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Securities and Exchange Commission v. Jovanovich

United States District Court, Seventh Circuit

August 1, 2013

SECURITIES AND EXCHANGE COMMISSION, Plaintiff,
v.
NENAD JOVANOVICH ET AL., Defendants.

Daniel J. Hayes, John E. Birkenheier, Paul M. G. Helms, Kathryn A. Pyszka, U.S. Securities and Exchange Commission, Chicago, Illinois, Attorneys for Plaintiff U.S. Securities and Exchange Commission.

MOTION FOR ENTRY OF FINAL JUDGMENTS

Defendants Nenad Jovanovich ("Jovanovich"), Accelerated Innovations, LLC ("Accelerated Innovations"), Kymberly A. Nelson ("Nelson"), Sky's the Limit Consulting, LLC ("Sky's the Limit Consulting"), Javorka L. Gasic ("J. Gasic"), Diana Bozovic ("Bozovic"), Dale J. Baeten ("Baeten"), Investing in Stock Market, Inc. ("Investing in Stock Market"), Midwest Stock Consulting, Inc. ("Midwest Stock Consulting"), Charles C. Bennett ("Bennett"), and George E. Bowker, III ("Bowker") and Relief Defendant Vertical Group Holdings, LLC ("Relief Defendant" or "Vertical Group") agreed to settle this matter with the Securities and Exchange Commission ("SEC" or the "Commission"). Accordingly, the Commission respectfully moves this Court for entry of the proposed final judgments attached as Exhibits 9 through 16 ("Proposed Judgments"). As reflected in Exhibits 1 through 8, Defendants Jovanovich, Accelerated Innovations, Nelson, Sky's the Limit Consulting, J. Gasic, Bozovic, Baeten, Investing in Stock Market, Midwest Stock Consulting, Bennett, and Bowker, and Relief Defendant Vertical Group consent to the entry of the Proposed Judgments. In support of the Motion, the SEC states as follows:

1. On August 1, 2013, the Commission filed a complaint against Defendants Jovanovich, Accelerated Innovations, Nelson, Sky's the Limit Consulting, J. Gasic, Bozovic, Baeten, Investing in Stock Market, Midwest Stock Consulting, Bennett, and Bowker (collectively, "Defendants"), and Relief Defendant Vertical Group for violation of the federal securities laws.[1]

2. In the Complaint, the Commission alleges that Defendants participated in a pump-and-dump scheme orchestrated by Bosko R. Gasich ("Gasich"), one of the founders and principal shareholders of Zenergy International, Inc. ("Zenergy"). Zenergy is a company headquartered in Chicago, Illinois that purported to be in the business of selling and producing biofuels. Zenergy's stock is quoted on the over-the-counter market.

3. According to the Complaint, in June 2009, Gasich caused Zenergy to enter into a reverse merger with Paradigm Tactical Products, Inc. ("Paradigm"), a publicly traded shell entity. Shortly before the merger, Gasich prepared a backdated convertible note for a $30, 000 debt purportedly owed to him by Zenergy. Paradigm agreed to assume this debt and to issue shares of its common stock to settle the debt as partial consideration for the reverse merger.

4. The Commission further alleges that Gasich then assigned this purported debt to his family and friends, Defendants Jovanovich, Nelson, J. Gasic, and Bozovic; stock promoters, including Scott H. Wilding; associates of Paradigm; and counsel, Diane D. Dalmy ("Dalmy"); and caused Paradigm to issue 300 million shares of purportedly unrestricted stock to these assignees.

5. In the Complaint, the Commission also alleges that Dalmy, who served as transaction counsel for the reverse merger and sold shares herself, issued opinion letters to transfer agents and others that improperly concluded that these shares were unrestricted and could be sold immediately.

6. The Commission further alleges that Gasich and the promoters then conducted two promotional campaigns to generate investor interest in Zenergy. The campaigns used misleading press releases and financial disclosures reviewed and approved by Gasich and Zenergy's Chief Executive Officer, Robert J. Luiten ("Luiten"), and touts by individuals who failed to disclose the compensation received for promoting Zenergy stock, including Defendants Baeten, Bennett, and Bowker and Ronald Martino. The promotional activity induced members of the investing public to buy Zenergy stock and increased Zenergy's share price.

7. According to the Complaint, Gasich, his assignees, and their associates then sold their shares into the public market for illicit profits totaling at least $4.4 million.

8. Finally, the Complaint alleges that Market Ideas, Inc., an entity controlled by Gasich, and Relief Defendant Vertical Group, received or benefited from the registration violations and fraudulent conduct described above and that the funds are the proceeds, or are traceable to the proceeds, of the unlawful activity alleged above.

