ORDER

SOLIS, Judge.

Before the Court are Plaintiff's Application for Issuance of a Temporary Restraining Order, Preliminary Injunction, and Orders Freezing Assets, Requiring an Accounting, Requiring Preservation of Documents, and Authorizing Expedited Discovery, filed February 11, 2002, Defendants' Response thereto, and Plaintiff's Reply. After considering the parties' briefings and arguments, and the applicable law, the Court GRANTS Plaintiff's application and motions.

I. Background

The Securities and Exchange Commission ("SEC") brought this civil action against Defendants on February 11, 2002, alleging violations of Section 10(b) and Rule 10b-5 of the Exchange Act, Sections 5(a), 5 (c), and 17(a) of the Securities Act, as well as claims against the Relief Defendants as Custodians of Investor Funds, and for an order under Section 21(e) of the Exchange Act.

The SEC alleges that Defendants Larry W. Tyler ("Tyler") and Advanced Financial Services, Inc. ("AFS") (collectively "Defendants") were engaged in a scheme to defraud elderly investors by buying fractional shares of viatical settlement agreements ("viaticals"). More specifically, the SEC contends that Defendants fraudulently enticed more than 480 mostly elderly investors into purchasing investments issued by AFS with false guarantees about the investment's liquidity, interest rates, and "fixed" maturity dates. Pl.'s Mem. of Law in Supp. of App. for Issuance of Prelim. Inj. ("Pl.'s Brief"), at 1. However, Defendants instead allegedly took the investors' money and bought fractional shares of viaticals which were not liquid, did not have fixed maturity dates, and have uncertain rates of return. Id.

The SEC further contends that Tyler solicited investors through newspaper advertisements, investment seminars, cold call campaigns conducted by in-house telemarketers, and mass mailings. Pl.'s App. at 147 (Walters Decl. ¶ 13), The SEC has provided declarations from several of Defendants' customers stating that Tyler made no mention of the illiquidity, contingent nature of the rates of return, or the indefinite term of the investments he offered. Pl.'s App. at 4-5 (Vaughn Decl. ¶ 5), 8 (McReynolds Decl. ¶ 9), 26 (Bailey Decl. ¶ 7), 77 (Teleschow Decl. ¶ 11). Defendants also provided investors with letters outlining the maturity date of their investments, an annual rate of return, and the total value at maturity. Pl.'s App. at 13, 268, 272-77, 296-97. Tyler received commissions from the original issuer of the viatical, Trade Partners, Inc. ("TPI"), which he never disclosed to investors. Pl.'s App. at 150 (Walters Decl. ¶¶ 23-24). Tyler received a primary commission at the time the viatical was purchased. Pl.'s App. at 150 (Walters Decl. ¶ 23). He also received a secondary commission, one that was several points of interest determined by the difference between the interest rate actually paid by TPI upon the death of a viator and the rate initially offered by Tyler and AFS to individual investors. Pl.'s App. at 150 (Walters Decl. ¶ 24). The SEC claims that Tyler received more than $5 million dollars in total commissions. Pl.'s App. at 150 (Walters Decl. ¶ 25).

The SEC also contends that Defendants altered the scheme around April 2001. Prior to that time, Defendants had used investor funds to purchase viaticals directly from TPI in the investors' names. Pl.'s App. at 150-51 (Walters Decl. ¶ 26). After April 2001, Tyler sold investors fractional shares of a group of viaticals he personally owned. Pl.'s App. at 150-51 (Walters Decl. ¶ 26). In some cases, Tyler established money market accounts in the investors' names for the purpose of transferring the funds to an account he controlled. Pl.'s App. at 151 (Walters Decl. ¶ 26). Tyler then notified TPI of the portion sold to a particular investor, and requested that TPI record the fractionalized interest in its records. Pl.'s App. at 151 (Walters Decl. ¶ 28). It is unclear how much Tyler earned from the sale of the viaticals held in his own name. Pl.'s App. at 151 (Walters Decl. ¶ 28).

