3.
By
engaging in the conduct described
in
this Complaint, the Defendantsviolated, and unless enjoined, are reasonably likely to continue to violate, Sections206(1),206(2) and 206(4)
of
the Investment Advisers Act
of
1940 ("Advisers Act") [15U.S.C.
§§
80b-6(1), (2), (4)], and Advisers Act Rule 206(4)-8 [17 C.F.R. §275.206(4)8]; Section 17(a)
ofthe
Securities Act
of
1933 ("Securities Act") [15 U.S.C.
§§
77e(a)];and Section 10(b)
ofthe
Securities Exchange Act
of
1934 ("Exchange Act") [15
V.S.C
§78j(b)], and Exchange Act Rule
l O b ~ 5
[17
C.F.R.
§ 240.lOb-5].4. To halt the ongoing fraud, maintain the status quo, and preserve investor.assets, the Commission seeks various forms
of
equitable relief against the Defendants,including,
but
not limited to, a temporary restraining order and asset freeze, preliminary .injunctions, permanent injunctions against future violations
of
the federal securities laws,disgorgement plus pre-judgment interest, and civil penalties.5. Based on the ongoing nature
oftheir
violations and the scienter the.Defendants have demonstrated through their willful and wanton disregard for the federalsecurities laws, the Defendants have shown they will continue to violate the law unlessthe Court grants the injunctive and other relief the Commission seeks.
,
DEFENDANTS AND RELIEF DEFENDANTS
6.
Defendant Nicholson, 42, is a resident
of
Saddle River, New Jersey, andthe managing member
of
Westgate. Nicholson is a former registered representative whowas permanently barred, in 2001,
by
the National Association
of
Securities Dealers (nowthe Financial Industry Regulatory Authority). At all relevant times, Nicholson providedinvestment advice, was responsible for the trading activities, and provided the account. values included in investors' account statements for all, or virtually all,
of
the Hedge
':"
3
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