QSGI, Inc.(fka QSGI)

[jaxstraw]

30. As a result of the conduct described above, Sherman violated
Section 10(b) of the Exchange Act and Rule 10b-5 there under, which prohibits fraudulent conduct in connection with the purchase or sale of any security involving:

a) the use of any device, scheme, or artifice to defraud;

b) the making of material misrepresentations or omissions; and

c) any act, practice, or course of business which operates or would operate as a fraud or deceit upon any person.