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This case was last updated from PACER on 06/04/2021 at 09:32:29 (UTC).

Securities and Exchange Commission v. Zachary J. Horwitz et al

Case Summary

On April 5, 2021, the Securities and Exchange Commission (“SEC” or “Plaintiff”), represented by Kathryn C. Wanner and M. Lance Jasper, attorney at the SEC’s Los Angeles Regional Office, filed a civil enforcement action against Zachary J. Horwitz (“Horwitz”) and 1inMM Capital, LLC (“1inMM”) (collectively, “Defendants”), seeking injunctive relief, disgorgement of all ill-gotten gains among other reliefs for offering fraud and Ponzi scheme in alleged violation of the federal securities laws. This case was filed in the U.S. District Court for the Central District of California with Judges Gail J. Standish and Christina A. Snyder presiding. 

 

In its complaint, the SEC alleged that “Since March 2014, until at least December 2019, Defendants raised over $690 million from investors by selling promissory notes issued by 1inMM, using fabricated agreements and fake emails with prominent third party companies with whom Defendants had no actual business relationship. Horwitz then misappropriated and misused the offering proceeds, including for the purchase of a luxury home he has recently listed for sale.” Furthermore, it was alleged by the SEC that “Defendants represented that the purpose of the offering was to finance 1inMM’s acquisition and licensing of distribution rights in specific movies, primarily from Latin America, to major media companies, mostly Netflix or Home Box Office (“HBO”). To persuade investors to purchase the promissory notes, Horwitz made materially false and misleading statements, including that he had experience acquiring and licensing distribution rights in movies to HBO and Netflix, and that he had, in the past, used the profits from those transactions to repay investors in 1inMM’s promissory notes. Horwitz described himself to investors in company documents as bringing “a wealth of knowledge, reputation, and experience.” Defendants also claimed that HBO, Netflix, and other media corporations were 1inMM’s “Strategic Partners.” 

 

The SEC further alleged that “Defendants promised returns in excess of 35% on 1inMM’s Promissory Notes. In reality, 1inMM and Horwitz had no relationship with either HBO or Netflix and never licensed any movie rights to either company. Instead, Horwitz misappropriated investor funds to pay putative returns on earlier investments.” “In late 2019, Horwitz began defaulting on outstanding notes issued by 1inMM, leaving investors with more than $234 million in unreturned principal. From early 2020 to at least March 2021, Horwitz has been lulling investors with false promises that he and 1inMM are on the verge of reaching agreements with HBO and/or Netflix, and would soon be able to repay investors from the proceeds of those settlements.”

 

There are two claims for relief laid down by the SEC. The first claim is for the alleged fraud conducted in connection with the Purchase and Sale of Securities, hence, for the alleged violations of Section 10(b) of the Exchange Act and Rule 10b-5. The second claim for relief is for the alleged fraud conducted in the Offer or Sale of Securities, hence, for the alleged violations of Sections 17(a) of the Securities Act.

 

In its prayer for relief, the SEC has requested the court to issue a temporary restraining order; a preliminary injunction; an asset freeze; accounting and document preservation; permanently enjoin the Defendants from violating the laws alleged in the complaint; order disgorgement of ill-gotten gains derived, together with prejudgment interest thereon; and order to pay civil penalties under Section 21(d)(3) of the Exchange Act, 15 U.S.C. § 78u(d)(3), and Section 20(d) of the Securities Act, 15 U.S.C. § 77t(d).

 

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Case Details Parties Documents Dockets

 

Case Details

  • Case Number:

    2:21-CV-02927

  • Filing Date:

    04/05/2021

  • Case Status:

    Pending - Other Pending

  • Case Type:

    Finance - Security/Commodity/Exchange

  • Court:

    U.S. District Courts

  • Courthouse:

    California Central District

Judge Details

Referral Judge

Gail J. Standish

Presiding Judge

Christina A. Snyder

 

