Source: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-cand-3_01-cv-03376/USCOURTS-cand-3_01-cv-03376-0/pdf.json

Nature of Suit Code: 850
Nature of Suit: Securities, Commodities, Exchange
Cause of Action: 15:77 Securities Fraud

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[Proposed] Order Granting Pl.’s Motion 

Case No. CV 01-3376 VRW 

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HELANE L. MORRISON (#127752) 

SUSAN F. LA MARCA (#215231) 

ELENA RO (#197308) 

Attorneys for Plaintiff 

SECURITIES AND EXCHANGE COMMISSION 

44 Montgomery Street, Suite 2600 

San Francisco, California 94104 

Telephone: (415) 705-2500 

SECURITIES AND EXCHANGE COMMISSION,

 Plaintiff, 

 v. 

M & A WEST, INC., et al. 

 Defendants. 

Case No. CV 01-3376 VRW 

[PROPOSED] ORDER GRANTING 

PLAINTIFF’S MOTION FOR PARTIAL 

SUMMARY JUDGMENT AGAINST 

DEFENDANT F. THOMAS ECK, III; 

ENTERING INJUNCTION; ORDERING 

CIVIL PENALTIES 

 

The motion by plaintiff Securities and Exchange Commission (“Commission”) for partial 

summary judgment against defendant F. Thomas Eck, III, pursuant to Rule 56 of the Federal Rules 

of Civil Procedure, supported by the Declaration of Elena Ro and the exhibits thereto, Plaintiff’s 

Request for Judicial Notice and the exhibits thereto, plaintiff’s memorandum, and the papers on 

file with the Court, has been submitted to the Court. By its motion, plaintiff seeks partial summary 

judgment against defendant Eck regarding his liability for aiding and abetting securities fraud, his 

offer and sale of securities without registration, and other related violations of the federal securities 

laws set forth in the Commission’s complaint. Plaintiff also seeks by its motion adjudication of 

certain remedial sanctions, including the entry of an injunction against defendant, and the issuance 

of an order requiring defendant to pay civil monetary penalties. 

UNITED STATES DISTRICT COURT 

NORTHERN DISTRICT OF CALIFORNIA 

SAN FRANCISCO DIVISION

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[Proposed] Order Granting Pl.’s Motion 

Case No. CV 01-3376 VRW

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The Court, having considered plaintiff’s motion and any opposition or response thereto, 

and good cause appearing therefrom, hereby finds: 

1. The Court has jurisdiction over defendant Eck and the subject matter of this 

litigation; 

2. There is no genuine issue as to any material fact; 

3. Defendant Eck knowingly provided substantial assistance to others who, directly or 

indirectly, by use of the means or instrumentalities of interstate commerce, or of the mails, or of a 

national securities exchange, in connection with the purchase or sale of securities, employed a 

device, scheme or artifice to defraud, and made untrue statements of material fact and omitted to 

state material facts necessary to make the statements made true, in light of the circumstances under 

which they were made, in violation of Section 10(b) of the Securities Exchange Act of 1934 

(“Exchange Act”), 15 U.S.C. § 78j(b), and Rule 10b-5 thereunder, 17 C.F.R. § 240.10b-5, and is 

therefore liable for such violations pursuant to 15 U.S.C. § 78t(e); 

4. Defendant Eck, directly or indirectly, in the absence of any applicable exemption, 

and without any registration statement filed with the Commission or in effect as to the securities, 

made use of means or instruments of transportation or communication in interstate commerce or of 

the mails to sell securities, and to offer to sell securities, in violation of Sections 5(a) and 5(c) of 

the Securities Act, 15 U.S.C. §§ 77e(a) and (c); 

5. Defendant Eck knowingly provided substantial assistance to M&A West, Inc. 

(“M&A West”) in its filing with the Commission annual reports on Forms 10-KSB that contained 

untrue statements of material fact and omitted to state material information required to be stated 

therein or necessary in order to make the statements made, in the light of the circumstances under 

which they were made, not misleading, in violation of Section 13(a) of the Exchange Act, 15 

U.S.C. § 78m(a), and 17 C.F.R. §§ 240.12b-20 and 240.13a-1, and is therefore liable for such 

violations pursuant to 15 U.S.C. § 78t(e); 

6. Defendant Eck knowingly provided substantial assistance to M&A West in its filing 

with the Commission quarterly reports on Forms 10-QSB that contained untrue statements of 

material fact and omitted to state material information required to be stated therein or necessary in 

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order to make the statements made, in the light of the circumstances under which they were made, 

not misleading, in violation of Section 13(a) of the Exchange Act, 15 U.S.C. § 78m(a), and 17 

C.F.R. §§ 240.12b-20 and 240.13a-13, and is therefore liable for such violations pursuant to 15 

U.S.C. § 78t(e); 

7. Defendant Eck knowingly provided substantial assistance to M&A West in its filing 

with the Commission a current report on Form 8-K that contained untrue statements of material 

fact and omitted to state material information required to be stated therein or necessary in order to 

make the statements made, in the light of the circumstances under which they were made, not 

misleading, in violation of Section 13(a) of the Exchange Act, 15 U.S.C. § 78m(a), and 17 C.F.R. 

