Deferred Prosecution Agreement Between SEC and John Kollus

UNITED STATES OF AMERICA 
SECURITIES AND EXCHANGE COMMISSION 
 
DEFERRED PROSECUTION AGREEMENT 
 
1.  In connection with an investigation, the Division of Enforcement (“Division”) of 
the United States Securities and Exchange Commission (“Commission”) alleges that John 
Kollus (“Respondent”), on or about July 22-25, 2016, violated Sections 10(b) and 14(e) 
of the Securities Exchange Act of 1934 (“Exchange Act”) and Rules 10b-5 and 14e-3 
thereunder, by trading ahead of the July 27, 2016, public announcement that Laboratory 
Corporation of America Holdings (“LabCorp”), through its wholly owned subsidiary 
Savoy Acquisition Corp., would acquire all outstanding stock of Sequenom, Inc. 
(“Sequenom”) in a cash tender offer of $2.40 per share  while he was in possession of 
material, nonpublic information concerning the transaction (the “Investigation”).  Prior to 
a public enforcement action being brought by the Commission against him, Respondent 
has offered to accept responsibility for his conduct and to not contest or contradict the 
factual statements contained in Paragraph 6 in any future Commission enforcement 
action in the event he breaches this Agreement.  Accordingly, the Commission and the 
Respondent enter into this deferred prosecution agreement (“Agreement”) on the 
following terms and conditions:     
 
ELIGIBILITY 
 
2.  The Respondent certifies that he has never been charged or found guilty of 
violating the federal securities laws, or a party to a civil action or administrative 
proceeding concerning allegations or findings of violations of the federal securities laws.  
 
TERM 
 
3.  The Respondent understands and agrees that the provisions of this Agreement are 
in full force and effect from July 26, 2018 to July 26, 2020 (“Deferred Period”), unless 
expressly stated otherwise. 
 
COOPERATION 
 
4. The Respondent agrees to cooperate fully and truthfully in the Investigation and 
any other related enforcement litigation or proceedings to which the Commission is a 
party (the “Proceedings”), regardless of the time period in which the cooperation is 
required.  The full, truthful, and continuing cooperation of the Respondent shall include, 
but not be limited to: 
 
a.  producing all non-privileged documents and other materials to the 
Commission as requested by the Division’s staff, wherever located, in the possession, 
custody, or control of the Respondent;  
 

b.  appearing for interviews, at such times and places, as requested by the 
Division’s staff;  
 
c.  responding fully and truthfully to all inquiries, when requested to do so by 
the Division’s staff, in connection with the Proceedings; 
 
d.  testifying at trial and other judicial proceedings, when requested to do so 
by the Division’s staff, in connection with the Proceedings; 
 
e. accepting service by mail, email, or facsimile transmission of notices or 
subpoenas for documents or testimony at depositions, hearings, trials or in connection 
with the Proceedings;  
 
f. appointing his undersigned attorney as agent to receive service of such 
notices and subpoenas;  
 
g. waiving the territorial limits on service contained in Rule 45 of the Federal 
Rules of Civil Procedure and any applicable local rules, when requested to appear by the 
Division’s staff; and  
 
h.  entering into tolling agreements, when requested to do so by the 
Division’s staff, during the period of cooperation. 
 
STATUTE OF LIMITATIONS 
 
5.  The Respondent agrees that the running of any statute of limitations applicable to 
any action or proceeding against him authorized, instituted, or brought by or on behalf of 
the Commission arising out of the Investigation, including any sanctions or relief that 
may be imposed therein, is tolled and suspended during the Deferred Period. 
 
a.  The Respondent and any of his attorneys or agents shall not include the 
Deferred Period in the calculation of the running of any statute of limitations or for any 
other time-related defense applicable to the Proceeding, including any sanctions or relief 
that may be imposed therein, in asserting or relying upon any such time-related defense.  
 
b.  This agreement shall not affect any applicable statute of limitations 
defense or any other time-related defense that may be available to Respondent before the 
commencement of the Deferred Period or be construed to revive a Proceeding that may 
be barred by any applicable statute of limitations or any other time-related defense before 
the commencement of the Deferred Period. 
 
c. The running of any statute of limitations applicable to the Proceeding shall 
commence again after the end of the Deferred Period, unless there is an extension of the 
Deferred Period executed in writing by or on behalf of the parties hereto. 
 

d.  This agreement shall not be construed as an admission by the Commission 
relating to the applicability of any statute of limitations to the Proceeding, including as to 
any sanctions or relief that may be imposed therein, or to the length of any limitations 
period that may apply, or to the applicability of any other time-related defense.  
 
