Securities and Exchange Commission v. McFarland et al
| U.S. Securities and Exchange Commission and Securities and Exchange Commission |
| Grant Margolin, William McFarland, Daniel Simon, Fyre Media, Inc., Magnises, Inc. and William Z. ("Billy") McFarland |
| 1:2018cv06634 |
| July 24, 2018 |
| US District Court for the Southern District of New York |
| Foley Square Office |
| NewYork |
| John G Koeltl |
| Securities/Commodities |
| 15 U.S.C. § 78 m(a) Securities Exchange Act |
| Plaintiff |
Docket Report
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| Filing 9 STATUS REPORT. SATISFACTION OF MONETARY PROVISIONS ONLY AS TO FINAL JUDGMENT AS TO DEFENDANT GRANT MARGOLIN Document filed by Securities and Exchange Commission.(Concannon, Sarah) |
Filing 8
FINAL JUDGMENT AS TO DEFENDANT GRANT H. MARGOLIN. IT IS HEREBY FURTHER ORDERED, ADJUDGED, AND DECREED that Defendant is permanently restrained and enjoined from violating Section 17(a)(3) of the Securities Act of 1933 (the "Securities Act") [15 U.S.C. 77q(a)) in the offer or sale of any security by the use of any means or instruments of transportation or communication in interstate commerce or by use of the mails, directly or indirectly, to engage in any transaction, practice, or course of business which operates or would operate as a fraud or deceit upon the purchaser. IT IS FURTHER ORDERED, ADJUDGED, AND DECREED that, as provided in Federal Rule of Civil Procedure 65(d)(2), the foregoing paragraph also binds the following who receive actual notice of this Final Judgment by personal service or otherwise: (a) Defendant's officers, agents, servants, employees, and attorneys; and (b) other persons in active concert or participation with Defendant or with anyone described in (a). IT IS FURTHER ORDERED, ADJUDGED, AND DECREED that, pursuant to Section 21(d)(5) of the Exchange Act [15 U.S.C. 78u(d)(5)], Defendant is prohibited, for seven years following the date of entry of this Final Judgment, from acting as an officer or director of any issuer that has a class of securities registered pursuant to Section 12 of the Exchange Act [15 U.S.C. 781] or that is required to file reports pursuant to Section 15(d) of the Exchange Act [15 U.S.C. 78o(d)]. IT IS FURTHER ORDERED, ADJUDGED, AND DECREED that Defendant is liable for a civil penalty in the amount of $35,000 pursuant to Section 20(d)(1) of the Securities Act [15 U.S.C. 77t(d)(1)). Defendant shall satisfy this obligation pursuant to the terms of the payment schedule set forth in paragraph IV below after entry of this Final Judgment. Defendant may transmit payment electronically to the Commission, 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 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 Enterprise Services Center, Accounts Receivable Branch, 6500 South MacArthur Boulevard, Oklahoma City, OK 73169 and shall be accompanied by a letter identifying the case title, civil action number, and name of this Court; Grant H. Margolin as a defendant in this action; and specifying that payment is made pursuant to this Final Judgment. Defendant shall simultaneously transmit photocopies of evidence of payment and case identifying information to the Commission's counsel in this action. By making this payment, Defendant relinquishes all legal and equitable right, title, and interest in such funds and no part of the funds shall be returned to Defendant. Defendant shall pay post judgment interest on any delinquent amounts pursuant to 28 U.S.C. 1961. The Commission shall hold the funds, together with any interest and income earned thereon (collectively, the "Fund"), pending further order of the Court. Defendant shall pay the total penalty due of $35,000 in two installments to the Commission according to the following schedule: (1) $15,000, within 14 days of entry of this Final Judgment; and (2) $20,000, within one year of entry of this Final Judgment. Payments shall be deemed made on the date they are received by the Commission and shall be applied first to post judgment interest, which accrues pursuant to 28 U.S.C. 1961 on any unpaid amounts due after 14 days of the entry of Final Judgment. Prior to making the final payment set forth herein, Defendant shall contact the staff of the Commission for the amount due for the final payment. If Defendant fails to make any payment by the date agreed and/or in the amount agreed according to the schedule set fo1th above, all outstanding payments under this Final Judgment, including post-judgment interest, minus any payments made, shall become due and payable immediately at the discretion of the staff of the Commission without further application to the Court. IT IS FURTHER ORDERED, ADJUDGED, AND DECREED that the Consent is incorporated herein with the same force and effect as if fully set forth herein, and that Defendant shall comply with all of the undertakings and agreements set forth therein. IT IS FURTHER ORDERED, ADJUDGED, AND DECREED that, solely for