SEC v. J.H. DARBIE & CO., INC., No. 1:22-cv-10482, Southern District of New York (Sept. 22, 2023) — Judgment

UNITED STATES DISTRICT COURT
SOUTHERN DISTRICT OF NEW YORK

SECURITIES AND EXCHANGE COMMISSION,

Plaintiff,
 C.A. No. 22-cv-10482 (JHR)
v.

J.H. DARBIE & CO., INC.,

Defendant.

[PROPOSED] FINAL JUDGMENT AS TO DEFENDANT J.H. DARBIE & CO., INC.

The Securities and Exchange Commission having filed a Complaint and Defendant
J.H. Darbie & Co., Inc. (“Defendant” or “J.H. Darbie”) 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 Section 17(a) of the Securities Exchange Act
of 1934 (the “Exchange Act”) [15 U.S.C. § 78q(a)] and Rule 17a-8 promulgated thereunder [17
C.F.R. § 240.17a-8] by failing to comply with the reporting, recordkeeping, and record retention
requirements of chapter X of Title 31 of the Code of Federal Regulations.
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

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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 shall pay a
civil penalty in the amount of $125,000 to the Securities and Exchange Commission pursuant to
Section 21(d)(3) of the Exchange Act.  Defendant shall make this payment pursuant to the terms
of the payment schedule set forth in paragraph III below 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; J.H. Darbie & Co., Inc. 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.

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The Commission may enforce the Court’s judgment for penalties by the use of all
collection procedures authorized by law, including the Federal Debt Collection Procedures Act,
28 U.S.C. § 3001 et seq., and moving for civil contempt for the violation of any Court orders
issued in this action.  Defendant shall pay post-judgment interest on any amounts due after 30
days of the entry of this Final Judgment pursuant to 28 U.S.C. § 1961.
III.
J.H. Darbie shall pay the total penalty due of $125,000 in 12 installments to the
Commission according to the following schedule:  (1) $25,000, paid within 14 days of entry of
this Final Judgment; (2) ten monthly payments of $9,100, each of which shall be paid by the last
business day of month for the 10 months following the entry of this Final Judgment starting with
the month following the month that this Final Judgment is entered; and (3) one monthly payment
of $9,000, paid by the last business day of the eleventh month following the entry of this Final
Judgment.  Payments shall be deemed made on the date they are received by the Commission
and shall be applied first to post judgment interest, which accrues pursuant to 28 U.S.C. § 1961
on any unpaid amounts due after 30 days of the entry of Final Judgment.  Prior to making the
final payment set forth herein, J.H. Darbie shall contact the staff of the Commission for the
amount due for the final payment.
      If J.H. Darbie fails to make any payment by the date agreed and/or in the amount
agreed according to the schedule set forth above, all outstanding payments under this Final
Judgment, including post-judgment interest, minus any payments made, shall become due and
payable immediately at the discretion of the staff of the Commission without further application
to the Court.

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IV.

 IT IS FURTHER ORDERED, ADJUDGED, AND DECREED that the Consent is
incorporated herein with the same force and effect as if fully set forth in this Final Judgment, 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 90 days of the entry of the Final Judgment, at its own cost, hire an
independent anti-money laundering (“AML”) Compliance Consultant, not unacceptable to the
Commission staff, to provide training to Defendant’s management and employees regarding the
proper implementation of Defendant’s anti-money laundering policies and procedures
(“AML P&P”).  The training shall address Defendant’s identification and investigation of
potentially suspicious customer activity that meets the description of the “red flags” set forth in
Defendant’s AML P&P and in applicable regulatory guidance, including, without limitation,
FINRA Regulatory Notice 19-18, and the filing of suspicious activity reports (“SARs”) with the
Department of Treasury’s Financial Crimes Enforcement Network concerning such activity.
Defendant shall cause the AML Compliance Consultant to complete the training described in
this paragraph no later than 180 days from entry of the Final Judgment.
(b) Defendant shall certify, in writing, the completion of the training
described in paragraph IV(a).  Defendant shall also cause the AML Compliance Consultant to
certify, in writing, the completion of the training described in paragraph IV(a).  The certification
shall identify the undertaking, 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 and the AML Compliance Consultant shall each submit the