STATEMENT OF FACTS
1
 
 
6.  If this case had gone to trial, the Commission would have presented evidence 
sufficient to prove the following facts:   
 
a. Respondent is a sales manager at a media and financial information firm 
and a childhood friend of Rob Lozuk (“Lozuk”).  Respondent is a resident of Carlsbad, 
California and is not registered with the Commission. 
 
b. Lozuk is a resident of Carlsbad, California and was the Senior Vice 
President of Commercial Operations at Sequenom from June 2015 until he left Sequenom 
in October 2016.  Lozuk is not registered with the Commission. 
 
 c.  Sequenom, incorporated in 1994, is a life sciences company headquartered 
in San Diego, California.  Sequenom was acquired in a 2016 tender offer by LabCorp, 
and is now a wholly-owned subsidiary of LabCorp.  Sequenom’s common stock was 
formerly registered with the Commission and was traded on the NASDAQ (ticker: 
SQNM). 
 
d. On June 8, 2016, Sequenom’s board of directors instructed an investment 
bank to reach out to four companies to gauge interest in acquiring Sequenom.  No later 
than that date, Rob Lozuk became aware that Sequenom would likely be acquired, and 
was therefore in possession of material, nonpublic information concerning the 
transaction.  Lozuk owed a duty to Sequenom not to disclose or trade upon the 
information concerning the acquisition.   
 
e. During a social gathering that both Lozuk and Respondent attended on 
July 21, 2016, Lozuk told Respondent that he should purchase $10,000 worth of 
Sequenom shares due to the impending acquisition.  Respondent knew that Lozuk had 
provided him this information in breach of Lozuk’s duty to Sequenom. 
 
f. Between July 22 and 25, 2016, Respondent used the material, nonpublic 
information he received from Lozuk to purchase a total of 18,000 shares of Sequenom 
stock when the shares were trading at prices ranging from $0.86 to $0.88 per share.   
 
g. On July 27, 2016, Sequenom and LabCorp announced that LabCorp would 
acquire all of Sequenom’s outstanding stock in a cash tender offer for $2.40 per share.  
                                                 
1
 The facts set forth in this section are made pursuant to settlement negotiations associated with the 
violations alleged by the Division in Paragraph 1 of this Agreement and are not binding in any other legal 
proceeding or on any other person or entity. 

As a result of the announcement, Sequenom’s stock price increased 176% to $2.35 per 
share. 
 
h. After the announcement of the Sequenom-LabCorp deal, Respondent sold 
all of his Sequenom shares on July 27, 2016, realizing a profit of $26,643.80.  
 
i.  The staff sent an administrative subpoena to Respondent in March 2017.  
In response, Respondent immediately contacted the staff through counsel and provided 
full and complete cooperation to the staff in connection with the Investigation.  Among 
other things, Respondent promptly identified Lozuk – the details of whose involvement 
was not yet known to the staff – as his tipper.  Respondent also provided the staff with 
the details of when, how, and where Lozuk provided Respondent with material, 
nonpublic information about Sequenom prior to the July 27 announcement of the 
LabCorp-Sequenom deal.  Respondent also provided the staff with details of subsequent 
conversations with Lozuk in which Respondent confirmed to Lozuk that Respondent 
benefitted financially by trading on the tip.  As a direct result of Respondent’s 
substantial cooperation, the Commission was able to bring charges against Lozuk, which 
he has agreed to settle.  
 
PROHIBITIONS 
 
7.  During the Deferred Period, the Respondent understands and agrees to comply 
with the following prohibitions: 
 
 a. to refrain from violating the federal and state securities laws;   
 
b.  to refrain from violating the applicable rules promulgated by any self 
regulatory organization or professional licensing board; and 
 
c. to refrain from seeking or accepting a federal or state tax credit or 
deduction for any civil penalties paid pursuant to this Agreement; 
 
UNDERTAKINGS 
 
8.  During the Deferred Period, the Respondent understands and agrees to perform 
the following undertakings: 
 
a. to provide written notification to the Division, within five days, if he has 
been questioned, charged, or convicted of an offense by any federal, state, or local law 
enforcement organization or regulatory agency;   
 
b. to provide written notification to the Division, within five days, if he has 
been questioned, a formal or informal complaint has been made against him, or 
disciplinary action has been taken against him by any self-regulatory organization or 
professional licensing board;  
 

c. to pay disgorgement obtained or retained as a result of the violations 
alleged in Paragraph 1 in the amount of $26,643.80, together with prejudgment interest 
thereon in the amount of $2,180.25 within 30 days.  Payment may be made directly from 
a bank account via Pay.gov through the SEC website at 
http://www.sec.gov/about/offices/ofm.htm.  Payment may also be made 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 
along with a letter identifying the Respondent and specifying that the payment is made 
pursuant to a deferred prosecution agreement entered into with the Commission on July 
26, 2018, and sending an additional copy of the letter and check in accordance with the 
service requirements of Paragraph 11; and  
 
 d. to provide the Division with a written certification of compliance with the 
prohibitions and undertakings in this Agreement between forty-five and sixty days before 
the end of the Deferred Period.     
 