9. As a result of the conduct described in the Complaint, the Commission alleges that Defendants Jovanovich, Accelerated Innovations, Nelson, Sky's the Limit Consulting, J. Gasic, Bozovic, Baeten, Investing in Stock Market, Midwest Stock Consulting, and Bennett violated Sections 5(a) and 5(c) of the Securities Act of 1933 ("Securities Act"), 15 U.S.C. §§ 77(e)(a), 77(e)(c).

10. In addition, the Commission alleges that Defendants Baeten, Investing in Stock Market, Midwest Stock Consulting, Bennett, and Bowker violated Section 17(b) of the Securities Act, 15 U.S.C. § 77q(b).

11. The Complaint also advances a claim against Relief Defendant Vertical Group seeking ill-gotten gains.

12. The Complaint seeks orders of permanent injunction, disgorgement and prejudgment interest, civil monetary penalties, and penny stock bars against Defendants and an order of disgorgement and prejudgment interest against Relief Defendant.

13. Prior to the filing of the Complaint, Defendants and Relief Defendant Vertical Group agreed to resolve this matter with the SEC by agreeing to the relief requested in the Proposed Judgments, attached as Exhibits 9 through 16.[2]

14. Each Defendant and the Relief Defendant waived service of a summons and the complaint in this action and admitted the Court's jurisdiction over them and over the subject matter of this action. E.g., Ex. 1, Jovanovich Consent ¶ 1.

15. The Proposed Judgment against Jovanovich and Accelerated Innovations permanently enjoins them from violations of Section 5 of the Securities Act; orders, jointly and severally, disgorgement of $108, 299, with prejudgment interest of $10, 761, and a civil penalty of $10, 000, to be paid pursuant to a three-year payment plan with post-judgment interest; and imposes penny stock bars.

16. The Proposed Judgment against Nelson and Sky's the Limit Consulting permanently enjoins them from violations of Section 5 of the Securities Act; orders, jointly and severally, disgorgement of $436, 835 and prejudgment interest of $28, 625, but waives payment of all but $18, 594 and does not impose a civil penalty based upon the sworn representations in Nelson's Statement of Financial Condition dated December 20, 2012 and other documents and information submitted to the Commission; and imposes penny stock bars.

17. The Proposed Judgment against J. Gasic permanently enjoins her from violations of Section 5 of the Securities Act; orders disgorgement of $25, 575 and prejudgment interest of $3, 105, but waives payment of all but $14, 400, to be paid pursuant to a three-year payment plan with post-judgment interest, and does not impose a civil penalty based upon the sworn representations in her Statement of Financial Condition dated February 7, 2013 and other documents and information submitted to the Commission; and imposes a penny stock bar.

18. The Proposed Judgment against Bozovic permanently enjoins her from violations of Section 5 of the Securities Act; orders disgorgement of $12, 500 and prejudgment interest of $1, 425, to be paid pursuant to a three-year payment plan with post-judgment interest, but does not impose a civil penalty based upon the sworn representations in her Statement of Financial Condition dated February 7, 2013 and other documents and information submitted to the Commission; and imposes a penny stock bar.

19. The Proposed Judgment against Baeten, Investing in Stock Market, and Midwest Stock Consulting permanently enjoins them from violations of Sections 5 and 17(b) of the Securities Act; orders, jointly and severally, disgorgement of $40, 751 and prejudgment interest of $4, 049, but waives payment of the disgorgement and prejudgment interest and does not impose a civil penalty based upon the sworn representations in Baeten's Statement of Financial Condition dated November 3, 2012 and other documents and information submitted to the Commission; and imposes penny stock bars.

20. The Proposed Judgment against Bennett permanently enjoins him from violations of Sections 5 and 17(b) of the Securities Act; orders disgorgement of $28, 486 and prejudgment interest of $3, 139, but waives payment of the disgorgement and prejudgment interest and does not impose a civil penalty based upon the sworn representations in his Statement of Financial Condition dated December 28, 2012 and other documents and information submitted to the Commission; and imposes a penny stock bar.

21. The Proposed Judgment against Bowker permanently enjoins him from violations of Section 17(b) of the Securities Act; orders disgorgement of $8, 000, with prejudgment interest of $1, 024, and imposes a civil penalty of $10, 000; and imposes a penny stock bar.

22. The Proposed Judgment against Vertical Group orders disgorgement of $172, 819, but waives payment of all but $74, 200 based upon the sworn representations in its Statement of Financial Condition dated February 11, 2013 and other documents and information submitted to the Commission.

23. As reflected in Exhibits 1 through 8, the Proposed Judgments have been reviewed by Defendants, Relief Defendant Vertical Group, and, with respect to Defendants Bennett and Bowker, their counsel.

WHEREFORE, the SEC respectfully moves this Court to enter the Proposed Judgments as to Defendants Jovanovich, Accelerated Innovations, Nelson, Sky's the Limit Consulting, J. Gasic, Bozovic, Baeten, Investing in Stock Market, Midwest Stock Consulting, Bennett, and Bowker, and Relief Defendant Vertical Group.

