Case 1: 14-cv-02650-0DE Document 1 Filed 08/15/ 14 Page 1 of 23

INTHEUNITEDSTATESDISTRICTCOURT
FORTHENORTHERNDISTRICTOFGEORGIA
ATLANTADIVISION
SECURITIESANDEXCHANGE
COMMISSION,
Plaintiff, CivilActionNo.
v.
HEIDIANNGAMER,
GAMERECONOMICSYSTEMS,LLC,and
GAMERMEDIAPARTNERSCORP.,
Defendants.
COMPLAINTFORINJUNCTIVERELIEF
Plaintiff,SecuritiesandExchangeCommission(the"Commission"),files its
complaintandallegesthat:
OVERVIEW
1. BetweenAugust2011 andMay2013,HeidiAnnGamer("Gamer")andtwo
companiesthatshecontrolled,GamerEconomicSystems,LLC("GES"),and
GamerMediaPartnersCorp. ("GMP"),fraudulently soldatleast$771,900of
investmentstomorethanthreedozeninvestors.
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2 . The defrauded investors resided in various states, including Georgia,
California, Colorado, Connecticut, Kansas, Massachusetts, New Jersey, Virginia,
and Washington.
3. The GES offering ran from approximately August 2011 until approximately
August 2012, while the GMP offering occurred from approximately August 2012
until approximately May 20 13.
4. Gamer, who lived in Colorado when the GES offering began, told
prospective investors that GES, and later, GMP, would use investor funds to
license, develop and market interactive technology, such as smart-phone
applications or "apps."
5. Between approximately August 2011 and August 2012, Gamer offered and
sold investments in GES, raising approximately $400,500 from 17 investors in
various states who wired money to, or sent checks for deposit into, the GES bank
account.
6. In the summer of2012, Gamer relocated from Colorado Springs, Colorado,
to Atlanta, Georgia, and began offering and selling investments in GMP, which
Gamer told investors was the same entity as GES except for a name change to
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improvetheentity'smarketappeal. BetweenapproximatelyAugust2012and
May2013,Gamerofferedandsoldapproximately$371,400ofsecuritiesofGMP
to atleast27 investorsinvariousstateswhowiredmoneyto,orsentchecksfor
depositinto,theGMPbankaccount.
7. ToinducethepurchaseandsaleofinvestmentsinGES andGMP, Gamer
intentionallymisrepresentedtoprospectiveinvestorshowinvestorfunds wouldbe
used. Duringbothofferings,Gameralsotoldprospectiveinvestorsthattheir
investedfundswouldbeusedas capitalforstart-uppurposesandforoperatingthe
businessofGES orGMP(collectively"theCompanies"),respectively. However,
Gamerdivertedinvestorfunds forpersonalusesthroughoutbothofferings. Gamer
alsotoldindividualsthatbothGESand, later,GMPhadsecuredlicensingrightsto
certainapps. Yet,no suchlicensingrightswereacquired.
8. AlthoughGamerneverpromisedaspecificrateofreturn,shedidtell
variousprospectiveinvestorsthattheywouldreceivequarterlyfinancial
statementsfromtheCompanies. InthecaseofGES,Gamerprovidedinvestor
agreementspromisingapercentreturninthe form of"licensingroyalties"once
GES becameprofitable,and,inthecaseofGMP, theagreementspromisedan
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undeterminedamountof "dividends"atsomeunspecifiedpointinthe future.
9. Additionally,astheofferingsprogressedandtoinduceinvestmentsin
GMP, GamerfalselyrepresentedtoprospectiveinvestorsthatGMPhadsecured
severallucrativecontractsorfundingcommitments,includingwhatshetold
potentialinvestorswasa$100,000contractwithDartmouthCollegeonajoint
project,a$1 millioncontracttouseaGMPappintheBollywoodfilm industry,a
$2millionpartnershipamongthreecompaniestodeploythesameGMPappinthe
MiddleEast,andacontractforanunspecifiedamounttodeployaGMPappatthe
stadiumfortheAtlantaFalcons,aNationalFootballLeagueteam. No suchdeals
orcommitmentsexisted.
10. Investorswereneverprovidedfinancial statements,andnonewaspaid
"royalties"or"dividends"becausetheCompaniesneversecuredanylicensingor
developmentdeals.