 
PUBLIC STATEMENTS 
 
9.  After the Deferred Period begins, July 26, 2018, the Respondent agrees not to take 
any action or to make or permit any public statement through present or future attorneys, 
employees, agents, or other persons authorized to speak for him, except in legal 
proceedings in which the Commission is not a party / in litigation or otherwise, denying, 
directly or indirectly, any aspect of this Agreement or creating the impression that the 
statements in Paragraph 6 of this Agreement are without factual basis.  If it is determined 
by the Commission that a public statement by the Respondent or any related person 
contradicts in whole or in part this Agreement, at its sole discretion, the Commission may 
bring an enforcement action in accordance with Paragraphs 12 through 14.      
 
10. Prior to issuing a press release concerning this Agreement, the Respondent agrees 
to have the text of the release approved by the staff of the Division.   
 
 
 
SERVICE 
 
11.  The Respondent agrees to serve by hand delivery or by next-day mail all written 
notices and correspondence required by or related to this Agreement to Marc Blau, 
Assistant Regional Director, 444 S Flower Street, Suite 900, Los Angeles, CA 90071, 
(323) 965-3975, unless otherwise directed in writing by the staff of the Division.   
 
 

VIOLATION OF AGREEMENT 
 
12. The Respondent understands and agrees that it shall be a violation of this 
Agreement if he knowingly provides false or misleading information or materials in 
connection with the Proceedings.  In the event of such misconduct, the Division will 
advise the Commission of the Respondent’s misconduct and may make a criminal referral 
for providing false information (18 U.S.C. § 1001), perjury (18 U.S.C. § 1621), making 
false statements or declarations in court proceedings (18 U.S.C. § 1623), contempt (18 
U.S.C. §§ 401-402) and/or obstructing justice (18 U.S.C. § 1503 et seq.). 
 
13. The Respondent understands and agrees that it shall be a violation of this 
Agreement if he violates the federal securities laws after entering into this agreement.  It 
is further understood and agreed that should the Division determine that the Respondent 
has failed to comply with any term or condition of this Agreement, the Division will 
notify the Respondent or his counsel of this fact and provide an opportunity for the 
Respondent to make a submission consistent with the procedures set forth in the 
Securities Act of 1933 Release No. 5310.  Under these circumstances, the Division may, 
in its sole discretion and not subject to judicial review, recommend to the Commission an 
enforcement action against the Respondent for any securities law violations, including, 
but not limited to, the substantive offenses relating to the Investigation.  Nothing in this 
agreement limits the Division’s discretion to recommend to the Commission an 
enforcement action against the Respondent for future violations of the federal securities 
laws, without notice, to protect the public interest.  
 
14. The Respondent understands that if he 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 Agreement, minus any payments made, shall become 
due and payable immediately at the discretion of the staff of the Commission.    
 
15. The Respondent understands and agrees that in any future enforcement action 
resulting from his violation of the Agreement, any documents, statements, information, 
testimony, or evidence provided by him during the Proceedings, and any leads derived 
there from, may be used against him in future legal proceedings.   
 
16. In the event he breaches this Agreement, the Respondent agrees not to contest or 
contradict in any future Commission enforcement action the factual statements contained 
in Paragraph 6 above as admissions pursuant to Federal Rule of Evidence 801(d)(2).     
 
 
COMPLIANCE WITH AGREEMENT 
 
17. Subject to the full, truthful, and continuing cooperation of the Respondent, as 
described in Paragraph 4, and compliance by Respondent with all obligations, 
prohibitions and undertakings in the Agreement during the Deferred Period, the 
Commission agrees not to bring any enforcement action or proceeding against the 
Respondent arising from the Investigation, after the conclusion of the Deferred Period.   

 
18. The Respondent understands and agrees that this Agreement does not bind other 
federal, state or self-regulatory organizations, but the Commission may, at its discretion, 
issue a letter to these organizations detailing the fact, manner, and extent of his 
cooperation during the Proceedings, upon the written request of the Respondent.  
 
