SEC v. Austin Mahone, No. 1:23-cv-02433, Southern District of New York (Aug. 7, 2023) — Judgment

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UNITED STATES DISTRICT COURT
SOUTHERN DISTRICT OF NEW YORK
SECURITIES AND EXCHANGE COMMISSION,
Plaintiff,
v.    Case No. 1:23-cv-02433-ER
JUSTIN SUN, TRON FOUNDATION LIMITED,
BITTORRENT FOUNDATION LTD.,
RAINBERRY, INC., AUSTIN MAHONE, and
DEANDRE CORTEZ WAY,
Defendants.
FINAL JUDGMENT AS TO DEFENDANT AUSTIN MAHONE
The Securities and Exchange Commission having filed a Complaint and Defendant
Austin Mahone (“Defendant”) 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 and except as otherwise provided herein in paragraph VI); 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(b) of the Securities Act of 1933
(“Securities Act”), 15 U.S.C. § 77q(b), by the use of any means or instruments of transportation
or communication in interstate commerce or by the use of the mails, to publish, give publicity to,
or circulate any notice, circular, advertisement, newspaper, article, letter, investment service, or
communication which, though not purporting to offer a security for sale, describes such security

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for a consideration received or to be received, directly or indirectly, from an issuer, underwriter,
or dealer, without fully disclosing the receipt, whether past or prospective, of such consideration
and the amount thereof.
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 pursuant to Section
21(d)(5) of the Securities Exchange Act of 1934 (“Exchange Act”), 15 U.S.C. § 78u(d)(5),
Defendant is,
 for a period of three years, restrained and enjoined from receiving or agreeing to
receive any form of compensation or consideration, directly or indirectly, from any issuer,
underwriter, or dealer, for directly or indirectly publishing, giving publicity to, or circulating any
notice, circular, advertisement, newspaper, article, letter, investment service, or communication,
which, though not purporting to offer a crypto asset security for sale, describes such crypto
asset
security.
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).

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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; Mahone 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.
III.
IT IS FURTHER ORDERED, ADJUDGED, AND DECREED that Defendant is liable
for
disgorgement of $7,507, representing net profits gained as a result of the conduct alleged in
the Complaint, together with prejudgment interest thereon in the amount of $682, and a civil
penalty in the amount of $37,535 pursuant to Section 20(d) of the Securities Act, 15 U.S.C. §
77t(d).  Defendant shall satisfy this obligation by   paying $45,724 to the Securities and Exchange
Commission pursuant to the terms of the payment schedule set   forth in paragraph IV    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:

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The Commission may enforce the Court’s judgment for disgorgement and prejudgment
interest by using all  collection procedures authorized by law, including, but not limited to,
moving for civil contempt at any time after 30 days following entry of this Final Judgment.
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.  The Commission shall
hold the funds, together with any interest and income earned thereon (collectively, the “Fund”),
pending further order of the Court.
The Commission may propose a plan to distribute the Fund subject to the Court’s
approval.  Such a plan may provide that the Fund
shall be distributed pursuant to the Fair Fund
provisions of Section 308(a) of the Sarbanes-Oxley Act of 2002.  The Court shall retain
jurisdiction over the administration of any distribution of the Fund and the Fund may only be
disbursed pursuant to an
Order of the Court.
Regardless of whether any such Fair Fund distribution is made, amounts ordered to be
paid as civil penalties
pursuant to this Judgment shall be treated as penalties paid to the
government for all purposes, including all  tax purposes.  To preserve the deterrent effect of the
civil penalty, Defendant shall not, after offset or reduction of any award of compensatory
damages in any Related
Investor Action based on Defendant’s payment of disgorgement in this
action, argue that he is entitled to, nor shall he further benefit by, offset or reduction of such
compensatory damages award by the amount of any part of Defendant’s payment of a civil
penalty in this action (“Penalty Offset”).  If the court in any Related
Investor Acti   on grants such