purposes of exceptions to discharge set fo1th in Section 523 of the Bankruptcy Code, 11 U.S.C. 523, the allegations in the complaint are true and admitted by Defendant, and further, any debt for disgorgement, prejudgment interest, civil penalty or other amounts due by Defendant under this Final Judgment or any other judgment, order, consent order, decree or settlement agreement entered in connection with this proceeding, is a debt for the violation by Defendant of the federal securities laws or any regulation or order issued under such laws, as set forth in Section 523(a)(19) of the Bankruptcy Code, 11 U.S.C. 523(a)(19). IT IS FURTHER ORDERED, ADJUDGED, AND DECREED that this Court shall retain jurisdiction of this matter for the purposes of enforcing the terms of this Final Judgment. There being no just reason for delay, pursuant to Rule 54(b) of the Federal Rules of Civil Procedure, the Clerk is ordered to enter this Final Judgment forthwith and without further notice., (Grant Margolin terminated.) (Signed by Judge John G. Koeltl on 7/31/18) (yv)
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Filing 7
FINAL JUDGMENT AS TO DEFENDANT DANIEL SIMON. IT IS HEREBY FURTHER ORDERED, ADJUDGED, AND DECREED that Defendant is permanently restrained and enjoined from violating Section 17(a)(3) of the Securities Act of 1933 (the "Securities Act") [15 U.S.C. 77q(a)] in the offer or sale of any security by the use of any means or instruments of transportation or communication in interstate commerce or by use of the mails, directly or indirectly, to engage in any transaction, practice, or course of business which operates or would operate as a fraud or deceit upon the purchaser. IT IS FURTHER ORDERED, ADJUDGED, AND DECREED that, as provided in Federal Rule of Civil Procedure 65(d)(2), the foregoing paragraph also binds the following who receive actual notice of this Final Judgment by personal service or otherwise: (a) Defendant's officers, agents, servants, employees, and attorneys; and (b) other persons in active concert or participation with Defendant or with anyone described in (a). IT IS FURTHER ORDERED, ADJUDGED, AND DECREED that, pursuant to Section 21 (d)(5) of the Exchange Act [15 U.S.C. 78u(d)(5)], Defendant is prohibited, for three years following the date of entry of this Final Judgment, from acting as an officer or director of any issuer that has a class of securities registered pursuant to Section 12 of the Exchange Act [15 U.S.C. 781] or that is required to file reports pursuant to Section 15(d) of the Exchange Act [15 U.S.C. 78o(d)]. IT IS FURTHER ORDERED, ADJUDGED, AND DECREED that Defendant is liable for disgorgement of $7,500, representing profits gained as a result of the conduct alleged in the Complaint, together with prejudgment interest thereon in the amount of $379.04, and a civil penalty in the amount of $7,500 pursuant to Section 20(d)(1) of the Securities Act [15 U.S.C. 77t(d)(1)]. Defendant shall satisfy this obligation pursuant to the terms of the payment schedule set forth in paragraph IV of this Final Judgment. Defendant may transmit payment electronically to the Commission, 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 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 Enterprise Services Center, Accounts Receivable Branch, 6500 South MacArthur Boulevard, Oklahoma City, OK 73169 and shall be accompanied by a letter identifying the case title, civil action number, and name of this Court; Daniel Simon as a defendant in this action; and specifying that payment is made pursuant to this Final Judgment. Defendant shall simultaneously transmit photocopies of evidence of payment and case identifying information to the Commission's counsel in this action. By making this payment, Defendant relinquishes all legal and equitable right, title, and interest in such funds and no part of the funds shall be returned to Defendant. Defendant shall pay the total disgorgement, prejudgment interest, and penalty due of $15,379.04 in two installments to the Commission according to the following schedule: (i) $5,000 within 14 days of entry of this Final Judgment; and (ii) $10,379.04, within one year of entry of this Final Judgment. Payments shall be deemed made on the date they are received by the Commission and shall be applied first to post judgment interest, which accrues pursuant to 28 U.S.C. 1961 on any unpaid amounts due after 14 days of the entry of Final Judgment. Prior to making the final payment set forth herein, Defendant shall contact the staff of the Commission for the amount due for the final payment. If Defendant fails to make any payment by the date agreed and/or in the amount agreed according to the schedule set forth above, all outstanding payments under this Final Judgment, including post-judgment interest, minus any payments made, shall become due and payable immediately at the discretion of the staff of the Commission without further application to the Court. IT