By buying viaticals in his own name, and subsequently selling fractional shares to investors, Tyler essentially created a liquid market of viatical shares to sell his investors. If an investor sought to liquidate her fractional share of a viatical, Tyler would either sell the fractional share to another investor or purchase it himself. Pl.'s App. at 151 (Walters Decl. ¶ 30). However, Tyler was not always successful in maintaining a liquid market. This was especially difficult for investors whose AFS investments reached "maturity" while the viator was still alive. At least one investor has not been paid despite the September 2001 maturity date of his investment. Pl.'s App. at 152 (Walters Decl. ¶ 31). Many more AFS investments are due to become mature in the coming months. Pl.'s App. at 152 (Walters Decl. ¶ 31).

The SEC also alleges that using funds he received from the sale of fractional shares of the viaticals he owned, Tyler bought real property in the name of limited partnerships he controls, Granbury Plaza and Benbrook Lane, and a corporation he controls, FWLT (collectively, the "Relief Defendants"). Pl.'s App. at 153 (Walters Decl. ¶¶ 34-36). Tyler also attempted to borrow against a life insurance policy in his name owned by a family trust. Pl.'s App. at 140-41 (Roussey Decl. ¶¶ 1-5, 8).

On January 28, 2002, both Tyler and AFS filed for bankruptcy protection, claiming that each held less than $50,000 in assets. Pl.'s App. at 159 (Walters Decl. ¶ 47); Defs.' App., Ex. 20, 21.

Additionally, on May 17, 2001, Tyler consented to the entry of an administrative cease and desist order by the SEC after being charged with violating the registration and antifraud provisions of the federal securities laws. In the Matter of Larry W. Tyler, Administrative Proceeding File No. 3-10487.

II. Application for Preliminary Injunction

Under section 20(b) of the 1933 Act, 15 U.S.C. § 77t(b), and section 21(d) of the 1934 Act, 15 U.S.C. § 78u(d), the test laid down for injunctive relief is whether or not "a proper showing" has been made by the SEC that there is a reasonable likelihood that the defendant is engaged or about to engage in practices that violate the federal securities laws. SEC v. First Financial Group of Texas, 645 F.2d 429 (5th Cir. Unit A 1981); see also Aaron v. SEC, 446 U.S. 680, 699 (1980); SEC v. Mize, 615 F.2d 1046, 1051 (5th Cir. 1980); SEC v. Savoy Industries, Inc., 587 F.2d 1149, 1168 (D.C. Cir. 1978). The latter showing is usually made with proof of past substantive violations that indicate a reasonable likelihood of future substantive violations. See Savoy Industries, 587 F.2d at 1168. When scienter is an element of the substantive violation sought to be enjoined, it must be proven before an injunction may issue. Aaron, 446 U.S. at 699-700.

In the instant case, Defendants object to Plaintiff's application on three grounds. First, they argue that the viaticals offered for sale do not fall within the definition of "security" regulated by the federal securities laws. Second, Defendants object to the appointment of a receiver and an asset freeze because Defendants are currently in bankruptcy proceedings in Fort Worth. Finally, Defendants object to the use of certain evidence which they claim was illegally seized in contravention of the Fourth Amendment.

A. Defendants' Sale of Securities

The SEC argues that the investments offered by Defendants are both notes and investment contracts as those terms have been defined by the federal securities laws. Defendants argue that the case law is clear in holding that viaticals are not securities as defined by federal securities law, and rely heavily on SEC v. Life Partners, Inc. for this proposition. 878 F.3d 536, reh'g denied, 102 F.3d 587 (D.C. Cir. 1996), dismissed by 986 F. Supp. 644 (D.D.C. 1997). Life Partners, however, discusses viaticals in the context of whether they can be considered investment contracts. Before reaching that issue, though, we look to whether the investments offered by Defendants can be considered "notes."

1. "Notes"

The evidence in this case establishes that Defendants provided investors with letters outlining the maturity date of their investments, an annual rate of return, and the total value of their investment at the maturity date. Pl.'s App. at 13, 268, 272-77, 296-97. The Supreme Court has held that the definition of "note" may "be viewed as a relatively broad term that encompasses instruments with widely varying characteristics." Reves v. Ernst Young, 494 U.S. 56, 69 (1990). As with the term "security," the definition of "note" looks to the economic reality and surrounding circumstances of a transaction. "If the seller's purpose is to . . . finance substantial investments and the buyer is interested primarily in the profit the note is expected to generate, the instrument is likely to be a `security'." Id. at 66.