Party Details

Plaintiff

Securities and Exchange Commission

Petitioner

City National Bank

Defendants

Zachary J. Horwitz

1inMM Capital, LLC

Attorney/Law Firm Details

Plaintiff Attorneys

M Lance Jasper

Attorney at US Securities and Exchange Commission

444 South Flower Street Suite 900

Los Angeles, CA 90071

Kathryn C Wanner

Attorney at US Securities and Exchange Commission

444 South Flower Street Suite 900

Los Angeles, CA 90071

Petitioner Attorney

Joshua G. Hamilton

Attorney at Latham and Watkins LLP

10250 Constellation Boulevard Suite 1100

Los Angeles, CA 90067

Defendant Attorneys

Michael J. Quinn

Attorney at Vedder Price LLP

1925 Century Park East Suite 1900

Los Angeles, CA 90067

Ryan S Hedges

Attorney at Vedder Price

222 North Lasalle Street Suite 2600

Chicago, IL 60601

 

Court Documents

#45

(#45) ORDER GRANTING NON-PARTY CITY NATIONAL BANKS EX PARTE APPLICATION FOR APPROVAL TO PAY OFF DEFENDANT ZACHARY J. HORWITZS LINE OF CREDIT AND CLOSE THE ACCOUNT, #44 by Judge Christina A. Snyder: The Court hereby GRANTS the Application. City National Bank is hereby approved to (1) pay off Defendant Zachary J. Horwitzs secured personal line of credit (PLC) at CNB, including all principal and accrued interest through the date of final payoff, using the proceeds from the liquidation of an associated collateral account at CNB held by Mr. Horwitzs mother, Susan Kozlowski; (2) close the PLC; and (3) return any excess proceeds from the collateral account to Ms. Kozlowski. IT IS SO ORDERED. (shb) (Entered: 06/02/2021)

#43

(#43) ORDER FREEZING ASSETS AND PROHIBITING DESTRUCTION OF DOCUMENTS by Judge Christina A. Snyder re Stipulation Prohibiting the Destruction of Documents and an Order Continuing the Asset Freeze and to Modify the Asset Freeze to Allow Creation of a New Bank Account #41 . The 5/17/2021, Order to Show Cause hearing at 10:00 AM., is hereby VACATED. (See Order for further information). (jp) (Entered: 05/14/2021)

#42

(#42) NOTICE of Pendency of Other Actions or Proceedings filed by Plaintiff Securities and Exchange Commission. (Wanner, Kathryn) (Entered: 05/14/2021)

#39

(#39) RESPONSE filed by Defendant Zachary J. Horwitz to the Government's Objection to Notice of Related Cases (Hedges, Ryan) (Entered: 05/11/2021)

#38

(#38) NOTICE Regarding Court Order for Schedule of Personal Assets filed by Defendant 1inMM Capital, LLC, Zachary J. Horwitz. (Quinn, Michael) (Entered: 05/10/2021)

#30

(#40) SCHEDULING NOTICE (IN CHAMBERS) CONTINUED AND SETTING HEARING BY TELEPHONE by Judge Christina A. Snyder, re: Order #30 . The 5/17/2021 Order to Show Cause Hearing Why The Asset Freeze Should Not Continue is continued from 10:00 AM to 11:00 AM before Judge Christina A. Snyder will be held by telephone. Bridge Call information will be emailed to counselTHERE IS NO PDF DOCUMENT ASSOCIATED WITH THIS ENTRY. (cj) TEXT ONLY ENTRY (Entered: 05/11/2021)

#28

(#37) FINANCIAL ENTRY: Received $1,417,517.16 into the registry of the Court from Portfolio Escrow Inc. on behalf of Defendants on 05/07/2021. Re: Order on Motion for Order,,, #28 . Receipt number LA222138. (pri) (Entered: 05/10/2021)

#9

(#9) DECLARATION of JOSEPH DEALTERIS filed by Plaintiff Securities and Exchange Commission. (esa) (Entered: 04/05/2021)

#8

(#8) DECLARATION of BRETT CRAVATT filed by Plaintiff Securities and Exchange Commission. (esa) (Entered: 04/05/2021)

#6

(#6) DECLARATION of LORRAINE PEARSON in support of EX PARTE APPLICATION for Temporary Restraining Order as to (1) Freezing Assets; (2) Requiring an Accounting; (3) Prohibiting Destruction of Documents; and (4) To Set a Hearing on Order to Show Cause #4 filed by Plaintiff Securities and Exchange Commission. (esa) (Entered: 04/05/2021)

