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This case was last updated from PACER on 06/07/2021 at 10:25:14 (UTC).

US Securities and Exchange Commission v. TKO Farms

Case Summary

On April 8, 2021, the United States Securities and Exchange Commission (the “Commission”) or (“Petitioner”), represented by Casey Fronk and Tracy Schloss Combs attorney at the SEC filed a civil enforcement action against TKO Farms, Inc. (“TKO Farms” or “Respondent”) seeking an order for the defendant to comply with the Commission’s lawfully-issued subpoena requiring it to produce documents in connection with an ongoing investigation. This case was filed in the U.S. District Court for the District of Utah with Judge Howard C. Nielson, Jr. presiding.

 

In its complaint, the Commission alleged that “TKO Farms has repeatedly refused to comply with a subpoena the Commission lawfully issued and served upon TKO Farms in connection with an ongoing Commission investigation titled In the Matter of TKO Farms, Inc. (SL-02853) (the “Investigation”). In furtherance of its Investigation, Commission staff issued and served on TKO Farms a December 30, 2020 subpoena (the “Subpoena”) containing a single request: to produce a native version(s) of its QuickBooks and/or other accounting or bookkeeping software files and whatever passwords are necessary to access them. Following the service of the Subpoena, TKO Farms, through its counsel, refused to produce its QuickBooks files as they were kept by TKO Farms in the ordinary course of business. TKO Farms’ counsel repeatedly represented to Commission staff that TKO Farms would not produce its QuickBooks files until TKO Farms had “corrected” them and that TKO Farms intended to alter its QuickBooks files forthwith.”

 

It is further alleged by the Commission that “In the course of the investigation, the Commission staff identified facts suggesting that, from at least 2017 to the present, TKO Farms was and is engaged in an unregistered offering of TKO Farms securities and engaged unregistered brokers to solicit investors on its behalf. The Commission staff further identified facts indicating that TKO Farms and its agents may have been and continue to solicit investments through misstatements and omissions of material fact which are in violations of Sections 5(a), 5(c), 17(a) of the Securities Act of 1933 (“Securities Act”) [15 U.S.C. § 77e(a), § 77e(c), and § 77q(a)], Section 10(b) of the Securities Exchange Act of 1934 (“Exchange Act”) [15 U.S.C. §§ 78j(b)] and Rule 10b‒5 thereunder [17 C.F.R. § 240.10b‒5], and Section 15(a)(1) of the Exchange Act [15 U.S.C. §§ 78o(a)(1)] by various acts and practices reported. Therefore, the unaltered accounting records of TKO Farms during the suspected unregistered securities activity and fraud period are highly relevant to the Investigation because those records, as kept in the ordinary course of business, could show: (1) the amount of funds raised from investors and in what securities products; (2) the time period in which such funds were raised; (3) the use of investor funds; (4) TKO Farms’s revenues from its purported business activities, or an absence of such revenues; and (5) how, when, and from what source investor returns were paid.”

 

In its prayer for relief, the Commission has requested the court to issue an order directing TKO Farms to produce to the Commission staff all materials responsive to its December 30, 2020 Subpoena, as those materials were kept in the ordinary course of business on or about the date the Subpoena was served, without alteration, granting the Commission such other and further relief as may be necessary and appropriate to achieve compliance with the Subpoena and with any Order the Court issues, and preserving this Court’s jurisdiction over this matter to ensure that TKO Farms complies with the administrative Subpoena and any orders of this Court.

 

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Case Details Parties Documents Dockets

 

Case Details

  • Case Number:

    2:21-CV-00216

  • Filing Date:

    04/08/2021

  • Case Status:

    Pending - Other Pending

  • Case Type:

    Finance - Security/Commodity/Exchange

  • Court:

    U.S. District Courts

  • Courthouse:

    Utah District

Judge Details

Presiding Judge

Howard C. Nielson, Jr

Referral Judge

Cecilia M. Romero

 

Party Details

Petitioner

US Securities and Exchange Commission

Respondent

TKO Farms

Attorney/Law Firm Details

Petitioner Attorneys

Tracy Schloss Combs

Attorney at SECURITIES AND EXCHANGE COMMISSION

351 S West Temple Ste 6.100

Salt Lake City, UT 84101

Casey Fronk

Attorney at SECURITIES AND EXCHANGE COMMISSION

351 S West Temple Ste 6.100

Salt Lake City, UT 84101

Respondent Attorney

D. Loren Washburn

Attorney at ARMSTRONG TEASDALE LLP

201 S Main St Ste 750

Salt Lake City, UT 84111

 

Court Documents

#9

(#9) REPORT AND RECOMMENDATIONS re #2 Petition to Enforce Administrative Subpoena: Magistrate Judge recommends that Petition be granted and TKO Farms be ordered to comply with the subpoena. Signed by Magistrate Judge Cecilia M. Romero on 5/6/21 (alt) (Entered: 05/06/2021)

#7

(#7) NOTICE of Appearance by D. Loren Washburn on behalf of TKO Farms (Washburn, D.) (Entered: 05/05/2021)

#6

(#6) WAIVER OF SERVICE Returned Executed filed by US Securities and Exchange Commission as to TKO Farms Waiver sent on 4/9/2021, answer due 6/8/2021. (Fronk, Casey) (Entered: 04/27/2021)

