SEC v Williams Et Al Doc 16 Filed 15 Oct 12

7/31/2019 SEC v Williams Et Al Doc 16 Filed 15 Oct 12

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UNITED STATES DISTRICT COURTDISTRICT OF CONNECTICUT

)SECURITIES AND EXCHANGE COMMISSION, )

)Plaintiff, )v. ) No. 3:12-cv-01068-RNC

)JERRY S. WILLIAMS, MONKS DEN, LLC, and )FIRST IN AWARENESS, LLC, )

)Defendants. )

)

JOINT REPORT OF PARTIES RULE 26(f) PLANNING MEETING

Date Complaint Filed: July 20, 2012

Date Complaint Served: July 27, 2012

Date of Defendant Williams Appearance: September 14, 2012

Pursuant to Fed. R. Civ. P. 16(b), 26(f), and D. Conn. L. Civ. R. 16, a conference was

held on October 4, 2012. The participants were:

Richard M. Harper II, Esq. for plaintiff U.S. Securities and Exchange Commission.

Jerry Williams,pro se, for defendant Jerry Williams.

I. Certification

Undersigned counsel certifies that, after consultation with his client, he has discussed the

nature and basis of the parties claims and defenses and any possibilities for achieving prompt

settlement or other resolution of the case and, in consultation with his client, has developed the

following proposed case management plan in a separate negotiation with defendant Jerry

Williams,pro se. Counsel further certifies that he has forwarded a copy of this report to his

client.

Case 3:12-cv-01068-RNC Document 16 Filed 10/15/12 Page 1 of 21


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II. Jurisdiction

A. Subject Matter Jurisdiction

This Court has jurisdiction over this action pursuant to 28 U.S.C. 1331, Section 22(a) of

the Securities Act of 1933 (Securities Act) [15 U.S.C. 77v(a)], Sections 21(d) and (e) and 27

of the Securities Exchange Act of 1934 (Exchange Act) [15 U.S.C. 78u(e) and 78aa], and

Section 214 of the Investment Advisers Act of 1940 (Advisers Act) [15 U.S.C. 80b-14].

B. Personal Jurisdiction

Williams denies the existence of personal jurisdiction by asserting it as an affirmative

defense. See Answer, pp.4-5.

B.1. Plaintiffs Position on Personal Jurisdiction

Williams objection to personal jurisdiction is frivolous. The Commission has alleged

claims against Williams for violating the Securities Act of 1933, the Securities and Exchange

Act of 1934, and the Investment Advisers Act of 1940. See Complaint, 83-96. These statutes

provide for service of process wherever the defendant may be found. See 15 U.S.C. 77v; 15

U.S.C. 78aa; 15 U.S.C. 80b-14. When Congress uses this broad service language, it intends

to permit nationwide personal jurisdiction. SeeDynegy Midstream Services v. Trammochem,

451 F.3d 89, 95-96 (2d Cir. 2006) (citing, as an example, Section 27 of Exchange Act, 15 U.S.C.

78aa). Under these statutes, if Williams resides in the United States, he is personally subject to

the jurisdiction of this court. SeeSEC v. e-Smart Technologies, Inc., 828 F. Supp.2d 167, 172

(D.D.C. 2011) (holding personal jurisdiction for alleged violations of Exchange Act and

Securities Act is satisfied by defendants contacts with United States); see alsoSEC v. Carrillo,

115 F.3d 1540, 1543 (11th Cir. 1997) (same);Application to Enforce Administrative Subpoena

Duces Tecum of SEC v. Knowles, 87 F.3d 413, 417 (10th Cir. 1996) (same). Williams answer



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admits that he resided in Connecticut during the time period alleged in the complaint and, during

the course of those alleged activities, moved to Arizona where he currently resides. See Answer,

11, 15; Affirmative Defenses, 1. He is therefore subject to the personal jurisdiction of this

Court.

B. Defendant Williams Position on Personal Jurisdiction

Defendant Williams does not deny that the United States District Court has Jurisdiction.