Grant such other and further relief as the Court deems just and appropriate.

Exhibit 1

CONSENT OF DEFENDANTS NENAD JOVANOVICH AND ACCELERATED INNOVATIONS, LLC

1. Defendants Nenad Jovanovich and Accelerated Innovations, LLC (collectively, "Defendants") waive service of a summons and the complaint in this action, enter a general appearance, and admit the Court's jurisdiction over Defendants and over the subject matter of this action.

2. Without admitting or denying the allegations of the complaint (except as to personal and subject matter jurisdiction, which Defendants admit), Defendants hereby consent to the entry of the final Judgment in the form attached hereto (the "Final Judgment") and incorporated by reference herein, which, among other things:

(a) permanently restrains and enjoins Defendants from violation of Section 5 of the Securities Act of 1933 (the "Securities Act") [15 U.S.C. § 77e];
(b) orders Defendants, jointly and severally, to pay disgorgement in the amount of $108, 299, plus prejudgment interest thereon in the amount of $10, 761, for a total of $119, 060;
(c) orders Defendants, jointly and severally, to pay a civil penalty in the amount of $10, 000 under Section 20(d) of the Securities Act [15 U.S.C. § 77t] and Section 21(d)(3) of the Securities Exchange Act of 1934 ("Exchange Act") [15 U.S.C. § 78u];
(d) prohibits Defendants from participating in an offering of penny stock under Section 20(g) of the Securities Act [15 U.S.C. § 77t] and 21(d)(6) of the Exchange Act [15 U.S.C. § 78u].

3. Defendants consent to payment of the $129, 060 pursuant to the payment plan required by the Final Judgment.

4. Defendants acknowledge that the civil penalty paid pursuant to the Final Judgment may be distributed pursuant to the Fair Fund provisions of Section 308(a) of the Sarbanes-Oxley Act of 2002. Regardless of whether any such Fair Fund distribution is made, the civil penalty shall be treated as a penalty paid to the government for all purposes, including all tax purposes. To preserve the deterrent effect of the civil penalty, Defendants agree that they shall not, after offset or reduction of any award of compensatory damages in any Related Investor Action based on Defendants' payment of disgorgement in this action, argue that either is entitled to, nor shall further benefit by, offset or reduction of such compensatory damages award by the amount of any part of Defendants' payment of a civil penalty in this action ("Penalty Offset"). If the court in any Related Investor Action grants such a Penalty Offset, Defendants agree that they shall, within thirty (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 action. For purposes of this paragraph, a "Related Investor Action" means a private damages action brought against Defendants by or on behalf of one or more investors based on substantially the same facts as alleged in the Complaint in this action.

4. Defendants agree that they shall not seek or accept, directly or indirectly, reimbursement or indemnification from any source, including but not limited to payment made pursuant to any insurance policy, with regard to any civil penalty amounts that Defendants pay pursuant to the Final Judgment, regardless of whether such penalty amounts or any part thereof are added to a distribution fund or otherwise used for the benefit of investors. Defendants further agree that they shall not claim, assert, or apply for a tax deduction or tax credit with regard to any federal, state, or local tax for any penalty amounts that Defendants pay pursuant to the Final Judgment, regardless of whether such penalty amounts or any part thereof are added to a distribution find or otherwise used for the benefit of investors.

5. Defendants waive the entry of findings of fact and conclusions of law pursuant to Rule 52 of the Federal Rules of Civil Procedure.

6. Defendants waive the right, if any, to a jury trial and to appeal from the entry of the Final Judgment.

7. Defendants enter into this Consent voluntarily and represent that no threats, offers, promises, or inducements of any kind have been made by the Commission or any member, officer, employee, agent, or representative of the Commission to induce Defendants to enter into this Consent.

8. Defendants agree that this Consent shall be incorporated into the Final Judgment with the same force and effect as if fully set forth therein.

9. Defendants will not oppose the enforcement of the Final Judgment on the ground, if any exists, that it fails to comply with Rule 65(d) of the Federal Rules of Civil Procedure, and hereby waive any objection based thereon.

10. Defendants waive service of the Final Judgment and agree that entry of the Final Judgment by the Court and filing with the Clerk of the Court will constitute notice to Defendants of its terms and conditions. Defendants further agree to provide counsel for the Commission, within thirty days after the Final Judgment is filed with the Clerk of the Court, with an affidavit or declaration stating that Defendants have received and read a copy of the Final Judgment.

