The opinion of the court was delivered by: Ricardo M. Urbina United States District Judge
MEMORANDUM OPINION GRANTING THE PLAINTIFF'S MOTION FOR DEFAULT JUDGMENT AND FOR A PERMANENT INJUNCTION
This matter comes before the court on the plaintiff's motion for default judgment pursuant to Federal Rule of Civil Procedure 55(b)(2). The plaintiff, the Securities and Exchange Commission ("SEC"), brings this action against four individuals who engaged in a "pump-and-dump" market manipulation scheme in violation of the Securities Act of 1933 ("Securities Act"), 15 U.S.C. § 77q(a), the Securities and Exchange Act of 1933 ("Exchange Act"), 15 U.S.C. § 78j(b), and 17 C.F.R. § 240.10b5 ("Rule 10b-5"). The plaintiff served the defendants with a copy of the complaint on March 27, 2007, and to date the defendants have not responded to the complaint. Accordingly, the court grants the plaintiff's motion for a default judgment and permanent injunction.
II. FACTUAL & PROCEDURAL BACKGROUND
The plaintiff commenced this action on March 6, 2007, alleging that between December 21, 2005, and December 4, 2006, the defendants, using a number of sub-accounts held at Pinnacle Capital Markets LLC ("Pinnacle") and titled in the name of relief defendant JSC Parex Bank ("Parex"), traded in the securities of issuers whose share prices were being manipulated through online intrusions and engaged in unauthorized trading in the online brokerage accounts of unsuspecting customers at U.S. broker-dealers. See generally Compl. On March 6, 2007, the court granted the plaintiff's motion to serve the defendants through Pinnacle and Parex. See Order (Mar. 6, 2007). In compliance with the court's order, the plaintiff served Parex with copies of the summons and complaint by sending copies of those documents via e-mail and Federal Express to Pinnacle's president, Michael A. Paciorek. Decl. of Att'y Kenneth J. Guido ("Guido Decl.") ¶ 6. On March 7, 2007, Paciorek forwarded the summons and complaint to Parex by electronic mail and Federal Express with instructions to serve the documents upon the defendants. Id. ¶ 7. Parex identified the defendants as Anna Gorelova, Oleg Kopylov, Sergey Kovalev and Dmitriy Philin and certified that on March 21, 2007, it served them with the summons and complaint. Id. ¶ 8; see also id., Ex. D.
On March 23, 2007, the court issued an order granting the plaintiff's unopposed motion for a preliminary injunction prohibiting the defendants from committing further violations of the Securities Act and the Exchange Act, freezing the defendants assets, providing for expedited discovery, preventing the destruction of evidence and ordering the defendants to provide an accounting for the transactions described in the complaint. See generally Order (Mar. 23, 2007). The court also concluded that it had subject matter jurisdiction over this action, personal jurisdiction over the defendants and that the defendants have been served with process. Id. at 2-3.
Because the defendants failed to appear, plead or otherwise defend themselves in this action, the Clerk of the Court entered default against those defendants on August 4, 2008. Clerk's Entry of Default (Aug. 4, 2008). The plaintiff filed this motion for a default judgment and permanent injunction on October 26, 2009. See generally Pl.'s Mot. Despite being served with a copy of this motion, the defendants have failed to respond.
A. Legal Standard for Entry of Default Judgment Under Rule 55(b)(2)
A court has the power to enter default judgment when a defendant fails to defend its case appropriately or otherwise engages in dilatory tactics. Keegel v. Key W. & Caribbean Trading Co., 627 F.2d 372, 375 n.5 (D.C. Cir. 1980). Rule 55(a) of the Federal Rules of Civil Procedure provides for entry of default "[w]hen a party against whom a judgment for affirmative relief is sought has failed to plead or otherwise defend as provided by these rules." FED. R. CIV. P. 55(a).
Upon request of the party entitled to default, Rule 55(b)(2) authorizes the court to enter against the defendant a default judgment for the amount claimed and costs. Id. 55(b)(2).
Because courts strongly favor resolution of disputes on their merits, and because "it seems inherently unfair" to use the court's power to enter judgment as a penalty for filing delays, modern courts do not favor default judgments. Jackson v. Beech, 636 F.2d 831, 835 (D.C. Cir. 1980). Accordingly, default judgment usually is available "only when the adversary process has been halted because of an essentially unresponsive party . . . [as] the diligent party must be protected lest he be faced with interminable delay and continued uncertainty as to his rights." Id. at 836 (quoting H. F. Livermore Corp. v. Aktiengesellschaft Gebruder Loepfe, 432 F.2d 689, 691 (D.C. Cir. 1970)).
Default establishes the defaulting party's liability for the well-pleaded allegations of the complaint. Adkins v. Teseo, 180 F. Supp. 2d 15, 17 (D.D.C. 2001); Avianca, Inc. v. Corriea, 1992 WL 102999, at *1 (D.D.C. Apr. 13, 1992); see also Brock v. Unique Racquetball & Health Clubs, Inc., 786 F.2d 61, 65 (2d Cir. 1986) (noting that "default concludes the liability phase of the trial"). Default does not, however, establish liability for the amount of damage that the plaintiff claims. Shepherd v. Am. Broad. Cos., Inc., 862 F. Supp. 486, 491 (D.D.C. 1994), vacated on other grounds, 62 F.3d 1469 (D.C. Cir. 1995). Instead, "unless the amount of damages is certain, the court is required to make an independent determination of the sum to be awarded." Adkins, 180 F. Supp. 2d at 17; see also Credit Lyonnais Secs. (USA), Inc. v. Alcantara, 183 F.3d 151, 155 (2d Cir. 1999) (stating that the court must conduct an inquiry to ascertain the amount of damages with reasonable certainty). The court has considerable latitude in determining the amount of damages. Jones v. Winnepesaukee Realty, 990 F.2d 1, 4 (1st Cir. 1993). To fix the amount, the court may conduct a ...