In re Mitchell P. Rales

 
 
 
UNITED STATES OF AMERICA 
Before the 
SECURITIES AND EXCHANGE COMMISSION 
 
SECURITIES EXCHANGE ACT OF 1934 
Release No. 101180 / September 25, 2024 
 
ADMINISTRATIVE PROCEEDING 
File No. 3-22196 
 
 
In the Matter of 
 
Mitchell P. Rales 
 
Respondent. 
 
 
 
 
 
 
ORDER INSTITUTING CEASE-AND-
DESIST PROCEEDINGS PURSUANT TO 
SECTION 21C OF THE SECURITIES 
EXCHANGE ACT OF 1934, MAKING 
FINDINGS, AND IMPOSING A CEASE-
AND-DESIST ORDER 
  
I. 
 
 The Securities and Exchange Commission (“Commission”) deems it appropriate that cease-
and-desist proceedings be, and hereby are, instituted pursuant to Section 21C of the Securities 
Exchange Act of 1934 (“Exchange Act”), against Mitchell P. Rales (“Rales” or “Respondent”).   
 
II. 
 
 In anticipation of the institution of these proceedings, Respondent has submitted an Offer 
of Settlement (the “Offer”) which the Commission has determined to accept. Solely for the purpose 
of these proceedings and any other proceedings brought by or on behalf of the Commission, or to 
which the Commission is a party, and without admitting or denying the findings herein, except as 
to the Commission’s jurisdiction over him and the subject matter of these proceedings, which are 
admitted, and except as provided herein in Section V, Respondent consents to the entry of this 
Order Instituting Cease-and-Desist Proceedings Pursuant to Section 21C of the Securities 
Exchange Act of 1934, Making Findings, and Imposing a Cease-and-Desist Order (“Order”), as set 
forth below.   
 

 2 
III. 
 
 On the basis of this Order and Respondent’s Offer, the Commission finds
1
 that: 
 
Summary 
 
1. These proceedings arise out of violations of the beneficial ownership reporting 
requirements of the federal securities laws.  Section 13(d) of the Exchange Act and Rule 13d-1 
thereunder together require that any person who directly or indirectly acquires beneficial 
ownership of more than five percent of a voting class of any equity security registered under 
Section 12 of the Exchange Act file a statement with the Commission.  During the relevant time, 
beneficial owners could comply with this requirement by filing a Schedule 13D with the 
Commission within 10 days after acquiring the requisite amount of beneficial ownership.   
 
2. Respondent violated Section 13(d) on two occasions by failing to timely file 
Schedules 13D related to his beneficial ownership in Danaher Corporation (“Danaher”) and ESAB 
Corporation (“ESAB”), respectively.  Regarding Danaher, Respondent’s beneficial ownership 
position changed due to changes in the total amount of common stock outstanding.  Regarding 
ESAB, Respondent’s beneficial ownership position changed through a distribution of shares 
following a spin-off transaction. 
 
Respondent 
 
3. Rales, age 68, and a resident of Potomac, Maryland, is a co-founder of Danaher, 
and has served on Danaher’s board of directors since 1983. Rales is chairman of the board of 
directors of ESAB. 
 
Legal Framework 
 
4. Section 13(d)(1) of the Exchange Act and Rule 13d-1(a) thereunder together require 
any person who has directly or indirectly acquired beneficial ownership of more than five percent of 
any voting class of equity security registered under Section 12 of the Exchange Act to file a 
statement with the Commission disclosing certain information specified in a Schedule 13D.  During 
the relevant time, individuals or entities could comply with this requirement by filing a Schedule 
13D with the Commission within 10 days after they acquired the requisite amount of beneficial  
                                                 
1
 The findings herein are made pursuant to Respondent's Offer of Settlement and are not binding on any other person 
or entity in this or any other proceeding. 
 

 3 
ownership.
2
  Section 13(d) is a key provision that allows shareholders and potential investors to 
evaluate changes in substantial shareholdings.
3
   
 
5. There is no state of mind requirement for violations of Section 13(d) and the rules 
thereunder.
4
  The failure to timely file a required report, even if inadvertent, constitutes a 
violation.
5
  
Facts 
 
Danaher Corporation 
 
6. In his capacity as a shareholder of Danaher, Respondent had at various times filed 
statements and amendments on Schedule 13D, when required, based upon his beneficial ownership 
of Danaher’s common stock. 
 