The Supreme Court has outlined the defining aspects of "notes" under the securities laws and adopted the "family resemblance" test articulated by the Second Circuit Court of Appeals. Reves, 494 U.S. at 64-65. This test begins with the presumption that every note is a security. Id. at 65. This is a rebuttable presumption and the Second Circuit listed several notes that are not securities, including "the note delivered in consumer financing, the note secured by a mortgage on a home, the short-term note secured by a lien on a small business or some of its assets, the note evidencing a `character' loan to a bank customer, short-term notes secured by an assignment of accounts receivable, or a note which simply formalizes an open-account debt incurred in the ordinary course of business." Id. at 65 (quoting Exchange Nat. Bank of Chicago v. Touche Ross Co., 544 F.2d 1126, 1138 (2d Cir. 1976)). The notes here do not fall into any one of these excluded categories.

Once the court determines that a note is not one specifically excluded, the Second Circuit provided guidance for what sorts of notes would be included in the definition of "security." The Supreme Court, adopting the Second Circuit's reasoning, set out four factors to examine when determining if a specific note is a security.

First, we examine a transaction to assess the motivations that would prompt a reasonable seller and a buyer to enter into it. If the seller's purpose is to raise money for the general use of a business enterprise or to finance substantial investments and the buyer is interested primarily in the profit the note is expected to generate, the instrument is likely to be a "security". . . . Second, we examine the plan of distribution of the instrument to determine whether it is an instrument in which there is common trading for speculation or investment. Third, we examine the reasonable expectations of the investing public: The Court will consider instruments to be "securities" on the basis of such public expectations, even where an economic analysis of the circumstances of the particular transaction might suggest that the instruments are not "securities" as used in that transaction. Finally, we examine whether some factor such as the existence of another regulatory scheme significantly reduces the risk of the instrument, thereby rendering application of the Securities Act unnecesssary.

Following this test, it seems clear that the notes sold by Defendants to investors are "securities" as described by the Supreme Court. The buyers expected a profit from their investment in the form of interest. The investments sold by Defendants were advertised and sold in multiple states and were regarded by the customers as investments. Also, the expectations of the investors clearly support a finding that these notes are securities. The investors here bought into Defendants' sales pitch because they were offered a fixed interest rate, a determined maturity date, and a maturity value at the outset of their investment. Although the true nature of the transaction was not consistent with investors' expectations, the buyers clearly bought what they believed to be interest-generating notes. Finally, there is no system in place to regulate the sale of the investments offered by Defendants. Thus, for all of these stated reasons, the Court finds that the investments offered by Defendants are notes that can be considered securities pursuant to the Supreme Court's guidance in Reves.

2. "Investment Contracts"

The SEC argues in the alternative that these investments which the Defendants sold are covered by the securities laws because they fall within the definition of investment contracts as provided by securities law. The Supreme Court has found that an investment contract is a security if the investors (1) expect profits from (2) a common enterprise that (3) depends upon the efforts of others. SEC v. W.J. Howey Co., 328 U.S. 293, 298-99 (1946).

Using this standard, the District of Columbia Court of Appeals held that a primary viaticals market does not constitute the sale of securities. SEC v. Life Partners, Inc., 878 F.3d at 537. Defendants rely heavily on the holding in Life Partners in opposing the SEC's application for preliminary injunction.

