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Securities and Exchange Commission v. Westmoore Management

September 29, 2010

SECURITIES AND EXCHANGE COMMISSION, PLAINTIFF,
v.
WESTMOORE MANAGEMENT, LLC; WESTMOORE INVESTMENT, L.P.; WESTMOORE CAPITAL MANAGEMENT, INC.; WESTMOORE CAPITAL, LLC, AND MATTHEW JENNINGS, DEFENDANTS.



The opinion of the court was delivered by: Hon. Andrew J. Guilford United States District Judge

PRELIMINARY INJUNCTION AND ORDERS: (1) FREEZING ASSETS, AND (2) PROHIBITING THE DESTRUCTION OF DOCUMENTS

This matter came to be heard upon the Ex Parte Application of Plaintiff Securities and Exchange Commission ("Commission") for a Temporary Restraining Order And Orders: (1) Freezing Assets, (2) Appointing A Temporary Receiver, (3) Prohibiting The Destruction Of Documents, And (4) Requiring Accountings; And Order To Show Cause Re Preliminary Injunction And Appointment Of A Permanent Receiver(the "Application"). On June 16, 2010, the Court granted the Commission's Application in part and ordered the defendants to show cause why a Preliminary Injunction should not be granted and a permanent received not be appointed in accordance with the Commission's complaint in this matter.

On June 23, 2010, upon stipulation of the parties, the Court entered an Order

(1) Extending Temporary Restraining Order, (2) Setting Briefing Schedule and Continuing Hearing on Order to Show Cause re: Preliminary Injunction and Appointment of Receiver, and (3) Continuing Deadlines for Compliance with Temporary Restraining Order.

On June 29, 2010, upon stipulation of the parties, the Court entered an Order Lifting Asset Freeze for Specified Accounts.

On July 6, 2010, upon stipulation of the parties, the Court entered an Order

(1) Extending Temporary Restraining Order, and (2) Extending Briefing Schedule and Continuing Hearing on Order to Show Cause re: Preliminary Injunction and Appointment of Receiver.

On July 22, 2010, upon stipulation of the parties, the Court entered an Order Lifting Asset Freeze for Specified Accounts.

On August 10, 2010, upon stipulation of the parties, the Court entered an Order (1) Extending Temporary Restraining Order, and (2) Extending Briefing Schedule and Continuing Hearing on Order to Show Cause re: Preliminary Injunction and Appointment of Receiver.

The Court, having considered the Commission's Complaint, its Application, the Memorandum of Points and Authorities, and the Declarations and other documents filed in support of the Application, and all other evidence and argument presented regarding the Application, finds that:

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

B. Good cause exists to believe that defendants Westmoore Management, LLC ("Westmoore Management"), Westmoore Investment, L.P. ("Westmoore Investment"), Westmoore Capital Management, Inc. ("Westmoore Capital Management"), Westmoore Capital, LLC ("Westmoore Capital"), and Matthew Jennings (collectively, the "Defendants"), and each of them, have engaged in, are engaging in, and are about to engage in transactions, acts, practices and courses of business that variously constitute violations of Sections 5(a), 5(c) and 17(a) of the Securities Act of 1933 ("Securities Act"), 15 U.S.C. §§ 77e(a), 77e(c), and 77q(a), and 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 and the possibility of dissipation of assets.

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.

E. The Commission has not, at this time, demonstrated sufficient cause to warrant the appointment of a permanent receiver.

I. IT IS HEREBY ORDERED that the Commission's Application for a Preliminary Injunction Order and Orders: (1) Freezing Assets, (2) Prohibiting The Destruction Of Documents, And (3) Requiring Accountings; is GRANTED.

II. IT IS FURTHER ORDERED that the Defendants, 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, making use of any means or instruments of transportation or communication in interstate commerce or of the mails, to sell, to offer to sell, or to offer to buy any security, or carrying or causing securities to be carried through the mails or in interstate commerce, by any means or instruments of transportation, for the purpose of sale or delivery after sale, in violation of Sections 5(a) and 5(c) of the Securities Act, 15 U.S.C. §§ 77(e)(a) and 77(e)(c).

III. IT IS FURTHER ORDERED that the Defendants, 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).

IV. IT IS FURTHER ORDERED that the Defendants, 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 any means or instrumentality of interstate commerce, or of the mails, or of any facility of any national securities exchange:

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

B. making any untrue statement of a material fact or omitting to state a material fact necessary in order to make the statements made, in the light of the circumstances under which they were made, not misleading; or

C. engaging in any act, practice, or course of business which operates or would operate as a fraud or deceit upon any person; in violation of Section 10(b) of the Exchange Act, 15 U.S.C. § 78j(b), and Rule 10b-5 thereunder, 17 C.F.R. § 240.10b-5.

V. IT IS FURTHER ORDERED that, except as otherwise ordered by this Court, Defendants 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 transferring, assigning, selling, hypothecating, changing, wasting, dissipating, converting, concealing, encumbering, or otherwise disposing of, in any manner, any funds, assets, securities, claims, or other real or personal property, including any notes or deeds of trust or other interests in real property, wherever located, of defendants Westmoore Management, Westmoore Investment, Westmoore Capital Management, Westmoore Capital and Jennings, or their subsidiaries or affiliates, whether owned by, controlled by, managed by or in the possession or custody of any of them and from transferring, encumbering, dissipating, incurring charges, or cash advances on any credit card or the credit arrangements of defendants Westmoore Management, Westmoore Investment, Westmoore Capital Management, Westmoore Capital and Jennings.

VI. IT IS FURTHER ORDERED that, except as otherwise ordered by this Court, an immediate freeze shall be placed on all monies and assets (with an allowance for necessary and reasonable living expenses to be granted only upon good cause shown by application to the Court with notice to and an opportunity for the Commission to be heard) in all accounts at any bank, financial institution or brokerage firm (including any futures commission merchant), or internet or "e-currency" payment processor, all certificates of deposit, and other funds or assets, held in the name of, for the benefit of, or over which account authority is held by defendants Westmoore Management, Westmoore Investment, Westmoore Capital Management, Westmoore Capital and/or Jennings, any subsidiaries of any of them, or any entity affiliated with any of them, including, but not limited to, the accounts set forth below:

INSTITUTION ACCOUNT HOLDER ACCOUNT NO. (LAST 4 DIGITS)

Bank of America Capital Asset Lending, Inc. 0458

Bank of America Harry's Pacific Grill (operating ...


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