7. On April 19, 2019, Respondent filed an amendment to his previously filed Schedule 
13D, disclosing that, as of April 18, 2019, due to a combination of donations by Respondent of 
shares of Danaher common stock that he had beneficially owned as well as an increase in the 
outstanding share count of Danaher’s common stock, Respondent was no longer the beneficial 
owner of more than five percent of the company’s common stock. 
 
8. However, on February 21, 2020, Danaher filed its annual report on Form 10-K for 
the fiscal year ended December 31, 2019, and reported there were 696,237,113 shares of common 
stock outstanding.  This amount represented a reduction of approximately 22 million shares 
compared to the share count disclosed in Danaher’s prior quarterly report on Form 10-Q. 
 
                                                 
2
 On October 10, 2023, the Commission adopted amendments to the rules governing beneficial ownership reporting 
under Sections 13(d) and 13(g) to update and shorten certain filing deadlines (the “2023 Amendments”).  
Modernization of Beneficial Ownership Reporting, SEC Release No. 34-98704 (Oct. 10, 2023), 88 Fed. Reg. 76896 
(Nov. 7, 2023).  Among other provisions, the 2023 Amendments shortened the deadline for filing the initial 
statement on Schedule 13D from 10 days to five business days, which became effective on February 5, 2024.  Id. at 
76897, 76906. 
 
3
 See generally GAF Corp. v. Milstein, 453 F.2d 709, 717 (2d Cir. 1971) cert. denied, 406 U.S. 910 (1972); see also 
SEC v. Savoy Indus., Inc., 587 F.2d 1149, 1167 (D.C. Cir. 1978) cert. denied, 440 U.S. 913 (1979), citing, S. Rep. 
No. 550, 90th Cong., 1st Sess. 1 (1967) and H.R. Rep. No. 1711, 90th Cong., 2d Sess. 2 (1968) (“The purpose of 
section 13(d) is to require disclosure of information by persons who have acquired a substantial interest, or increased 
their interest in the equity securities of a company by a substantial amount, within a relatively short period of 
time.”). 
 
4
 See, e.g., Savoy Indus., 587 F.2d at 1167 (“Indeed, the plain language of section 13(d)(1) gives no hint that 
intentional conduct need be found, but rather, appears to place a simple and affirmative duty of reporting on certain 
persons.”). 
 
5 Cf. Oppenheimer & Co., Inc., 47 SEC 286, 1980 WL 26901, at *1–2 (May 19, 1980) (Commission opinion) (“We 
have previously held that the failure to make a required report, even though inadvertent, constitutes a willful 
violation”); Herbert Moskowitz, 77 SEC 446, 2002 WL 434524, at *7 (Mar. 21, 2002) (Commission opinion) 
(“evidence of both motive for non-disclosure and actual market impact ... is irrelevant” to whether violations of 
Section 13(d) of the Exchange Act and Rules 13d-1 and 13d-2 thereunder occurred). 

 4 
9. As a result of the reduction in the outstanding share count, and not due to any 
acquisition of Danaher common stock by Respondent, Respondent’s beneficial ownership of 
Danaher common stock as of the date of the Form 10-K filing, February 21, 2020, represented 
approximately 5.1%. 
 
10. Respondent should have made a Schedule 13D filing to report his 5.1% beneficial 
ownership position no later than 10 days from February 21, 2020.  However, Respondent did not 
file a Schedule 13D until May 12, 2020, which was untimely.   
 
ESAB Corporation 
 
11. During the investigation of the Danaher filing, Respondent undertook a review of 
his other Schedule 13D filings at the Commission staff’s request and voluntarily reported that he 
had made an untimely Schedule 13D filing regarding his beneficial ownership position in ESAB 
common stock.   
 
12. ESAB is a company that was spun off in April 2022 from a corporation (“Prior 
Corporation”) in which Respondent was a director.  In connection with the spin-off transaction, the 
common stock of ESAB was registered under Section 12 of the Exchange Act on March 18, 2022. 
 
13. On April 4, 2022, the spin-off of ESAB was consummated and each shareholder of 
the Prior Corporation received one share of ESAB common stock for every three shares of Prior 
Corporation common stock.  As a result, Respondent received approximately 3.2 million shares of 
ESAB, which represented 5.4% of the company’s common stock. 
 
14. Respondent should have made a Schedule 13D filing no later than 10 days from 
April 4, 2022.  However, Respondent did not file a Schedule 13D until August 18, 2022, which 
was untimely. 
 
