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Securities and Exchange Commission v. Gina Champion-Cain and Ani Development, LLC

United States District Court, S.D. California

September 3, 2019

SECURITIES AND EXCHANGE COMMISSION, Plaintiff,
v.
GINA CHAMPION-CAIN AND ANI DEVELOPMENT, LLC Defendants, and AMERICAN NATIONAL INVESTMENTS, INC., Relief Defendant.

          ORDER; GRANTING THE PARTIES' JOINT MOTION AND STIPULATED REQUEST BY ALL PARTIES FOR A PRELIMINARY INJUNCTION ORDER AND ORDER (1) FREEZING ASSETS; (2) REQUIRING ACCOUNTINGS; (3) PROHIBITING THE DESTRUCTION OF DOCUMENTS; AND (4) APPOINTING A PERMANENT RECEIVER [DOC. NO. 2]

          MARILYN L. HUFF, DISTRICT JUDGE

         On August 28, 2019, the Securities and Exchange Commission (“Plaintiff” or “SEC”) filed a complaint against ANI Development, LLC (“ANI Development”), Gina Champion-Cain (collectively “Defendants”) and Relief Defendant American National Investments, Inc. (American National Investments) alleging violations of various federal securities laws. (Doc. No. 1.) Concurrently the parties filed a joint motion for Preliminary Injunction which is now before the Court. (Doc. No. 2.)

         The present Joint Motion and Stipulated Request by All Parties seeks a Preliminary Injunction Order and Order (1) Freezing Assets; (2) Requiring Accountings; (3) Prohibiting the Destruction of Documents; and (4) Appointing a Permanent Receiver filed by the SEC and Defendants and Relief Defendant American National Investments.

         Background

         The SEC seeks an order preliminarily enjoining Defendants from engaging in specified conduct, Defendants and Relief Defendant do not oppose the requested relief, and Defendants and Relief Defendant consent and agree to an asset freeze, accountings, and prohibition of the destruction of documents, and the SEC, Defendants, and Relief Defendants jointly request the appointment of a permanent receiver over ANI Development, American National Investments, and all of their subsidiaries and affiliates.

         The Court, having considered the SEC's Complaint and the parties' Joint Motion and Stipulated Request by All Parties for a Preliminary Injunction Order and Order (1) Freezing Assets; (2) Requiring Accountings; (3) Prohibiting the Destruction of Documents; and (4) Appointing a Permanent Receiver, finds that:

A. This Court has jurisdiction over the parties to, and the subject matter of, this action, pursuant to Sections 20(b), 20(d)(1) and 22(a) of the Securities Act of 1933 (“Securities Act”), 15 U.S.C. §§ 77t(b), 77t(d)(1) & 77v(a), and Sections 21(d)(1), 21(d)(3)(A), 21(e) and 27(a) of the Securities Exchange Act of 1934 (“Exchange Act”), 15 U.S.C. §§78u(d)(1), 78u(d)(3)(A), 78u(e) & 78aa(a).
B. Venue properly lies in this district pursuant to Section 22(a) of the Securities Act, 15 U.S.C. § 77v(a) and Section 27(a) of the Exchange Act, 15 U.S.C. § 78aa(a), because certain of the transactions, acts, practices and courses of conduct constituting alleged violations of the federal securities laws occurred within this district. In addition, venue is proper in this district because Defendant ANI Development and Relief Defendant American National Investments have their principal places of business in this district.
C. Defendants and Relief Defendant do not dispute that the SEC is able to make the requisite showing for the requested relief pursuant to Section 20(b) of the Securities Act [15 U.S.C. s 77t(b)] and Section 21(d) of the Exchange Act [15 U.S.C. § 78u(b)] in order to prevent violations of federal securities laws during the pendency of the litigation.
D. Good cause exists to believe that, unless restrained and enjoined by order of this Court, Defendants or Relief Defendants could dissipate, conceal, or transfer assets which could be the subject to an order directing disgorgement or the payment of civil money penalties in this action. It is appropriate for the Court to issue this Preliminary Injunction preventing the dissipation of assets.
E. Good cause exists to believe that an accounting of assets is necessary.
F. Good cause exists to believe that, unless restrained and enjoined by order of this Court, Defendants and Relief Defendants could alter or destroy documents relevant to this action.
G. Good cause exists to warrant the appointment of a permanent receiver over ANI Development, American National Investments, and all of their subsidiaries and affiliates.

         I.

         IT IS HEREBY ORDERED that the SEC, Defendants, and Relief Defendant's Joint Motion and Stipulated Request by All Parties for a Preliminary Injunction Order and Order (1) Freezing Assets; (2) Requiring Accountings; (3) Prohibiting the Destruction of Documents; and (4) Appointing a Permanent Receiver is GRANTED.

         II.

         IT IS FURTHER ORDERED that Defendants Champion-Cain and ANI Development, 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 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 Champion-Cain and ANI Development, 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 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.

         IV.

         IT IS FURTHER ORDERED that, except as otherwise ordered by this Court, Defendants Champion-Cain and ANI Development, and Relief Defendant American National Investments, and their officers, agents, servants, employees, attorneys, subsidiaries and affiliates, including, but not limited to the following:

132 & 140 Keller Street, LLC
2163 Abbot Street, LP
2466 1st Avenue, LLC
301 D Street, LLC
3415 Mission Blvd., LLC
3445 Ingraham Street, LLC
3768 Mission Blvd., LLC
3816 Mission Blvd., LLC
3833 Mission Blvd., LLC
4030 Randolph Street, LLC
4445 Lamont Street, ...

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