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certification and supporting material to Alison Conn Esq., Assistant Regional Director, New
York Regional Office, with a copy to the Office of Chief Counsel of the Enforcement Division,
no later than 60 days from the date of the completion of the undertaking.
(c) Between 270 and 360 days of entry of the Final Judgment, Defendant shall
retain an independent AML Compliance Consultant, not unacceptable to the Commission staff,
to perform testing to assess whether Defendant is complying with (i) the recommendations set
forth in the May 19, 2016 report by Defendant’s third-party AML compliance consultant
concerning potentially suspicious customer activity in low-priced securities, and (ii) applicable
regulatory guidance regarding potentially suspicious customer activity including, without
limitation, FINRA Regulatory Notice 19-18, and the filing of SARs concerning such activity;
and that Defendant is properly implementing its AML P&P concerning potentially suspicious
customer activity in low-priced securities and the filing of SARs concerning such activity.
At least 30 days prior to beginning this testing, Defendant shall provide to the Commission staff
a copy of the parameters for testing.  Defendant shall cause the AML Compliance Consultant to
complete the testing described in this paragraph no later than 450 days from entry of the Final
Judgment.
(d) Defendant shall certify, in writing, the completion of the testing described
in paragraph IV(c).  Defendant shall also cause the AML Compliance Consultant to certify, in
writing, the completion of the testing described in paragraph IV(c).  The certification shall
identify the undertaking, provide written evidence of compliance in the form of a narrative,
including the results of the testing, 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 and the AML

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Compliance Consultant shall each submit the certification and supporting material to Alison
Conn Esq., Assistant Regional Director, New York Regional Office, with a copy to the Office
of Chief Counsel of the Enforcement Division, no later than 60 days from the date of the
completion of the undertaking.
V.
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.
Dated:  ______________, _____
____________________________________
JENNIFER H. REARDEN
UNITED STATES DISTRICT JUDGE
September 132023
New York, NY

UNITED STATES DISTRICT COURT 
SOUTHERN DISTRICT OF NEW YORK 

 
  
SECURITIES AND EXCHANGE COMMISSION,  
  

Plaintiff,  
 C.A. No. 22-cv-10482 (JHR) 

v.  
  
J.H. DARBIE & CO., INC.,  
  

Defendant.  
  

 
[PROPOSED] FINAL JUDGMENT AS TO DEFENDANT J.H. DARBIE & CO., INC. 

 
The Securities and Exchange Commission having filed a Complaint and Defendant 

J.H. Darbie & Co., Inc. (“Defendant” or “J.H. Darbie”) 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 Section 17(a) of the Securities Exchange Act 

of 1934 (the “Exchange Act”) [15 U.S.C. § 78q(a)] and Rule 17a-8 promulgated thereunder [17 

C.F.R. § 240.17a-8] by failing to comply with the reporting, recordkeeping, and record retention 

requirements of chapter X of Title 31 of the Code of Federal Regulations. 

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 

Case 1:22-cv-10482-JHR   Document 38   Filed 09/13/23   Page 1 of 6



 
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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 shall pay a 

civil penalty in the amount of $125,000 to the Securities and Exchange Commission pursuant to 

Section 21(d)(3) of the Exchange Act.  Defendant shall make this payment pursuant to the terms 

of the payment schedule set forth in paragraph III below 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; J.H. Darbie & Co., Inc. 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.     

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The Commission may enforce the Court’s judgment for penalties by the use of all 

collection procedures authorized by law, including the Federal Debt Collection Procedures Act, 

28 U.S.C. § 3001 et seq., and moving for civil contempt for the violation of any Court orders 

issued in this action.  Defendant shall pay post-judgment interest on any amounts due after 30 

days of the entry of this Final Judgment pursuant to 28 U.S.C. § 1961.   

III. 

