Alpha Capital Consent Judgment Re Dkt. 92 (19cv8175) Gov - Uscourts.nysd.500558.92.0

Case 1:18-cv-08175-ER Document 92 Filed 02/06/19 Page 1 of 14
UNITED STATES DISTRICT COURT

SOUTHERN DISTRICT OF NEW YORK
----------------------------------------------------------------------- x
SECURITIES AND EXCHANGE COMMISSION, :
:
Plaintiff, :
: 18 Civ. 8175 (ER)
-- against -- :
: ECF CASE
BARRY C. HONIG, JOHN STETSON, :
MICHAEL BRAUSER, JOHN R. O’ROURKE III, :
MARK GROUSSMAN, PHILLIP FROST, :
ROBERT LADD, ELLIOT MAZA, BRIAN KELLER, :
JOHN H. FORD, ALPHA CAPITAL ANSTALT, ATG :
CAPITAL LLC, FROST GAMMA INVESTMENTS :
TRUST, GRQ CONSULTANTS, INC., :
HS CONTRARIAN INVESTMENTS, LLC, :
GRANDER HOLDINGS, INC., MELECHDAVID, :
INC., OPKO HEALTH, INC., :
SOUTHERN BIOTECH, INC., and :
STETSON CAPITAL INVESTMENTS INC., :
:
Defendants. :
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FINAL JUDGMENT AS TO ALPHA CAPITAL ANSTALT
The Securities and Exchange Commission having filed a Complaint and Defendant Alpha
Capital Anstalt having entered a general appearance; consented to the Court’s jurisdiction over
Defendant and the subject matter of this action; consented to entry of this Final Judgment
without admitting or denying the allegations of the Complaint (except as to jurisdiction); waived
findings of fact and conclusions of law; and waived any right to appeal from this Final Judgment:
I.
IT IS HEREBY ORDERED, ADJUDGED, AND DECREED that Defendant is
permanently restrained and enjoined from violating Sections 5(a) and (c) of the Securities Act of
1933 (“Securities Act”) [15 U.S.C. §§ 77e(a) and (c)] by, directly or indirectly, in the absence of
any applicable exemption:
(a) Unless a registration statement is in effect as to a security, making use of any
means or instruments of transportation or communication in interstate commerce
or of the mails to sell such security through the use or medium of any prospectus
or otherwise;
(b) Unless a registration statement is in effect as to a security, carrying or causing to
be carried through the mails or in interstate commerce, by any means or
instruments of transportation, any such security for the purpose of sale or for
delivery after sale; or
(c) Making use of any means or instruments of transportation or communication in
interstate commerce or of the mails to offer to sell or offer to buy through the use
or medium of any prospectus or otherwise any security, unless a registration
statement has been filed with the Commission as to such security, or while the
registration statement is the subject of a refusal order or stop order or (prior to the
effective date of the registration statement) any public proceeding or examination
under Section 8 of the Securities Act [15 U.S.C. § 77h].
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).
II.
IT IS FURTHER ORDERED, ADJUDGED, AND DECREED that Defendant is liable
2
for disgorgement of $708,470.07, representing profits gained as a result of the conduct alleged in
the Complaint, together with prejudgment interest thereon in the amount of $149,788.44, and a
civil penalty in the amount of $50,000 pursuant to Section 20(d)(2) of the Securities Act [15
U.S.C. § 77t(d)(2)]. Defendant shall satisfy this obligation by paying $908,258.51 to the
Securities and Exchange Commission within 14 days 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; Alpha Capital Anstalt 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. The Commission shall send the funds paid pursuant
to this Final Judgment to the United States Treasury. Defendant shall pay post-judgment interest
on any delinquent amounts pursuant to 28 USC § 1961.
3
III.
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, including, but not
limited to, the undertakings to:
a. Within forty-five (45) days of the date of the Final Judgment, retain an
Independent Compliance Consultant (“ICC”), (not counsel for the Defendant in
connection with the transactions alleged in the Complaint involving the
Defendant, who would not be independent), not unacceptable to the Commission
staff to do the following:
(i) Review, within sixty (60) days of retention, Defendant’s policies

and procedures respecting its investments in any penny stock (which is
any equity security that has a price of less than five dollars, except as
provided in Rule 3a51-1 under the Securities Exchange Act of 1934 [17
C.F.R. § 240.3a51-1]) to determine whether they are sufficient to ensure
Defendant’s compliance with the federal securities laws in the purchase
and sale of such securities;
(ii) Report, within fifteen (15) days of completion of the ICC’s work,
findings on the issues set forth above in Paragraph III(a)(i) (including
recommendations as to enhanced policies and/or procedures) to the
Commission staff.
b. Implement, within thirty (30) days of receipt of the ICC’s report, the ICC’s
recommendations.
c. Certify, in writing, compliance with the undertaking(s) set forth above. The
certification shall identify the undertaking(s), provide written evidence of
compliance in the form of a narrative, and be supported by exhibits sufficient to
demonstrate compliance. The Commission staff may make reasonable requests
for further evidence of compliance, and Defendant agrees to provide such
evidence. Defendant shall submit the certification and supporting material to
Michael Paley, Esq., with a copy to the Office of Chief Counsel of the
Enforcement Division, no later than sixty (60) days from the date of the
completion of the undertakings.
4
IV.
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.
V.
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.
Dated: ______________, _____
____________________________________
UNITED STATES DISTRICT JUDGE
2/6/2019
5

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Case 1:18-cv-08175-ER Document 92 Filed 02/06/19 Page 1 of 14

UNITED STATES DISTRICT COURT

FINAL JUDGMENT AS TO ALPHA CAPITAL ANSTALT

IT IS HEREBY ORDERED, ADJUDGED, AND DECREED that Defendant is

any applicable exemption:

(a) Unless a registration statement is in effect as to a security, making use of any

means or instruments of transportation or communication in interstate commerce

(b) Unless a registration statement is in effect as to a security, carrying or causing to

be carried through the mails or in interstate commerce, by any means or

delivery after sale; or

(c) Making use of any means or instruments of transportation or communication in

or medium of any prospectus or otherwise any security, unless a registration

effective date of the registration statement) any public proceeding or examination

under Section 8 of the Securities Act [15 U.S.C. § 77h].

IT IS FURTHER ORDERED, ADJUDGED, AND DECREED that, as provided in

participation with Defendant or with anyone described in (a).

IT IS FURTHER ORDERED, ADJUDGED, AND DECREED that Defendant is liable

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

Commission, which shall be delivered or mailed to

Enterprise Services Center

made pursuant to this Final Judgment.

Defendant shall simultaneously transmit photocopies of evidence of payment and case

on any delinquent amounts pursuant to 28 USC § 1961.

IT IS FURTHER ORDERED, ADJUDGED, AND DECREED that the Consent is

limited to, the undertakings to:

(i) Review, within sixty (60) days of retention, Defendant’s policies

Dated: ______________, _____

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Dated: __________, _