Williams asserts, as the Plaintiff has stated that Williams did reside in Connecticut for a portion

of time of the alleged complaints and Williams moved to Arizona as a permanent residence in

early 2010. As the Plaintiff has stated that service of process can occur wherever the defendant

may be found, and as the Plaintiff has served and communicated over the course of their

investigation of approximately two years with Williams at his residence in Arizona, Williams

believes that the filing of complaint in Connecticut is in accordance with Rule 11, solely for the

purpose of increasing litigation costs of the Defendant and placing undue burden of travel and

lodging.

III. Brief Description of Case

This case is a securities fraud enforcement action brought by the Commission against

defendant Williams and his wholly-owned business entities.

A. Claims of Plaintiff

The Commissions complaint alleges that, from March 2009 through the end of 2010,

defendant Williams and his business entities perpetrated an internet-based scalping scheme

involving the stock of two companies, Cascadia Investments, Inc. (Cascadia) and Green Oasis

Environmental, Inc. (Green Oasis). Scalping is a type of fraud in which the owner of stock, in

this case defendant Williams, recommends that stock for investment and then immediately sells



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it at a profit upon the rise in the market price which follows his recommendation. Williams and

his companies repeatedly recommended and instructed others to buy, hold and accumulate these

two stocks. When a rise in market price followed his repeated recommendations and

instructions, Williams immediately sold his holdings at a profit, deceiving all of the investors and

potential investors whom he had told to buy and hold Cascadia and Green Oasis stock.

Williams was in fact a paid stock promoter of these companies. He obtained large

holdings of Cascadia and Green Oasis in exchange for his agreement to promote these stocks. In

March 2009, Cascadia hired Williams to promote the company in exchange for 14 million

shares, which Williams received on March 18, 2009. Cascadia engaged Williams promotion

services again in May 2009, paying him 10 million shares, and again December 2009, paying

him an additional 3.3 million shares. In late February 2010, Green Oasis hired Williams to

promote the company. Green Oasis paid Williams by selling him 1.4 million shares at a price of

$0.1 per share at a time when the stock traded at $0.8 per share.

To promote these stocks, Williams broadcasted his recommendations through two

principal means: (1) an internet message board, and (2) teaching securities trading classes. With

regard to the message board, Williams moderated and controlled a message board called

Monks Den, which was hosted on InvestorsHub (iHub), a website dedicated to securities

trading message boards. Williams used the message board to market himself as an enormously

successful trader who, through years of experience, had learned certain trading techniques that

would enable other people to also become successful stock traders. Williams also used the

message board to recommend Cascadia and Green Oasis and as forum to discuss those

recommendations. As moderator of the board, Williams communicated with other iHub

subscribers by posting messages and sending email messages or alerts. Williams created the



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content of the message board, selected the discussion topics--which restricted board discussions

to his stock recommendations and strategies, and chose the boards assistant moderators. In

addition to the message board activity, beginning in or around December 2009, Williams started

teaching classes, called Monkinars, in which he touted his recommended stocks, including

Cascadia and Green Oasis, and taught his Den members the trading strategies he wanted them

to follow. Although the classes started out small with only a few attendees, over time the class

sizes grew as Williams online popularity grew. From December 2009 through October 2010,

Williams held approximately 18 Monkinars in cities across the United States, and also held at

least three outside the United States. Williams and his business entities charged attendees

between $1,000 and $1,500 per person. By October 2010, Williams Monkinar in Boston,

Massachusetts drew approximately ninety attendees, each of whom paid $1,500 to attend.

Williamss recommendations of Cascadia and Green Oasis stock coincided with his

promotion engagements. For example, on March 19, 2009just one day after he received his

initial 14 million shares to promote CascadiaWilliams recommended the companys stock on

his website and began to tout the companys prospects through message board posts and emails.

In addition to promoting Cascadia stock on the Monks Den message board, Williams hired other

stock promoters to help him market Cascadia to investors.

Similarly, Williams scalping occurred immediately following his promotional

recommendations. For example, after Williams told others to buy Cascadia in March 2009 and

the stocks price started to rise, Williams sold his own stock holdings. On March 23, 2009less

than a week after he received 14 million shares to promote the company and only four days after

he began recommending the stock to his followersWilliams sold over one million Cascadia

shares. Within the next four days, Williams sold another 1.1 million shares. As will be shown at



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trial, this patternpayment to Williams for stock promotion, Williams promotion of the stock

to Monks Den followers, Williams scalping sales repeated itself over several months.