§§ 240.12b-20 and 240.13a-11, and is therefore liable for such violations pursuant to 15 U.S.C. § 

78t(e); 

8. Defendant Eck knowingly provided substantial assistance to M&A West’s failure to 

make and keep books, records, and accounts which, in reasonable detail, accurately and fairly 

reflected the transactions and dispositions of the assets of the Company, in violation of Section 

13(b)(2)(A) of the Exchange Act, 15 U.S.C. § 78m(b)(2)(A), and is therefore liable for such 

violations pursuant to 15 U.S.C. § 78t(e); 

9. Defendant Eck knowingly provided substantial assistance to M&A West’s failure to 

devise and maintain a system of internal accounting controls sufficient to provide reasonable 

reassurances that transactions were recorded as necessary to maintain accountability for assets, in 

violation of Section 13(b)(2)(B)(ii)(II) of the Exchange Act, 15 U.S.C. § 78m(b)(2)(B)(ii)(II), and 

is therefore liable for such violations pursuant to 15 U.S.C. § 78t(e); 

10. Defendant Eck knowingly falsified M&A West’s books, records and accounts in 

violation of Section 13(b)(5) of the Exchange Act, 15 U.S.C. § 78m(b)(5), and falsified M&A 

West’s books, records and accounts, in violation of 17 C.F.R. § 13b2-1; 

11. Defendant Eck knowingly provided substantial assistance to defendant Scott Kelly, 

an officer and director of M&A West, who made or caused to be made a materially false or 

misleading statement to accountants and omitted to state, or caused another person to omit to state 

to accountants material facts necessary in order to make statements made to the accountants, in 

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light of the circumstances under which such statements were made, not misleading, in violation 17 

C.F.R. § 240.13b2-2, and is therefore liable for such violations pursuant to 15 U.S.C. § 78t(e); 

12. Unless restrained or enjoined, Defendant Eck is likely to again violate the securities 

laws described above; 

13. The deterrent purposes of the federal securities laws would be served by the 

imposition of civil penalties against Defendant Eck. 

I. 

 IT IS THEREFORE ORDERED, ADJUDGED AND DECREED that Defendant Eck, his 

agents, servants, employees, attorneys, and all persons in active concert or participation with them 

who receive actual notice of this Order by personal service or otherwise are permanently restrained 

and enjoined from violating, directly or indirectly, Section 10(b) of the Exchange Act, 15 U.S.C. § 

78j(b) and Rule 10b-5 thereunder, 17 C.F.R. § 240.10b-5, by using any means or instrumentality of 

interstate commerce, or of the mails, or of any facility of any national securities exchange, in 

connection with the purchase or sale of any security: 

(a) to employ any device, scheme, or artifice to defraud; 

(b) to make any untrue statement of a material fact or to omit to state a material 

fact necessary in order to make the statements made, in the light of the 

circumstances under which they were made, not misleading; or 

(c) to engage in any act, practice, or course of business which operates or would 

operate as a fraud or deceit upon any person. 

II. 

 IT IS HEREBY FURTHER ORDERED, ADJUDGED, AND DECREED that Defendant 

Eck, his agents, servants, employees, attorneys, and all persons in active concert or participation 

with them who receive actual notice of this Order by personal service or otherwise are permanently 

restrained and enjoined from violating Sections 5(a) and 5(c) of the Securities Act, 15 U.S.C. §§ 

77e(a) and (c), by, directly or indirectly, in the absence of any applicable exemption and unless a 

registration statement is filed and is in effect as to a security, making use of any means or 

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instruments of transportation or communication in interstate commerce or of the mails to offer or 

to sell such security through the use or medium of any prospectus or otherwise. 

III. 

 IT IS FURTHER ORDERED, ADJUDGED AND DECREED that Defendant Eck, his 

agents, servants, employees, attorneys, assigns, and all persons in active concert or participation 

with him who receive actual notice of this order by personal service or otherwise are permanently 

restrained and enjoined from violating, directly or indirectly, Section 13(a) of the Exchange Act, 

15 U.S.C. § 78m(a), and 17 C.F.R. §§ 240.12b-20 and 240.13a-1, by causing any issuer that has 

securities registered as described in those sections, to file with the Commission an annual report on 

Form 10-K that contains an untrue statement of material fact or omits to state material information 

required to be stated therein or necessary in order to make the statements made, in light of the 

circumstances under which they were made not misleading. 

IV. 

 IT IS FURTHER ORDERED, ADJUDGED AND DECREED that Defendant Eck, his 

agents, servants, employees, attorneys, assigns, and all persons in active concert or participation 

with him who receive actual notice of this order by personal service or otherwise are permanently 

restrained and enjoined from violating, directly or indirectly, Section 13(a) of the Exchange Act, 

15 U.S.C. § 78m(a), and 17 C.F.R. §§ 240.12b-20 and 240.13a-13, by causing any issuer that has 

securities registered as described in those sections, to file with the Commission a quarterly report 

on Form 10-Q that contains an untrue statement of material fact or omits to state material 

information required to be stated therein or necessary in order to make the statements made, in 

light of the circumstances under which they were made not misleading. 