Life Partners involved the sale of fractional interests in viaticals from the issuer of the viatical settlement agreements to individual investors. In applying the test from Howey, the D.C. Circuit found that the sale of viaticals in that case did meet the expectation of profits and common interest requirements but did not "depend on the efforts of others." Id. at 308-11. In reaching this conclusion, the court pointed to the fact that buyers were not dependent upon Life Partners to perform any post-purchase management of the investment. Specifically, the Court pointed to three aspects of the sale of the viatical shares that undermined the SEC's argument that the sale was a sale of securities. First, investors did not seek to liquidate their investments in viaticals prior to the receipt of death benefits. Id. at 312. Second, Life Partners did not assist the investor in a way that added value to the investment contract. Id. Finally, Life Partners clearly warned potential investors that "viatical transactions are not liquid assets. There is no established market for the resale of such policies. They should be purchased only by persons who are willing and able to hold the policy until it matures. . . . There is no guarantee that any policy can be resold, or that resale, if it occurs, will be at any given price." Id., (emphasis added). Therefore, the court found that none of the post-purchase services could meaningfully affect the profit of the investments. Id.

If Defendants had been engaged in sales similar to those by Life Partners, then it would be more likely that this Court would find that the investments were not investment contracts. However, the SEC distinguishes Defendants' actions from the defendants in Life Partners based upon the post-purchase activities that Defendants engaged in. In dispute is the third prong of the Howey test, the activities undertaken by the seller that create a situation where any profit created "depends on the efforts of others." The instant case can be distinguished from Life Partners, and there is other case law supporting the finding that Defendants' efforts did create profit in such a way that the investments sold by Defendants should be considered investment contracts.

As previously stated, "[t]he definitions of `security' are broad and ambiguous; they allow courts to use a flexible approach `to meet the countless and variable schemes devised by those who seek the use of money of others on the promise of profits.'" Gary Plastic Packaging Corp. v. Merrill Lynch, 756 F.2d 230, 238 (2d Cir. 1985) (quoting Howey, 328 U.S. at 299). The facts of Gary Plastic are somewhat analogous to the instant case. In that case, Defendant Merrill Lynch advertised certificates of deposit (CDs) to prospective investors through a special program that included a secondary market for CDs which gave the investment some degree of liquidity. Id. at 232. Defendant did create such market, and performed some post-purchase services. Id. Defendant also received a commission from the banks who issued the CDs, but never disclosed this commission to their customers. Id. at 235.

The Second Circuit Court of Appeals found that although the initial sale of CDs is not governed by securities laws, the creation of a secondary market, the post-purchases services and guarantees, and the creation of liquidity all lead to the conclusion that the secondary sale of CDs was indeed the sale of securities. Id. at 240. In the instant case, Defendants created a secondary market providing some liquidity for the fractional viatical shares that were sold. When Tyler began buying viaticals in his own name and selling fractional shares of the viaticals, he was giving the investments he sold the liquidity he promised. Defendants' activities created a market for the shares of viaticals that would not have otherwise existed.

The court in Gary Plastic found that Merrill Lynch's post-purchase services and creation of a secondary market satisfied the third prong of the Howey test. The court reached this conclusion by finding that investors' decisions to invest were premised upon Merrill Lynch's promises, knowledge, and skill. Id. at 240-41. Because of the additional actions by Merrill Lynch, the court found that the sale of CDs through this special program was "wholly different" from the sale of ordinary CDs. Id. at 241.

In this case, the investors relied on Defendants' misrepresentations, not on their reputation or knowledge of any post-purchase services. In fact, some were not even aware that they were buying fractions of viaticals, and they did not know that it was Defendants' activities that were creating the secondary market and the liquidity that Tyler promised.

Despite this distinction, the Court still finds that the investments sold by Defendants are investment contracts. The Supreme Court has repeatedly held that the term "security" should be defined broadly and should be based upon the economic reality of a transaction. In determining what instruments are covered by the securities laws, "we are not bound by legal formalisms, but instead take account of the economics of the transaction under investigation. Congress' purpose in enacting the securities laws was to regulate investments, in whatever form they are made and by whatever name they are called." Reves, 494 U.S. at 61 (emphasis in original). Even if the investors did not know or rely upon Defendants' post-purchase activities in creating a secondary market to provide liquidity to the investment, investors relied upon Defendants' promises that such liquidity was available. Examining the substance of the transaction, the Court finds that Defendants' sale of investments must be considered investment contracts.

Therefore, the Court holds that Defendants sold notes and investment contracts. Because both are included within the definition of "security," application of the federal securities laws is appropriate.

