U.S. SECURITIES AND EXCHANGE COMMISSION
Litigation Release No. 22955 / March 31, 2014
Securities and Exchange Commission v. Schultz and Redfin Network, Inc., Civil Action No. 13-cv-61763-Cohn/Seltzer
District Court Enters Default Judgment Against Defendant Redfin Network, Inc, Judgment of Permanent Injunction and Other Relief Against Defendant Jeffrey L. Schultz, and Order Dismissing Case
The Commission announced that on January 9, 2014, the United States District Court for the Southern District of Florida entered a Judgment of Permanent Injunction by consent against Defendant Jeffrey L. Schultz, enjoining him from violations of Section 10(b) and Rule 10b-5 of the Securities Exchange Act of 1934 and Section 17(a)(1) of the Securities Act of 1933. The Court also barred Schultz from serving as an officer or director of a public company along with a penny stock bar. In addition, at the Commission’s request, District Judge James I. Cohn dismissed the Commission’s claims against Schultz for disgorgement, prejudgment interest, and a civil penalty, based on the parallel federal criminal case, where Schultz was convicted of securities fraud and sentenced to six months in prison, three years of supervised release, and an order of forfeiture.
The Court previously had entered by default a permanent injunction against Defendant Redfin Network, Inc., enjoining the company from violations of the same securities laws. The court also ordered Redfin to pay disgorgement of $18,290 and prejudgment interest of $1,190.48 for a total of $19,480.48 representing profits gained as a result of the conduct alleged in the Complaint. On January 8, 2014, the Commission dismissed its civil penalty claim against Redfin.
The Commission commenced this action by filing its Complaint on August 14, 2013, against Schultz and Redfin. The Complaint alleges violations of the antifraud provisions of the federal securities laws.
For more information on earlier actions in this case, see Litigation Release No. 22780 (Aug. 14, 2013).