarily restrained and enjoined from, directly or indirectly, in the offer or sale of any securities, by the use of any means or instruments of transportation or communication in interstate commerce or by the use of the mails:

A. employing any device, scheme or artifice to defraud;

B. obtaining money or property by means of any untrue statement of a material fact or any omission to state a material fact necessary in order to make the statements made, in light of the circumstances under which they were made, not misleading; or

C. engaging in any transaction, practice, or course of business which operates or would operate as a fraud or deceit upon the purchaser; in violation of Section 17(a) of the Securities Act, 15 U.S.C. § 77q(a).

III. IT IS FURTHER ORDERED that defendants MCHI, MCC, MP VI, Field, and Lampariello, and their officers, agents, servants, employees, attorneys, subsidiaries and affiliates, and those persons in active concert or participation with any of them, who receive actual notice of this Order, by personal service or otherwise, and each of them, be and hereby are temporarily restrained and enjoined from, directly or indirectly, in connection with the purchase or sale of any security, by the use of ...


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