In addition to simply recommending purchases of Cascadia and Green Oasis stock,

Williams employed a more aggressive and direct stock promotion scheme called a Float Lock

Down. Williams told his followers they could make huge profits by collectively buying and

holding the outstanding shares, or float, of companies selected by Williams. After they had

locked down the float by purchasing all publicly available shares, Williams claimed that they

would trigger a short squeeze, forcing market makers that had shorted the stocks to buy the

investors shares at enormous profits. Williams emphasized that to successfully deploy the Float

Lock Down strategy, investors would have to work together as a team: that is, they had to buy,

hold and continue to accumulate the stock until the short squeeze occurred, even when the price

of the stock rose and they could potentially profit by selling prior to the purported short squeeze.

Williams repeatedly discouraged individuals from making short term profits from temporary

price increases caused by those deploying the Float Lock Down strategy. Williams claimed

such sales would undermine the timing of the short squeeze by delaying the locking of the float

or by allowing market makers to cover their short position before the short squeeze occurred.

Williams selected both Cascadia and Green Oasis as Float Lock Down targets for his

followers. In each case, Williams selection of the stock as a Float Lock Down coincided with

(i) his engagement by the company to promote the stock, and (ii) his receipt of free or discounted

company shares as payment for promoting the companys stock.

Once Williams announced the Float Lock Downs to his followers, Williams actively

promoted buying, and discouraged any selling, of the stocks through message board postings,

emails, and direct statements in his Monkinar classes. Moreover, as Williams was encouraging



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his followers to buy and hold Cascadia and Green Oasis in pursuit of the Float Lock Downs,

Williams did the opposite. As the price of these stocks began to rise from the buying activity

inspired by his promotional activity, Williams sold his holdings, profiting on the deception of his

followers.

In a final twist on the scalping scheme, in the spring of 2010, Williams scalped an

investment fund for which he had become an investment adviser. After teaching a Monkinar in

Japan in April 2010, Williams was approached by attendees about investing their funds using the

Float Lock Down strategy. Williams agreed and, together with another Monks Den follower,

worked to create a pooled investment fund for these investors. With the help of a New Zealand-

based investment bank, the prospective investors created the U.S. High Performance Fund

(USHPF). Williams signed an Investment Management Agreement to become the funds

investment adviser, for which he would receive a fee of three percent of the realized profits for

each trade. The fund received approximately $3.5 million from investors.

As the fund was being established, Williams purchased 158,681 Green Oasis shares for

his own account in June 2010, adding to his existing holding of approximately 20,000 shares.

Then, starting on July 7, 2010 and continuing through August 11, 2010, Williams, as investment

adviser for the USHPF, purchased over 2.6 million shares of Green Oasis for the fund at a cost of

nearly $1.3 million. Green Oasis share price, which had been trading at around 0.24 for several

days, rose to .31 by the close of trading on July 7, 2010. Williams continued to purchase

additional shares for the USHPF through August 11, 2010, and the price rose to over $0.72, often

trading well above $0.60.

While Williams purchased Green Oasis stock for the USHPF as its investment adviser,

from July 8, 2010 through July 13, 2010, Williams sold his personal Green Oasis stock position



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of 178,681 shares, for $78,484, realizing profits of approximately $36,000. Williams never

disclosed these sales to the USHPF, its trustee, or the investors in the fund.

In total, Williams reaped unlawful profits in excess of $2.4 million from his scalping

scheme. Based upon the misconduct alleged in the Complaint, the Commission has sued

Williams and his business entities for securities fraud in violation of Sections 17(a) of the

Securities Act, Section 10(b) of Exchange Act and Rule 10b-5 thereunder, and Sections 206(1)

and 206(2) of the Investment Advisers Act. See Complaint, Claims 1, 3 & 4. The Commission

has also sued Williams and his business entities for promoting Cascadia and Green Oasis stock

without disclosing the fact that Williams received and would continue to receive compensation

for these promotional activities, which violates Section 17(b) of the Securities Act. See

Complaint, Claim 2. The Commission seeks permanent injunctions restraining and enjoining the

defendants from future securities law violations, disgorgement of ill-gotten gains together with

pre-judgment interest, civil penalties, a penny stock bar against Williams, and any other relief the

Court may deem just or appropriate.