11. Consistent with 17 C.F.R. 202.5(f), this Consent resolves only the claims asserted against Defendants in this civil proceeding. Defendants acknowledge that no promise or representation has been made by the Commission or any member, officer, employee, agent, or representative of the Commission with regard to any criminal liability that may have arisen or may arise from the facts underlying this action or immunity from any such criminal liability. Defendants waive any claim of Double Jeopardy based upon the settlement of this proceeding, including the imposition of any remedy or civil penalty herein. Defendants further acknowledge that the Court's entry of a permanent injunction may have collateral consequences under federal or state law and the rules and regulations of self-regulatory organizations, licensing boards, and other regulatory organizations. Such collateral consequences include, but are not limited to, a statutory disqualification with respect to membership or participation in, or association with a member of, a self-regulatory organization. This statutory disqualification has consequences that are separate from any sanction imposed in an administrative proceeding. In addition, in any disciplinary proceeding before the Commission based on the entry of the injunction in this action, Defendants understand that he shall not be permitted to contest the factual allegations of the complaint in this action.

12. Defendants understand and agree to comply with the terms of 17 C.F.R. § 202.5(e), which provides in part that it is the Commission's policy "not to permit a defendant or respondent to consent to a judgment or order that imposes a sanction while denying the allegations in the complaint or order for proceedings, " and "a refusal to admit the allegations is equivalent to a denial, unless the defendant or respondent states that he neither admits nor denies the allegations." As part of Defendants' agreement to comply with the terms of Section 202.5(e), Defendants: (i) will not take any action or make or permit to be made any public statement denying, directly or indirectly, any allegation in the complaint or creating the impression that the complaint is without factual basis; (ii) will not make or permit to be made any public statement to the effect that Defendants do not admit the allegations of the complaint, or that this Consent contains no admission of the allegations, without also stating that Defendants do not deny the allegations; and (iii) upon the filing of this Consent, Defendants hereby withdraw any papers filed in this action to the extent that they deny any allegation in the complaint. If Defendants breach this agreement, the Commission may petition the Court to vacate the Final Judgment and restore this action to its active docket. Nothing in this paragraph affects Defendants': (i) testimonial obligations; or (ii) right to take legal or factual positions in litigation or other legal proceedings in which the Commission is not a party.

13. Defendants hereby waive any rights under the Equal Access to Justice Act, the Small Business Regulatory Enforcement Fairness Act of 1996, or any other provision of law to seek from the United States, or any agency, or any official of the United States acting in his or her official capacity, directly or indirectly, reimbursement of attorney's fees or other fees, expenses, or costs expended by Defendants to defend against this action. For these purposes, Defendants agree that Defendants are not the prevailing parties in this action since the parties have reached a good faith settlement.

14. Defendants agree that the Commission may present the Final Judgment to the Court for signature and entry without further notice.

15. Defendants agree that this Court shall retain jurisdiction over this matter for the purpose of enforcing the terms of the Final Judgment.5236752367131081101450181

Exhibit 2

CONSENT OF DEFENDANT KYMBERLY A. NELSON

1. Defendant Kymberly A. Nelson ("Defendant") waives service of a summons and the complaint in this action, enters a general appearance, and admits the Court's jurisdiction over Defendant and over the subject matter of this action.

2. Without admitting or denying the allegations of the complaint (except as to personal and subject matter jurisdiction, which Defendant admits), Defendant hereby consents to the entry of the final Judgment in the form attached hereto (the "Final Judgment") and incorporated by reference herein, which, among other things:

(a) permanently restrains and enjoins Defendant from violation of Section 5 of the Securities Act of 1933 ("Securities Act") [15 U.S.C. § 77e];
(b) orders Defendant to pay disgorgement in the amount of $436, 835, plus prejudgment interest thereon in the amount of $28, 625, for a total of $465, 460, but waives payment of all but $18, 594 of the disgorgement, waives prejudgment interest, and does not impose a civil penalty based upon Defendant's sworn representations in Defendant's Statement of Financial Condition dated December 20, 2012 and other documents and information submitted to the Commission; and
(d) prohibits Defendant from participating in an offering of penny stock under Section 20(g) of the Securities Act [15 U.S.C. § 77t] and 21(d)(6) of the Securities Exchange Act of 1934 ("Exchange Act") [15 U.S.C. § 78u].

