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Securities and Exchange Commission v. Aletheia Research and Management, Inc.

United States District Court, C.D. California

May 11, 2015

SECURITIES AND EXCHANGE COMMISSION, Plaintiff,
v.
ALETHEIA RESEARCH AND MANAGEMENT, INC., and PETER J. EICHLER, JR., Defendants.

JOHN B. BULGOZDY, GARY Y. LEUNG, JANET E. MOSER, Attorneys for Plaintiff, Securities and Exchange Commission Michele Wein Layne, Regional Director Lorraine B. Echavarria, Associate Regional Director John W. Berry, Regional Trial Counsel. Los Angeles, California.

JUDGMENT AS TO DEFENDANT PETER J. EICHLER, JR.

JOHN F. WALTER, District Judge.

The Securities and Exchange Commission (the "SEC") having filed a Complaint and Defendant Peter J. Eichler, Jr. ("Eichler") having entered a general appearance and having consented to the Court's jurisdiction over Defendant and the subject matter of this action:

I.

IT IS HEREBY ORDERED, ADJUDGED, AND DECREED that Eichler and Eichler's agents, servants, employees, attorneys, and all persons in active concert or participation with them who receive actual notice of this Final Judgment by personal service or otherwise are permanently restrained and enjoined from violating, directly or indirectly, Section 10(b) of the Securities Exchange Act of 1934 (the "Exchange Act") [15 U.S.C. § 78j(b)] and Rule 10b-5 promulgated thereunder [17 C.F.R. § 240.10b-5], by using any means or instrumentality of interstate commerce, or of the mails, or of any facility of any national securities exchange, in connection with the purchase or sale of any security:

(a) to employ any device, scheme, or artifice to defraud;
(b) to make any untrue statement of a material fact or to omit 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) to engage in any act, practice, or course of business which operates or would operate as a fraud or deceit upon any person.

II.

IT IS HEREBY ORDERED, ADJUDGED, AND DECREED that Eichler and Eichler's agents, servants, employees, attorneys, and all persons in active concert or participation with them who receive actual notice of this Final Judgment by personal service or otherwise are permanently restrained and enjoined from violating, directly or indirectly, Sections 206(1), 206(2) and 206(4) of the Investment Advisers Act of 1940 ("Advisers Act") [15 U.S.C. § 80b-6(1), (2) and (4)] and Rule 206(4)-8(a) promulgated thereunder [17 C.F.R. § 275.206(4)-8(a)], by using any means or instrumentality of interstate commerce, or of the mails, or of any facility of any national securities exchange:

(a) to employ any device, scheme, or artifice to defraud any client or prospective client;
(b) to engage in any transaction, practice, or course of business which operates as a fraud or deceit upon any client or prospective client; or
(c) to engage in any act, practice, or course of business which is fraudulent, deceptive, or manipulative.

III.

IT IS HEREBY FURTHER ORDERED, ADJUDGED, AND DECREED that Defendant Eichler is liable for disgorgement of $1, 655, 923, representing profits gained as a result of the conduct alleged in the Complaint, together with prejudgment interest thereon in the amount of $41, 749.35, for a total of $1, 697, 672.35.

Defendant Eichler filed for bankruptcy protection under Chapter 7 of the Bankruptcy Code on or about December 19, 2013 ( see In re Peter J. Eichler, Jr., Case. No. 2:13-bk-39626-RK (Bankr. C.D. Cal.)). Subject to applicable bankruptcy law, Defendant Eichler shall satisfy this obligation by paying $1, 697, 672.35 to the Securities and Exchange Commission within 14 days after entry of this Final Judgment, or at such point as permitted under applicable bankruptcy law.

Defendant Eichler may transmit payment electronically to the SEC, which will provide detailed ACH transfer/Fedwire instructions upon request. Payment may also be made directly from a bank account via Pay.gov through the SEC website at http://www.sec.gov/about/offices/ofm.htm. Defendant Eichler may also pay by certified check, bank cashier's check, or United States postal money order payable to the Securities and Exchange Commission, which shall be delivered or mailed to

and shall be accompanied by a letter identifying the case title, civil action number, and name of this Court; Peter J. Eichler, Jr. as a defendant in this action; and specifying that payment is made pursuant to this Final Judgment.

Defendant Eichler shall simultaneously transmit photocopies of evidence of payment and case identifying information to the SEC's counsel in this action. By making this payment, Defendant Eichler relinquishes all legal and equitable right, title, and interest in such funds and no part of the funds shall be returned to Defendant Eichler.

The SEC shall hold the funds (collectively, the "Fund") and may propose a plan to distribute the Fund subject to the Court's approval. The Court shall retain jurisdiction over the administration of any distribution of the Fund. If the SEC staff determines that the Fund will not be distributed, the SEC shall send the funds paid pursuant to this Final Judgment to the United States Treasury.

Subject to applicable bankruptcy law, the SEC may enforce the Court's judgment for disgorgement and prejudgment interest by moving for civil contempt (and/or through other collection procedures authorized by law) at any time after 14 days following entry of this Final Judgment, or at such point as permitted under applicable bankruptcy law. Defendant Eichler shall pay post judgment interest on any delinquent amounts pursuant to 28 U.S.C. § 1961.

IV.

IT IS FURTHER ORDERED, ADJUDGED, AND DECREED that Defendant Eichler shall pay a civil penalty in the amount of $1, 655, 923 to the Securities and Exchange Commission pursuant to Section 21(d)(3)(A) of the Exchange Act, 15 U.S.C. § 78u(d)(3)(A) and Section 209(e) of the Advisers Act, 15 U.S.C. § 80b-9(e)(2)(C).

Defendant Eichler filed for bankruptcy protection under Chapter 7 of the Bankruptcy Code on or about December 19, 2013 ( see In re Peter J. Eichler, Jr., Case. No. 2:13-bk-39626-RK (Bankr. C.D. Cal.)). Subject to applicable bankruptcy law, Defendant Eichler shall make this payment within 14 days after entry of this Final Judgment, or at such point as permitted under applicable bankruptcy law.

Defendant Eichler may transmit payment electronically to the SEC, which will provide detailed ACH transfer/Fedwire instructions upon request. Payment may also be made directly from a bank account via Pay.gov through the SEC website at http://www.sec.gov/about/offices/ofm.htm. Defendant Eichler may also pay by certified check, bank cashier's check, or United States postal money order payable to the Securities and Exchange Commission, which shall be delivered or mailed to

and shall be accompanied by a letter identifying the case title, civil action number, and name of this Court; Peter J. Eichler, Jr. as a defendant in this action; and specifying that payment is made pursuant to this Final Judgment.

Defendant Eichler shall simultaneously transmit photocopies of evidence of payment and case identifying information to the SEC's counsel in this action. By making this payment, Defendant Eichler relinquishes all legal and equitable right, title, and interest in such funds and no part of the funds shall be returned to Defendant Eichler. The SEC shall send the funds paid pursuant to this Final Judgment to the United States Treasury.

V.

IT IS FURTHER ORDERED, ADJUDGED, AND DECREED that Defendant Eichler's Consent (Dkt. No. 31) is incorporated herein with the same force and effect as if fully set forth herein, and that Defendant Eichler shall comply with all of the undertakings and agreements set forth therein.

VI.

IT IS FURTHER ORDERED, ADJUDGED, AND DECREED that this Court shall retain jurisdiction over this matter for the purpose of enforcing the terms of this Final Judgment.


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