#5

(#5) ORDER TO SHOW CAUSE why an Order Compelling Compliance with the Administrative Subpoena should not be granted: Show Cause Hearing set for 5/5/2021 at 03:00 PM via Zoom before Magistrate Judge Cecilia M. Romero. Proof of service completed shall be filed with the Clerk as soon as practicable. Signed by Magistrate Judge Cecilia M. Romero on 4/19/21 (alt) (Entered: 04/19/2021)

2 #3

Text of Proposed Order

2 #2

Civil Cover Sheet

2 #1

Exhibit A - Declaration of James J. Thibodeau

#2

(#2) PETITION to Enforce Administrative Subpoena. Fee waived filed by US Securities and Exchange Commission. (Attachments: #1 Exhibit A - Declaration of James J. Thibodeau, #2 Civil Cover Sheet, #3 Text of Proposed Order) Assigned to Judge Howard C. Nielson, Jr (Fronk, Casey) (Entered: 04/08/2021)

#1

(#1) Case has been indexed and assigned to Judge Howard C. Nielson, Jr. Petitioner US Securities and Exchange Commission is directed to E-File the Petition to Enforce Administrative Subpoena and cover sheet (found under Complaints and Other Initiating Documents) by the end of the business day. Filing Fee waived (USA)NOTE: The court will not have jurisdiction until the opening document is electronically filed and the filing fee paid in the CM/ECF system. (nmt) (Entered: 04/08/2021)

 

Docket Entries

  • 05/06/2021
  • View Court Documents
  • Docket(#9) REPORT AND RECOMMENDATIONS re #2 Petition to Enforce Administrative Subpoena: Magistrate Judge recommends that Petition be granted and TKO Farms be ordered to comply with the subpoena. Signed by Magistrate Judge Cecilia M. Romero on 5/6/21 (alt) (Entered: 05/06/2021)

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  • 05/05/2021
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  • Docket(#8) Minute Entry for proceedings held before Magistrate Judge Cecilia M. Romero: Show Cause Hearing held on 05/05/2021 re #5 Order to Show Cause. Court hears from both parties. Court takes matter under advisement and will issue its Report and Recommendation in short order. Attorneys for Petitioner: Tracy Combs, Casey Fronk. Attorney for Respondent: Loren Washburn. (Start Time: 3:00 PM End Time: 3:25 PM; Court Reporter: ZOOM). (mas) (Entered: 05/06/2021)

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  • 05/05/2021
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  • Docket(#7) NOTICE of Appearance by D. Loren Washburn on behalf of TKO Farms (Washburn, D.) (Entered: 05/05/2021)

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  • 04/27/2021
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  • Docket(#6) WAIVER OF SERVICE Returned Executed filed by US Securities and Exchange Commission as to TKO Farms Waiver sent on 4/9/2021, answer due 6/8/2021. (Fronk, Casey) (Entered: 04/27/2021)

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  • 04/19/2021
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  • Docket(#5) ORDER TO SHOW CAUSE why an Order Compelling Compliance with the Administrative Subpoena should not be granted: Show Cause Hearing set for 5/5/2021 at 03:00 PM via Zoom before Magistrate Judge Cecilia M. Romero. Proof of service completed shall be filed with the Clerk as soon as practicable. Signed by Magistrate Judge Cecilia M. Romero on 4/19/21 (alt) (Entered: 04/19/2021)

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  • 04/16/2021
  • Docket(#4) DOCKET TEXT ORDER - Docket entry entered on April 15, 2021, stating that this case is no longer referred was entered in error. This case remains referred to Magistrate Judge Cecilia M. Romero. See Dkt. No. 3 . Referral is hereby changed from 28 U.S.C. 636(b)(1)(A) to 28 U.S.C. 636(b)(1)(B). Magistrate Judge Romero to handle case up to and including R&R on all dispositive matters. SO ORDERED. Signed by Judge Howard C. Nielson, Jr on 4/16/2021. (jwt) (Entered: 04/16/2021)

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  • 04/15/2021
  • DocketCase no longer referred to Magistrate Judge Cecilia M. Romero. (mlp) (Entered: 04/15/2021)

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  • 04/12/2021
  • Docket(#3) DOCKET TEXT ORDER REFERRING CASE to Magistrate Judge Cecilia M. Romero under 28:636 (b)(1)(A), Magistrate to hear and determine all nondispositive pretrial matters. No attached document. Signed by Judge Howard C. Nielson, Jr on 4/12/21. (dla) (Entered: 04/12/2021)

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  • 04/08/2021
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  • Docket(#2) PETITION to Enforce Administrative Subpoena. Fee waived filed by US Securities and Exchange Commission. (Attachments: #1 Exhibit A - Declaration of James J. Thibodeau, #2 Civil Cover Sheet, #3 Text of Proposed Order) Assigned to Judge Howard C. Nielson, Jr (Fronk, Casey) (Entered: 04/08/2021)

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  • 04/08/2021
  • View Court Documents
  • Docket(#1) Case has been indexed and assigned to Judge Howard C. Nielson, Jr. Petitioner US Securities and Exchange Commission is directed to E-File the Petition to Enforce Administrative Subpoena and cover sheet (found under Complaints and Other Initiating Documents) by the end of the business day. Filing Fee waived (USA)NOTE: The court will not have jurisdiction until the opening document is electronically filed and the filing fee paid in the CM/ECF system. (nmt) (Entered: 04/08/2021)

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