3. Defendant acknowledges that the Court is not imposing a civil penalty or requiring payment of all but $18, 594 of disgorgement and prejudgment interest based on Defendant's sworn representations in Defendant's Statement of Financial Condition dated December 20, 2012 and other documents and information submitted to the Commission. Defendant further consents that if at any time following the entry of the Final Judgment the Commission obtains information indicating that Defendant's representations to the Commission concerning Defendant's assets, income, liabilities, or net worth were fraudulent, misleading, inaccurate, or incomplete in any material respect as of the time such representations were made, the Commission may, at its sole discretion and without prior notice to Defendant, petition the Court for an order requiring Defendant to pay the unpaid portion of the disgorgement, prejudgment and post-judgment interest thereon, and the maximum civil penalty allowable under the law. In connection with any such petition, the only issue shall be whether the fmancial information provided by Defendant was fraudulent, misleading, inaccurate, or incomplete in any material respect as of the time such representations were made. In any such petition, the Commission may move the Court to consider all available remedies, including but not limited to ordering Defendant to pay funds or assets, directing the forfeiture of any assets, or sanctions for contempt of the Court's Final Judgment. The Commission may also request additional discovery. Defendant may not, by way of defense to such petition: (1) challenge the validity of this Consent or the Final Judgment; (2) contest the allegations in the complaint; (3) assert that payment of disgorgement, prejudgment or post-judgment interest, or a civil penalty should not be ordered; (4) contest the amount of disgorgement or prejudgment or post-judgment interest; (5) contest the imposition of the maximum civil penalty allowable under the law; or (6) assert any defense to liability or remedy, including but not limited to any statute of limitations defense.

4. In connection with this action and any related judicial or administrative proceeding or investigation commenced by the Commission or to which the Commission is a party, Defendant (i) agrees to appear and be interviewed by Commission staff at such times and places as the staff requests upon reasonable notice; (ii) will accept service by mail or facsimile transmission of notices or subpoenas issued by the Commission for documents or testimony at depositions, hearings, or trials, or in connection with any related investigation by Commission staff; (iii) appoints Defendant's undersigned attorney as agent to receive service of such notices and subpoenas; (iv) with respect to such notices and subpoenas, waives the territorial limits on service contained in Rule 45 of the Federal Rules of Civil Procedure and any applicable local rules, provided that the party requesting the testimony reimburses Defendant's travel, lodging, and subsistence expenses at the then-prevailing U.S. Government per diem rates; and (v) consents to personal jurisdiction over Defendant in any United States District Court for purposes of enforcing any such subpoena.

5. Defendant waives the entry of findings of fact and conclusions of law pursuant to Rule 52 of the Federal Rules of Civil Procedure.

6. Defendant waives the right, if any, to a jury trial and to appeal from the entry of the Final Judgment.

7. Defendant enters into this Consent voluntarily and represents that no threats, offers, promises, or inducements of any kind have been made by the Commission or any member, officer, employee, agent, or representative of the Commission to induce Defendant to enter into this Consent.

8. Defendant agrees that this Consent shall be incorporated into the Final Judgment with the same force and effect as if fully set forth therein.

9. Defendant will not oppose the enforcement of the Final Judgment on the ground, if any exists, that it fails to comply with Rule 65(d) of the Federal Rules of Civil Procedure, and hereby waives any objection based thereon.

10. Defendant waives service of the Final Judgment and agrees that entry of the Final Judgment by the Court and filing with the Clerk of the Court will constitute notice to Defendant of its terms and conditions. Defendant further agrees to provide counsel for the Commission, within thirty (30) days after the Final Judgment is filed with the Clerk of the Court, with an affidavit or declaration stating that Defendant has received and read a copy of the Final Judgment.

11. Consistent with 17 C.F.R. 202.5(f), this Consent resolves only the claims asserted against Defendant in this civil proceeding. Defendant acknowledges that no promise or representation has been made by the Commission or any member, officer, employee, agent, or representative of the Commission with regard to any criminal liability that may have arisen or may arise from the facts underlying this action or immunity from any such criminal liability. Defendant waives any claim of Double Jeopardy based upon the settlement of this proceeding, including the imposition of any remedy or civil penalty herein. Defendant further acknowledges that the Court's entry of a permanent injunction may have collateral consequences under federal or state law and the rules and regulations of self-regulatory organizations, licensing boards, and other regulatory organizations. Such collateral consequences include, but are not limited to, a statutory disqualification with respect to membership or participation in, or association with a member of, a self-regulatory organization. This statutory disqualification has consequences that are separate from any sanction imposed in an administrative proceeding. In addition, in any disciplinary proceeding before the Commission based on the entry of the injunction in this action, Defendant understands that she shall not be permitted to contest the factual allegations of the complaint in this action.

12. Defendant understands and agrees to comply with the terms of 17 C.F.R. § 202.5(e), which provides in part that it is the Commission's policy "not to permit a defendant or respondent to consent to a judgment or order that imposes a sanction while denying the allegations in the complaint or order for proceedings, " and "a refusal to admit the allegations is equivalent to a denial, unless the defendant or respondent states that he neither admits nor denies the allegations." As part of Defendant's agreement to comply with the terms of Section 202.5(e), Defendant: (i) will not take any action or make or permit to be made any public statement denying, directly or indirectly, any allegation in the complaint or creating the impression that the complaint is without factual basis; (ii) will not make or permit to be made any public statement to the effect that Defendant does not admit the allegations of the complaint, or that this Consent contains no admission of the allegations, without also stating that Defendant does not deny the allegations; and (iii) upon the filing of this Consent, Defendant hereby withdraws any papers filed in this action to the extent that they deny any allegation in the complaint. If Defendant breaches this agreement, the Commission may petition the Court to vacate the Final Judgment and restore this action to its active docket. Nothing in this paragraph affects Defendant's: (i) testimonial obligations; or (ii) right to take legal or factual positions in litigation or other legal proceedings in which the Commission is not a party.