11. Infact, GES andGMPwereseparateentities,contrarytoGamer'sclaims
thatonlythecompanynameforGES hadchanged. AfterGamercreatedGMP,
shetooknostepstoprotecttheownershipinterestsofinvestorsinGES fromthe
firstofferingandmovedcertainGES investorfunds intoanewaccountforGMP.
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12. ThroughoutboththeGES andGMPofferings,andinsteadof usinginvestor
funds foroperatingcapital,Gamerdivertedasizeableportionof thefundsraised
forherownpersonaluse, includingpayingforrestaurantdining,shopping,rental
housing,vacationtravel,petgroomingandcasinogambling,amongotherpersonal
expenses.
13. Victimsof thefraudincludedGamer'sfriends, aswellasthefamilyand
friends ofGamer'sdomesticpartner("DomesticPartner"),inadditionto
individualswhomGamermetthroughasubstance-abusesupportprogram. The
DomesticPartner'snamewasusedtoregisterGES asalimitedliabilitycompany
inColoradoandtoopentheGES bankaccount.
14. Gamer,as CEOofGESandGMP,usedtheCompaniesasheralter-egosin
ordertoperpetratetheofferingfrauds oninvestors.
VIOLATIONS
15. Defendantshaveengagedand,unlessrestrainedandenjoinedbythisCourt,
willcontinuetoengageinactsandpracticesthatconstituteandwillconstitute
violationsofSection17(a)oftheSecuritiesActof1933 ("SecuritiesAct") [15
U.S.C. 77q(a)] andSection 10(b)of theSecuritiesExchangeActof1934
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("ExchangeAct")[15 U.S.C.78j(b)] andRule 10b-5thereunder[17 C.F.R.
240.1Ob-5].
JURISDICTION AND VENUE
16. TheCommissionbringsthisactionpursuanttoSections20and22ofthe
SecuritiesAct[15 U.S.C. 77tand77v] andSections21(d)and21(e)ofthe
ExchangeAct[15 U.S.C. 78u(d)and78u(e)]toenjoinDefendantsfrom
engaginginthetransactions,acts,practices,andcoursesofbusinessallegedinthis
complaint,andtransactions,acts,practices,andcoursesofbusinessofsimilar
purportandobject,forcivilpenaltiesandforotherequitablerelief.
17. ThisCourthasjurisdictionoverthisactionpursuantto Section22 ofthe
SecuritiesAct[15 U.S.C. 77v] andSections21(d),21(e),and27 ofthe
ExchangeAct[15 U.S.C. 78u(d),78u(e),and78aa].
18. Defendants,directlyandindirectly,madeuseof themails,themeansand
instrumentsof transportationandcommunicationininterstatecommerceandthe
meansandinstrumentalitiesofinterstatecommerceinconnectionwiththe
transactions,acts,practices,andcoursesofbusinessallegedinthiscomplaintand
madeuseofmailandmeansofinstrumentalityofinterstatecommercetoeffect
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transactions,ortoinduceortoattempttoinducethepurchaseorsaleofsecurities
allegedinthiscomplaint.
19. VenueisproperinthisCourtas certainof thetransactions,acts,practices,
andcoursesofbusinessconstitutingviolationsof theSecuritiesActandthe
ExchangeActoccurredintheNorthernDistrictofGeorgia. Inaddition,Gamer
residedintheNorthernDistrictofGeorgiafrom July2012untilMay2013,
spanningthefinalmonthsoftheGES offeringandtheentiretyoftheGMP
offering,anddirectedtheoperationsofGES andGMPduringthattimeperiod
fromherthen-residenceintheNorthernDistrictofGeorgia.
20. Defendants,unlessrestrainedandenjoinedbythisCourt,willcontinueto
engageinthetransactions,acts,practices,andcoursesofbusinessallegedinthis
complaint,andintransactions,acts,practices,andcoursesofbusinessofsimilar
purportandobject.