B. Defendants' Scienter

The SEC is required to establish scienter as an element of a civil enforcement action to enjoin violations of § 17(a)(1) of the 1933 Act, § 10(b) of the 1934 Act, and Rule 10b-5 promulgated under that section of the 1934 Act. Aaron, 446 U.S. at 701-02. Scienter has been defined by the Supreme Court as "a mental state embracing intent to deceive, manipulate, or defraud." First Fin. Group of Texas, 645 F.2d at 435 n. 9 (quoting Ernst Ernst v. Hochfelder, 425 U.S. 185, 193 n. 12 (1976)).

One method of demonstrating scienter is to prove that defendants acted consciously or with severe recklessness. SEC v. Brooks, No. Civ.A. 3:99-CV-1326-D, 1999 WL 493052, *2 (N.D. Tex. July 12, 1999) (Fitzwater, J); see also Coates v. Heartland Wireless Communications, Inc., 26 F. Supp.2d 910, 918 (N.D. Tex. 1998).

Based on the evidence presented, using either a preponderance of the evidence or a clear and convincing standard, the Court finds that Defendants, acting with scienter, made material misstatements and omissions in the sale of securities, in violation of the securities laws. The evidence clearly shows that Tyler made misrepresentations based upon false guarantees about the investments' liquidity, interest rates, and "fixed" maturity dates. While soliciting investments, Tyler also failed to disclose his commissions and the true nature of the viatical investments. Moreover, based on the several declarations of Defendants' victims, the Court finds these misrepresentations and omissions were material because the victimized investors would not have invested had they known the truth. Finally, the Court finds that Defendants acted with scienter. These misrepresentations and omissions were unquestionably deliberate and clearly intentional. Thus, the Court concludes that Defendants' actions adequately demonstrate an intentional pattern to deceive. See First Financial Group, 645 F.2d at 435-36.

C. Defendants' Motion to Suppress

Defendants also argue that some of the evidence provided by the SEC was illegally seized by agents of the State Securities Board of Texas without a search warrant. Assuming arguendo that the evidence was seized illegally, the Supreme Court has never applied the exclusionary rule to exclude evidence from a civil proceeding, federal or state. United States v. Janis, 428 U.S. 433, 447 (1976). Therefore, this argument does not undermine the Plaintiff's application for preliminary injunction.

D. Appointment of a Temporary Receiver and Motion to Freeze Defendants' Assets

Defendants oppose Plaintiff's motion for the appointment of a temporary receiver and to freeze Defendants' assets. Defendants argue that the Court should deny these motions because Defendants are currently in bankruptcy proceedings in U.S. Bankruptcy Court in Fort Worth, Texas.

The SEC points to SEC v. First Financial Group of Texas for support in appointing a receiver even where a bankruptcy proceeding is ongoing. In that case, the Fifth Circuit allowed for a receiver despite the defendant's pending bankruptcy. The Court of Appeals held that the need for a receiver can continue where a court has enjoined a party due to its fraudulent actions. That is,

[t]he appointment of a receiver is a well-established equitable remedy available to the SEC in its civil enforcement proceedings for injunctive relief. The district courts s exercise of its equity power in this respect is particularly necessary in instances in which the corporate defendant, through its management, has defrauded members of the investing public; in such cases, it is likely that, in the absence of the appointment of a receiver to maintain the status quo, the corporate assets will be subject to diversion and waste to the detriment of those who were induced to invest in the corporate scheme and for whose benefit, in some measure, the SEC injunctive action was brought.

Defendants argue that the situation in First Financial was distinct because it involved an involuntary bankruptcy proceeding; they contend that because they have entered bankruptcy proceedings voluntarily that there is less need for a receiver. The Court finds that despite the bankruptcy filing, it is still proper to appoint a receiver and freeze Defendants' assets. Indeed, because Defendants themselves filed for bankruptcy and are debtors-in-possession, there is even greater reason to appoint a receiver to ensure that no further diversion of Defendants' assets occurs.