Violations 
 
15. As a result of the conduct described above, Respondent violated Section 13(d)(1) of 
the Exchange Act and Rule 13d-1 thereunder. 
 
Remedial Efforts and Cooperation 
 
In determining to accept the Offer, the Commission considered remedial acts, steps 
promptly undertaken by Respondent after being approached by Commission staff, and cooperation 
afforded to the Commission staff. 
 
IV. 
 
 In view of the foregoing, the Commission deems it appropriate to impose the sanctions 
agreed to in Respondent Rales’ Offer. 
 

 5 
 Accordingly, it is hereby ORDERED that: 
 
 A. Pursuant to Section 21C of the Exchange Act, Respondent Mitchell P. Rales cease 
and desist from committing or causing any violations and any future violations of Sections 13(d)(1) 
of the Exchange Act and Rule 13d-1 thereunder. 
 
B. Respondent shall, within 14 days of the entry of this Order, pay a civil money 
penalty in the amount of $10,000.00 to the Securities and Exchange Commission for transfer to the 
general fund of the United States Treasury, subject to Exchange Act Section 21F(g)(3). If timely 
payment is not made, additional interest shall accrue pursuant to 31 U.S.C. §3717.   
 
Payment must be made in one of the following ways:   
 
(1) Respondent may transmit payment electronically to the Commission, which 
will provide detailed ACH transfer/Fedwire instructions upon request;  
 
(2) Respondent may make direct payment from a bank account via Pay.gov 
through the SEC website at http://www.sec.gov/about/offices/ofm.htm; or  
 
(3) Respondent may pay by certified check, bank cashier’s check, or United 
States postal money order, made payable to the Securities and Exchange 
Commission and hand-delivered or mailed to:  
 
Enterprise Services Center 
Accounts Receivable Branch 
HQ Bldg., Room 181, AMZ-341 
6500 South MacArthur Boulevard 
Oklahoma City, OK 73169 
 
Payments by check or money order must be accompanied by a cover letter identifying 
Mitchell P. Rales as a Respondent in these proceedings, and the file number of these proceedings; a 
copy of the cover letter and check or money order must be sent to D. Mark Cave, Associate 
Director, Division of Enforcement, Securities and Exchange Commission, 100 F St., NE, 
Washington, DC 20549.  
 
 C. Amounts ordered to be paid as civil money penalties pursuant to this Order 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, Respondent agrees that in any Related Investor 
Action, he shall not argue that he is entitled to, nor shall he benefit by, offset or reduction of any 
award of compensatory damages by the amount of any part of Respondent’s payment of a civil 
penalty in this action (“Penalty Offset”).  If the court in any Related Investor Action grants such a 
Penalty Offset, Respondent agrees that he 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 Securities and Exchange Commission.  Such a payment shall not be deemed 
an additional civil penalty and shall not be deemed to change the amount of the civil penalty 

 6 
imposed in this proceeding.  For purposes of this paragraph, a “Related Investor Action” means a 
private damages action brought against Respondent by or on behalf of one or more investors based 
on substantially the same facts as alleged in the Order instituted by the Commission in this 
proceeding. 
 
D.   Respondent acknowledges that the Commission is not imposing a civil penalty in 
excess of $10,000, based upon his cooperation in a Commission investigation.  If at any time 
following the entry of the Order, the Division of Enforcement (“Division”) obtains information 
indicating that Respondent knowingly provided materially false or misleading information or 
materials to the Commission, or in a related proceeding, the Division may, at its sole discretion and 
with prior notice to the Respondent, petition the Commission to reopen this matter and seek an 
order directing that the Respondent pay an additional civil penalty.  Respondent may contest by 
way of defense in any resulting administrative proceeding whether it knowingly provided 
materially false or misleading information, but may not: (1) contest the findings in the Order; or (2) 
assert any defense to liability or remedy, including, but not limited to, any statute of limitations 
defense. 
 
V. 
It is further Ordered that, solely for purposes of exceptions to discharge set forth in Section 
523 of the Bankruptcy Code, 11 U.S.C. §523, the findings in this Order are true and admitted by 
Respondent, and further, any debt for disgorgement, prejudgment interest, civil penalty or other 
amounts due by Respondent under this Order or any other judgment, order, consent order, decree 
or settlement agreement entered in connection with this proceeding, is a debt for the violation by 
Respondent 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). 
 