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a Penalty Offset, Defendant shall, within 30 days after entry of a final order granting the Penalty
Offset, notify the Commission’s counsel in this action and pay the amount of the Penalty Offset
to the United States Treasury or to a Fair Fund, as the Commission directs.  Such a payment shall
not be deemed an additional civil penalty and shall not be deemed to change the amount of the
civil penalty imposed in this Judgment.  For purposes of this paragraph, a “Related Investor
Action” means a private damages action brought against Defendant by or on behalf of one or
more investors based on substantially the same facts as alleged in the
Complaint in this   action.
IV.
Defendant shall pay the total disgorgement, prejudgment interest, and penalty due of
$45,724 in four installments to the Commission according to the following schedule:  (1)
$15,242 within 30 days following entry of this Final Judgment; (2)
$15,241 within 120 days
following entry of this Final Judgment; (3) $15,241 within 240 days following entry of this
Final
Judgment; and (4) any remaining amounts due under this Final Judgment within 360 days
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 following the entry of
Final Judgment.  Prior to making the final payment set   forth herein, Defendant shall contact the
staff of the Commission for the amount due for the final payment.
If  Defendant 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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Da
ted:  ____________________
V.
IT IS FURTHER ORDERED, ADJUDGED, AND DECREED that Defendant’s 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.
VI.
IT IS FURTHER ORDERED, ADJUDGED, AND DECREED that, solely for purposes of
exceptions to discharge set   forth in Section 523 of the Bankruptcy Code, 11 U.S.C. §523, the
allegations in the C om
plaint are true and admitted by Defendant, and further, any debt for
disgorgement, prejudgment interest, civil penalty or other amounts due by Defendant under this
Final Judgment or any other judgment, order, consent order, decree or settlement agreement
entered in connection with this proceeding, is a debt for the violation by Defendant of the federal
securities laws or any regulation or order issued under such laws,
as set   forth in Section
523(a)(19) of the Bankruptcy Code, 11 U.S.C. § 523(a)(19).
VII.
IT IS FURTHER ORDE
RED, ADJUDGED, AND DECREED that this Court shall retain
jurisdiction of this matter for the purposes of enforcing the terms of this Final Judgment.
VIII.
T
here being no just reason for delay, pursuant to Rule 54(b) of the Federal Rules of Civil
Procedure, the Clerk is ordered to enter thi
s Final Judgment forthwith and without further notice.
New York, NY
August 4, 2023

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UNITED STATES DISTRICT COURT 
SOUTHERN DISTRICT OF NEW YORK 

SECURITIES AND EXCHANGE COMMISSION, 

Plaintiff, 

v.    Case No. 1:23-cv-02433-ER 

JUSTIN SUN, TRON FOUNDATION LIMITED, 
BITTORRENT FOUNDATION LTD., 
RAINBERRY, INC., AUSTIN MAHONE, and 
DEANDRE CORTEZ WAY, 

Defendants. 

FINAL JUDGMENT AS TO DEFENDANT AUSTIN MAHONE

The Securities and Exchange Commission having filed a Complaint and Defendant 

Austin Mahone (“Defendant”) 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 and except as otherwise provided herein in paragraph VI); 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(b) of the Securities Act of 1933 

(“Securities Act”), 15 U.S.C. § 77q(b), by the use of any means or instruments of transportation 

or communication in interstate commerce or by the use of the mails, to publish, give publicity to, 

or circulate any notice, circular, advertisement, newspaper, article, letter, investment service, or 

communication which, though not purporting to offer a security for sale, describes such security 

Case 1:23-cv-02433-ER   Document 33   Filed 08/04/23   Page 1 of 6



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for a consideration received or to be received, directly or indirectly, from an issuer, underwriter, 

or dealer, without fully disclosing the receipt, whether past or prospective, of such consideration 

and the amount thereof.   

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 pursuant to Section 

21(d)(5) of the Securities Exchange Act of 1934 (“Exchange Act”), 15 U.S.C. § 78u(d)(5), 

Defendant is, for a period of three years, restrained and enjoined from receiving or agreeing to 

receive any form of compensation or consideration, directly or indirectly, from any issuer, 

underwriter, or dealer, for directly or indirectly publishing, giving publicity to, or circulating any 

notice, circular, advertisement, newspaper, article, letter, investment service, or communication, 

which, though not purporting to offer a crypto asset security for sale, describes such crypto asset 

security. 

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). 

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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; Mahone 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.   

III. 