13. Defendant hereby waives any rights under the Equal Access to Justice Act, the Small Business Regulatory Enforcement Fairness Act of 1996, or any other provision of law to seek from the United States, or any agency, or any official of the United States acting in his or her official capacity, directly or indirectly, reimbursement of attorney's fees or other fees, expenses, or costs expended by Defendant to defend against this action. For these purposes, Defendant agrees that Defendant is not the prevailing party in this action since the parties have reached a good faith settlement.

14. Defendant agrees that the Commission may present the Final Judgment to the Court for signature and entry without further notice.

15. Defendant agrees that this Court shall retain jurisdiction over this matter for the purpose of enforcing the terms of the Final Judgment.

Exhibit 3

CONSENT OF DEFENDANT JAVORKA L. GASIC

1. Defendant Javorka L. Gasic ("Defendant") waives service of a summons and the complaint in this action, enters a general appearance, and admits the Court's jurisdiction over Defendant and over the subject matter of this action.

2. Without admitting or denying the allegations of the complaint (except as to personal and subject matter jurisdiction, which Defendant admits), Defendant hereby consents to the entry of the final Judgment in the form attached hereto (the "Final Judgment") and incorporated by reference herein, which, among other things:

(a) permanently restrains and enjoins Defendant from violation of Section 5 of the Securities Act of 1933 ("Securities Act") [15 U.S.C. § 77e];
(b) orders Defendant to pay disgorgement in the amount of $25, 575, plus prejudgment interest thereon in the amount of $3, 105, for a total of $28, 680, but waives payment of all but $14, 400 of the disgorgement and prejudgment interest and does not impose a civil penalty based upon Defendant's sworn representations in Defendant's Statement of Financial Condition dated February 7, 2013 and other documents and information submitted to the Commission; and
(c) prohibits Defendant from participating in an offering of penny stock under Section 20(g) of the Securities Act [15 U.S.C. § 77-0 and 21(d)(6) of the Securities Exchange Act of 1934 [15 U.S.C. § 78u].

3. Defendant consents to payment of the $14, 400 pursuant to the payment plan required by the Final Judgment.

4. Defendant acknowledges that the Court is waiving all but $14, 400 of the disgorgement and prejudgment interest and not imposing a civil penalty based on Defendant's sworn representations in Defendant's Statement of Financial Condition dated February 7, 2013 and other documents and information submitted to the Commission. Defendant further consents that if at any time following the entry of the Final Judgment the Commission obtains information indicating that Defendant's representations to the Commission concerning Defendant's assets, income, liabilities, or net worth were fraudulent, misleading, inaccurate, or incomplete in any material respect as of the time such representations were made, the Commission may, at its sole discretion and without prior notice to Defendant, petition the Court for an order requiring Defendant to pay the unpaid portion of the disgorgement, prejudgment and post-judgment interest thereon, and the maximum civil penalty allowable under the law. In connection with any such petition, the only issue shall be whether the financial information provided by Defendant was fraudulent, misleading, inaccurate, or incomplete in any material respect as of the time such representations were made. In any such petition, the Commission may move the Court to consider all available remedies, including but not limited to ordering Defendant to pay funds or assets, directing the forfeiture of any assets, or sanctions for contempt of the Court's Final Judgment. The Commission may also request additional discovery. Defendant may not, by way of defense to such petition: (1) challenge the validity of this Consent or the Final Judgment; (2) contest the allegations in the complaint; (3) assert that payment of disgorgement, prejudgment or post-judgment interest, or a civil penalty should not be ordered; (4) contest the amount of disgorgement or prejudgment or post-judgment interest; (5) contest the imposition of the maximum civil penalty allowable under the law; or (6) assert any defense to liability or remedy, including but not limited to any statute of limitations defense.

5. Defendant waives the entry of findings of fact and conclusions of law pursuant to Rule 52 of the Federal Rules of Civil Procedure.

6. Defendant waives the right, if any, to a jury trial and to appeal from the entry of the Final Judgment.

7. Defendant enters into this Consent voluntarily and represents that no threats, offers, promises, or inducements of any kind have been made by the Commission or any member, officer, employee, agent, or representative of the Commission to induce Defendant to enter into this Consent.

8. Defendant agrees that this Consent shall be incorporated into the Final Judgment with the same force and effect as if fully set forth therein.