IS FURTHER ORDERED, ADJUDGED, AND DECREED that, solely for purposes of exceptions to discharge set forth in Section 523 of the Bankruptcy Code, 11 U.S.C. 523, the allegations in the complaint are true and admitted by Defendant, and further, any debt for disgorgement, prejudgment interest, civil penalty or other amounts due by Defendant under this Final Judgment or any other judgment, order, consent order, decree or settlement agreement entered in connection with this proceeding, is a debt for the violation by Defendant of the federal securities laws or any regulation or order issued under such laws, as set forth in Section 523(a)(19) of the Bankruptcy Code, 11 U.S.C. 523(a)(19). IT IS FURTHER ORDERED, ADJUDGED, AND DECREED that this Court shall retain jurisdiction of this matter for the purposes of enforcing the terms of this Final Judgment. There being no just reason for delay, pursuant to Rule 54(b) of the Federal Rules of Civil Procedure, the Clerk is ordered to enter this Final Judgment forthwith and without further notice., (Daniel Simon terminated.) (Signed by Judge John G. Koeltl on 7/31/18) (yv)
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Filing 6
FINAL JUDGMENT AS TO DEFENDANTS WILLIAM Z. ("BILLY") MCFARLAND, FYRE MEDIA, INC., AND MAGNISES, INC. IT IS HEREBY ORDERED, ADJUDGED, AND DECREED that Defendants are permanently restrained and enjoined from, directly or indirectly, violating Section 17(a) of the Securities Act of 1933 (the "Securities Act") [15 U.S.C. 77q(a)] in the offer or sale of any security by the use of any means or instruments of transportation or communication in interstate commerce or by use of the mails, directly or indirectly as further set forth in this Judgment. IT IS HEREBY FURTHER ORDERED, ADJUDGED, AND DECREED that Defendants 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 as further set forth in this Judgment. IT IS HEREBY FURTHER ORDERED, ADJUDGED, AND DECREED that Defendants McFarland and Fyre Media are permanently restrained and enjoined from violating, directly or indirectly Sections 5(a) and 5(c) of the Securities Act [15 U.S.C. 77e] by, unless a registration statement is in effect as to a security as further set forth in this Judgment. IT IS HEREBY FURTHER ORDERED, ADJUDGED, AND DECREED that Defendant McFarland is permanently restrained and enjoined from violating, directly or indirectly Section 15(a) of the Exchange Act [15 U.S.C. 78o(a)] by making use of the mails or any means or instrumentality of interstate commerce to effect any transactions in, or to induce or attempt to induce the purchase or sale of, any security (other than an exempted security or commercial paper, bankers' acceptances, or commercial bills) unless such registered in accordance with subsection (b) of Section 15. IT IS FURTHER ORDERED, ADJUDGED, AND DECREED that, pursuant to Section 21(d)(2) of the Exchange Act [15 U.S.C. 78u(d)(2)] and Section 20(e) of the Securities Act [15 U.S.C. 77t(e)], Defendant McFarland is prohibited from acting as an officer or director of any issuer that has a class of securities registered pursuant to Section 12 of the Exchange Act [15 U.S.C. 781] or that is required to file reports pursuant to Section 15(d) of the Exchange Act [15 U.S.C. 78o(d)]. IT IS FURTHER ORDERED, ADJUDGED, AND DECREED that Defendant McFarland is permanently restrained and enjoined from, directly or indirectly, including, but not limited to, through any entity he owns or controls, participating in the issuance, purchase, offer, or sale, of any security, provided, however, that this Final Judgment shall not prevent him from purchasing or selling securities for his own personal account. IT IS FURTHER ORDERED, ADJUDGED, AND DECREED that: (a) Defendants McFarland and Fyre Media are jointly and severally liable for disgorgement of $7,900,000, representing their profits gained as a result of the conduct alleged in the Complaint, together with prejudgment interest thereon in the amount of $362,481.72; (b) Defendant McFarland is liable for disgorgement of $16,500,000, representing his profits gained as a result of the conduct alleged in the Complaint regarding Fyre Festival, together with prejudgment interest thereon in the amount of $757,082.09; and (c) Defendants McFarland and Magnises are jointly and severally liable for disgorgement of $3,000,000, representing their profits gained as a result of the conduct alleged in the Complaint, together with prejudgment interest thereon in the amount of $137,651.28. Defendants' payment of these amounts shall be deemed satisfied by the entry of an order of restitution and/or forfeiture against Defendant McFarland in a related criminal case in the Southern District of New York, United States v. William McFarland, 1:17-cr-00600 (S.D.N.Y.) (NRB). No civil penalty is imposed against Defendants in this Final Judgment in consideration of the incarceration to which Defendant McFarland is subject in United Slates v. William McFarland, 