 
 By the Commission. 
 
 
 
Vanessa A. Countryman 
Secretary 
 
 

UNITED STATES OF AMERICA 

Before the 

SECURITIES AND EXCHANGE COMMISSION 

 

SECURITIES EXCHANGE ACT OF 1934 

Release No. 101180 / September 25, 2024 

 

ADMINISTRATIVE PROCEEDING 

File No. 3-22196 

 

 

In the Matter of 

 

Mitchell P. Rales 

 

Respondent. 

 

 

 

 

 

 

ORDER INSTITUTING CEASE-AND-

DESIST PROCEEDINGS PURSUANT TO 

SECTION 21C OF THE SECURITIES 

EXCHANGE ACT OF 1934, MAKING 

FINDINGS, AND IMPOSING A CEASE-

AND-DESIST ORDER 

  

I. 

 

 The Securities and Exchange Commission (“Commission”) deems it appropriate that cease-

and-desist proceedings be, and hereby are, instituted pursuant to Section 21C of the Securities 

Exchange Act of 1934 (“Exchange Act”), against Mitchell P. Rales (“Rales” or “Respondent”).   

 

II. 

 

 In anticipation of the institution of these proceedings, Respondent has submitted an Offer 

of Settlement (the “Offer”) which the Commission has determined to accept. Solely for the purpose 

of these proceedings and any other proceedings brought by or on behalf of the Commission, or to 

which the Commission is a party, and without admitting or denying the findings herein, except as 

to the Commission’s jurisdiction over him and the subject matter of these proceedings, which are 

admitted, and except as provided herein in Section V, Respondent consents to the entry of this 

Order Instituting Cease-and-Desist Proceedings Pursuant to Section 21C of the Securities 

Exchange Act of 1934, Making Findings, and Imposing a Cease-and-Desist Order (“Order”), as set 

forth below.   

 



 2 

III. 

 

 On the basis of this Order and Respondent’s Offer, the Commission finds1 that: 

 

Summary 

 

1. These proceedings arise out of violations of the beneficial ownership reporting 

requirements of the federal securities laws.  Section 13(d) of the Exchange Act and Rule 13d-1 

thereunder together require that any person who directly or indirectly acquires beneficial 

ownership of more than five percent of a voting class of any equity security registered under 

Section 12 of the Exchange Act file a statement with the Commission.  During the relevant time, 

beneficial owners could comply with this requirement by filing a Schedule 13D with the 

Commission within 10 days after acquiring the requisite amount of beneficial ownership.   

 

2. Respondent violated Section 13(d) on two occasions by failing to timely file 

Schedules 13D related to his beneficial ownership in Danaher Corporation (“Danaher”) and ESAB 

Corporation (“ESAB”), respectively.  Regarding Danaher, Respondent’s beneficial ownership 

position changed due to changes in the total amount of common stock outstanding.  Regarding 

ESAB, Respondent’s beneficial ownership position changed through a distribution of shares 

following a spin-off transaction. 

 

Respondent 

 

3. Rales, age 68, and a resident of Potomac, Maryland, is a co-founder of Danaher, 

and has served on Danaher’s board of directors since 1983. Rales is chairman of the board of 

directors of ESAB. 

 

Legal Framework 

 

4. Section 13(d)(1) of the Exchange Act and Rule 13d-1(a) thereunder together require 

any person who has directly or indirectly acquired beneficial ownership of more than five percent of 

any voting class of equity security registered under Section 12 of the Exchange Act to file a 

statement with the Commission disclosing certain information specified in a Schedule 13D.  During 

the relevant time, individuals or entities could comply with this requirement by filing a Schedule 

13D with the Commission within 10 days after they acquired the requisite amount of beneficial  

                                                 
1 The findings herein are made pursuant to Respondent's Offer of Settlement and are not binding on any other person 

or entity in this or any other proceeding. 

 



 3 

ownership.2  Section 13(d) is a key provision that allows shareholders and potential investors to 

evaluate changes in substantial shareholdings.3   

 

5. There is no state of mind requirement for violations of Section 13(d) and the rules 

thereunder.4  The failure to timely file a required report, even if inadvertent, constitutes a 

violation.5  

Facts 

 

Danaher Corporation 

 

6. In his capacity as a shareholder of Danaher, Respondent had at various times filed 

statements and amendments on Schedule 13D, when required, based upon his beneficial ownership 

of Danaher’s common stock. 