#5

(#5) MEMORANDUM OF POINTS AND AUTHORITIES in Support of EX PARTE APPLICATION for Temporary Restraining Order as to (1) Freezing Assets; (2) Requiring an Accounting; (3) Prohibiting Destruction of Documents; and (4) To Set a Hearing on Order to Show Cause #4 filed by Plaintiff Securities and Exchange Commission. (esa) (Entered: 04/05/2021)

#3

(#3) 21 DAY Summons issued re Complaint #1 as to defendants 1inMM Capital, LLC, Zachary J. Horwitz. (esa) (Entered: 04/05/2021)

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Docket Entries

  • 06/01/2021
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  • Docket(#45) ORDER GRANTING NON-PARTY CITY NATIONAL BANKS EX PARTE APPLICATION FOR APPROVAL TO PAY OFF DEFENDANT ZACHARY J. HORWITZS LINE OF CREDIT AND CLOSE THE ACCOUNT, #44 by Judge Christina A. Snyder: The Court hereby GRANTS the Application. City National Bank is hereby approved to (1) pay off Defendant Zachary J. Horwitzs secured personal line of credit (PLC) at CNB, including all principal and accrued interest through the date of final payoff, using the proceeds from the liquidation of an associated collateral account at CNB held by Mr. Horwitzs mother, Susan Kozlowski; (2) close the PLC; and (3) return any excess proceeds from the collateral account to Ms. Kozlowski. IT IS SO ORDERED. (shb) (Entered: 06/02/2021)

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  • 05/21/2021
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  • Docket(#44) EX PARTE APPLICATION for Order for Approval to Pay Off Defendant Zachary J. Horwitz's Line of Credit and Close the Account filed by Non-Party City National Bank. (Attachments: #1 Proposed Order) (Attorney Joshua G. Hamilton added to party City National Bank(pty:mov)) (Hamilton, Joshua) (Entered: 05/21/2021)

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  • 05/14/2021
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  • Docket(#43) ORDER FREEZING ASSETS AND PROHIBITING DESTRUCTION OF DOCUMENTS by Judge Christina A. Snyder re Stipulation Prohibiting the Destruction of Documents and an Order Continuing the Asset Freeze and to Modify the Asset Freeze to Allow Creation of a New Bank Account #41 . The 5/17/2021, Order to Show Cause hearing at 10:00 AM., is hereby VACATED. (See Order for further information). (jp) (Entered: 05/14/2021)

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  • 05/14/2021
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  • Docket(#42) NOTICE of Pendency of Other Actions or Proceedings filed by Plaintiff Securities and Exchange Commission. (Wanner, Kathryn) (Entered: 05/14/2021)

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  • 05/13/2021
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  • Docket(#41) STIPULATION for Order Prohibiting the Destruction of Documents and an Order Continuing the Asset Freeze and to Modify the Asset Freeze to Allow Creation of a New Bank Account by Defendant Zachary J. Horwitz and Payment of Necessary and Reasonable Living Expenses Therefrom filed by Plaintiff Securities and Exchange Commission. (Attachments: #1 Proposed Order)(Wanner, Kathryn) (Entered: 05/13/2021)

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  • 05/11/2021
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  • Docket(#40) SCHEDULING NOTICE (IN CHAMBERS) CONTINUED AND SETTING HEARING BY TELEPHONE by Judge Christina A. Snyder, re: Order #30 . The 5/17/2021 Order to Show Cause Hearing Why The Asset Freeze Should Not Continue is continued from 10:00 AM to 11:00 AM before Judge Christina A. Snyder will be held by telephone. Bridge Call information will be emailed to counselTHERE IS NO PDF DOCUMENT ASSOCIATED WITH THIS ENTRY. (cj) TEXT ONLY ENTRY (Entered: 05/11/2021)

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  • 05/11/2021
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  • Docket(#39) RESPONSE filed by Defendant Zachary J. Horwitz to the Government's Objection to Notice of Related Cases (Hedges, Ryan) (Entered: 05/11/2021)