V. 

 IT IS FURTHER ORDERED, ADJUDGED AND DECREED that Defendant Eck, his 

agents, servants, employees, attorneys, assigns, and all persons in active concert or participation 

with him who receive actual notice of this order by personal service or otherwise are permanently 

restrained and enjoined from violating, directly or indirectly, Section 13(a) of the Exchange Act, 

15 U.S.C. § 78m(a), and 17 C.F.R. §§ 240.12b-20 and 240.13a-11, by causing any issuer that has 

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securities registered as described in those sections, to file with the Commission a current report on 

Form 8-K that contains an untrue statement of material fact or omits to state material information 

required to be stated therein or necessary in order to make the statements made, in light of the 

circumstances under which they were made not misleading. 

VI. 

 IT IS FURTHER ORDERED, ADJUDGED AND DECREED that Defendant Eck, his 

agents, servants, employees, attorneys, assigns, and all persons in active concert or participation 

with him who receive actual notice of this order by personal service or otherwise are permanently 

restrained and enjoined from violating, directly or indirectly, Section 13(b)(2)(A) of the Exchange 

Act, 15 U.S.C. § 78m(b)(2)(A), by causing any issuer which has a class of securities registered as 

described in this section to fail to make and keep books, records, or accounts, which, in reasonable 

detail, accurately and fairly reflect the transactions and dispositions of the assets of the issuer. 

VII. 

 IT IS FURTHER ORDERED, ADJUDGED AND DECREED that Defendant Eck, his 

agents, servants, employees, attorneys, assigns, and all persons in active concert or participation 

with him who receive actual notice of this order by personal service or otherwise are permanently 

restrained and enjoined from violating, directly or indirectly, Section 13(b)(2)(B) of the Exchange 

Act, 15 U.S.C. § 78m(b)(2)(B), by causing any issuer which has a class of securities registered as 

described in this section to fail to devise or maintain a system of internal accounting controls 

sufficient to provide reasonable assurances that transactions are executed in accordance with 

management’s general or specific authorization; or to fail to record transactions as necessary to 

permit preparation of financial statements in conformity with generally accepted accounting 

principles or any other criteria applicable to such statements, and to maintain accountability for 

assets. 

VIII. 

 IT IS FURTHER ORDERED, ADJUDGED AND DECREED that Defendant Eck, his 

agents, servants, employees, attorneys, assigns, and all persons in active concert or participation 

with him who receive actual notice of this order by personal service or otherwise are permanently 

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restrained and enjoined from violating Section 13(b)(5) of the Exchange Act, 15 U.S.C. § 

78m(b)(5), by knowingly circumventing or failing to implement a system of internal accounting 

controls or knowingly falsifying any book, record, or account of described in this section. 

IX. 

 IT IS FURTHER ORDERED, ADJUDGED AND DECREED that Defendant Eck, his 

agents, servants, employees, attorneys, assigns, and all persons in active concert or participation 

with him who receive actual notice of this order by personal service or otherwise are permanently 

restrained and enjoined from violating 17 C.F.R. § 240.13b2-1, by falsifying or causing to be 

falsified any book, record or account described in this section. 

X. 

 IT IS FURTHER ORDERED, ADJUDGED AND DECREED that Defendant Eck, his 

agents, servants, employees, attorneys, assigns, and all persons in active concert or participation 

with him who receive actual notice of this order by personal service or otherwise permanently 

restrained and enjoined from violating 17 C.F.R. § 240.13b2-2, by, as a director or officer of an 

issuer, directly or indirectly making or causing to be made a materially false or misleading 

statement to an accountant in connection with an audit, review or examination of the financial 

statements of the issuer required to be made pursuant to statute or to the Commission’s rules as 

described in this section. 

XI. 

IT IS FURTHER ORDERED, ADJUDGED, AND DECREED that Defendant Eck shall 

pay civil penalties in the amount of $550,000.00 pursuant to the Securities Act and the Exchange 

Act, 15 U.S.C. §§ 77t(d) & 78u(d)(3). Defendant shall make this payment within ten (10) business 

days after entry of this Order by certified check, bank cashier’s check, or United States postal 

money order payable to the Securities and Exchange Commission. The payment shall be delivered 

or mailed to the Office of Financial Management, Securities and Exchange Commission, 

Operations Center, 6432 General Green Way, Mail Stop 0-3, Alexandria, Virginia 22312; and shall 

be accompanied by a letter identifying F. Thomas Eck as a defendant in this action; setting forth 

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the title and civil action number of this action and the name of this Court; and specifying that 

payment is made pursuant to this Order. 

XII. 

 IT IS FURTHER ORDERED, ADJUDGED, AND DECREED that this Court shall retain 

jurisdiction of this matter for the purpose of enforcing the terms of this Order and for all other 

purposes. 

XIII. 

 There being no just reason for delay, the Clerk is hereby ordered to enter this judgment 

against Defendant Eck forthwith and without delay, which represents a final judgment of the 

Commission’s claims for an injunction and a civil penalty. 

DATED: ______/s/_______________________________ 

United States District Judge 

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