B. Defenses of Defendant Williams

Defendant Williams cannot speculate as to the mindset of the Plaintiff complaint, but as a reader

and, in this case, the Defendant, the Plaintiff complaint appears to imply a predatory picture of

Defendant actions.

As I am not an Attorney, and have no experience in matters such as this, the following

description will be written in a response manner to points of the Plaintiff complaint or their

included case description (I will make no distinction between Plaintiff complaint and their

description as it is a summarized version of the complaint).



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I would also like to apologize for any format irregularities that I may have or have had as

well as for not being familiar with when written responses should be in first or third person. I am

simply going to relay my points in a manner that will be easy to read and or follow.

As this is Defendants first opportunity to relay any substantial version of Defendants

view of the complaint or more importantly, to inform the court of material and relevant facts that

will show Defendant always acted in good character and furthermore, Defendant acted in

accordance with what Defendant suggested to others for both sales of stocks and in life.

Plaintiff complaint states that Defendant immediately sold his shares of two specific

companies, CDIV and GRNO that were part of Float Lock Down calls by Defendant. Plaintiff

complaint does not provide a complete picture of either sales of shares by Defendant or the

Float Lock Down process spoken of by Defendant. Plaintiff complaint also fails to mention

that in all forums related to Defendant, the S.E.C. paragraph regarding due diligence for

investors was displayed from the S.E.C. website. Additionally, all students participating in the

Monkinars received a disclosure that the Defendant was in no way financially licensed but, was

rather teaching a method of technical analysis.

Plaintiff complaint states that Defendant immediately sold his shares giving the

implication that Defendant called plays and immediately dumped all his shares took the profit

and ran. Nothing could be further from the truth. Defendant sold shares in the aforementioned

companies over the course of 2 years. What the Plaintiff complaint does not reveal is that

Defendant sold shares of said companies in the same manner as he relayed to readers of the

forums or in conversations in email or in person to attendees of Monkinars. Most of the

Defendants sales were out of necessity rather than by choice. Defendant had to liquidate half of

his CDIV, which equaled approximately 11 million shares at that time, per divorce agreement,

and as will be discussed further, Defendant had to pay all costs of holding the Monkinars out of

his pocket as PayPal withheld the release of funds until the end of 2010. The method of selling

relayed, was to sell in increments as the price and volume increased to recover cost basis and

assure at least some profit, and then hold a chunk for the long haul, rather than waiting for a

single specific target price and unloading all shares at once, as this would harm the natural



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movement of the stock, it was also relayed that short term flipping was counter-productive, as

short term flipping on stocks with low floats would lock the price in a channel. Defendant

relayed to folks that he would not advertise or post his sales as such an announcement would

likely flood the market with sellers and create enormous downward pressure on such low float

stocks, although, he did mention on occasion, as a price passed a certain resistance point that he

would treat himself in some way or another, thus implying that Defendant would be selling

incrementally as new levels of higher bases were established. As the Defendant was routinely

asked when he would sell, his common answer was, as the price and volume increased and that

I would not advertise my sales as it would be like yelling fire in a theater.

The Plaintiff complaint does an excellent job of listing Defendants sales however,

completely disregards 4 very critical facts.

1. Defendant held and continues to hold millions of shares in the aforementioned 2companies the Defendant did not sell, which he could have sold for approximately 3.5

million dollars.

2. Defendant held those shares without selling long before Defendant was informed or anyhad any knowledge of any S.E.C. investigation(s).

3. Defendant did not sell those shares as Defendant was following the same process herelayed to others, by not selling into weakness, Defendant held himself to the same

standard as anyone else and watched millions of dollars in profit disappear rather than

selling those millions of shares into a falling stock which would have only compounded

the weakness.

4. This action alone, is contradictive to any predatory picture painted by Plaintiff and,furthermore shows without a doubt, that Defendant actions were in line with what

Defendant relayed to readers or students.