THE DEFENDANTS
21. HeidiAnnGamer("Gamer"),41 andnowaresidentofColoradoSprings,
Colorado,istheChiefExecutiveOfficer("CEO")andregisteredagentforGMP
and,duringcourseofthefraud, alsowastheCEOofGES. Shepreviouslyworked
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attworegisteredbroker-dealers,servingasaregisteredcustomerassociatefrom
1997to2002atthefirst,andas aninvestmentcompanyrepresentativefor six
monthsin2004atthesecond. Between2004andthestartofGES in2011,Gamer
workedatvariousjobs,includingpositionsinadvertisingsalesforatelephone
bookcompanyandanewspaper. Whileemployedinthesecuritiesindustry,
GamerheldtheFinancialIndustryRegulatoryAuthority("FINRA")Series6, 7, 63
and65 licenses.
22. GamerEconomicSystems,LLC("GES")isaColoradolimitedliability
companycreatedinJuly2011. AlthoughGamerundertookthestepstocreate
GES, sheobtainedtheconsentofherDomesticPartnerto listtheDomestic
Partner'snameas theagentof thebusiness. GES nolongerhasanyactive
operationsorassets,andislistedin"delinquent"statusontheColoradoSecretary
ofState'swebsiteforfailuretofile arequired2013 periodicreport.
23. GamerMediaPartners,Corp.("GMP")isaGeorgiacorporationcreatedby
GamerinAugust2012. GamerherselfislistedasGMP'sregisteredagent. GMP
nolongerhasanyactiveoperationsorassets, andislistedwithastatusof"tobe
dissolved"ontheGeorgiaSecretaryofState'swebsite.
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THE FRAUDULENT SCHEME
24. Inthewinterof2010-2011,whiletakingclassesatDartmouthCollege,
Gamerbecameinterestedinthedevelopmentandmarketingofinteractive
softwareandtechnology,includingapplications,or"apps,"for smartphones.
UponreturningtoColoradoattheconclusionof thewinterterm,sheundertook
effortstostartabusinessinthetechnologyfield.
25. InJuly2011,GamerregisteredGES asalimitedliabilitycompanyin
Colorado,usingherDomesticPartner'selectronicsignatureandnameas the
entity'sagentontheonlineapplication.
26. Gamercontactedaformerco-workerfrom oneof heradvertisementsales
jobs("Coworker")andaskedhimtoworkwithhertorunthenewbusiness.
GamerconvincedCoworkertoleavehisjobatthetimeandbeginworkingasthe
de facto GES chiefoperatingofficer("COO")forfreeuntilGES secured
investors.
27. Meetinginthelivingroomof theDomesticPartner'shomeinColorado
Springs,GamerandCoworkerdevelopedabusinessplanand"Prospectus"for
GESexplainingthatGES wouldidentifynewtechnologies,suchassmart-phone
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apps, and develop and license the technologies in the marketplace. To lure
individuals into investing in GES, the Prospectus also explained that GES would
fund its initial business operations by raising funds from investors to serve as
operating capital.
28. Gamer pitched the GES offering to Coworker's family members in 2011,
stating that GES would be licensing and marketing smart-phone apps. To lure
Coworker's family members into investing in GES, as explained below, Gamer
told Coworker's family that investor funds would be used by GES as operating
capital and Gamer said that she had connections to also build apps for political
campaigns and expected to sell licensing rights for upwards of $10 million.
29. Coworker's parents and parents-in-law invested a total of$75,000 in GES
in September 2011. Gamer instructed Coworker's family members in Texas and
Colorado to wire their investment funds to the GES account.
30. Shortly after the investments in GES by Coworker' s family members,
Gamer began approaching other friends and acquaintances of either her,or her
Domestic Partner,for investments in GES . Some investors were individuals that
Gamer met through a substance-abuse support program.
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3 1. In soliciting these individuals to invest, Gamer touted the supposed
licensing rights held by GES to a product called " StoryMap," an app that was
supposed to allow television viewers to look up the episodic history of a show and
even purchase items seen on a television show's set. However, Gamer had never
finalized the GES licensing agreement for the product with the original third-party
developers, and, as a result, GES had no licensing rights to Story Map.
32. Gamer also told friends and acquaintances that funds raised would be used
by GES for operating capital. However, after each investor's funds were received,
Gamer diverted a sizeable portion for travel, gambling, shopping and other
personal expenses.
33. Following Gamer's instructions, these investors, residing in Colorado, New
Hampshire and Virginia, wired their investment funds to the GES bank account.
