The opinion of the court was delivered by: William M. Skretny United States District Judge
CONSENT ORDER GRANTING PRELIMINARY INJUNCTION AND OTHER INTERIM RELIEF
WHEREAS,on May 15, 2008, Plaintiff Securities and Exchange Commission (the "Commission") commenced this action against defendants Watermark Financial Services Group, Inc. ("Watermark Financial"), Watermark M-One Holdings, Inc. ("Watermark Holdings"), MOne Financial Services, LLC ("M-One"), Watermark Capital Group, LLC ("Watermark Capital"), Guy W. Gane, Jr. ("Gane") and Lorenzo Altadonna ("Altadonna") (collectively, "Defendants") and relief defendants Guy W. Gane, III, Jenna Gane, and Denkon, Inc. (collectively, the "Relief Defendants") by filing a complaint;
WHEREAS,on May 15, 2008, the Commission filed a Motion for an Ex Parte Temporary Restraining Order, Preliminary Injunction, Expedited Hearing and Other Relief, seeking, among other things, an order:
(a) preliminarily enjoining: (I) defendants Watermark Financial, Watermark Holdings, M-One, Gane and Altadonna from violating Sections 5(a) and 5(c) of the Securities Act of 1933 ("Securities Act") [15 U.S.C. §§ 77e(a) and 77e(c)]; (ii) defendants Watermark Financial, Watermark Holdings, M-One, Watermark Capital, Gane, and Altadonna from violating Section 17(a) of the Securities Act [15 U.S.C. § 77q(a)], Section 10(b) of the Securities Exchange Act of 1934 ("Exchange Act") [15 U.S.C. § 78j(b)], and Exchange Act Rule 10b-5 [17 C.F.R. § 240.10b-5]; and (iii) defendant Gane from violating Section 15(a) of the Exchange Act [15 U.S.C. § 78o(a)];
(b) freezing the assets of Defendants and Relief Defendants;
(c) directing the Defendants and Relief Defendants to provide verified accountings; and
(d) prohibiting Defendants and Relief Defendants from destroying, altering, or concealing documents;
WHEREAS, on May 16, 2008, the Court entered a Decision and Order that, among other things, found that "the Commission has made a proper showing" and that "[i]t appears from the evidence presented that Defendants . . . have violated, and, unless temporarily restrained, will continue to violate" the relevant provision of the federal securities law; accordingly, the Court substantially granted the Commission's motion for a temporary restraining order;
WHEREAS,the Defendants and Relief Defendants have been duly and properly served with the Summons and the Complaint filed by the Commission, dated May 14, 2008; the Declaration of Israel Maya, executed on May 14, 2008, and the exhibits thereto; the Declaration of Linda Arnold, executed May 15, 2008, and the exhibits thereto; the Notice of Motion for an Ex Parte Temporary Restraining Order, Preliminary Injunction, Expedited Hearing and Other Relief, dated May 14, 2008; and the Memorandum of Law in Support of Plaintiff's Motion for an Ex Parte Temporary Restraining Order, Preliminary Injunction, Expedited Hearing and Other Relief, dated May 14, 2008;
WHEREAS,this Court has jurisdiction over the subject matter of this action and over the Defendants and Relief Defendants, and venue properly lies in this District; and
WHEREAS,the Court conducted status conferences on May 22, 2008, June 2, 2008, and a hearing on June 16, 2008; and
WHEREAS,at the hearing on June16, 2008, the Court considered the evidence and testimony submitted by Relief Defendant Denkon, Inc. and found that Denkon, Inc. received funds from Defendants that it did not have a legitimate claim to, the Court determined that Denkon, Inc. should be included in the Consent Order Granting Preliminary Injunction and Other Interim Relief (the "Consent Order") and that the Consent Order should be entered.
IT IS ORDERED that the Commission's Motion for a Preliminary ...