9. Defendant will not oppose the enforcement of the Final Judgment on the ground, if any exists, that it fails to comply with Rule 65(d) of the Federal Rules of Civil Procedure, and hereby waives any objection based thereon.

10. Defendant waives service of the Final Judgment and agrees that entry of the Final Judgment by the Court and filing with the Clerk of the Court will constitute notice to Defendant of its terms and conditions. Defendant further agrees to provide counsel for the Commission, within thirty days after the Final Judgment is filed with the Clerk of the Court, with an affidavit or declaration stating that Defendant has received and read a copy of the Final Judgment.

11. Consistent with 17 C.F.R. 202.5(f), this Consent resolves only the claims asserted against Defendant in this civil proceeding. Defendant acknowledges that no promise or representation has been made by the Commission or any member, officer, employee, agent, or representative of the Commission with regard to any criminal liability that may have arisen or may arise from the facts underlying this action or immunity from any such criminal liability. Defendant waives any claim of Double Jeopardy based upon the settlement of this proceeding, including the imposition of any remedy or civil penalty herein. Defendant further acknowledges that the Court's entry of a permanent injunction may have collateral consequences under federal or state law and the rules and regulations of self-regulatory organizations, licensing boards, and other regulatory organizations. Such collateral consequences include, but are not limited to, a statutory disqualification with respect to membership or participation in, or association with a member of, a self-regulatory organization. This statutory disqualification has consequences that are separate from any sanction imposed in an administrative proceeding. In addition, in any disciplinary proceeding before the Commission based on the entry of the injunction in this action, Defendant understands that she shall not be permitted to contest the factual allegations of the complaint in this action.

12. Defendant understands and agrees to comply with the terms of 17 C.F.R. § 202.5(e), which provides in part that it is the Commission's policy "not to permit a defendant or respondent to consent to a judgment or order that imposes a sanction while denying the allegations in the complaint or order for proceedings, " and "a refusal to admit the allegations is equivalent to a denial, unless the defendant or respondent states that he neither admits nor denies the allegations." As part of Defendant's agreement to comply with the terms of Section 202.5(e), Defendant: (i) will not take any action or make or permit to be made any public statement denying, directly or indirectly, any allegation in the complaint or creating the impression that the complaint is without factual basis; (ii) will not make or permit to be made any public statement to the effect that Defendant does not admit the allegations of the complaint, or that this Consent contains no admission of the allegations, without also stating that Defendant does not deny the allegations; and (iii) upon the filing of this Consent, Defendant hereby withdraws any papers filed in this action to the extent that they deny any allegation in the complaint. If Defendant breaches this agreement, the Commission may petition the Court to vacate the Final Judgment and restore this action to its active docket. Nothing in this paragraph affects Defendant's: (i) testimonial obligations; or (ii) right to take legal or factual positions in litigation or other legal proceedings in which the Commission is not a party.

13. Defendant hereby waives any rights under the Equal Access to Justice Act, the Small Business Regulatory Enforcement Fairness Act of 1996, or any other provision of law to seek from the United States, or any agency, or any official of the United States acting in his or her official capacity, directly or indirectly, reimbursement of attorney's fees or other fees, expenses, or costs expended by Defendant to defend against this action. For these purposes, Defendant agrees that Defendant is not the prevailing party in this action since the parties have reached a good faith settlement.

14. Defendant agrees that the Commission may present the Final Judgment to the Court for signature and entry without further notice.

15. Defendant agrees that this Court shall retain jurisdiction over this matter for the purpose of enforcing the terms of the Final Judgment.

Exhibit 4

CONSENT OF DEFENDANT DIANA BOZOVIC

1. Defendant Diana Bozovic ("Defendant") waives service of a summons and the complaint in this action, enters a general appearance, and admits the Court's jurisdiction over Defendant and over the subject matter of this action.

2. Without admitting or denying the allegations of the complaint (except as to personal and subject matter jurisdiction, which Defendant admits), Defendant hereby consents to the entry of the final Judgment in the form attached hereto (the "Final Judgment") and incorporated by reference herein, which, among other things:

(a) permanently restrains and enjoins Defendant from violation of Section 5 of the Securities Act of 1933 ("Securities Act") [15 U.S.C. § 77e];
(b) orders Defendant to pay disgorgement in the amount of $12, 500, plus prejudgment interest thereon in the amount of $1, 425, for a total of $13, 925 but does not impose a civil penalty based upon Defendant's sworn representations in Defendant's Statement of Financial Condition dated February 7, 2013 and other documents and information submitted to the Commission; and
(c) prohibits Defendant from participating in an offering of penny stock under Section 20(g) of the Securities Act [15 U.S.C. § 77t] and 21(d)(6) of the Securities Exchange Act of 1934 [15 U.S.C. § 78u].