19. The Respondent understands and agrees that the Agreement only provides 
protection against enforcement actions arising from the Investigation and does not relate 
to any other violations or any individual or entity other than the Respondent.   
 
VOLUNTARY AGREEMENT 
 
20. The Respondent’s decision to enter into this Agreement is freely and voluntarily 
made and is not the result of force, threats, assurances, promises, or representations other 
than those contained in this Agreement.    
 
21. The Respondent has read and understands this Agreement.  Furthermore, he has 
reviewed all legal and factual aspects of this matter with his attorney and is fully satisfied 
with his attorney’s legal representation.  The Respondent has thoroughly reviewed this 
Agreement with his attorney and has received satisfactory explanations concerning each 
paragraph of the Agreement.  After conferring with his attorney and considering all 
available alternatives, the Respondent has made a knowing decision to enter into the 
Agreement.   
 
ENTIRETY OF AGREEMENT 
 
22. This Agreement constitutes the entire agreement between the Commission and the 
Respondent, and supersedes all prior understandings, if any, whether oral or written, 
relating to the subject matter herein.   
 
23.  This Agreement cannot be modified except in writing, signed by the Respondent 
and a representative of the Commission. 
 
24. In the event an ambiguity or a question of intent or interpretation arises, this 
Agreement shall be construed as if drafted jointly by the parties hereto, and no 
presumption or burden of proof shall arise favoring or disfavoring the Commission or the 
Respondent by virtue of the authorship of any of the provisions of the Agreement. 
 
 
 
 
 
 
 
 
 

The 
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CALIFORNIA ALL-PURPOSE ACKNOWLEDGMENT 
CIVIL CODE § 1189 
A 
notary public or other officer completing this certificate verifies only the identity of the individual who signed the 
document to which this certificate is attached, and not the truthfulness, accuracy, or validity of that document. 
State of California ) 
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On J\,\Q-£ .. \<BJ 2D\t before me, v~"'hoq1) ·'Dctvecw~>.+11Y o+t'"t.f'y . {Ju.&b I I~ 
Date Here lnserf Name and Titld of the Officer 
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Name(s) of Signer(s) 
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who proved to me on the basis of satisfactory evidence to be ~perso~ whose nam~ t2rare 
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\bi$/her/their authorized capacity~, and that by(tii§)her/their signature1s) on the instrument the person~, 
or the entity upon behalf of which the perso~acted, executed the instrument. 
Place Notary Seal Abo.ve 
I certify under PENAL TV OF PERJURY under the laws 
of the State of California that the foregoing paragraph 
is true and correct. 
WITNESS my hand and official seal. 
Signaturel£vh~, ~ 
Signature of Notary Public 
------------------------------oPTIONAL------------------------------
Though this section is optional, completing this information can deter alteration of the document or 
fraudulent reattachment of this form to an unintended document. 
Description of Attached Document . 
Title or Type of Docyment: ~l1>rosecv.n~ll ~'Y'ee~es1T Document Date: _,(o"'-. i---=-.;~ ~,.__· _ .. _) ~=-----
Number of Pages: 8 Signer(s) Other Than Named Above: _______________________ _ 
Capacity{ies) 
Claimed by Signer(s) 
Signer's 
Name~Joba i<O)h.\.5 
0 Corporate Officer -Title(s): ____________ _ 
0 
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0  Trustee 0 Guardian 
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Signer Is Representing: -~,.,...:e~Jl'-'"£------------~ 
Signer's.Name: -----------------------
0 Corporate Officer -Title(s): ____________ _ 
0 Partner -0 Limited 0 General 
0 Individual 0  Attorney 
in Fact 
0  Trustee 0 Guardian 
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Other: __________________________ __ 
Signer Is Representing: ---------------~ 
>§<>~ 
©2014 National Notary Association o www.NationaiNotary.org o 1-800-US NOTARY (1-800-876-6827) Item #5907 

UNITED STATES OF AMERICA 
SECURITIES AND EXCHANGE COMMISSION 

 
DEFERRED PROSECUTION AGREEMENT 

 
1.  In connection with an investigation, the Division of Enforcement (“Division”) of 
the United States Securities and Exchange Commission (“Commission”) alleges that John 
Kollus (“Respondent”), on or about July 22-25, 2016, violated Sections 10(b) and 14(e) 
of the Securities Exchange Act of 1934 (“Exchange Act”) and Rules 10b-5 and 14e-3 
thereunder, by trading ahead of the July 27, 2016, public announcement that Laboratory 
Corporation of America Holdings (“LabCorp”), through its wholly owned subsidiary 
Savoy Acquisition Corp., would acquire all outstanding stock of Sequenom, Inc. 
(“Sequenom”) in a cash tender offer of $2.40 per share  while he was in possession of 
material, nonpublic information concerning the transaction (the “Investigation”).  Prior to 
a public enforcement action being brought by the Commission against him, Respondent 
has offered to accept responsibility for his conduct and to not contest or contradict the 
factual statements contained in Paragraph 6 in any future Commission enforcement 
action in the event he breaches this Agreement.  Accordingly, the Commission and the 
Respondent enter into this deferred prosecution agreement (“Agreement”) on the 
following terms and conditions:     
 