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Additional note, Defendant routinely advised people to never put money in plays that

they could not afford to lose and always relayed that he understood that life gets in the way and

given the choice of holding or buying a play, or providing for needed expenses such as mortgage

payments or bills and such, that it was no contest, life needs always come first. Again, long

before Defendant was informed of any S.E.C. investigation, Defendant routinely helped folks in

need by donating funds on multiple occasions and even traveled at his own expense from

Arizona to Michigan to teach a family with a paralyzed head of household.

The thought process behind a Float Lock down.

The concept of the Float Lock Down is quite simple; a group of investors buys all of

the outstanding shares of a low float stock, ideally, a very low priced stock. It is no mystery that

penny stocks and sub-penny stocks are massively naked shorted as evidenced by S.E.C.

regulations and enforcement. This referenced Bloomberg investigative piece is one of literally

hundreds of similar news pieces showing that naked shorting exists in the 6 Billion dollar per day

range.

http://www.youtube.com/watch?v=9w2FDNsJFuw&feature=gv#!

The logic of supply and demand would rule the resultant lock up of the float. For

example, if a companys stock has 50 million shares outstanding and the group collectively owns

75 million shares, then, it stands to reason that the excess 25 million shares are naked shorts.

Assuming the naked short position is forced, via a buy in notice to cover the short position or

the shorting party elects to cut their losses and cover their naked position, the inevitable result

would be that the holders of the shares could then dictate the price at which they were willing to

sell.

Defendant first became aware of the concept of locking up the float of companies while

witnessing and to some extent, participating in the process first hand on two companies that

essentially had no business model to speak of, nor revenues of any substance. The results of

http://www.youtube.com/watch?v=9w2FDNsJFuw&feature=gv#!http://www.youtube.com/watch?v=9w2FDNsJFuw&feature=gv#!http://www.youtube.com/watch?v=9w2FDNsJFuw&feature=gv#!


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locking up the company floats took TUBR from a few cents to over $4.00 and EVCC from a few

cents to nearly $8.00.

The process of buying and selling shares on low float companies is quite different than

that of a heavily traded and liquid stock like AAPL, for example. Stocks like AAPL have

instant liquidity, allowing investors to buy and or sell at will without having an effect on the

price of the shares. Small float companies are quite different in that, any holder of shares, even

with what might seem to be a small amount of shares can greatly affect the price of the stock.

Defendant relayed the following strategy relating to buys and sells for the Float Lock

Downs: When buying, the buyer should buy in phases, by placing a portion of the intended

purchase on the bid with a limit order and buying the balance of intended purchase at the ask

price. This method would help the stock and traders in two ways. First, it would show activity at

the ask price signaling strength in the trend. Second, by placing a portion on the bid side, it

would show a deeper level of support on the Level 2s and, additionally, would allow a potential

seller to exit without having a large effect on the price, which is win / win for the buyer and

seller, The buyer gets a cheaper price and the seller has liquidity for their exit sale.

When selling, Defendant suggested to sell incrementally into strength by placing orders

above the current ask price as this would not stall an existing movement. Defendant suggested

the incremental sales to recover initial cost basis and secure a portion of profit thereby leaving

the investor risk free to hold a chunk for the long haul as the seller would already be whole and

only risking potential gains. Plaintiff states that Williams advised against short term profits. That

is incorrect, what Williams did advise against was short term flipping as that method of trading

would tend to hold a low float stock at resistance levels for extended periods of time, for

example, if a trader sat on bid collecting shares at .04 and immediately placed the shares on ask

at .06, those actions tend to stall a stock and if a stock stalls long enough, investors lose interest

and sell at bid to move on to the next one.

Plaintiff complaint relays that Defendant taught at least 18 Monkinars throughout 2009

and 2010. What the Plaintiff complaint does not relay, even though Plaintiff is completely aware



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by deposition of Defendant and Plaintiffs forensic review of Defendant financial records

spanning the previous 3 plus years, is that Defendant was receiving fees for the Monkinars via

PayPal. Plaintiff is fully aware that PayPal did not release the funds collected for the Monkinars

until the end of 2010 which forced Defendant to liquidate shares over the course of the 2 years.