34. Between August 2011 and August 2012, Gamer obtained investments in
GES of approximately $400 ,500 from 17 investors. At least seven of these
investors were emailed investor agreements, signed by Gamer, which promised
quarterly GES financial statements and five percent of any GES royalties once
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GES "beginstoshowaprofit,"andtherepaymentofeachinvestor'sinitial
investmentattherequestoftheinvestorsorinconsultationwithGES.
35. GamerandherDomesticPartnerrelocatedtoAtlantainJuly2012 inorder
tobeclosertoseveralsoftwaredevelopersinAtlantawhomGamerhadmetand
hired,usingGES funds, as independentcontractorstowritecodeforpotential
smart-phoneappsforwhichGamerfalsely claimedtohavesecuredlicensing
rights. Atthesametime,GamercreatedanewentitynamedGamerMedia
Partners("GMP"),whichsheregisteredwiththe GeorgiaSecretaryofState's
OfficeinAugust2012.
36. AfterthecreationofGMP,Gamercontinuedtosolicitinvestorfunds. She
toutedGMP'ssupposedlicensingrightsinStoryMaptolureindividualsinto
investinginGMP. However,GMPhadnosuchlicensingrightsfor StoryMap.
37. GamertoldinvestorsthatGES hadchangeditsnametoGMPsothatit
wouldbeassociatedwithmorethanjust"economics,"butsheomittedtotell
investorsthatGMPwasacompletelynewentityandseparatefromGES. Asa
result,GES investorswerenevertoldthattheywouldhavenointerestinany
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licensesprocuredbyGMP,whileGMPinvestorswerenottoldthattheyhadno
interestinlicensessupposedlyprocuredbyGES.
38. Gamerbegantorepresenttovariousexistingandprospectiveinvestorsthat
GMPhadsecuredcontractsthatsheportrayedas lucrativeandwhichsheclaimed
wouldallowGMPtodevelopanddeploysoftwareproducts,includingStoryMap,
invariousways. Forinstance,Gamer,verballyandinemailmessages,toldcertain
prospectiveinvestorsthatGMPhadsecureda$1 millioncontracttodeploy
StoryMapinthe"Bollywood"Indianfilm industry. Nosuchcontractexisted.
39. Gamer,verballyandine-mailmessages,alsotoldcertainprospective
investorsthatGMPhadsecuredapartnershipwiththreeothercompaniesthat
wouldmake$2millionavailablefortheexclusivelicensingofStoryMapin
Dubai. Nosuchpartnershipexisted.
40. Gamer,verballyandine-mailmessages,alsotoldcertainprospective
investorsaboutothernon-existentcontractsthatGMPhadsecured,includinga
supposed$100,000contractwithDartmouthCollegeforwhatGamertold
investorswasa"MetaDataproject"andadealwiththeAtlantaFalconstousea
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GMPproductintheFalcons' downtownAtlantastadium. Nosuchcontractor
dealexisted.
41. BetweenAugust2012andMay2013,Gamersoldto27individuals
approximately$371,400ofinvestmentsinGMP,whichshecharacterizedas
"shares"ininvestoragreements. Tosomeindividuals,sheofferedthechanceto
purchase25,000sharesofGMPinexchangefor$10,000;tootherinvestors,she
offered50,000sharesinexchangefor $10,000. LiketheinvestorsinGES,Gamer
toldtheseinvestorsthattheirfunds wouldbeusedforoperatingcapitalbyGMP
andthat,inreturnfortheirinvestments,individualswouldreceivean investment
returnintheform ofdividends. Thosedividendswouldbederivedfrom the
profitsthatGMPgeneratedthroughlicensingandmarketingagreements.
The Defendants' Misrepresentations
42. ContrarytoGamer'srepresentationsthroughGES andGMP, including
verbalstatements,e-mailsandinvestoragreementssignedinhercapacityaseither
CEOofGESorGMP,respectively,investorsneverreceivedquarterlyfinancial
statementsabouttheCompanies,nordidanyinvestorseverreceiveanyroyalties
from GESoranydividendsfromGMP. Further, GMP investorswerenot
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providedthereturnof theirinitialinvestments,as promisedbytheinvestor
agreements. Similarly,GES investorswerenotprovidedthereturnoftheirinitial
investmentsupondemandoruponconsultationwithGES,as theagreements
provided.