E. Conclusion

Therefore, the Court GRANTS Plaintiff's Application for Issuance of Preliminary Injunction, and Plaintiff's Motions for Orders Freezing Assets, Requiring an Accounting, Requiring Preservation of Documents, and Authorizing Expedited Discovery. The Court GRANTS Plaintiff's Application for Appointment of Receiver by separate order.

III. Preliminary Injunction

THEREFORE, IT IS HEREBY ORDERED THAT:

1. Defendants, their officers, directors, agents, servants, employees, attorneys, and all other persons in active concert or participation with them, who receive actual notice of this Order by personal service or otherwise, and each of them, be and hereby are restrained and enjoined from violating Section 5(a) of the Securities Act, 15 U.S.C. § 77e(a), directly or indirectly, by:

A. making use of any means or instruments of transportation or communication in interstate commerce or of the mails, to sell a security through the use or medium of a prospectus or otherwise; or

B. carrying or causing to be carried through the mails or in interstate commerce, by any means or instruments of transportation, a security for the purpose of sale or for delivery after sale where no registration statement is in effect as to the security.

2. Defendants, their officers, directors, agents, servants, employees, attorneys, and all other persons in active concert or participation with them, who receive actual notice of this Order by personal service or otherwise, and each of them, be and hereby are restrained and enjoined from violating Section 5(c) of the Securities Act, 15 U.S.C. § 77e(c), directly or indirectly, by making use of any means or instruments of transportation or communication in interstate commerce or of the mails to offer to sell or offer to buy through the use or medium of a prospectus or otherwise any security, where no registration statement has been filed as to the security, or while the registration statement has been filed as to the security, or while the registration statement is the subject of a refusal order, a stop order, or (prior to the effective date of the registration statement) any public proceeding or examination under Section 8 of the Securities Act.

3. Defendants, their officers, directors, agents, servants, employees, attorneys, and all other persons in active concert or participation with them, who receive actual notice of this Order by personal service or otherwise, and each of them, be and hereby are restrained and enjoined from violating Section 17(a) of the Securities Act, 15 U.S.C. § 77q(a), directly or indirectly, in the offer or sale of any security by the use of any means or instruments of transportation or communication in interstate commerce or by the use of the mails:

A. to employ any device, scheme, or artifice to defraud; or

B. to obtain 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 statement(s) made, in the light of the circumstances under which they were made, not misleading; or

C. to engage in any transaction, practice, or course of business which operates or would operate as a fraud or deceit upon the purchaser.

4. Defendants, their officers, directors, agents, servants, employees, attorneys, and all other persons in active concert or participation with them, who receive actual notice of this Order by personal service or otherwise, and each of them, be and hereby are restrained and enjoined from violating Section 10(b) of the Exchange Act or Rule 10b-5, 15 U.S.C. § 78j(b) and 17 C.F.R. § 240.10b-5, directly or indirectly, in connection with the purchase or sale of any security, by making use of any means or instrumentality of interstate commerce, or of the mails, or of any facility of any national securities exchange:

A. to use or employ any manipulative or deceptive device or contrivance in contravention of the rules and regulations promulgated by the Commission; or

B. to employ any device, scheme, or artifice to defraud; or

C. to make any untrue statement of a material fact or omit 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

D. to engage in any act, practice, or course of business which operates or would operate as a fraud or deceit upon any person.

5. Defendants, their officers, directors, agents, servants, employees, attorneys, and all other persons in active concert or participation with them, who receive actual notice of this Order by personal service or otherwise, and each of them, be and hereby are restrained and enjoined from, directly or indirectly, making any payment or expenditure of funds belonging to or in the possession, custody or control of Defendants, or effecting any sale, gift, hypothecation, or other disposition of any asset belonging to or in the possession, custody, or control of Defendants, pending a showing to this Court that Defendants have sufficient funds or assets to satisfy all claims arising out of the violations alleged in the Commission's Complaint or the posting of a bond or surety sufficient to assure payment of such claim.