PayPals withholding of collected fees forced Defendant to pay for all expenses of the Monkinars

out of his own pocket. This totaled hundreds of thousands of dollars in travel, hotel rooms,

conference rooms and equipment rental, staff pay and administrative expenses as well as meals

for all participants (costs for meals was included in sign up and thus also remitted to PayPal).

Plaintiff has shown a one sided picture of my actions, in what I believe is an attempt to

show me as mentioned earlier, to be a predator. While I do agree that a portion of the

Plaintiffs complaint or their included case description are factual, such as numbers and dates, I

believe and can certainly show that there is a far greater range of action(s) that show aspects of

the time frame in which alleged complaints occurred as well as my actions since the S.E.C.

investigation.

Plaintiff relayed I had been a promoter. That is true and while working for other

promoters, I found out very quickly that nearly every promoter in the penny stock arena was out

to hurt people. I can literally and vividly recall a promoter calling me and asking me to go stir

up the action, they want to dump shares after lunch I declined. (That statement is certainly not

meant to say that every person or company involved in promotional activity can be typecast, I

am not intending to cast an accusation, only to relay personal experience.) Plaintiff also states

that I never disclosed that I received shares from various companies. While I may not have

disclosed the information in the proper format required by the S.E.C., I certainly disclosed it as

shown in deposition transcripts of witnesses. Keeping in mind that the Monks Den members

were, and still are a very tight group with most of them considering each other family. Any

information or news shared by anyone was instantly common knowledge.

Plaintiff states that Defendant, as Moderator, controlled the Monks Den as to not allow

any discussion of plays that were not called by the Defendant. This allegation is a half truth. I,

and all Moderators of Monks Den allowed free discussion of any play for years, it was only



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after Monks Den had reached a traffic level that, what was routinely called, drive by

spammers started inundating the board with so many random posts that it made the threads of

conversation impossible to follow.

Plaintiff description of USHPF Fund, is in my opinion, also vastly distorted in that the

Plaintiff complaint and their included case description are written to focus on a single action

showing my profit from the sale of GRNO shares of approximately $36,000 (which I took 5 days

to liquidate in keeping with the selling method described earlier).

The following, is a far more complete representation:

Defendant was invited by a previous attendee of a Monkinar to come to Japan and

discuss with his associates about how a Float Lock Down could work. He mentioned the

interest in establishing a fund to participate in the Float Lock Down investment strategy.

Defendant agreed to travel to Japan to share in these discussions and shortly thereafter,

Defendant traveled to New Zealand to meet with the Fund holders.

The Plaintiff complaint focuses on 2 Float Lock Downs. There were however, a total of

4. The Defendants actions in the other 2 companies will again show the Defendant acted in

good character.

The investors from Japan proceeded to form the Fund in New Zealand. Discussions with

the investors included which of the Float Lock Downs the Fund would take part in.

Defendant advised against the Fund purchasing shares of CDIV. This again, is in keeping good

character, and continues to show the pattern of Defendant purporting himself both professionally

and honestly by informing the investors that CDIV was too far along for them to take part in

given that CDIV rose in price over 119,000% from the original call by Defendant. And, no, that

number is not a typo. And Defendant had been selling incrementally and was now holding the

chunk for the long haul.



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Plaintiff states that Williams sold 178,681 shares of GRNO for approximately $36,000

profit and that Fund was not notified. That statement is completely false. Fund was informed of

my intent to sell a portion of my GRNO shares to cover my expenses of travel to Japan and New

Zealand The Fund was also informed that I had well over a million shares that I would hold

for the long haul After covering travel expenses, I had no intent to sell any further, and I

didnt. GRNO reached in excess of $.70 I could have sold those shares for approximately

$850,000 in total. I still hold those shares. I would not sell into weakness hurting the stock or

other people.

The Fund also entered EIGH. And, yet again, in keeping with the pattern of good

character and the process Defendant taught and shared with others, along with the Fund,

Defendant personally purchased with his own funds, in his own account just over 3 million

shares of EIGH at a cost of $582,000.00. I never sold a share even as I watched the price

plummet from hovering around $.40 to sub-penny, I would not and could not in good conscience

race for the exit as so many others did, I stuck to my beliefs and did not hurt others, I have taken

the entire loss. Once again, this pattern of behavior is directly contradictory to the nature of the

Plaintiff complaint.