ELIGIBILITY 
 
2.  The Respondent certifies that he has never been charged or found guilty of 
violating the federal securities laws, or a party to a civil action or administrative 
proceeding concerning allegations or findings of violations of the federal securities laws.  
 

TERM 
 
3.  The Respondent understands and agrees that the provisions of this Agreement are 
in full force and effect from July 26, 2018 to July 26, 2020 (“Deferred Period”), unless 
expressly stated otherwise. 
 

COOPERATION 
 
4. The Respondent agrees to cooperate fully and truthfully in the Investigation and 
any other related enforcement litigation or proceedings to which the Commission is a 
party (the “Proceedings”), regardless of the time period in which the cooperation is 
required.  The full, truthful, and continuing cooperation of the Respondent shall include, 
but not be limited to: 
 

a.  producing all non-privileged documents and other materials to the 
Commission as requested by the Division’s staff, wherever located, in the possession, 
custody, or control of the Respondent;  
 



b.  appearing for interviews, at such times and places, as requested by the 
Division’s staff;  
 

c.  responding fully and truthfully to all inquiries, when requested to do so by 
the Division’s staff, in connection with the Proceedings; 
 

d.  testifying at trial and other judicial proceedings, when requested to do so 
by the Division’s staff, in connection with the Proceedings; 
 

e. accepting service by mail, email, or facsimile transmission of notices or 
subpoenas for documents or testimony at depositions, hearings, trials or in connection 
with the Proceedings;  
 

f. appointing his undersigned attorney as agent to receive service of such 
notices and subpoenas;  

 
g. waiving the territorial limits on service contained in Rule 45 of the Federal 

Rules of Civil Procedure and any applicable local rules, when requested to appear by the 
Division’s staff; and  

 
h.  entering into tolling agreements, when requested to do so by the 

Division’s staff, during the period of cooperation. 
 

STATUTE OF LIMITATIONS 
 
5.  The Respondent agrees that the running of any statute of limitations applicable to 
any action or proceeding against him authorized, instituted, or brought by or on behalf of 
the Commission arising out of the Investigation, including any sanctions or relief that 
may be imposed therein, is tolled and suspended during the Deferred Period. 
 

a.  The Respondent and any of his attorneys or agents shall not include the 
Deferred Period in the calculation of the running of any statute of limitations or for any 
other time-related defense applicable to the Proceeding, including any sanctions or relief 
that may be imposed therein, in asserting or relying upon any such time-related defense.  
 

b.  This agreement shall not affect any applicable statute of limitations 
defense or any other time-related defense that may be available to Respondent before the 
commencement of the Deferred Period or be construed to revive a Proceeding that may 
be barred by any applicable statute of limitations or any other time-related defense before 
the commencement of the Deferred Period. 

 
c. The running of any statute of limitations applicable to the Proceeding shall 

commence again after the end of the Deferred Period, unless there is an extension of the 
Deferred Period executed in writing by or on behalf of the parties hereto. 
 



d.  This agreement shall not be construed as an admission by the Commission 
relating to the applicability of any statute of limitations to the Proceeding, including as to 
any sanctions or relief that may be imposed therein, or to the length of any limitations 
period that may apply, or to the applicability of any other time-related defense.  
 

STATEMENT OF FACTS1 
 
6.  If this case had gone to trial, the Commission would have presented evidence 
sufficient to prove the following facts:   
 

a. Respondent is a sales manager at a media and financial information firm 
and a childhood friend of Rob Lozuk (“Lozuk”).  Respondent is a resident of Carlsbad, 
California and is not registered with the Commission. 
 

b. Lozuk is a resident of Carlsbad, California and was the Senior Vice 
President of Commercial Operations at Sequenom from June 2015 until he left Sequenom 
in October 2016.  Lozuk is not registered with the Commission. 
 
 c.  Sequenom, incorporated in 1994, is a life sciences company headquartered 
in San Diego, California.  Sequenom was acquired in a 2016 tender offer by LabCorp, 
and is now a wholly-owned subsidiary of LabCorp.  Sequenom’s common stock was 
formerly registered with the Commission and was traded on the NASDAQ (ticker: 
SQNM). 

