This case was last updated from U.S. District Courts on 02/12/2022 at 00:14:13 (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

Judge Details

Presiding Judge

Christina A. Snyder

Referral Judge

Gail J. Standish

 

Party Details

Plaintiff

Securities and Exchange Commission

Petitioners

City National Bank

Rogue Black, LLC

Defendants

Zachary J. Horwitz

1inMM Capital, LLC

Attorney/Law Firm Details

Plaintiff Attorneys

Kathryn C Wanner

Attorney at US Securities and Exchange Commission

444 South Flower Street Suite 900

Los Angeles, CA 90071

M Lance Jasper

Attorney at US Securities and Exchange Commission

444 South Flower Street Suite 900

Los Angeles, CA 90071

Petitioner Attorneys

Joshua G. Hamilton

Attorney at Latham and Watkins LLP

10250 Constellation Boulevard Suite 1100

Los Angeles, CA 90067

Anya Jennifer Goldstein

Attorney at Summa LLP

800 Wilshire Boulevard Suite 1050

Los Angeles, CA 90017

Defendant Attorney

Ryan S Hedges

Attorney at Vedder Price

222 North Lasalle Street Suite 2600

Chicago, IL 60601

 

Court Documents

72 #1

Proposed Order

72 #72

Main Document

71 #4

Exhibit 4

71 #3

Exhibit 3

71 #2

Exhibit 2

71 #1

Exhibit 1

71 #71

Main Document

#70

(#70) ORDER ON APPOINTMENT OF A PERMANENT RECEIVER by Judge Christina A. Snyder: IT IS HEREBY ORDERED that the SECs Motion to Appoint a Permanent Receiver is GRANTED and a permanent receiver shall be appointed over 1inMM Capital, LLC; over assets that are attributable to funds derived from investors or clients of the Defendants or were fraudulently transferred by the Defendants (collectively, the Subject Assets); and, to identify any other significant assets that may be available to compensate investors. IT IS FURTHER ORDERED that Michele Vives of Douglas Wilson Companies is appointed as permanent receiver of Defendant 1inMM Capital, LLC (1inMM) and its subsidiaries and affiliates, and over the Subject Assets, with full powers of an equity receiver, including, but not limited to, full power over all funds, assets, collateral, premises (whether owned, leased, occupied, or otherwise controlled), choses in action, books, records, papers and other property belonging to, being managed by or in the possession of or control of Defendant 1inMM and its subsidiaries and affiliates, and over the Subject Assets. IT IS SO ORDERED. See order for more information. IT IS SO ORDERED. See order for more information. (shb) Modified on 1/21/2022 (shb). (Entered: 01/20/2022)

69 #1

Proposed Order

#9

#8

#6

#5

#3

81 More Documents Available
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Docket Entries

  • 02/08/2022
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  • Docket(#73) SCHEDULING NOTICE (IN CHAMBERS) AND SETTING HEARING BY ZOOM by Judge Christina A. Snyder, re: NOTICE OF MOTION AND MOTION for Order for Authorizing Employment of Katten Muchin Rosenman LLP as Counsel for Receiver #71 and NOTICE OF MOTION AND MOTION for Order for Establishing Procedures for Allowance of Compensation and Reimbursement of Expenses for Receiver and Her Professionals #72 . The 2/14/2022 hearing at 10:00 AM will be held by Zoom. Zoom Webinar Information can be found on the Court's website, under Judge Snyder's Procedures. THERE IS NO PDF DOCUMENT ASSOCIATED WITH THIS ENTRY. (cj) TEXT ONLY ENTRY (Entered: 02/08/2022)

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  • 02/03/2022
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  • Docket(#72) NOTICE OF MOTION AND MOTION for Order for Establishing Procedures for Allowance of Compensation and Reimbursement of Expenses for Receiver and Her Professionals [Unopposed] filed by Receiver Michele Vives. Motion set for hearing on 2/14/2022 at 10:00 AM before Judge Christina A. Snyder. (Attachments: #1 Proposed Order) (Banich, Terence) (Entered: 02/03/2022)

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  • 02/03/2022
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  • Docket(#71) NOTICE OF MOTION AND MOTION for Order for Authorizing Employment of Katten Muchin Rosenman LLP as Counsel for Receiver [Unopposed] filed by Receiver Michele Vives. Motion set for hearing on 2/14/2022 at 10:00 AM before Judge Christina A. Snyder. (Attachments: #1 Exhibit 1, #2 Exhibit 2, #3 Exhibit 3, #4 Exhibit 4) (Attorney Terence G Banich added to party Michele Vives(pty:rc)) (Banich, Terence) (Entered: 02/03/2022)

