Yes, but there is an obligation to provide complete disclosure. Trotting out a dog and pony show to investors who probably don't read the SEC filings, while omitting certain disclosures in those SEC filings, in my mind, is inappropriate and probably illegal. Bad management and poor decisions certainly aren't again the law. Disguising those poor decisions and bad management by carefully omitting certain disclosures, does rise to the level of stock manipulation and fraud. Look, this $36MM in Bergamo/Autilion financing has allowed the company to raise several million dollars, which, without the lie, would not have been achievable. Vsta's management is hiding behind the idea that if someone signs a statement that they are an accredited investor, they (Vsta) have met their obligations under the law. I don't think that is the case, Taking money from investors without a certain amount of due diligence (like reviewing their tax returns and performing other third party confirmations) while concealing certain information, rises to the level of fraud. The SEC has, over the past five years or so, endeavored to end these sorts of scams. Vsta cannot hide behind "we did this and we did that and we disclosed that". The end result is you have someone selling snake oil as the miracle cure for everything, knowing they are doing so, and also knowing that the product is toxic. You are right in stating that the Board has completely abrogated their responsibilities. Good thing for VSTA management and directors that VSTA has managed to finance their officers and directors liability insurance. Question is, will they have the cash to pay the financing arrangement? And if they can't pay their insurance, then those officers and directors will be at risk,financially, for defending any law suites filed. I am surprised that their auditors haven't withdrawn from their engagement and association with this entity, but then, how many white collar executives have paid any price since 2007 for contravening the law? Muddle through, show your work papers to anyone in authority who asks and you can get away with murder.
There is no financing, there is no $36MM, there is no product, there is no future. Oh, and if there are allegations of fraud, their officers and directors insurance carrier will probably elect to decline any assistance.
