Searching over 5,500,000 cases.


searching
Buy This Entire Record For $7.95

Download the entire decision to receive the complete text, official citation,
docket number, dissents and concurrences, and footnotes for this case.

Learn more about what you receive with purchase of this case.

United States Securities and Exchange Commission v. Mediatrix Capital Inc.

United States District Court, D. Colorado

September 13, 2019

UNITED STATES SECURITIES AND EXCHANGE COMMISSION, Plaintiff,
v.
MEDIATRIX CAPITAL INC., BLUE ISLE MARKETS INC. St. Vincent & the Grenadines, BLUE ISLE MARKETS LTD., MICHAEL S. YOUNG, MICHAEL S. STEWART, and BRYANT E. SEWALL, Defendants, and MEDIATRIX CAPITAL FUND LTD., ISLAND TECHNOLOGIES LLC, VICTORIA M. STEWART, MARIA C. YOUNG, HANNA OHONKOVA SEWALL, MICHAEL C. BAKER, WALTER C. YOUNG III, ARUAL LP, WEST BEACH LLC, SALVE REGINA TRUST, TF ALLIANCE, LLC, CASA CONEJO LLC, HASE HAUS, LLC, DCC ISLANDS FOUNDATION, KEYSTONE BUSINESS TRUST, WEINZEL, LLC, THE 1989 FOUNDATION, MEDIATRIX CAPITAL PR LLC, MEDIATRIX CAPITAL, LLC, and BLUE ISLE MARKETS INC. Cayman Islands, Relief Defendants.

          ORDER GRANTING PLAINTIFF'S EMERGENCY MOTION FOR AN EX PARTE ASSET FREEZE, TEMPORARY RESTRAINING ORDER, ORDER TO SHOW CAUSE, AND OTHER EMERGENCY RELIEF

          Raymond P. Moore United States District Judge.

         On September 12, 2019, Plaintiff United States Securities and Exchange Commission (the “SEC” or “Commission”) filed an emergency motion for an ex parte order: (1) freezing funds and other assets of Defendants Mediatrix Capital Inc. (“Mediatrix Capital”), Blue Isle Markets Inc. (“Blue Isle 1”), Blue Isle Markets Ltd. (“Blue Isle 2”), Michael S. Young (“Young”), Michael S. Stewart (“Stewart”), and Bryant E. Sewall (“Sewall”) (collectively, the “Defendants”) and Relief Defendants Mediatrix Capital Fund Ltd., Island Technologies LLC, Victoria M. Stewart, Maria C. Young, Hanna Ohonkova Sewall, West Beach LLC, Salve Regina Trust, TF Alliance, LLC, Casa Conejo LLC, Hase Haus, LLC, DCC Islands Foundation, Keystone Business Trust, Weinzel, LLC, The 1989 Foundation, Mediatrix Capital PR, LLC, Mediatrix Capital, LLC, and Blue Isle Markets Inc. (Cayman Islands) (collectively, with Michael C. Baker, Walter C. Young III and Arual LP, the “Relief Defendants”);[1](2) prohibiting Defendants and Relief Defendants from the acceptance, deposit, or disbursement of additional investor funds; (3) prohibiting Defendants from future violations of Sections 5(a), 5(c), and 17(a) of the Securities Act of 1933 (“Securities Act”) [15 U.S.C. §§ 77e(a), e(c), and q(a)] and Section 10(b) of the Securities Exchange Act of 1934 (“Exchange Act”) [15 U.S.C. § 78j(b)] and Rule 10b-5 [17 C.F.R. § 240.10b-5] thereunder, and prohibiting Mediatrix Capital, Young, Stewart, and Sewall from future violations of Sections 206(1), 206(2), and 206(4) of the Investment Advisers Act of 1940 (“Advisers Act”) [15 U.S.C. §§ 80b-6(1), b-6(2) and b-6(4)] and Rule 206(4)-8 [17 C.F.R. § 275.206(4)-8] thereunder; (4) requiring Defendants and Relief Defendants to provide an accounting; (5) directing Defendants and Relief Defendants to repatriate assets held abroad; (6) prohibiting Defendants and Relief Defendants from the destruction or alteration of documents; (7) providing for expedited discovery; (8) providing for alternative means of service by the SEC; and (9) setting this matter for a preliminary injunction hearing. The Court will treat this motion as a request for a preliminary injunction as well.