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  • 05/10/2021
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  • Docket(#38) NOTICE Regarding Court Order for Schedule of Personal Assets filed by Defendant 1inMM Capital, LLC, Zachary J. Horwitz. (Quinn, Michael) (Entered: 05/10/2021)

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  • 05/10/2021
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  • Docket(#37) FINANCIAL ENTRY: Received $1,417,517.16 into the registry of the Court from Portfolio Escrow Inc. on behalf of Defendants on 05/07/2021. Re: Order on Motion for Order,,, #28 . Receipt number LA222138. (pri) (Entered: 05/10/2021)

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  • 05/06/2021
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  • Docket(#36) NOTICE of Related Case(s) filed by Defendants 1inMM Capital, LLC, Zachary J. Horwitz. Related Case(s): 2:21-cr-00214-MCS (Hedges, Ryan) (Entered: 05/06/2021)

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25 More Docket Entries
  • 04/05/2021
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  • Docket(#10) DECLARATION of MELINDA LEMOINE filed by Plaintiff Securities and Exchange Commission. (esa) (Entered: 04/05/2021)

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  • 04/05/2021
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  • Docket(#9) DECLARATION of JOSEPH DEALTERIS filed by Plaintiff Securities and Exchange Commission. (esa) (Entered: 04/05/2021)

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  • 04/05/2021
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  • Docket(#8) DECLARATION of BRETT CRAVATT filed by Plaintiff Securities and Exchange Commission. (esa) (Entered: 04/05/2021)

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  • 04/05/2021
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  • Docket(#7) DECLARATION of LANCE JASPER in support of EX PARTE APPLICATION for Temporary Restraining Order as to (1) Freezing Assets; (2) Requiring an Accounting; (3) Prohibiting Destruction of Documents; and (4) To Set a Hearing on Order to Show Cause #4 filed by Plaintiff Securities and Exchange Commission. (Attachments: #1 part 2)(esa) (Entered: 04/05/2021)

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  • 04/05/2021
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  • Docket(#6) DECLARATION of LORRAINE PEARSON in support of EX PARTE APPLICATION for Temporary Restraining Order as to (1) Freezing Assets; (2) Requiring an Accounting; (3) Prohibiting Destruction of Documents; and (4) To Set a Hearing on Order to Show Cause #4 filed by Plaintiff Securities and Exchange Commission. (esa) (Entered: 04/05/2021)

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  • 04/05/2021
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  • Docket(#5) MEMORANDUM OF POINTS AND AUTHORITIES in Support of EX PARTE APPLICATION for Temporary Restraining Order as to (1) Freezing Assets; (2) Requiring an Accounting; (3) Prohibiting Destruction of Documents; and (4) To Set a Hearing on Order to Show Cause #4 filed by Plaintiff Securities and Exchange Commission. (esa) (Entered: 04/05/2021)

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  • 04/05/2021
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  • Docket(#4) EX PARTE APPLICATION for an Order (1) Freezing Assets; (2) Requiring an Accounting; (3) Prohibiting Destruction of Documents; and (4) To Set a Hearing on Order to Show Cause filed by plaintiff Securities and Exchange Commission. (Attachments: #1 lodged proposed order) (esa) (Entered: 04/05/2021)

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  • 04/05/2021
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  • Docket(#3) 21 DAY Summons issued re Complaint #1 as to defendants 1inMM Capital, LLC, Zachary J. Horwitz. (esa) (Entered: 04/05/2021)

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  • 04/05/2021
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  • Docket(#2) EX PARTE APPLICATION to File Complaint and Application for an Asset Freeze and Other Relief Under Seal filed by plaintiff Securities and Exchange Commission. (Attachments: #1 lodged proposed order) (esa) (Entered: 04/05/2021)

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  • 04/05/2021
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  • Docket(#1) COMPLAINT against defendants 1inMM Capital, LLC, Zachary J. Horwitz.Case assigned to Judge Christina A. Snyder for all further proceedings. Discovery referred to Magistrate Judge Gail J Standish, Jury Demanded, filed by plaintiff Securities and Exchange Commission. (Attachments: #1 CV 71) (esa) (Entered: 04/05/2021)

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