 
d. On June 8, 2016, Sequenom’s board of directors instructed an investment 

bank to reach out to four companies to gauge interest in acquiring Sequenom.  No later 
than that date, Rob Lozuk became aware that Sequenom would likely be acquired, and 
was therefore in possession of material, nonpublic information concerning the 
transaction.  Lozuk owed a duty to Sequenom not to disclose or trade upon the 
information concerning the acquisition.   

 
e. During a social gathering that both Lozuk and Respondent attended on 

July 21, 2016, Lozuk told Respondent that he should purchase $10,000 worth of 
Sequenom shares due to the impending acquisition.  Respondent knew that Lozuk had 
provided him this information in breach of Lozuk’s duty to Sequenom. 

 
f. Between July 22 and 25, 2016, Respondent used the material, nonpublic 

information he received from Lozuk to purchase a total of 18,000 shares of Sequenom 
stock when the shares were trading at prices ranging from $0.86 to $0.88 per share.   

 
g. On July 27, 2016, Sequenom and LabCorp announced that LabCorp would 

acquire all of Sequenom’s outstanding stock in a cash tender offer for $2.40 per share.  

                                                 
1 The facts set forth in this section are made pursuant to settlement negotiations associated with the 
violations alleged by the Division in Paragraph 1 of this Agreement and are not binding in any other legal 
proceeding or on any other person or entity. 



As a result of the announcement, Sequenom’s stock price increased 176% to $2.35 per 
share. 

 
h. After the announcement of the Sequenom-LabCorp deal, Respondent sold 

all of his Sequenom shares on July 27, 2016, realizing a profit of $26,643.80.  
 
i.  The staff sent an administrative subpoena to Respondent in March 2017.  

In response, Respondent immediately contacted the staff through counsel and provided 
full and complete cooperation to the staff in connection with the Investigation.  Among 
other things, Respondent promptly identified Lozuk – the details of whose involvement 
was not yet known to the staff – as his tipper.  Respondent also provided the staff with 
the details of when, how, and where Lozuk provided Respondent with material, 
nonpublic information about Sequenom prior to the July 27 announcement of the 
LabCorp-Sequenom deal.  Respondent also provided the staff with details of subsequent 
conversations with Lozuk in which Respondent confirmed to Lozuk that Respondent 
benefitted financially by trading on the tip.  As a direct result of Respondent’s 
substantial cooperation, the Commission was able to bring charges against Lozuk, which 
he has agreed to settle.  

 
PROHIBITIONS 

 
7.  During the Deferred Period, the Respondent understands and agrees to comply 
with the following prohibitions: 
 
 a. to refrain from violating the federal and state securities laws;   
 

b.  to refrain from violating the applicable rules promulgated by any self 
regulatory organization or professional licensing board; and 

 
c. to refrain from seeking or accepting a federal or state tax credit or 

deduction for any civil penalties paid pursuant to this Agreement; 
 

UNDERTAKINGS 
 
8.  During the Deferred Period, the Respondent understands and agrees to perform 
the following undertakings: 
 

a. to provide written notification to the Division, within five days, if he has 
been questioned, charged, or convicted of an offense by any federal, state, or local law 
enforcement organization or regulatory agency;   
 

b. to provide written notification to the Division, within five days, if he has 
been questioned, a formal or informal complaint has been made against him, or 
disciplinary action has been taken against him by any self-regulatory organization or 
professional licensing board;  
 



c. to pay disgorgement obtained or retained as a result of the violations 
alleged in Paragraph 1 in the amount of $26,643.80, together with prejudgment interest 
thereon in the amount of $2,180.25 within 30 days.  Payment may be made directly from 
a bank account via Pay.gov through the SEC website at 
http://www.sec.gov/about/offices/ofm.htm.  Payment may also be made 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 

along with a letter identifying the Respondent and specifying that the payment is made 
pursuant to a deferred prosecution agreement entered into with the Commission on July 
26, 2018, and sending an additional copy of the letter and check in accordance with the 
service requirements of Paragraph 11; and  
 
 d. to provide the Division with a written certification of compliance with the 
prohibitions and undertakings in this Agreement between forty-five and sixty days before 
the end of the Deferred Period.     
 