         The Court has considered the entire record of this case, including: (1) the Complaint; (2) Plaintiff's Emergency Motion for an Ex Parte Asset Freeze, Temporary Restraining Order, Order to Show Cause, and Other Emergency Relief; (3) and the Declaration of Jeffrey D. Felder, with attached exhibits.

         Based on this record, the Court finds:

1. The Court has jurisdiction over the subject matter of this action and over Defendants and Relief Defendants.
2. The SEC has made a sufficient and proper showing in support of the relief granted herein, as required by Section 20(b) of the Securities Act [15 U.S.C. § 77t(b)], Section 21(d) of the Exchange Act [15 U.S.C. § 78u(d)], and Section 209(d) of the Advisers Act [15 U.S.C. § 80b-9(d)] by establishing:
a. For purposes of freezing assets, a likelihood of success on the merits, or that an inference can be drawn that the party has violated the federal securities laws; and
b. For purposes of a temporary restraining order, a prima facie case for each of the violations in the Complaint and a likelihood that the SEC will prevail at trial on the merits and that the Defendants, and each of them, directly or indirectly, have engaged in and, unless restrained and enjoined by order of this Court, will continue to engage in acts, practices, and courses of business constituting violations of Sections 5(a), 5(c), and 17(a) of the Securities Act; and Section 10(b) of the Exchange Act and Rule 10b-5 thereunder [17 C.F.R. § 240.10b-5]; and Mediatrix Capital, Young, Stewart, and Sewall, and each of them, directly or indirectly, have engaged in and, unless restrained and enjoined by order of this Court, will continue to engage in acts, practices, and courses of business constituting violations of Sections 206(1), 206(2), and 206(4) of the Advisers Act and Rule 206(4)-8 thereunder.

         There is good cause to believe that, unless restrained and enjoined by order of this Court, the Defendants and Relief Defendants will dissipate, conceal, or transfer from the jurisdiction of this Court assets that could be subject to an order directing disgorgement or the payment of civil money penalties in this action, and that unless restrained Defendants may solicit additional funds from investors. Accordingly, an order freezing the Defendants' and Relief Defendants' assets, as specified herein, is necessary to preserve the status quo and to protect this Court's ability to award equitable relief in the form of disgorgement of illegal profits from fraud, unregistered securities offerings, and Advisers Act violations, as well as civil penalties.

3. There is good cause to believe that an immediate accounting is necessary to identify the location of additional assets subject to an asset freeze.
4. There is good cause to believe that, unless restrained and enjoined by order of this Court, Defendants and Relief Defendants may alter or destroy documents relevant to this action.
5. There is good cause to believe that expedited discovery and alternative means of service are warranted.
6. There is good cause to believe that an order directing Defendants and Relief Defendants to repatriate assets to the United States is warranted.
7. Pursuant to Fed.R.Civ.P. 65(b), this Court specifically finds that there is a likelihood of irreparable injury to investors unless this order is issued ex parte. This Court finds that the SEC has made a prima facie showing that Defendants have engaged in deceptive conduct in order to defraud investors, made false and misleading statements to investors and omitted material facts in connection with the purchase or sale or the offer or sale of securities.
8. Based on these and other facts alleged by the SEC, there is good cause to believe that Defendants and Relief Defendants will dispose of, dissipate, or remove investor funds and assets from the jurisdiction of the Court. Such dissipation of investor funds and assets would constitute irreparable harm to investors. To avoid this irreparable harm, it is appropriate for the Court to issue this Order ex parte so that prompt service on appropriate financial institutions and persons acting in concert with or directing the activities of Defendants and Relief Defendants can be made, thus preventing the dissipation of investor funds.