J.H. Darbie shall pay the total penalty due of $125,000 in 12 installments to the 

Commission according to the following schedule:  (1) $25,000, paid within 14 days of entry of 

this Final Judgment; (2) ten monthly payments of $9,100, each of which shall be paid by the last 

business day of month for the 10 months following the entry of this Final Judgment starting with 

the month following the month that this Final Judgment is entered; and (3) one monthly payment 

of $9,000, paid by the last business day of the eleventh month following the entry of this Final 

Judgment.  Payments shall be deemed made on the date they are received by the Commission 

and shall be applied first to post judgment interest, which accrues pursuant to 28 U.S.C. § 1961 

on any unpaid amounts due after 30 days of the entry of Final Judgment.  Prior to making the 

final payment set forth herein, J.H. Darbie shall contact the staff of the Commission for the 

amount due for the final payment.  

      If J.H. Darbie fails to make any payment by the date agreed and/or in the amount 

agreed according to the schedule set forth above, all outstanding payments under this Final 

Judgment, including post-judgment interest, minus any payments made, shall become due and 

payable immediately at the discretion of the staff of the Commission without further application 

to the Court. 

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IV.  
 

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

incorporated herein with the same force and effect as if fully set forth in this Final Judgment, 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 90 days of the entry of the Final Judgment, at its own cost, hire an 

independent anti-money laundering (“AML”) Compliance Consultant, not unacceptable to the 

Commission staff, to provide training to Defendant’s management and employees regarding the 

proper implementation of Defendant’s anti-money laundering policies and procedures 

(“AML P&P”).  The training shall address Defendant’s identification and investigation of 

potentially suspicious customer activity that meets the description of the “red flags” set forth in 

Defendant’s AML P&P and in applicable regulatory guidance, including, without limitation, 

FINRA Regulatory Notice 19-18, and the filing of suspicious activity reports (“SARs”) with the 

Department of Treasury’s Financial Crimes Enforcement Network concerning such activity.  

Defendant shall cause the AML Compliance Consultant to complete the training described in 

this paragraph no later than 180 days from entry of the Final Judgment. 

(b) Defendant shall certify, in writing, the completion of the training 

described in paragraph IV(a).  Defendant shall also cause the AML Compliance Consultant to 

certify, in writing, the completion of the training described in paragraph IV(a).  The certification 

shall identify the undertaking, 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 and the AML Compliance Consultant shall each submit the 

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 5

certification and supporting material to Alison Conn Esq., Assistant Regional Director, New 

York Regional Office, with a copy to the Office of Chief Counsel of the Enforcement Division, 

no later than 60 days from the date of the completion of the undertaking. 

(c) Between 270 and 360 days of entry of the Final Judgment, Defendant shall 

retain an independent AML Compliance Consultant, not unacceptable to the Commission staff, 

to perform testing to assess whether Defendant is complying with (i) the recommendations set 

forth in the May 19, 2016 report by Defendant’s third-party AML compliance consultant 

concerning potentially suspicious customer activity in low-priced securities, and (ii) applicable 

regulatory guidance regarding potentially suspicious customer activity including, without 

limitation, FINRA Regulatory Notice 19-18, and the filing of SARs concerning such activity; 

and that Defendant is properly implementing its AML P&P concerning potentially suspicious 

customer activity in low-priced securities and the filing of SARs concerning such activity.  

At least 30 days prior to beginning this testing, Defendant shall provide to the Commission staff 

a copy of the parameters for testing.  Defendant shall cause the AML Compliance Consultant to 

complete the testing described in this paragraph no later than 450 days from entry of the Final 

Judgment.   

(d) Defendant shall certify, in writing, the completion of the testing described 

in paragraph IV(c).  Defendant shall also cause the AML Compliance Consultant to certify, in 

writing, the completion of the testing described in paragraph IV(c).  The certification shall 

identify the undertaking, provide written evidence of compliance in the form of a narrative, 

including the results of the testing, 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 and the AML 

Case 1:22-cv-10482-JHR   Document 38   Filed 09/13/23   Page 5 of 6



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Compliance Consultant shall each submit the certification and supporting material to Alison 

Conn Esq., Assistant Regional Director, New York Regional Office, with a copy to the Office 

of Chief Counsel of the Enforcement Division, no later than 60 days from the date of the 

completion of the undertaking. 

V.  

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. 

Dated:  ______________, _____ 

____________________________________ 
JENNIFER H. REARDEN

UNITED STATES DISTRICT JUDGE 

September 13 2023
New York, NY

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