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  • 01/14/2022
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  • Docket(#70) ORDER ON APPOINTMENT OF A PERMANENT RECEIVER by Judge Christina A. Snyder: IT IS HEREBY ORDERED that the SECs Motion to Appoint a Permanent Receiver is GRANTED and a permanent receiver shall be appointed over 1inMM Capital, LLC; over assets that are attributable to funds derived from investors or clients of the Defendants or were fraudulently transferred by the Defendants (collectively, the Subject Assets); and, to identify any other significant assets that may be available to compensate investors. IT IS FURTHER ORDERED that Michele Vives of Douglas Wilson Companies is appointed as permanent receiver of Defendant 1inMM Capital, LLC (1inMM) and its subsidiaries and affiliates, and over the Subject Assets, with full powers of an equity receiver, including, but not limited to, full power over all funds, assets, collateral, premises (whether owned, leased, occupied, or otherwise controlled), choses in action, books, records, papers and other property belonging to, being managed by or in the possession of or control of Defendant 1inMM and its subsidiaries and affiliates, and over the Subject Assets. IT IS SO ORDERED. See order for more information. IT IS SO ORDERED. See order for more information. (shb) Modified on 1/21/2022 (shb). (Entered: 01/20/2022)

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  • 01/11/2022
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  • Docket(#69) NOTICE OF LODGING filed re Order on Motion to Appoint Receiver,, Motion Hearing, #68 (Attachments: #1 Proposed Order)(Wanner, Kathryn) (Entered: 01/11/2022)

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  • 01/10/2022
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  • Docket(#68) MINUTES OF PLAINTIFF'S MOTION TO APPOINT RECEIVER (65) (VIA ZOOM) held before Judge Christina A. Snyder: The Court confers with the parties. For reasons stated on the record, counsel shall submit an update proposed order for theCourt's review and consideration. IT IS SO ORDERED. Court Reporter: Miriam Baird. (shb) (Entered: 01/11/2022)

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  • 01/04/2022
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  • Docket(#67) SCHEDULING NOTICE AND ORDER RE PLAINTIFF'S MOTION TO APPOINT RECEIVER #65 by Judge Christina A. Snyder. COUNSEL OF RECORD ARE HEREBY NOTIFIED, the motion hearing, will proceed by Zoom Webinar. Please refer to the Court's website under "Judge's Procedures and Schedules", to obtain the Zoom Webinar information. THERE IS NO PDF DOCUMENT ASSOCIATED WITH THIS ENTRY. (droj) TEXT ONLY ENTRY (Entered: 01/04/2022)

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  • 12/08/2021
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  • Docket(#66) ORDER GRANTING THIRD PARTY ROGUE BLACK, LLCS UNOPPOSED EX PARTE APPLICATION TO ALLOW PAYMENT FOR COSTS INCURRED, #64 by Judge Christina A. Snyder: IT IS HEREBY ORDERED THAT: Rogue Blacks Unopposed Ex Parte Application To Allow Payment for Costs Incurred is GRANTED. Rogue Black may withdraw up to $51,115.00 from the bank account it was previously permitted to open by order of this Court. Neither Zachary Horwitz, 1inMM, nor any company owned in whole or in part by Zachary Horwitz (with the exception of Rogue Black) shall have access to the Rogue Black Bank Account. IT IS SO ORDERED. See order for more information. (shb) (Entered: 12/09/2021)

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  • 12/08/2021
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  • Docket(#65) NOTICE OF MOTION AND MOTION to Appoint Receiver filed by Plaintiff Securities and Exchange Commission. Motion set for hearing on 1/10/2022 at 10:00 AM before Judge Christina A. Snyder. (Attachments: #1 Memorandum, #2 Declaration of Kathryn C. Wanner, #3 Declaration of Lorraine Pearson, #4 Declaration of Andrew Esbenshade, #5 Proposed Order) (Wanner, Kathryn) (Entered: 12/08/2021)

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  • 12/08/2021
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  • Docket(#64) EX PARTE APPLICATION for Order for TO ALLOW PAYMENT FOR COSTS INCURRED (Unopposed) filed by Third Party Rogue Black, LLC. (Attachments: #1 Declaration, #2 Proposed Order) (Goldstein, Anya) (Entered: 12/08/2021)

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53 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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