The Fund also entered PNTV. Again, in total, I had as many as approximately 1.9

million shares at one time. I could have sold those shares for easily in excess of $650,000 as the

price remained well over $.20 for an extended period of time and a good period of close to $.40.

As I stated earlier, the volume and price never increased with enough strength to allow for the

sale of any shares in the method I always relayed to others. When the S.E.C. investigation

became public, at the request of the company, I returned my shares to the PNTV treasury. I dont

recall the specific amount, but I believe it was 1.5 million Admittedly, the remaining shares I

had in PNTV have been sold over the course of the last 2 plus years (at a loss), but, frankly the

expense of voluntarily complying with the S.E.C. in their investigation has depleted my

resources and forced me to liquidate my remaining shares.

Plaintiff seeks injunctions and $2.4 million plus interest from Defendant. I say the pattern

and actions described here are not only provable but, have been known by Plaintiff for better



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than a year or more. As I will not likely have the resources to defend myself through the

completion of a trial, I am taking this opportunity to get opinions and facts as part of the record.

Over the course of the investigative requests, as I have had no staff or assistance for quite

some time now, I have personally, spent over 2,000 hours in research, reading, copying and

relaying information in the formats requested.

Defendant has at times, in order to comply with deadlines for production, collapsed from

exhaustion, lack of sleep and dehydration on multiple occasions, and in one instance, to the

extent of a hospital stay.

I have voluntarily complied with every request of me from the S.E.C. at the cost of

literally, all my available resources and placed myself in substantial debt.

I believe the aforementioned actions and descriptions show that I kept my word and acted

honestly, so much so that during the time of the alleged complaints, in keeping my word, I

watched $5 million dollars vanish from my accounts.

This investigation and action, whether warranted or not, is destroying my health and has

destroyed my reputation and thereby ended any chance of my ever teaching again, resulting in

essentially, no livelihood. The Plaintiff is also aware that the Veterans Administration has

deemed my disabilities to make me unemployable. Without teaching, I will be forced into living

on a fixed income of just under $1,200 per month as I do not qualify for social security benefits.

I believe the S.E.C. has already acted as Judge, Jury and Executioner. Any punishment

warranted for improper disclosure has certainly been paid.

Additional notes:



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Settlement conference:

Plaintiff states that no early settlement is possible. Plaintiff intends to pursue trial to

closure to seek full judgment and or remedies listed in Plaintiff complaint.

Defendant, in good faith, attempted to open discussion of settlement during initial

discovery conference on October 4th

, 2012 with Plaintiff Counsel. Defendant is well aware that

in all likelihood, he will not be able to complete this trial successfully to completion on his own

as he does not possess the experience or knowledge and cannot afford a knowledgeable staff for

assistance. Nor will he be able to afford Counsel to represent the business entities where the

Plaintiff Counsel has moved to strike the answer(s) provided by Jerry Williams, on behalf of

Monks Den, LLC and First in Awareness, LLC appearing, Pro Se. Defendant will likely have to

expend all equity remaining in his home, his last significant asset. Williams attempted to suggest

a settlement based on the equity remaining in his home, relaying that a settlement would be the

only probable way the Plaintiff would receive any relief in this matter as the costs for Defendant

to hire Counsel and continue with trial will very likely exceed Defendants resources and result

in a default judgment in favor of Plaintiff. The judgment, if won, will be an empty victory at

further costs including the time of the Court and its staff, the government and tax payers as well

as the Plaintiffs time and expense to prepare for and attend.

IV. Statement of Material Undisputed Facts

Counsel and defendant Williams, pro se, certify that they have made a good faith attempt

to determine whether there are any material facts that are not in dispute. Defendant Williams is

unwilling to stipulate to any facts before reviewing the available documentary and testimonial

record.

V. Case Management Plan

A. Standing Order on Scheduling in Civil Cases

The parties request modification of the deadlines in the Standing Order on Scheduling in

Civil Cases as set forth below.