6. Relief Defendants, their officers, directors, agents, servants, employees, attorneys, and all other persons in active concert or participation with them, who receive actual notice of this Order by personal service or otherwise, and each of them, be and hereby are restrained and enjoined from, directly or indirectly, making any payment or expenditure of funds belonging to or in the possession, custody or control of Relief Defendants, pending a showing to this Court that the Relief Defendants have sufficient funds or assets to satisfy all claims arising out of the violations alleged in the Commission's Complaint or the posting of a bond or surety sufficient to assure payment of such claims.

7. All banks, savings and loan associations, savings banks, trust companies, securities broker-dealers, commodities dealers, investment companies, other financial or depository institutions, and investment companies that hold one or more accounts in the name, on behalf or for the benefit of Defendants are hereby restrained and enjoined, in regard to any such account, from engaging in any transaction in securities (except liquidating transactions necessary to comply with a court order) or any disbursement of funds or securities pending further order of this Court.

8. All banks, savings and loan associations, savings banks, trust companies, securities broker-dealers, commodities dealers, investment companies, other financial or depository institutions, and investment companies that hold one or more accounts in the name, on behalf or for the benefit of Defendants are hereby restrained and enjoined, with respect to any such account, from engaging in any transaction in securities (except liquidating transactions necessary to comply with a court order) or any disbursement of funds or securities pending further order of this Court.

9. All other individuals, corporations, partnerships, limited liability companies, and other artificial entities are hereby restrained and enjoined from disbursing any funds, securities, or other property obtained from Defendants or Relief Defendants without adequate consideration.

10. Defendants and Relief Defendants are hereby required to make an interim accounting, under oath, within ten (10) days of the issuance of this order: (1) detailing all monies and other benefits which each received, directly or indirectly, as a result of the activities alleged in the Complaint (including the date on which the monies or other benefit was received and the name, address, and telephone number of the person paying the money or providing the benefit), (2) listing all current assets wherever they may be located and by whomever they are being held (including the name and address of the holder and the amount or value of the holdings), and (3) listing all accounts with any financial or brokerage institution maintained in the name of, on behalf of, or for the benefit of the Defendants or Relief Defendants (including the name and address of the account holder and the account number) and the amount held in each account at any point during the period from May 1998, through the date of the accounting.

11. Defendants and Relief Defendants, their officers, directors, agents, servants, employees, attorneys, and all other persons in active concert or participation with them, including any bank, securities broker-dealer, or any financial or depository institution, who receive actual notice of this order by personal service or otherwise are hereby restrained and enjoined from destroying, removing, mutilating, altering, concealing, or disposing of, in any manner, any books and records owned by or pertaining to the financial transactions and assets of Defendants or Relief Defendants or any entities under their control.

12. The United States Marshal in any judicial district in which Defendants or Relief Defendants do business or may be found, or in which any Receivership Asset may be located, is authorized and directed to make service of process at the request of the Commission.

13. The Commission is authorized to serve process on, and give notice of these proceedings and the relief granted herein to, the Defendants and Relief Defendants by U.S. Mail or by any other means authorized by the Federal Rules of Civil Procedure.

14. Expedited discovery may take place consistent with the following:

A. Any party may notice and conduct depositions upon oral examination and may request production of documents or other things for inspection or copying, or both, from parties prior to the expiration of thirty (30) days after service of a summons and Plaintiff Commission's Complaint upon Defendants.

B. All parties shall comply with the provisions of Federal Rule of Civil Procedure 45 regarding issuance and service of subpoena unless the person designated to provide testimony or to product documents and things agrees to provide the testimony or to produce the documents or things without the issuance of a subpoena or to do so at a place other than one at which testimony or production can be compelled.

C. Any party may notice and conduct depositions upon oral examination subject to minimum notice of seventy-two (72) hours.

D. All parties shall produce for inspection and copying all documents and things that are requested within seventy-two (72) hours of service of a written request for those documents and things.

E. All parties shall serve written responses to written interrogatories within seventy-two (72) hours after service of the interrogatories.

15. All parties shall serve written responses to any other party's request for discovery and the interim accountings to be provided by Defendants and Relief Defendants by delivery to Plaintiff Commission addressed as follows:

and by delivery to other parties at such address(es) as may be designated by them in writing. Such delivery shall be made by the most expeditious means available, including facsimile machine.

It is so ordered.