Securities fraud under Rule 10b-5, a plaintiff must establish the following: (1) material misrepresentation or omission by the defendant; (2) intent to defraud or recklessness; (3) a connection between the misrepresentation or omission and the purchase or sale of a security; (4) reliance upon the misrepresentation or omission (transaction causation); (5) economic loss; and (6) loss causation. In this case, you both have clearly committed fraud because: (i) GRAS made a material misrepresentation as to the status of the APA; and (ii) you both had the intent to defraud because you decided to ignore the Asset Purchase Agreement which Heineman executed and then filed an 8-K announcing an unauthorized LOI Between GRAS and Ngen; (iii) the misrepresentation by Heineman was made as an inducement for the Ngen to purchase the securities of GRAS; (iv) the Company relied upon the misrepresentation from GRAS as inducement to enter into the Merger transaction; (v) the Company suffered substantial economic loss in the form of loss of investment capital needed for operations, enhanced regulatory and accounting costs, loss of goodwill, equity dilution, declines in share price, and the loss of good will as a result of GRAS’s fraud; and (vi) these losses are attributable to the fraudulent actions of you both.
The penalty for willfully violating the Securities Act, for which you are learly culpable, is severe and can result in: (i) a fine; and (ii)
imprisonment for up to Twenty Five Years (25 years) in a Federal
penitentiary. 18 USC § 1346(2) of the Securities Act of 1933 (the
“Securities Act”) provides the following:
“Whoever knowingly executes, or attempts to execute, a scheme or
artifice …
Do your own DD I am not an advisor. All post are IMO.