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

for disgorgement of $7,507, representing net profits gained as a result of the conduct alleged in 

the Complaint, together with prejudgment interest thereon in the amount of $682, and a civil 

penalty in the amount of $37,535 pursuant to Section 20(d) of the Securities Act, 15 U.S.C. § 

77t(d).  Defendant shall satisfy this obligation by paying $45,724 to the Securities and Exchange 

Commission pursuant to the terms of the payment schedule set forth in paragraph IV 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:  

Case 1:23-cv-02433-ER   Document 33   Filed 08/04/23   Page 3 of 6



4 

The Commission may enforce the Court’s judgment for disgorgement and prejudgment 

interest by using all collection procedures authorized by law, including, but not limited to, 

moving for civil contempt at any time after 30 days following entry of this Final Judgment.   

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.  The Commission shall 

hold the funds, together with any interest and income earned thereon (collectively, the “Fund”), 

pending further order of the Court.     

The Commission may propose a plan to distribute the Fund subject to the Court’s 

approval.  Such a plan may provide that the Fund shall be distributed pursuant to the Fair Fund 

provisions of Section 308(a) of the Sarbanes-Oxley Act of 2002.  The Court shall retain 

jurisdiction over the administration of any distribution of the Fund and the Fund may only be 

disbursed pursuant to an Order of the Court.    

Regardless of whether any such Fair Fund distribution is made, amounts ordered to be 

paid as civil penalties pursuant to this Judgment shall be treated as penalties paid to the 

government for all purposes, including all tax purposes.  To preserve the deterrent effect of the 

civil penalty, Defendant shall not, after offset or reduction of any award of compensatory 

damages in any Related Investor Action based on Defendant’s payment of disgorgement in this 

action, argue that he is entitled to, nor shall he further benefit by, offset or reduction of such 

compensatory damages award by the amount of any part of Defendant’s payment of a civil 

penalty in this action (“Penalty Offset”).  If the court in any Related Investor Action grants such 

Case 1:23-cv-02433-ER   Document 33   Filed 08/04/23   Page 4 of 6



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a Penalty Offset, Defendant shall, within 30 days after entry of a final order granting the Penalty 

Offset, notify the Commission’s counsel in this action and pay the amount of the Penalty Offset 

to the United States Treasury or to a Fair Fund, as the Commission directs.  Such a payment shall 

not be deemed an additional civil penalty and shall not be deemed to change the amount of the 

civil penalty imposed in this Judgment.  For purposes of this paragraph, a “Related Investor 

Action” means a private damages action brought against Defendant by or on behalf of one or 

more investors based on substantially the same facts as alleged in the Complaint in this action. 

IV. 

Defendant shall pay the total disgorgement, prejudgment interest, and penalty due of 

$45,724 in four installments to the Commission according to the following schedule:  (1) 

$15,242 within 30 days following entry of this Final Judgment; (2) $15,241 within 120 days 

following entry of this Final Judgment; (3) $15,241 within 240 days following entry of this Final 

Judgment; and (4) any remaining amounts due under this Final Judgment within 360 days 

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 following the entry of 

Final Judgment.  Prior to making the final payment set forth herein, Defendant shall contact the 

staff of the Commission for the amount due for the final payment.  

If Defendant 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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Dated:  ____________________ 

V. 

IT IS FURTHER ORDERED, ADJUDGED, AND DECREED that Defendant’s 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.   

VI. 

IT IS FURTHER ORDERED, ADJUDGED, AND DECREED that, solely for purposes of 

exceptions to discharge set forth in Section 523 of the Bankruptcy Code, 11 U.S.C. §523, the 

allegations in the Complaint are true and admitted by Defendant, and further, any debt for 

disgorgement, prejudgment interest, civil penalty or other amounts due by Defendant under this 

Final Judgment or any other judgment, order, consent order, decree or settlement agreement 

entered in connection with this proceeding, is a debt for the violation by Defendant of the federal 

securities laws or any regulation or order issued under such laws, as set forth in Section 

523(a)(19) of the Bankruptcy Code, 11 U.S.C. § 523(a)(19). 

VII. 

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. 

VIII. 

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. 

New York, NY

August 4, 2023

Case 1:23-cv-02433-ER   Document 33   Filed 08/04/23   Page 6 of 6