1:17-cr-00600 (S.D.N.Y.) (NRB). IT IS FURTHER ORDERED, ADJUDGED, AND DECREED that, for purposes of exceptions to discharge set forth in Section 523 of the Bankruptcy Code [11 U.S.C. 523], the allegations in the complaint are true and admitted by Defendant McFarland, and further, any debt for disgorgement, prejudgment interest, civil penalty or other amounts due by Defendant McFarland under this Final Judgment or any other judgment, order, consent order, decree or settlement agreement entered in connection with this proceeding, is a debt for the violation by Defendant McFarland of the federal securities laws or any regulation or order issued under such laws, as set forth in Section 523(a)(19) of the Bankruptcy Code [11 U.S.C. 523(a)(19)]. IT IS FURTHER ORDERED, ADJUDGED, AND DECREED that this Court shall retain jurisdiction of this matter for the purposes of enforcing the terms of this Final Judgment. There being no just reason for delay, pursuant to Rule 54(b) of the Federal Rules of Civil Procedure, the Clerk is ordered to enter this Final Judgment forthwith and without further notice., (Fyre Media, Inc. and Magnises, Inc. terminated.) (Signed by Judge John G. Koeltl on 7/31/18) (yv)
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| Filing 5 CIVIL COVER SHEET filed. (Concannon, Sarah) |
| Filing 4 CIVIL COVER SHEET filed. (Concannon, Sarah) |
| Filing 3 COMPLAINT against Fyre Media, Inc., Magnises, Inc., Grant Margolin, Daniel Simon, William Z. ("Billy") McFarland. Document filed by Securities and Exchange Commission.(Concannon, Sarah) |
| ***NOTICE TO ATTORNEY REGARDING DEFICIENT PLEADING. Notice to Attorney Sarah Heaton Concannon to RE-FILE Document No. #1 Complaint,. The filing is deficient for the following reasons: party names have been modified due to typographical errors; the name of the filer contains a typographical error on the docket entry text; the name of one of the parties whom the pleading is against contains a typographical error on the docket entry text. Re-file the pleading using the event type Complaint found under the event list Complaints and Other Initiating Documents - attach the correct signed PDF - select the individually named filer/filers - select the individually named party/parties the pleading is against. (pne) |
| ***NOTICE TO ATTORNEY REGARDING DEFICIENT CIVIL COVER SHEET. Notice to attorney Sarah Heaton Concannon to RE-FILE Document No. #2 Civil Cover Sheet. The filing is deficient for the following reason: plaintiff name contains a typographical error. Re-file the document using the event type Civil Cover Sheet found under the event list Other Documents and attach the correct PDF. Use civil cover sheet issued by S.D.N.Y. dated June 2017. The S.D.N.Y. Civil Cover Sheet dated June 2017 is located at#http://nysd.uscourts.gov/file/forms/civil-cover-sheet.. (pne) |
| CASE OPENING INITIAL ASSIGNMENT NOTICE: The above-entitled action is assigned to Judge John G. Koeltl. Please download and review the Individual Practices of the assigned District Judge, located at #http://nysd.uscourts.gov/judges/District. Attorneys are responsible for providing courtesy copies to judges where their Individual Practices require such. Please download and review the ECF Rules and Instructions, located at #http://nysd.uscourts.gov/ecf_filing.php. (pne) |
| Magistrate Judge Henry B. Pitman is so designated. Pursuant to 28 U.S.C. Section 636(c) and Fed. R. Civ. P. 73(b)(1) parties are notified that they may consent to proceed before a United States Magistrate Judge. Parties who wish to consent may access the necessary form at the following link: #http://nysd.uscourts.gov/forms.php. (pne) |
| Case Designated ECF. (pne) |
| ***NOTICE TO ATTORNEY REGARDING PARTY MODIFICATION. Notice to attorney Sarah Heaton Concannon. The party information for the following party/parties has been modified: Securities and Exchange Commission, William Z. ("Billy") McFarland. The information for the party/parties has been modified for the following reason/reasons: party name contained a typographical error. (pne) |
| ***NOTICE TO ATTORNEY REGARDING CIVIL CASE OPENING STATISTICAL ERROR CORRECTION: Notice to attorney Sarah Heaton Concannon. The following case opening statistical information was erroneously selected/entered: County code Albany; Fee Status code pd (paid). The following corrections have been made to your case entry: the County code has been modified to New York; the Fee Status code has been modified to none (no fee required). (pne) |
| Filing 2 FILING ERROR - PDF ERROR - CIVIL COVER SHEET filed. (Concannon, Sarah) Modified on 7/25/2018 (pne). |
| Filing 1 FILING ERROR - DEFICIENT PLEADING - FILER ERROR - FILED AGAINST PARTY ERROR -COMPLAINT against Fyre Media, Inc., Magnises, Inc., Grant Margolin, William McFarland, Daniel Simon. Document filed by U.S. Securities and Exchange Commission.(Concannon, Sarah) Modified on 7/25/2018 (pne). |
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