43. Inaddition,whileGamer,throughGES andGMP,toldinvestors,both
verballyandinawritten"Prospectus"documentdesignedtolureindividualsinto
investing,thatinvestorfunds wouldbeusedasoperatingcapital,shediverteda
sizeableportionofinvestorfunds forherownpersonalusethroughouttheGES
andGMPofferings.
44. Inverbalstatementsandine-mails,Gamer,throughGMP,alsotold
investors,toinducethemtoinvest,thatGMPhadsecuredhigh-dollarlicensing
dealsandcontracts. However,nosuchhigh-dollarlicensingdealsorcontracts
existed.
45. Inverbalstatements,marketingmaterialsande-mails,Gamer,throughGES
andGMP,toldprospectiveinvestorsandindependentcontractors,whomshehired
forGESandGMP,thattheCompanies'hadlicensingrightstocertainthird-party
technologies. Nosuchlicensingrightshadbeenobtained.
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The Defendants' Misappropriation
46. Asizeableportionof thefundsthatGES andGMPreceivedfrom investors
weredivertedbyGamertopayforherpersonal,non-businessexpenses.
47. AfterGESreceiveditsveryfirstinvestorfunds inAugust2011,Gamer
withdrewfunds fromtheGESaccountatvariousATMsinLasVegastopayfor
herpersonalgamblingexpenses. Gameralsousedtheaccountdebitcardthat
monthforrestaurantandshoppingtrips,andthenusedtheinvestorfundsto
vacationinMexicoalongwithherDomesticPartnerandothers.
48. Similarly,GamerusedGES andGMPinvestorfunds onamonthlybasis
throughoutbothofferingsforGamer'spersonalexpenses,includingaseparate
vacationtoWashington,numerouscasinogamblingtrips,andpurchasesof
groceries,fastfoodandpetgrooming.
49. Gameralsousedinvestorfunds topayforacondominiumthatsherentedin
Atlantain2012,andtohelppayforarelativeof herDomesticPartnertoattenda
privateresidentialweight-lossandfitnesscampinMalibu,California.
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50. GamertooknoeffortstotracktheGES orGMPfundsthatshedivertedfor
herpersonaluseanddidnotclaimanyoftheinvestorfundsthatshe
misappropriatedas incomewithanytaxauthority.
COUNT I-FRAUD
Violations of Section 17(a)(l) of the Securities Act
[15 U.S.C. 77g(a)(l)]
51. Paragraphs 1through50areherebyre-allegedandareincorporatedherein
byreference.
52. FromatleastAugust2011 toMay2013,Defendants,intheofferandsaleof
thesecuritiesdescribedherein,bytheuseofmeansandinstrumentsof
transportationandcommunicationininterstatecommerceandbyuseofthemails,
directlyandindirectly,employeddevices,schemesandartificestodefraud
purchasersofsuchsecurities,allasmoreparticularlydescribedabove.
53. Defendantsknowingly,intentionally,and/orrecklesslyengagedinthe
aforementioneddevices,schemesandartificestodefraud.
54. Whileengaginginthecourseofconductdescribedabove,Defendantsacted
withscienter,thatis,withanintenttodeceive,manipulateordefraudorwitha
severelyrecklessdisregardforthetruth.
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55. Byreasonof theforegoing,Defendants,directlyandindirectly,have
violatedand,unlessenjoined,willcontinuetoviolateSection17(a)(l)ofthe
SecuritiesAct[15 U.S.C. 77q(a)(1)].
COUNT II- FRAUD
Violations of Sections 17(a)(2) and 17(a)(3) of the Securities Act
[15 U.S.C. 77g(a)(2) and 77g(a)(3)]
56. Paragraphs 1through50areherebyreallegedandareincorporatedhereinby
reference.
57. FromatleastAugust2011 totheMay2013,Defendants,intheofferand
saleofthesecuritiesdescribedherein,byuseof meansandinstrumentsof
transportationandcommunicationininterstatecommerceandbyuseofthemails,
directlyandindirectly:
a. obtainedmoneyandpropertybymeansofuntruestatementsof
materialfactandomissionstostatematerialfacts necessaryinorder
tomakethestatementsmade,inlightofthecircumstancesunder
whichtheyweremade,notmisleading;and
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b. engagedintransactions,practicesandcoursesofbusiness
whichwouldanddidoperateasafraudanddeceituponthe
purchasersofsuchsecurities,
allasmoreparticularlydescribedabove.