 

PUBLIC STATEMENTS 
 
9.  After the Deferred Period begins, July 26, 2018, the Respondent agrees not to take 
any action or to make or permit any public statement through present or future attorneys, 
employees, agents, or other persons authorized to speak for him, except in legal 
proceedings in which the Commission is not a party / in litigation or otherwise, denying, 
directly or indirectly, any aspect of this Agreement or creating the impression that the 
statements in Paragraph 6 of this Agreement are without factual basis.  If it is determined 
by the Commission that a public statement by the Respondent or any related person 
contradicts in whole or in part this Agreement, at its sole discretion, the Commission may 
bring an enforcement action in accordance with Paragraphs 12 through 14.      
 
10. Prior to issuing a press release concerning this Agreement, the Respondent agrees 
to have the text of the release approved by the staff of the Division.   
 
 

 
SERVICE 

 
11.  The Respondent agrees to serve by hand delivery or by next-day mail all written 
notices and correspondence required by or related to this Agreement to Marc Blau, 
Assistant Regional Director, 444 S Flower Street, Suite 900, Los Angeles, CA 90071, 
(323) 965-3975, unless otherwise directed in writing by the staff of the Division.   
 
 



VIOLATION OF AGREEMENT 
 
12. The Respondent understands and agrees that it shall be a violation of this 
Agreement if he knowingly provides false or misleading information or materials in 
connection with the Proceedings.  In the event of such misconduct, the Division will 
advise the Commission of the Respondent’s misconduct and may make a criminal referral 
for providing false information (18 U.S.C. § 1001), perjury (18 U.S.C. § 1621), making 
false statements or declarations in court proceedings (18 U.S.C. § 1623), contempt (18 
U.S.C. §§ 401-402) and/or obstructing justice (18 U.S.C. § 1503 et seq.). 
 
13. The Respondent understands and agrees that it shall be a violation of this 
Agreement if he violates the federal securities laws after entering into this agreement.  It 
is further understood and agreed that should the Division determine that the Respondent 
has failed to comply with any term or condition of this Agreement, the Division will 
notify the Respondent or his counsel of this fact and provide an opportunity for the 
Respondent to make a submission consistent with the procedures set forth in the 
Securities Act of 1933 Release No. 5310.  Under these circumstances, the Division may, 
in its sole discretion and not subject to judicial review, recommend to the Commission an 
enforcement action against the Respondent for any securities law violations, including, 
but not limited to, the substantive offenses relating to the Investigation.  Nothing in this 
agreement limits the Division’s discretion to recommend to the Commission an 
enforcement action against the Respondent for future violations of the federal securities 
laws, without notice, to protect the public interest.  
 
14. The Respondent understands that if he 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 Agreement, minus any payments made, shall become 
due and payable immediately at the discretion of the staff of the Commission.    
 
15. The Respondent understands and agrees that in any future enforcement action 
resulting from his violation of the Agreement, any documents, statements, information, 
testimony, or evidence provided by him during the Proceedings, and any leads derived 
there from, may be used against him in future legal proceedings.   
 
16. In the event he breaches this Agreement, the Respondent agrees not to contest or 
contradict in any future Commission enforcement action the factual statements contained 
in Paragraph 6 above as admissions pursuant to Federal Rule of Evidence 801(d)(2).     
 

 
COMPLIANCE WITH AGREEMENT 

 
17. Subject to the full, truthful, and continuing cooperation of the Respondent, as 
described in Paragraph 4, and compliance by Respondent with all obligations, 
prohibitions and undertakings in the Agreement during the Deferred Period, the 
Commission agrees not to bring any enforcement action or proceeding against the 
Respondent arising from the Investigation, after the conclusion of the Deferred Period.   



 
18. The Respondent understands and agrees that this Agreement does not bind other 
federal, state or self-regulatory organizations, but the Commission may, at its discretion, 
issue a letter to these organizations detailing the fact, manner, and extent of his 
cooperation during the Proceedings, upon the written request of the Respondent.  
 
19. The Respondent understands and agrees that the Agreement only provides 
protection against enforcement actions arising from the Investigation and does not relate 
to any other violations or any individual or entity other than the Respondent.   
 

VOLUNTARY AGREEMENT 
 
20. The Respondent’s decision to enter into this Agreement is freely and voluntarily 
made and is not the result of force, threats, assurances, promises, or representations other 
than those contained in this Agreement.    
 
21. The Respondent has read and understands this Agreement.  Furthermore, he has 
reviewed all legal and factual aspects of this matter with his attorney and is fully satisfied 
with his attorney’s legal representation.  The Respondent has thoroughly reviewed this 
Agreement with his attorney and has received satisfactory explanations concerning each 
paragraph of the Agreement.  After conferring with his attorney and considering all 
available alternatives, the Respondent has made a knowing decision to enter into the 
Agreement.   
 

