UNITED STATES DISTRICT COURT CENTRAL DISTRICT OF CALIFORNIA SECURITIES AND EXCHANGE COMMISSION, Plaintiff, v. GERALD A. DOBBINS and FIDELITY SECURED DEPOSIT CORPORATION, Defendants. Civil Action No. SACV98-229GLT PRELIMINARY INJUNCTION FILED May 19 1998 This matter came to be heard upon an Order to show cause why a Preliminary Injunction: (1) restraining defendants from violating the securities laws and (2) continuing a freeze of defendants assets should not enter. The Court, having considered the Commission's Complaint, the Motion for Temporary Restraining Order, and the Memorandum of Points and Authorities and the Declarations and other documents filed in support of such Motion, the Opposition of Defendants to the Preliminary Injunction, the Reply of the Commission to that Opposition and all other evidence and argument presented regarding the Order to Show Cause, finds that: A. The Commission has made a sufficient and proper showing in support of the relief granted herein, as required by Section 20(b) of the Securities Act of 1933 ("Securities Act") [15 U.S.C. § 77t(b)] and Section 21(d) of the Securities Exchange Act of 1934 ("Exchange Act") [15 U.S.C. § 78u(d)] by evidence establishing a prima facie case and a strong likelihood that the Commission will prevail at trial on the merits. B. There is good caused to believe that the Defendants, and each of them, directly or indirectly, have engaged in and, unless enjoined by order of this Court, will continue to engage in acts, practices, and courses of business constituting violations of Section 10(b) of the Exchange Act [15 U.S.C. § 78j(b)], and Rule 10b-5 promulgated thereunder [17 C.F.R. § 240.10b-5]. C. There is good cause to believe that, unless enjoined by order of this Court, Defendants will dissipate, conceal, or transfer from the jurisdiction of this Court assets which could be subject to an order directing restitution, disgorgement or the payment of civil money penalties in this action. I. The Commission's Motion for Order: (1) restraining defendants from violating the securities laws and (2) freezing assets is HEREBY GRANTED. II. IT IS HEREBY ORDERED that, until otherwise ordered by this Court, Defendants Gerald A. Dobbins and Fidelity Secured Deposit Corporation, and their officers, agents, servants, employees, attorneys, and those persons in active concert or participation with any of them, who receive actual notice of this Order; by personal service or otherwise, and each of them, be and hereby are enjoined from, directly or indirectly, in the offer or sale of any securities, by the use of any means or instruments of transportation or communication in interstate commerce or by the use of the mails: A. employing any device, scheme or artifice to defraud; B. obtaining money or property by means of any untrue statement of a material fact or any omission to state a material fact necessary in order to make the statements made, in the light of the circumstances under which they were made, not misleading; or C. engaging in any transaction, practice, or course of business which operates or would operate as a fraud or deceit upon the purchaser; in violation of Section 17(a) of the Securities Act [15 U.S.C. § 77q(a)]. III. IT IS FURTHER ORDERED that, until otherwise ordered by this Court, Defendants Gerald A. Dobbins and Fidelity Secured Deposit Corporation, and their officers, agents, servants, employees, attorneys, and those persons in active concert or participation with any of them, who receive actual notice of this Order, by personal service or otherwise, and each of them, be and hereby are enjoined from, directly or indirectly, in connection with the purchase or sale of any securities, by the use of any means or instrumentality of interstate commerce, or of the mails, or of any facility of any national securities exchange: A. employing any device, scheme or artifice to defraud; B. making any untrue statement of a material fact or omitting to state a material fact necessary in order to make the statements made, in the light of the circumstances under which they were made, not misleading; or C. engaging in any act, practice, or course of business which operates or would operate as a fraud or deceit upon any person; in violation of Section 10(b) of the Exchange Act [15 U.S.C. § 78j(b)] and Rule 10b-5 thereunder [17 C.F.R. § 240.10b-5]. IV. IT IS FURTHER ORDERED that, until otherwise ordered by this Court: A. Gerald A. Dobbins and Fidelity Secured Deposit Corporation, and their officers, directors, subsidiaries, affiliates, agents, servants, employees, attorneys in fact, and those persons in active concert or participation with them who receive actual notice of this order by personal service or otherwise, and each of them, hold and retain within their control, and otherwise prevent any disposition, transfer, pledge, encumbrance, assignment, dissipation, concealment, or other disposal whatsoever of any of their funds or other assets presently held by them, under their control or over which they exercise actual or apparent investment or other authority, in whatever form such assets may presently exist and wherever located; B. That any financial or brokerage institution or other person or entity located within the territorial jurisdiction of the United States courts and holding any funds or other assets in the name of, for the benefit of, or under the control of Gerald A. Dobbins or Fidelity Secured Deposit Corporation, and their officers, directors, subsidiaries, affiliates, agents, servants, employees, attorneys in fact, and those persons in active concert or participation with them, and each of them, shall hold and retain within their control and prohibit the withdrawal, removal, transfer or other disposal of any such funds or other assets; and C. Gerald A. Dobbins and Fidelity Secured Deposit Corporation, and their officers, directors, subsidiaries and affiliates, agents, servants, employees, attorneys in fact, and those persons in active concert or participation with them who receive actual notice of this order by personal service or otherwise, and each of them, shall refrain from accepting, taking control of or depositing in any financial institution additional funds from actual or potential investors. D. Tom Lemen shall remain custodian of the bonds. E. Defendants may apply to the court for payment of reasonable, necessary, and ordinary business expenses, including attorney fees. V. IT IS FURTHER ORDERED that this Court shall retain jurisdiction over this action for the purpose of implementing and carrying out the terms of all orders and decrees which may be entered herein and to entertain any suitable application or motion for additional relief within the jurisdiction of this Court. IT IS SO ORDERED. DATED: May 19, 1998 /s/ Gary L. Taylor UNITED STATES DISTRICT JUDGE GARY L. TAYLOR Presented by: /s/ Polly Atkinson POLLY ATKINSON JULIE K. LUTZ (Ca. Bar No. 77246) Securities and Exchange Commission 1801 California Street Denver, Colorado 80202 Telephone: (303)844-1000 KAREN L. MATTESON (Ca. Bar No. 102103) Securities and Exchange Commission 5670 Wilshire Boulevard 11th Floor Los Angeles, California 90036-3648 Telephone: (213) 965-3998 Attorneys for: The United States Securities and Exchange Commission