 

7. On April 19, 2019, Respondent filed an amendment to his previously filed Schedule 

13D, disclosing that, as of April 18, 2019, due to a combination of donations by Respondent of 

shares of Danaher common stock that he had beneficially owned as well as an increase in the 

outstanding share count of Danaher’s common stock, Respondent was no longer the beneficial 

owner of more than five percent of the company’s common stock. 

 

8. However, on February 21, 2020, Danaher filed its annual report on Form 10-K for 

the fiscal year ended December 31, 2019, and reported there were 696,237,113 shares of common 

stock outstanding.  This amount represented a reduction of approximately 22 million shares 

compared to the share count disclosed in Danaher’s prior quarterly report on Form 10-Q. 

 

                                                 
2 On October 10, 2023, the Commission adopted amendments to the rules governing beneficial ownership reporting 

under Sections 13(d) and 13(g) to update and shorten certain filing deadlines (the “2023 Amendments”).  

Modernization of Beneficial Ownership Reporting, SEC Release No. 34-98704 (Oct. 10, 2023), 88 Fed. Reg. 76896 

(Nov. 7, 2023).  Among other provisions, the 2023 Amendments shortened the deadline for filing the initial 

statement on Schedule 13D from 10 days to five business days, which became effective on February 5, 2024.  Id. at 

76897, 76906. 

 
3 See generally GAF Corp. v. Milstein, 453 F.2d 709, 717 (2d Cir. 1971) cert. denied, 406 U.S. 910 (1972); see also 

SEC v. Savoy Indus., Inc., 587 F.2d 1149, 1167 (D.C. Cir. 1978) cert. denied, 440 U.S. 913 (1979), citing, S. Rep. 

No. 550, 90th Cong., 1st Sess. 1 (1967) and H.R. Rep. No. 1711, 90th Cong., 2d Sess. 2 (1968) (“The purpose of 

section 13(d) is to require disclosure of information by persons who have acquired a substantial interest, or increased 

their interest in the equity securities of a company by a substantial amount, within a relatively short period of 

time.”). 

 
4 See, e.g., Savoy Indus., 587 F.2d at 1167 (“Indeed, the plain language of section 13(d)(1) gives no hint that 

intentional conduct need be found, but rather, appears to place a simple and affirmative duty of reporting on certain 

persons.”). 

 

5 Cf. Oppenheimer & Co., Inc., 47 SEC 286, 1980 WL 26901, at *1–2 (May 19, 1980) (Commission opinion) (“We 

have previously held that the failure to make a required report, even though inadvertent, constitutes a willful 

violation”); Herbert Moskowitz, 77 SEC 446, 2002 WL 434524, at *7 (Mar. 21, 2002) (Commission opinion) 

(“evidence of both motive for non-disclosure and actual market impact … is irrelevant” to whether violations of 

Section 13(d) of the Exchange Act and Rules 13d-1 and 13d-2 thereunder occurred). 



 4 

9. As a result of the reduction in the outstanding share count, and not due to any 

acquisition of Danaher common stock by Respondent, Respondent’s beneficial ownership of 

Danaher common stock as of the date of the Form 10-K filing, February 21, 2020, represented 

approximately 5.1%. 

 

10. Respondent should have made a Schedule 13D filing to report his 5.1% beneficial 

ownership position no later than 10 days from February 21, 2020.  However, Respondent did not 

file a Schedule 13D until May 12, 2020, which was untimely.   

 

ESAB Corporation 

 

11. During the investigation of the Danaher filing, Respondent undertook a review of 

his other Schedule 13D filings at the Commission staff’s request and voluntarily reported that he 

had made an untimely Schedule 13D filing regarding his beneficial ownership position in ESAB 

common stock.   

 

12. ESAB is a company that was spun off in April 2022 from a corporation (“Prior 

Corporation”) in which Respondent was a director.  In connection with the spin-off transaction, the 

common stock of ESAB was registered under Section 12 of the Exchange Act on March 18, 2022. 

 

13. On April 4, 2022, the spin-off of ESAB was consummated and each shareholder of 

the Prior Corporation received one share of ESAB common stock for every three shares of Prior 

Corporation common stock.  As a result, Respondent received approximately 3.2 million shares of 

ESAB, which represented 5.4% of the company’s common stock. 

 

14. Respondent should have made a Schedule 13D filing no later than 10 days from 

April 4, 2022.  However, Respondent did not file a Schedule 13D until August 18, 2022, which 

was untimely. 

