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1999-04-16
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UNITED STATES DISTRICT COURT
CENTRAL DISTRICT OF CALIFORNIA
SECURITIES AND EXCHANGE COMMISSION,
Plaintiff,
v.
GERALD A. DOBBINS and FIDELITY SECURED DEPOSIT CORPORATION,
Defendants.
Civil Action No. SACV98-229GLT
PRELIMINARY INJUNCTION
FILED May 19 1998
This matter came to be heard upon an Order to show cause why
a Preliminary Injunction: (1) restraining defendants from
violating the securities laws and (2) continuing a freeze of
defendants assets should not enter.
The Court, having considered the Commission's Complaint, the
Motion for Temporary Restraining Order, and the Memorandum of
Points and Authorities and the Declarations and other documents
filed in support of such Motion, the Opposition of Defendants to
the Preliminary Injunction, the Reply of the Commission to that
Opposition and all other evidence and argument presented
regarding the Order to Show Cause, finds that:
A. The Commission has made a sufficient and proper
showing in support of the relief granted herein, as required by
Section 20(b) of the Securities Act of 1933 ("Securities Act")
[15 U.S.C. º 77t(b)] and Section 21(d) of the Securities Exchange
Act of 1934 ("Exchange Act") [15 U.S.C. º 78u(d)] by evidence
establishing a prima facie case and a strong likelihood that the
Commission will prevail at trial on the merits.
B. There is good caused to believe that the Defendants,
and each of them, directly or indirectly, have engaged in and,
unless enjoined by order of this Court, will continue to engage
in acts, practices, and courses of business constituting
violations of Section 10(b) of the Exchange Act [15 U.S.C. º
78j(b)], and Rule 10b-5 promulgated thereunder [17 C.F.R. º
240.10b-5].
C. There is good cause to believe that, unless enjoined by
order of this Court, Defendants will dissipate, conceal, or
transfer from the jurisdiction of this Court assets which could
be subject to an order directing restitution, disgorgement or the
payment of civil money penalties in this action.
I.
The Commission's Motion for Order: (1) restraining
defendants from violating the securities laws and (2) freezing
assets is HEREBY GRANTED.
II.
IT IS HEREBY ORDERED that, until otherwise ordered by this
Court, Defendants Gerald A. Dobbins and Fidelity Secured Deposit
Corporation, and their officers, agents, servants, employees,
attorneys, and those persons in active concert or participation
with any of them, who receive actual notice of this Order; by
personal service or otherwise, and each of them, be and hereby
are enjoined from, directly or indirectly, in the offer or sale
of any securities, by the use of any means or instruments of
transportation or communication in interstate commerce or by the
use of the mails:
A. employing any device, scheme or artifice to defraud;
B. obtaining money or property by means of any untrue
statement of a material fact or any omission to state a material
fact necessary in order to make the statements made, in the light
of the circumstances under which they were made, not misleading;
or
C. engaging in any transaction, practice, or course of
business which operates or would operate as a fraud or deceit
upon the purchaser;
in violation of Section 17(a) of the Securities Act [15 U.S.C. º
77q(a)].
III.
IT IS FURTHER ORDERED that, until otherwise ordered by this
Court, Defendants Gerald A. Dobbins and Fidelity Secured Deposit
Corporation, and their officers, agents, servants, employees,
attorneys, and those persons in active concert or participation
with any of them, who receive actual notice of this Order, by
personal service or otherwise, and each of them, be and hereby
are enjoined from, directly or indirectly, in connection with the
purchase or sale of any securities, by the use of any means or
instrumentality of interstate commerce, or of the mails, or of
any facility of any national securities exchange:
A. employing any device, scheme or artifice to defraud;
B. making any untrue statement of a material fact or
omitting to state a material fact necessary in order to make the
statements made, in the light of the circumstances under which
they were made, not misleading; or
C. engaging in any act, practice, or course of business
which operates or would operate as a fraud or deceit upon any
person;
in violation of Section 10(b) of the Exchange Act [15 U.S.C. º
78j(b)] and Rule 10b-5 thereunder [17 C.F.R. º 240.10b-5].
IV.
IT IS FURTHER ORDERED that, until otherwise ordered by this
Court:
A. Gerald A. Dobbins and Fidelity Secured Deposit
Corporation, and their officers, directors, 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, 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
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;
B. That any financial or brokerage institution or other
person or entity located within the territorial jurisdiction of
the United States courts and holding any funds or other assets in
the name of, for the benefit of, or under the control of Gerald
A. Dobbins or Fidelity Secured Deposit Corporation, and their
officers, directors, 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; and
C. Gerald A. Dobbins and Fidelity Secured Deposit
Corporation, and their officers, directors, subsidiaries and
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 refrain from accepting, taking
control of or depositing in any financial institution additional
funds from actual or potential investors.
D. Tom Lemen shall remain custodian of the bonds.
E. Defendants may apply to the court for payment of
reasonable, necessary, and ordinary business expenses, including
attorney fees.
V.
IT IS FURTHER ORDERED that this Court shall retain
jurisdiction over this action for the purpose of implementing and
carrying out the terms of all orders and decrees which may be
entered herein and to entertain any suitable application or
motion for additional relief within the jurisdiction of this
Court.
IT IS SO ORDERED.
DATED: May 19, 1998
/s/ Gary L. Taylor
UNITED STATES DISTRICT JUDGE
GARY L. TAYLOR
Presented by:
/s/ Polly Atkinson
POLLY ATKINSON
JULIE K. LUTZ (Ca. Bar No. 77246)
Securities and Exchange Commission
1801 California Street
Denver, Colorado 80202
Telephone: (303)844-1000
KAREN L. MATTESON (Ca. Bar No. 102103)
Securities and Exchange Commission
5670 Wilshire Boulevard
11th Floor
Los Angeles, California 90036-3648
Telephone: (213) 965-3998
Attorneys for: The United States Securities and Exchange
Commission