         Now, therefore, I.

         IT IS HEREBY ORDERED that, pending the determination of the SEC's request for a preliminary injunction and the implementation of the asset freeze requested therein:

         A. The assets, funds, or other property held by or under the direct or indirect control of Defendants or Relief Defendants, whether held in any of their names or for their direct or indirect beneficial interests, wherever located, up to the amount of $251, 074, 084 are frozen, including but not limited to the accounts listed below in Schedule A to this Order and the assets listed in Schedule B to this order.

         B. Defendants and Relief Defendants, and their officers, directors, successor corporations, subsidiaries, affiliates, agents, servants, employees, attorneys-in-fact, and those persons in active concert or participation with them who receive actual notice of this order by personal service or otherwise, and each of them, shall hold and retain within their control, and otherwise prevent any disposition, transfer, pledge, encumbrance, assignment, dissipation, concealment, or other disposal whatsoever of any of their funds or other assets or things of value presently held by them, under their control or over which they exercise actual or apparent investment or other authority, in whatever form such assets may presently exist and wherever located, including but not limited to the accounts and assets listed in Schedules A and B, as defined above, up to the amounts identified in paragraph I.A.

         C. Any bank, financial or brokerage institution, storage facility, or other person or entity holding any funds, securities or other assets of Defendants or Relief Defendants, up to the amounts identified in paragraph I.A, held in the name of, for the benefit of, or under the control of Defendants or Relief Defendants; or their officers, directors, successor corporations, subsidiaries, affiliates, agents, servants, employees, attorneys-in-fact, and those persons in active concert or participation with them, and each of them, shall hold and retain within their control and prohibit the withdrawal, removal, transfer or other disposal of any such funds or other assets, including but not limited to assets held listed in Schedules A and B, as defined above.

         D. No. person or entity, including Defendants or Relief Defendants, or any creditor or claimant against the Defendants or Relief Defendants, or any person acting on behalf of such creditor or claimant, shall take any action to interfere with the asset freeze, including, but not limited to, the filing of any lawsuits, liens, or encumbrances, or bankruptcy cases to impact the property and assets subject to this order; provided, however, that any party or non-party may seek leave from this order upon a proper showing.

         E. The SEC may file Notices of Lis Pendens, or any similar document that has the effect of clouding title, on all pieces of real property in which Defendants or Relief Defendants have an interest. Should the Defendant or Relief Defendants wish to sell any piece of real property in which they have an interest, they shall give counsel for the SEC notice of the proposed sale and seek and obtain an order of the Court permitting the sale prior to the sale. Defendants and Relief Defendants shall fully account for any proceeds received from the sale of such property to the Court and counsel for the SEC, and the proceeds of such sales shall be frozen pursuant to the provisions of this Order; and Defendants and Relief Defendants are hereby prohibited from further encumbering their interests in any real or personal property by means of pledging it for collateral for any purpose or by allowing it to secure any obligation. This order applies, but is not limited, to the following properties:

• 5406 South Cottonwood Court, Greenwood Village, Colorado 80121;
• 8082 East Arroyo Hondo Road, Scottsdale, Arizona 85266;
• 1201 Lloyds Road, Little Elm, Texas 75068;
• 330 Dorado Beach East, Dorado, Puerto Rico 00646;
• 319 Dorado Beach East, Dorado, Puerto Rico 00646;
• Mira Mar Villas, #15 Garden Drive, Paradise Island, ...

Buy This Entire Record For $7.95

Download the entire decision to receive the complete text, official citation,
docket number, dissents and concurrences, and footnotes for this case.

Learn more about what you receive with purchase of this case.