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B. Scheduling Conference with the Court

The parties request a pretrial conference with the Court before entry of a scheduling order

pursuant to Fed. R. Civ. P. 16(b). Both the Commission and Williams would prefer to attend the

conference in person.

C. Early Settlement Conference

1. The parties certify that they have considered the desirability of attempting to settle

the case before undertaking significant discovery or motion practice. Settlement is unlikely at

this time.

2. The parties do not request an early settlement conference.

3. The parties do not request a referral for alternative dispute resolution pursuant to

D. Conn. L. Civ. R. 16.

D. Joinder of Parties and Amendment of Pleadings

1. Plaintiff should be allowed until Friday, November 2, 2012 to file motions to join

additional parties and to amend the pleadings.

2. Defendant Williams should be allowed until Friday, November 30, 2012 to file

motions to join additional parties and to file a response to any amended complaint.

E. Discovery

1. The parties anticipate that discovery will be needed on the following subjects:

Williams securities trading activity, Williams activity on and moderation of the Monks Den

message board, Williams communications to members of Monks Den (both electronic and oral

communications during Monkinar classes), Williams activities leading to the formation of the

USHPF, and Williams activities as investment adviser of the USHPF.



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2. All discovery, including depositions of expert witnesses pursuant to Fed. R. Civ.

P. 26(b)(4), will be commenced by October 18, 2012 and completed (not propounded) by Friday,

March 8, 2013.

3. Discovery will not be conducted in phases.

4. Plaintiff anticipates taking a total of ten depositions of fact witnesses. Defendant

anticipates taking a total of ten depositions of fact witnesses. The depositions will be completed

by Friday, March 8, 2013.

5. The parties will not request permission to serve more than 25 interrogatories.

6. Plaintiff does not intend to call an expert witness in its case in chief. Plaintiff

may call a rebuttal expert in the event any of the defendants call an expert. Plaintiff will

designate all rebuttal trial experts and provide opposing counsel with reports from retained

experts pursuant to Fed. R. Civ. P. 26(a)(2) by Friday, February 1, 2013.

7. Defendant Williams does not intend to call an expert witness at trial. Williams

will designate all trial experts and provide opposing counsel with reports from retained experts

pursuant to Fed. R. Civ. P. 26(a)(2) by Friday, January 4, 2013.

8. Depositions of experts will be completed by Friday, March 8, 2013.

9. Undersigned counsel and defendant Williams have discussed the disclosure and

preservation of electronically stored information, including, but not limited to, the form in which

such data shall be produced, search terms to be applied in connection with the retrieval and

production of such information, the location and format of electronically stored information,

appropriate steps to preserve electronically stored information.

10. Undersigned counsel and defendant Williams have discussed discovery

procedures that minimize the risk of waiver of privilege or work-product protection, including



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procedures for asserting privilege claims after production. The parties have further agreed that if

a producing party identifies any inadvertently produced attorney-client privileged or attorney-

work-product protected document(s), the receiving party will either return or delete the

document upon request of the producing party.

F. Dispositive Motions

Dispositive motions will be filed on or before Friday, April 26, 2013.

G. Joint Trial Memorandum

The joint trial memorandum required by the Standing Order on Trial Memoranda in Civil

Cases will be filed by Friday, May 24, 2013.

VI. Trial Readiness

The case will be ready for trial by Monday, June 3, 2013.

Respectfully submitted,

SECURITIES AND EXCHANGE COMMISSION,By its attorney,

/s/ R.M. Harper IIRichard M. Harper II (PHV #05528)Senior Trial Counsel

U.S. Securities and Exchange Commission33 Arch Street, 23rd FloorBoston, Massachusetts 02110(617) 573-8979 (Harper)(617) 573-4590 (Facsimile)[email protected]

mailto:[email protected]:[email protected]:[email protected]


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JERRY S. WILLIAMS,

/s/ Jerry S. Williams

Jerry S. Williams,pro se3123 North 82nd

WayMesa, AZ [email protected]

October 15, 2012


Documents

SEC v Williams Et Al Doc 16 Filed 15 Oct 12