Case 1:19-cv-11416-WGY Document 337 Filed 08/11/23 Page 1 of 3

UNITED STATES DISTRICT COURT

DISTRICT OF MASSACHUSETTS

___________________________________________
)
SECURITIES AND EXCHANGE COMMISSION, )
)
Plaintiff, )
)
v. ) Case No. 19-CV-11416 (WGY)
)
HENRY B. SARGENT, )
)
Defendant. )
___________________________________________ )

MOTION FOR ENTRY OF ORDER CONCURRENTLY GRANTING

CERTAIN RELIEF AND DISMISSING FRAUD CLAIMS

On July 3, 2023, the Commission petitioned the Court to enter partial judgment on the

Commission’s claim under Section 5 of the Securities Act of 1933, on which the Court granted

summary judgement, so that the Commission could assess the relief granted and determine

whether to pursue its remaining securities-fraud claims in a retrial scheduled for September. Dkt

No. 328 at 8. On July 12, 2023, the Court entered an order on the Section 5 claim that:

(1) enjoined Sargent from future violations of Section 5 of the Securities Act; (2) barred Sargent

from participating in the offer or sale of penny stocks for 10 years; and (3) ordered Sargent to

pay $562,786 in disgorgement and $142,132 in prejudgment interest. Dkt No. 333. The Court

deferred consideration of a penalty and stayed entry of the order pending the retrial. Id.1

On July 24, 2023, having considered the extensive relief ordered by the Court and the

limited utility of retrying the case, undersigned counsel informed the Court that it intended to

1
In the Section of the Order titled “Equitable Disgorgement,” the Court stated that the
“Defendant is liable for [disgorgement and prejudgment interest thereon] and a civil penalty in
the amount of $630,979[.]” Dkt No. 333 at 4. Later in the Order, in the Section titled “Penalty,”
the Court stated that it lacked authority to impose a penalty while jury claims remained pending.
Id. at 6.
 Case 1:19-cv-11416-WGY Document 337 Filed 08/11/23 Page 2 of 3

seek authorization from the Commission to dismiss the remaining fraud claims against Sargent.

Dkt No. 334. The Commission has now granted that authorization.

Accordingly, the Commission moves this Court to enter an order or orders that

concurrently: (1) provide all of the relief set forth above and in the Court’s July 12, 2023 Order;

(2) impose a civil penalty of $630,979 or, if needed, set a hearing regarding imposition of a civil

penalty as soon as is practicable; and (3) dismiss the First Claim for Relief as to Sargent alleging

violation of Section 10(b) of the Exchange Act of 1934 [15 U.S.C. § 78j(b)] and Rule 10b-5

thereunder [17 C.F.R. § 240.10b-5] and the Second Claim for Relief as to Sargent, alleging

violation of Section 17(a) of the Securities Act of 1933 [15 U.S.C. § 77q(a)].2

As grounds therefore, the Commission states that the Court’s July 12, 2023 Order grants

substantially all of the equitable relief sought by the Commission following the unanimous jury

verdict against Sargent. See Dkt Nos. 282-83. With the dismissal of the triable claims, there is

no legal impediment to the Court imposing a civil penalty on the Section 5 claim, and the Court

should now do so in the amount set forth in its July 12, 2023 Order.3

The Commission will separately move the Court to enter an order directing Sargent to

surrender to PixarBio Corporation or its transfer agent, Action Stock Transfer, with instructions

2
On August 10, 2023, Sargent filed a “Notice of Appeal” of the July 12, 2023 Order. It is
apparent on the face of this notice that it is neither an appeal of a final order nor a properly
authorized interlocutory appeal. Accordingly, the notice does not divest the Court of jurisdiction
over any aspect of this case, and the Court may strike it. See United States v. Brooks, 145 F.3d
446, 456 (1st Cir. 1998) (“[A] district court can proceed, notwithstanding the filing of an appeal,
if the notice of appeal is defective in some substantial and easily discernible way (if, for
example, it is based on an unappealable order) or if it otherwise constitutes a transparently
frivolous attempt to impede the progress of the case.”). See also Williams v. Vilsack, 669 F.
Supp. 2d 16, 16 (D.D.C. 2009) (striking deficient notice of appeal).
3
For reasons previously set forth, the Commission maintains that the Court has the authority to
impose a civil penalty on the Section 5 claim, even if triable claims remain. See, e.g., Dkt Nos.
191, 194, 283, and 303.

2
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to cancel, all shares of stock in PixarBio Corporation in his possession. See Dkt Nos. 1 at 33 ¶F

(Complaint prayer for relief) and 283 at 19 (Memorandum in support of motion for entry of final

judgments).

As the dismissal of the remaining claims would obviate the need for a retrial, the

Commission further moves the Court to suspend all pretrial deadlines during the pendency of the

instant motion, and reset such deadlines only if needed at a later date. The Commission has

conferred with Sargent’s counsel, and Sargent does not object to this request.

Dated: August 11, 2023 Respectfully submitted,

SECURITIES AND EXCHANGE

COMMISSION

By its Attorneys,

/s/ David J. D’Addio

David J. D’Addio (Mass. Bar No. 665790)
Jonathan R. Allen (Mass. Bar No. 680729)
Boston Regional Office
33 Arch Street
Boston, MA 02110

Certificate of Service

I, David J. D’Addio, certify that on August 11, 2022, I filed the foregoing document
electronically with the Court. The filing will be sent to the registered participants as identified on
the Notice of Electronic Filing and may also be accessed through the Court’s ECF system.

/s/ David J. D’Addio

David J. D’Addio

Certificate of Compliance with Local Rule 7.1(A)(2)

The undersigned conferred with counsel for Sargent via email. The parties were unable
to further resolve their differences as to the motion.

/s/ David J. D’Addio

David J. D’Addio