 

Violations 

 

15. As a result of the conduct described above, Respondent violated Section 13(d)(1) of 

the Exchange Act and Rule 13d-1 thereunder. 

 

Remedial Efforts and Cooperation 

 

In determining to accept the Offer, the Commission considered remedial acts, steps 

promptly undertaken by Respondent after being approached by Commission staff, and cooperation 

afforded to the Commission staff. 

 

IV. 

 

 In view of the foregoing, the Commission deems it appropriate to impose the sanctions 

agreed to in Respondent Rales’ Offer. 

 



 5 

 Accordingly, it is hereby ORDERED that: 

 

 A. Pursuant to Section 21C of the Exchange Act, Respondent Mitchell P. Rales cease 

and desist from committing or causing any violations and any future violations of Sections 13(d)(1) 

of the Exchange Act and Rule 13d-1 thereunder. 

 

B. Respondent shall, within 14 days of the entry of this Order, pay a civil money 

penalty in the amount of $10,000.00 to the Securities and Exchange Commission for transfer to the 

general fund of the United States Treasury, subject to Exchange Act Section 21F(g)(3). If timely 

payment is not made, additional interest shall accrue pursuant to 31 U.S.C. §3717.   

 

Payment must be made in one of the following ways:   

 

(1) Respondent may transmit payment electronically to the Commission, which 

will provide detailed ACH transfer/Fedwire instructions upon request;  

 

(2) Respondent may make direct payment from a bank account via Pay.gov 

through the SEC website at http://www.sec.gov/about/offices/ofm.htm; or  

 

(3) Respondent may pay by certified check, bank cashier’s check, or United 

States postal money order, made payable to the Securities and Exchange 

Commission and hand-delivered or mailed to:  

 

Enterprise Services Center 

Accounts Receivable Branch 

HQ Bldg., Room 181, AMZ-341 

6500 South MacArthur Boulevard 

Oklahoma City, OK 73169 

 

Payments by check or money order must be accompanied by a cover letter identifying 

Mitchell P. Rales as a Respondent in these proceedings, and the file number of these proceedings; a 

copy of the cover letter and check or money order must be sent to D. Mark Cave, Associate 

Director, Division of Enforcement, Securities and Exchange Commission, 100 F St., NE, 

Washington, DC 20549.  

 

 C. Amounts ordered to be paid as civil money penalties pursuant to this Order 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, Respondent agrees that in any Related Investor 

Action, he shall not argue that he is entitled to, nor shall he benefit by, offset or reduction of any 

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

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

Penalty Offset, Respondent agrees that he 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 Securities and Exchange Commission.  Such a payment shall not be deemed 

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

http://www.sec.gov/about/offices/ofm.htm


 6 

imposed in this proceeding.  For purposes of this paragraph, a “Related Investor Action” means a 

private damages action brought against Respondent by or on behalf of one or more investors based 

on substantially the same facts as alleged in the Order instituted by the Commission in this 

proceeding. 

 

D.   Respondent acknowledges that the Commission is not imposing a civil penalty in 

excess of $10,000, based upon his cooperation in a Commission investigation.  If at any time 

following the entry of the Order, the Division of Enforcement (“Division”) obtains information 

indicating that Respondent knowingly provided materially false or misleading information or 

materials to the Commission, or in a related proceeding, the Division may, at its sole discretion and 

with prior notice to the Respondent, petition the Commission to reopen this matter and seek an 

order directing that the Respondent pay an additional civil penalty.  Respondent may contest by 

way of defense in any resulting administrative proceeding whether it knowingly provided 

materially false or misleading information, but may not: (1) contest the findings in the Order; or (2) 

assert any defense to liability or remedy, including, but not limited to, any statute of limitations 

defense. 

 

V. 

It is further Ordered that, solely for purposes of exceptions to discharge set forth in Section 

523 of the Bankruptcy Code, 11 U.S.C. §523, the findings in this Order are true and admitted by 

Respondent, and further, any debt for disgorgement, prejudgment interest, civil penalty or other 

amounts due by Respondent under this Order or any other judgment, order, consent order, decree 

or settlement agreement entered in connection with this proceeding, is a debt for the violation by 

Respondent 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). 

 

 

 By the Commission. 

 

 

 

Vanessa A. Countryman 

Secretary 

 

 


	UNITED STATES OF AMERICA
	IV.