Case Document 134-1 Filed 08/31/18 Page 1 of 17 UNITED STATES DISTRICT COURT SOUTHERN DISTRICT OF NEW YORK SECURITIES AND EXCHANGE COMMISSION, Plaintiff, CA. No. 14-01528 (VEC) V. STEVEN H. DAVIS, STEPHEN DICARMINE, JOEL SANDERS, FRANCIS CANELLAS, and THOMAS MULLIKIN, Defendants. CONSENT OF DEFENDANT STEVEN H. DAVIS 1. Defendant Steven H. Davis (?Defendant?) acknowledges having been served with 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. Defendant has entered into a deferred-prosecution agreement in The People of the State of New York v. Steven Davis, e: 511., Ind. No. 00773 2014. In connection with that deferred-prosecution agreement, Defendant acknowledged the terms of the deferred-prosecution agreement that is attached as Exhibit A to this Consent. 3. Without admitting or denying the allegations of the complaint (except as provided herein in paragraph 12 and except as to personal and subject matter jurisdiction, which Defendant admits), Defendant hereby consents to the entry of the ?nal Judgment in the form attached hereto (the ?Final Judgment?) and incorporated by reference herein, which, among other things: Sn 0 Case Document 134-1 Filed 08/31/18 Page 2 of 17 permanently restrains and enjoins Defendant from violation of Section 17(a) of the Securities Act of 1933 [15 U.S.C. 77q(a)] and Section 10(b) of the Securities Exchange Act of 1934 [15 U.S.C., 78j(b)] and Rules 10b-5 thereunder [17 C.F.R. prohibits Defendant from serving as an of?cer or director of any entity having a class of securities registered with the Commission under Section 12 of the Exchange Act [15 U.S.C. 781] or that is required to ?le reports under Section 15(d) of the Exchange Act [15 U.S.C. and orders Defendant to pay a $130,000 civil penalty under Section 20(d) of the Securities Act [15 U.S.C. 77t(d)] and Section 21(d) of the Exchange Act [15 U.S.C. 4. Defendant agrees that he shall not seek or accept, directly or indirectly, reimbursement or indemni?cation from any source, including but not limited to payment made pursuant to any insurance policy, with regard to any civil penalty amounts or any part thereof are added to a distribution fund or otherwise used for the bene?t of investors. Defendant further agrees that he 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 Defendant pays 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 bene?t of investors. 5. Defendant waives the entry of ?ndings 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 Judgement. 3110 Case Document 134-1 Filed 08/31/18 Page 3 of 17 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, of?cer, 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 ?ling 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 ?led with the Clerk of the Court, with an af?davit or declaration stating that Defendant has received and read a copy of the Final Judgment. 11. Consistent with 17 C.F.R. 202.56), 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, of?cer, 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 Case Document 134-1 Filed 08/31/18 Page 4 of 17 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 disquali?cation with respect to membership or participation in, or association with a member of, self-regulatory organization. This statutory disquali?cation 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 injunctions in this action, Defendant understands that he shall not be permitted to contest the factual allegation of the complaint in this action. 12. Defendant understands and agrees to comply with the terms of 17 CPR. 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 Defendant acknowledges the deferred-prosecution agreement for related conduct described in paragraph 2 above, and: 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; upon the ?ling of this Consent, Defendant hereby withdraws any papers ?led in this action to the extent that they deny any allegation in the complaint; and (iv) stipulates solely for purposes of exceptions to discharge set forth in Section 523 of. the 960 Case Document 134-1 Filed 08/31/18 Page 5 of 17 Bankruptcy Code, 11 U.S.C. 523, that the allegations in the complaint are true, and further, that any debt for disgorgement, prejudgment interest, civil penalty or other amounts due by Defendant under the Final Judgment or any other judgment, order, consent order, decree or settlement agreement entered in connection with this proceeding, is a debt for the violation by Defendant of the federal securities laws or any regulation or order issued under such laws, as set forth in Section 523(a)(l9) of the Bankruptcy Code, 11 U.S.C. 523(a)(19). 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: 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 1966, or any other provision of law to seek from the United States, 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. l4. Defendant agrees that the Commission may present the Final Judgment to the Court for signature and entry without further notice. gt?) Case Document 134-1 Filed 08/31/18 Page 6 of 17 Hill-Eli Benton not} i; 11;} 5-11.33 ?5 . 