The opinion of the court was delivered by: Honorable George H. King United States District Judge
[PROPOSED] PRELIMINARY INJUNCTION AND ORDERS: (1) FREEZING ASSETS; (2) PROHIBITING THE DESTRUCTION OF DOCUMENTS; (3) REQUIRING ACCOUNTINGS; AND (4) APPOINTING A PERMANENT RECEIVER
This matter came before the Court on Plaintiff Securities and Exchange Commission's ("Commission") 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) Requiring Accountings;
(5) Allowing Expedited Discovery; and Order to Show Cause Re Preliminary Injunction and Appointment of a Permanent Receiver (the "Application").
The Court, having considered the Commission's Complaint, the Application, the supporting Memorandum of Points and Authorities, Declarations and Exhibits, 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 Christian Stanley, Inc. ("Christian Stanley") and Daniel C.S. Powell ("Powell") (collectively, "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 constitute violations of Sections 5(a), 5(c), and 17 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. Good cause exists to believe that relief defendants Christian Stanley, LLC and Daniel Christian Stanley Powell Realty Holdings, Inc. ("Realty Holdings") (collectively, "Relief Defendants") possess assets attributable to the Defendants' fraudulent conduct and that the Relief Defendants have no legitimate claim on such assets.
D. The Commission has demonstrated a probability of success on the merits and the possibility of dissipation of assets.
E. 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.
IT IS HEREBY ORDERED that the Commission's request for a preliminary injunction and orders: (1) freezing assets; (2) prohibiting the destruction of documents;
(3) requiring accountings; and (4) appointing a permanent receiver is hereby GRANTED.
IT IS FURTHER ORDERED that Defendants Christian Stanley and Powell, 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 preliminarily 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. §§ 77e(a) & 77e(c).
IT IS FURTHER ORDERED that Defendants Christian Stanley and Powell, 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 preliminarily 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 ...