58. Byreasonoftheforegoing,Defendants,directlyandindirectly,have
violatedand,unlessenjoined,willcontinuetoviolateSections 17(a)(2)and
17(a)(3)oftheSecuritiesAct[15 U.S.C. 77q(a)(2)and77q(a)(3)].
COUNTIII-FRAUD
ViolationsofSection1O(b) oftheExchangeAct
[15U.S.C. 78j(b)] andRulelOb-5thereunder[17C.F.R. 240.10b-5]
59. Paragraphs 1through50areherebyre-allegedandareincorporatedherein
byreference.
60. FromatleastAugust2011 toMay2013,Defendants,inconnectionwiththe
purchaseandsaleofsecuritiesdescribedherein,bytheuseof themeansand
instrumentalitiesofinterstatecommerceandbyuseofthemails,directlyand
indirectly:
a. employeddevices,schemes,andartificestodefraud;
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b. madeuntruestatementsof materialfacts andomittedtostate
materialfacts necessaryinordertomakethestatementsmade, inlight
ofthecircumstancesunderwhichtheyweremade,notmisleading;
and
c. engagedinacts,practices,andcoursesofbusinesswhich
wouldanddidoperateasafraudanddeceituponthepurchasersof
suchsecurities,
allas moreparticularlydescribedabove.
61. Defendantsknowingly,intentionally,and/orrecklesslyengagedinthe
aforementioneddevices, schemesandartificestodefraud,madeuntruestatements
ofmaterialfacts andomittedtostatematerialfacts, andengagedinfraudulentacts,
practicesandcoursesofbusiness. Inengaginginsuchconduct,Defendantsacted
withscienter,thatis,withanintenttodeceive,manipulateordefraudorwitha
severelyrecklessdisregardforthetruth.
62. Byreasonof theforegoing, Defendants,directlyandindirectly,have
violatedand,unlessenjoined,willcontinuetoviolateSection lO(b)ofthe
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Exchange Act [1 5 U.S.C. 78j(b)] and Rule 10b-5 thereunder [17 C.P .R.
240.1 Ob-5].
PRAYER FOR RELIEF
WHEREFORE, Plaintiff Commission respectfully prays for:
I.
Findings of fact and conclusions of law pursuant to Rule 52 of the Federal
Rules of Civil Procedure, finding that Defendants named herein committed the
violations alleged herein.
II.
Permanent injunctions enjoining Defendants, their officers, agents, servants,
employees, and attorneys from violating, directly or indirectly, Section 17(a) of the
Securities Act [15 U.S.C. 77q(a)] and Section 10(b) ofthe Exchange Act [15
U.S.C. 78j(b )] and Rule 1 Ob-5 thereunder [17 C.P.R. 240.1 Ob-5].
III.
An order requiring the disgorgement by Defendants of all ill-gotten gains or
unjust enrichment with prejudgment interest, to effect the remedial purposes of the
federal securities laws.
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IV.
AnorderpursuanttoSection20(d)of theSecuritiesAct[15 U.S.C. 77t(d)]
andSection21(d)(3)oftheExchangeAct[15 U.S.C. 78u(d)(3)]imposingcivil
penaltiesagainstDefendants.
v.
SuchotherandfurtherreliefasthisCourtmaydeemjust,equitable,and
appropriateinconnectionwiththeenforcementof thefederal securitieslawsandfor
theprotectionofinvestors.
Dated: 15,2014
Respectfullysubmitted,
Is/ M Graham Loomis
M. GrahamLoomis
RegionalTrialCounsel
GeorgiaBarNo.457868
Email: LoomisM@sec.gov
RobertF.Schroeder
SeniorTrialCounsel
GeorgiaBarNo. 001390
Email: SchroederR@sec.gov
BrianM. Basinger
Counsel
GeorgiaBarNo.595901
Email:BasingerB@sec.gov
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COUNSELFORPLAINTIFF
SecuritiesandExchange
Commission
950EastPacesFerryRoadNE,Suite900
Atlanta,Georgia30326-1382
Tel: (404)842-7600
Fax: (404)842-7666
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