1 . . Eulogy}, one tom-o Mun-En of Ame . reiend nit ?1 . SS tit-5t IS. Defendant agrees that this Court shall retain jurisdiotion over this matter for the purpose ofenforcing the terms of the Finai Judgment. Datedzj??, 25" 24'! 2/ On ?g 2018,. 1 personatfy . ed before me and acknowledged executing the foregoing Consent. H. DAVIS ?atmgmi I22 W?of? Maze/wow 9 ?new Nolan Public Commission expires: Approved as to form: Elkan Abramowitz, Esq. Morvilio Abrnmowitz Grand Iason-??e Anello RC. 565 Fifth Avenue New York, New York 1001? Attorney for Defendant Bonnie An elov Vice Conga; . United States of Amenoa London. England ommteeuon Inde?nite This document contains :Mpages, Each initialed by the Sm!) Case Document 134-1 Filed 08/31/18 Page 7 of 17 EXHIBIT A $th Case Document 134-1 Filed 08/31/18 Page 8 of 17 DEFERRED PROSECUTION AGREEMENT Defendant STEVEN H. DAVIS (?Defendant?) and the New York Cenoty District Attorney?s Of?ce hereby enter into this Deferred Prosecution Agreement (this ?Agreement?). This Agreement shall be in effect for a period of sixty (60) months from the date of its execution (the ?Period of this Agreement?). Defendant was Chairman, and later a member of the Of?ce of the Chair, of Dewey 8: LeBoeuf LLP, an international law ?rm headquartered in New York County. In late February 2014, a New York County Grand Jury returned Indictment 773/2014 (the ?Indictment?) charging Defendant and three others with various crimes related to their conduct at Dewey r3: LeBoeuf LLP, including Scheme to Defraud in the First Degree, Grand Larceny in the First Degree, Falsifying Business Records in the First Degree, violation of the Martin Act, and Conspiracy in the Fifth Degree, Following trial on the Indictment, the jury deliberated for 21 days. During that time, the jury returned two partial verdicts acquitting Defendant on a number of Falsifying Business Records in the First Degree counts but did not reach a verdict on the remaining counts, and the Court declared a mistrial. Based on juror interviews conducted by DANY and counsel for Defendant, the parties understand that the jury was deeply divided on some of the remaining counts. DANY believes that the admissible evidence against Defendant establishes his guilt on the remaining counts beyond a reasonable doubt, but based on the outcome of the trial, recognizes that a jury at any retrial may fail to reach a verdict or may acquit se Document 134-1 Filed 08/31/18 Page 9 of 17 Defendant on the remaining counts. Defendant, after consultation with his counsel, recognizes that based on the admissible evidence, a jury at any retrial may convict him on some or all of the remaining counts. Concurrent with this Agreement, Defendant is entering into an agreement with the United States Securities and Exchange Commission (the consenting to the entry of a judgment in Securities and Exchange Commission v. Steven H. Davis et al, 14 Civ. 1528 (VEC), which among other things includes a prohibition from acting as an of?cer or director of any public company. Additionally, Defendant agrees to be suspended from appearing or practicing before the SEC as an attorney pursuant to Rule 102(c)(3) of the Rules of Practice and will consent to execute any document or further agreement necessary to effectuate such a suspension in any proceeding initiated by the SEC for that purpose (collectively, the Agreements?). Defendant?s entry into the SEC Agreements is a material consideration in decision to enter into this Agreement. Defendant agrees that he shall in all respects comply with his obligations under this Agreement as follows: 3.. Defendant agrees not to commit any crimes in New York State or any other jurisdiction. b. Defendant agrees not to practice law in New York State during the Period of this Agreement. c. Defendant agrees not to violate his obligations under the SEC Agreements. 2 Case Document 134-1 Filed 08/31/18 Page 10 of 17 d. Defendant agrees to appear for a status conference before the Court in this case when requested by the People upon reasonable notice and at least annually during the Period of this Agreement. e. At first Court appearance following execution of this Agreement, Defendant will Withdraw all pending motions related to the criminal case. Defendant agrees that in all instances, DANY has sole discretion to determine whether Defendant has violated his obligations under this Agreement, and Defendant further agrees that such determination shall not be subject to judicial review. Prior to any ?nal determination by DANY that Defendant has violated his obligations under this Agreement, Defendant will be given a reasonable