3. Defendant consents to payment of the $13, 925 pursuant to the payment plan required by the Final Judgment.

4. Defendant acknowledges that the Court is not imposing a civil penalty based on Defendant's sworn representations in Defendant's Statement of Financial Condition dated February 7, 2013 and other documents and information submitted to the Commission. Defendant further consents that if at any time following the entry of the Final Judgment the Commission obtains information indicating that Defendant's representations to the Commission concerning Defendant's assets, income, liabilities, or net worth were fraudulent, misleading, inaccurate, or incomplete in any material respect as of the time such representations were made, the Commission may, at its sole discretion and without prior notice to Defendant, petition the Court for an order requiring Defendant to pay the unpaid portion of the disgorgement, prejudgment and post-judgment interest thereon, and the maximum civil penalty allowable under the law. In connection with any such petition, the only issue shall be whether the financial information provided by Defendant was fraudulent, misleading, inaccurate, or incomplete in any material respect as of the time such representations were made. In any such petition, the Commission may move the Court to consider all available remedies, including but not limited to ordering Defendant to pay funds or assets, directing the forfeiture of any assets, or sanctions for contempt of the Court's Final Judgment. The Commission may also request additional discovery. Defendant may not, by way of defense to such petition: (1) challenge the validity of this Consent or the Final Judgment; (2) contest the allegations in the complaint; (3) assert that payment of disgorgement, prejudgment or post-judgment interest, or a civil penalty should not be ordered; (4) contest the amount of disgorgement or prejudgment or post-judgment interest; (5) contest the imposition of the maximum civil penalty allowable under the law; or (6) assert any defense to liability or remedy, including but not limited to any statute of limitations defense.

5. Defendant waives the entry of findings of fact and conclusions of law pursuant to Rule 52 of the Federal Rules of Civil Procedure.

6. Defendant waives the right, if any, to a jury trial and to appeal from the entry of the Final Judgment.

7. Defendant enters into this Consent voluntarily and represents that no threats, offers, promises, or inducements of any kind have been made by the Commission or any member, officer, employee, agent, or representative of the Commission to induce Defendant to enter into this Consent.

8. Defendant agrees that this Consent shall be incorporated into the Final Judgment with the same force and effect as if fully set forth therein.

9. Defendant will not oppose the enforcement of the Final Judgment on the ground, if any exists, that it fails to comply with Rule 65(d) of the Federal Rules of Civil Procedure, and hereby waives any objection based thereon.

10. Defendant waives service of the Final Judgment and agrees that entry of the Final Judgment by the Court and filing with the Clerk of the Court will constitute notice to Defendant of its terms and conditions. Defendant further agrees to provide counsel for the Commission, within thirty (30) days after the Final Judgment is filed with the Clerk of the Court, with an affidavit or declaration stating that Defendant has received and read a copy of the Final Judgment.

11. Consistent with 17 C.F.R. 202.5(f), this Consent resolves only the claims asserted against Defendant in this civil proceeding. Defendant acknowledges that no promise or representation has been made by the Commission or any member, officer, employee, agent, or representative of the Commission with regard to any criminal liability that may have arisen or may arise from the facts underlying this action or immunity from any such criminal liability. Defendant waives any claim of Double Jeopardy based upon the settlement of this proceeding, including the imposition of any remedy or civil penalty herein. Defendant further acknowledges that the Court's entry of a permanent injunction may have collateral consequences under federal or state law and the rules and regulations of self-regulatory organizations, licensing boards, and other regulatory organizations. Such collateral consequences include, but are not limited to, a statutory disqualification with respect to membership or participation in, or association with a member of, a self-regulatory organization. This statutory disqualification has consequences that are separate from any sanction imposed in an administrative proceeding. In addition, in any disciplinary proceeding before the Commission based on the entry of the injunction in this action, Defendant understands that she shall not be permitted to contest the factual allegations of the complaint in this action.

12. Defendant understands and agrees to comply with the terms of 17 C.F.R. § 202.5(e), which provides in part that it is the Commission's policy "not to permit a defendant or respondent to consent to a judgment or order that imposes a sanction while denying the allegations in the complaint or order for proceedings, " and "a refusal to admit the allegations is equivalent to a denial, unless the defendant or respondent states that he neither admits nor denies the allegations." As part of Defendant's agreement to comply with the terms of Section 202.5(e), Defendant: (i) will not take any action or make or permit to be made any public statement denying, directly or indirectly, any allegation in the complaint or creating the impression that the complaint is without factual basis; (ii) will not make or permit to be made any public statement to the effect that Defendant does not admit the allegations of the complaint, or that this Consent contains no admission of the allegations, without also stating that Defendant does not deny the allegations; and (iii) upon the filing of this Consent, Defendant hereby withdraws any papers filed in this action to the extent that they deny any allegation in the complaint. If Defendant breaches this agreement, ...


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