ENTIRETY OF AGREEMENT 
 
22. This Agreement constitutes the entire agreement between the Commission and the 
Respondent, and supersedes all prior understandings, if any, whether oral or written, 
relating to the subject matter herein.   
 
23.  This Agreement cannot be modified except in writing, signed by the Respondent 
and a representative of the Commission. 
 
24. In the event an ambiguity or a question of intent or interpretation arises, this 
Agreement shall be construed as if drafted jointly by the parties hereto, and no 
presumption or burden of proof shall arise favoring or disfavoring the Commission or the 
Respondent by virtue of the authorship of any of the provisions of the Agreement. 
 
 
 
 
 
 
 
 
 



The signatories below acknowledge acceptance of the foregoing terms and conditions.

RESPONDENT

~~l~~~c31~'

Date

~~~

John K.o 1 bus

The fore oin i~.strument was ackno~vled ed before me this ~ r' da of ~ ~ 20~~g g Y ~~
b ..~ ~ - C~ 1 ~ ~~ ;who is a ersonall hcraown to me ~r - who hasy r ~
produced a valid driver's license as identi~catgon and who did take an oath.

I~ota~ry Pubic °
State:
Commission number:
Commission expiration:

RESPONDENT'S C~IJNSEL,

Approved as to form:

~ ~r
Date

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~v~~e~r~ ..o:. oavE~PoA~~

~~~. ...
Camr~~~~i~on~~~21~~t72$

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#.off=An~~~ comity .•

SECURITIES A.ND EXCHANGE ~O~ZMISSION
DIVISION OF ~~TFORC~~NT

J 2 6 20~
Date Jo erry

sociate Regional D'r for
Division of Enforcem nt
United States Securities and Exchange
Commission

Akin Gump Strauss Hauer &Feld LLP
x.999 Avenue of the Stars, Suite 600
Los .Angeles, CA 94067



CALIFORNIA ALL-PURPOSE ACKNOWLEDGMENT CIVIL CODE § 1189 

A notary public or other officer completing this certificate verifies only the identity of the individual who signed the 
document to which this certificate is attached, and not the truthfulness, accuracy, or validity of that document. 

State of California ) 

Co~ of Los A O§~Jes ) 
On J\,\Q-£ .. \<BJ 2D\t before me, v~"'hoq1) ·'Dctvecw~>.+11Y o+t'"t.f'y . {Ju.&b I I~ 

Date Here lnserf Name and Titld of the Officer 

pe~on~~ appeared -'~)~O~b~n~-~~~}~}~Y~~~~~~~~~~~~~~~~~~~~ 
Name(s) of Signer(s) 

--------------------------------------------------------------------------' 
who proved to me on the basis of satisfactory evidence to be ~perso~ whose nam~ t2rare 

)ll4>scribed to the within instrument and ackno.dged to me thaNli/she/they executed the same in 
\bi$/her/their authorized capacity~, and that by(tii§)her/their signature1s) on the instrument the person~, 
or the entity upon behalf of which the perso~acted, executed the instrument. 

Place Notary Seal Abo.ve 

I certify under PENAL TV OF PERJURY under the laws 
of the State of California that the foregoing paragraph 
is true and correct. 

WITNESS my hand and official seal. 

Signaturel£vh~, ~ 
Signature of Notary Public 

------------------------------oPTIONAL------------------------------
Though this section is optional, completing this information can deter alteration of the document or 

fraudulent reattachment of this form to an unintended document. 

Description of Attached Document . 
Title or Type of Docyment: ~l1>rosecv.n~ll ~'Y'ee~es1T Document Date: _,(o"'-. i---=-.;~ ~,.__· _ .. _) ~=-----
Number of Pages: 8 Signer(s) Other Than Named Above: _______________________ _ 

Capacity{ies) Claimed by Signer(s) 
Signer's Name~Joba i<O)h.\.5 
0 Corporate Officer - Title(s): ____________ _ 
0 Partner- 0 Limited 0 General 
Vfhdividual 0 Attorney in Fact 
0 Trustee 0 Guardian or Conservator 
0 Other: ----------,.,=----.-.-------------­
Signer Is Representing: -~,.,...:e~Jl'-'"£------------~ 

Signer's.Name: -----------------------
0 Corporate Officer - Title(s): ____________ _ 
0 Partner - 0 Limited 0 General 
0 Individual 0 Attorney in Fact 
0 Trustee 0 Guardian or Conservator 
0 Other: __________________________ __ 
Signer Is Representing: ---------------~ 

>§<>~ 

©2014 National Notary Association o www.NationaiNotary.org o 1-800-US NOTARY (1-800-876-6827) Item #5907