opportunity to be heard by DANY. Without limitation to any other determination by DANY, should Defendant be arrested in any jurisdiction during the Period of this Agreement, or should DANY in its sole discretion determine that Defendant or any party representing him has made any statement that contradicts the provisions of this Agreement, DANY may determine that Defendant has violated his obligations under this Agreement. Upon the consent of the Court, in order to allow Defendant an opportunity to demonstrate good conduct and compliance with the terms of this Agreement, DANY will defer prosecution of the Defendant during the Period of this Agreement, so long as Defendant does not violate his obligations under this Agreement. DANY agrees that, if Defendant remains in compliance with all of his obligations under this Agreement throughout the Period of this Agreement, DANY will within 30 days of eel Document 134-1 Filed 08/31/18 Page 11 of 17 the expiration of the Period of this Agreement, move that the Court dismiss the Indictment against Defendant with prejudice. Should Defendant violate his obligations under this Agreement, DANY may prosecute Defendant on all remaining counts in the Indictment. In such event, Defendant expressly waives any rights he may have under the proffer agreements he entered into with DANY on November 27 and December 16, 2013, and DANY may use any statements made by Defendant at the .meedngs covered by these proffer agreements in its casein?chief at trial. 10. Defendant expressly waives all rights to a speedy trial on the Indictment pursuant to Criminal Procedure Law Section 30.30, any other applicable statute or rule, and under the New York State and federal constitutions, for the Period of this Agreement. This waiver is knowing, voluntary and in express reliance on the advice of Defendant?s counsel, and Defendant shall inform the Court on the record of this waiver. Case Document 134-1 Filed 08/31/18 Page 12 of 17 11. This document sets forth all the terms of this Agreement. Nothing in this Agreement shall prevent either Defendant or DANY from requesting from the other party a modi?cation or addition to this Agreement; however, no modi?cations or additions to this Agreement shall be-valid unless they are agreed to by both parties in writing and signed by DANY, Defendant, and Defendant?s counsel. It is understood that this Agreement is binding on Defendant and DANY, but speci?cally does not bind any other federal, state or local law enforcement agencies, any licensing authorities or any regulatory authorities. Dated: New York New York January I 2016 Cyrus R. Vanee,]r. District Attorney By: ?s 7 I?eiree R. Moser Assistant District Attorney 95am ?31wa H. Davis Defendant Elxigf?is (33?3" Elkan Abramowitz, Esq, Counsel for Defendant SW9 Case 1:14-cv-01528-VEC Document 134-1 Filed 08/31/18 Page 13 of 17 UNITED STATES DISTRICT COURT SOUTHERN DISTRICT OF NEW YORK SECURITIES AND EXCHANGE COMMISSION, Plaintiff, C.A. No. 14-01528 (VEC) v. STEVEN H. DAVIS, STEPHEN DICARMINE, JOEL SANDERS, FRANCIS CANELLAS, and THOMAS MULLIKIN, Defendants. FINAL JUDGMENT AS TO DEFENDANT STEVEN H. DAVIS The Securities and Exchange Commission having filed a Complaint and Defendant Steven H. Davis (“Defendant”) having entered a general appearance; consented to the Court’s jurisdiction over Defendant and the subject matter of this action; consented to entry of this Final Judgment without admitting or denying the allegations of the Complaint (except as to jurisdiction and except as otherwise provided herein in paragraph V.); waived findings of fact and conclusions of law; and waived any right to appeal from this Final Judgment: I. IT IS HEREBY ORDERED, ADJUDGED, AND DECREED that Defendant is permanently restrained and enjoined from violating Section 17(a) of the Securities Act of 1933 (the “Securities Act”) [15 U.S.C. § 77q(a)] in the offer or sale of any security by the use of any means or instruments of transportation or communication in interstate commerce or by use of the mails, directly or indirectly: (a) to employ any device, scheme, or artifice to defraud; Case 1:14-cv-01528-VEC Document 134-1 Filed 08/31/18 Page 14 of 17 (b) to obtain money or property by means of any untrue statement of a material fact or any omission of a material fact necessary in order to make the statements made, in light of the circumstances under which they were made, not misleading; or (c) to engage in any transaction, practice, or course of business which operates or would operate as a fraud or deceit upon the purchaser. IT IS FURTHER ORDERED, ADJUDGED, AND DECREED that, as provided in Federal Rule of Civil Procedure 65(d)(2), the foregoing paragraphs also binds the following who receive actual notice of this Final Judgment by personal service or otherwise: (a) Defendant’s officers, agents, servants, employees, and attorneys, and (b) other persons in active concert or participation with Defendant or with anyone described in (a). II. IT IS HEREBY FURTHER ORDERED, ADJUDGED, AND DECREED that Defendant is permanently restrained and enjoined from violating, directly or indirectly, Section 10(b) of the Securities Exchange Act of 1934 (the “Exchange Act”) [15 U.S.C. § 78j(b)] and Rule 10b-5 promulgated 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 Case 1:14-cv-01528-VEC Document 134-1 Filed 08/31/18 Page 15 of 17 operate as a fraud or deceit upon any person. IT IS FURTHER ORDERED, ADJUDGED, AND DECREED that, as provided in Federal Rule of Civil Procedure 65(d)(2), the foregoing paragraph also binds the following who receive actual notice of this Final Judgment by personal service or otherwise: (a) Defendant’s officers, agents, servants, employees, and attorneys; and (b) other persons in active concert or participation with Defendant or with anyone described in (a). III. IT IS FURTHER ORDERED, ADJUDGED, AND DECREED that Defendant shall pay a civil penalty in the amount of $130,000 to the Securities and Exchange Commission pursuant to Section 20(d) of the Securities Act [15 U.S.C. §77t(d)]. Defendant shall make this payment pursuant to the terms of the payment schedule set forth in paragraph IV. below after entry of this Final Judgment. Defendant may transmit payment electronically to the Commission, which will provide detailed ACH transfer/Fedwire instructions upon request. Payment may also be made directly from a bank account via Pay.gov through the SEC website at http://www.sec.gov/about/offices/ofm.htm. Defendant may also pay by certified check, bank cashier’s check, or Untied 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 and shall be accompanied by a letter identifying the case title, civil action number, and name of this Court; Davis as a defendant in this action; and specifying that payment is made pursuant to this Final Judgment. Case 1:14-cv-01528-VEC Document 134-1 Filed 08/31/18 Page 16 of 17 Defendant shall simultaneously transmit photocopies of evidence of payment and case identifying information to the Commission’s counsel in this action. By making this payment, Defendant relinquishes all legal and equitable right, title, and interest in such funds and no part of the funds shall be returned to Defendant. The Commission shall send the funds paid pursuant to this Final Judgment to the United States Treasury. Defendant shall pay post-judgment interest on any delinquent amounts pursuant to 28 U.S.C. § 1961. IV. Davis shall pay the total penalty due of $130,000 in two (2) separate installments to the Commission according to the following schedule: (1) $65,000 within thirty (30) days after entry of this Final Judgment; and (2) $65,000 within nine (9) months after the date of the first $65,000 payment. Payments shall be deemed made on the date they are received by the Commission and shall be applied first to post judgment interest, which accrues pursuant to 28 U.S.C. § 1961 on any unpaid amounts due after fourteen (14) days of the entry of the Final Judgment. Prior to making the final payment set forth herein, Davis shall contact the staff of the Commission for the amount due for the final payment. If Davis fails to make any payment by the date agreed and/or in the amount agreed according to the schedule set forth above, all outstanding payments under this Final Judgment, including post-judgment interest, minus any payments made, shall become due and payable immediately at the discretion of the staff of the Commission without further application to the Court. V. IT IS FURTHER ORDERED, ADJUDGED, AND DECREED that, solely for purposes of exceptions to discharge set forth in Section 523 of the Bankruptcy Code, 11 U.S.C. § 523, the Case 1:14-cv-01528-VEC Document 134-1 Filed 08/31/18 Page 17 of 17 allegations in the complaint are true and admitted by Defendant, and further, any debt for disgorgement, prejudgment interest, civil penalty or other amounts due by Defendant under this Final Judgment or any other judgment, order, consent order, decree or settlement agreement entered in connection with this proceeding, is a debt for the violation by Defendant of the federal securities laws or any regulation or order issued under such laws, as set forth in Section 523(a)(19) of the Bankruptcy Code, 11 U.S.C. § 523(a)(19). VI. IT IS FURTHER ORDERED, ADJUDGED, AND DECREED that this Court shall retain jurisdiction of this matter for the purposes of enforcing the terms of this Final Judgment. VII. There being no just reasons for delay, pursuant to Rule 54(b) of the Federal Rules of Civil Procedure, the Clerk is ordered to enter this Final Judgment forthwith and without further notice. Dated: _________________, 2018 ____________________________________ UNITED STATES DISTRICT JUDGE