Element Global Inc (ELGL)

[PennyPimpr]

GREAT READ
Re: Poor Old Ms. Dolores CASS may she R.I.P. Sadly, Smith Barney, Composite Holdings and Ms. Cass all long gone.... not Merle. Any of this stuff sound familiar?

Delores A. Cass, individually
et al ........,Plaintiff
vs.
Composite Industries of America, Inc.
CS&S Enterprises, and Merle A. Ferguson, Defendants.

FACTS COMMON TO ALL COUNTS
7. In December 1997 Plaintiff was contacted by defendant Ferguson,who stated and represented that he was the president of Composite Industries. Ferguson represented that Composite Industries had acquired or otherwise possessed rights to certain technology developed by Zawada Technologies for the production of “Z-Mix,” a building material made from landfill waste products. Plaintiff earlier had spoken with Joseph Zawada, founder of Zawada Technologies.

8. Beginning in December 1997, and continuing through June 1998, Plaintiff was induced by Ferguson to purchase shares of stock in Composite Industries. During that time period Plaintiff purchased approximately 1.3 million ihares of Composite Industries stock for an aggregate amount of $750,000.00.
9. In order to induce Plaintiff’s purchase of stock, defendant Ferguson md Composite Industries made untrue statements of material fact, omitted to itate material facts necessary in order to make the statements made, in the light of the circumstances under which they were made, not misleading, and otherwise zmployed a device, scheme or artifice to defraud, including but not limited to the hollowing acts, conducts or omissions:
(a) In December 1997, Plaintiff agreed and intended to purchase Composite Industries stock for the amount of twenty thousand dollars. Plaintiff net with Ferguson in Billings, Montana and delivered a check for that purpose. However, Ferguson represented that he could work out a “better deal” for Plaintiff. At that meeting and subsequently, to induce Plaintiff to purchase additional
shares, Ferguson represented that Plaintiff had a unique opportunity to purchase ” 500,000 shares at a price of eighty cents per share, that a public offering of Composite Industries stock was imminent, and that, upon the public offering, the stock would have a value greatly in excess of one dollar a share.[color=red][/color] Ferguson further represented that Composite Industries had an offer to merge with an entity known as American Colloid, whose shares were trading at $13.50 per share, and that, pursuant to the merger, Plaintiff could expect to receive one share of American Colloid for every three shares of Composite Industries that she purchased. Based m these and other promises and inducements, Plaintiff agreed to purchase 300,000 shares for the amount of $240,000.00. @I Ferguson travelled to Billings, Montana in January 1998 to accept ?laintiff’s payments for purchase of Composite Industries’ shares. Plaintiff ,repared two checks in the aggregate amount of $220,000.00. Ferguson called later in the day to request that Plaintiff issue five checks, three in the amount of 640,000.00, and two in the amount of $50,000.00. Ferguson further instructed ‘laintiff to make the checks out to CS&S Enterprises. Plaintiff delivered the checks to Ferguson as instructed. Plaintiff also permitted Ferguson to intercept
md convert her earlier payment, in the amount of $20,000.00, for purchase of Composite Industries shares. At that time Ferguson delivered to Plaintiff a handwritten note, purportedly for a right to purchase 200,000 additional shares at a price of eighty cents per share, to be exercisable on the eve of the public offering which Ferguson again represented to be imminent.
(4 Some weeks later Plaintiff contacted Ferguson to inquire why she had: received no further word regarding the merger or public offering that Ferguson had represented to be imminent. In response, Ferguson represented that Composite Industries had elected not to go forward with either the merger or public offering, but rather the market interest in Composite Industries technology was so great the company would do better by “going it alone.” Ferguson represented that the firm of Smith Barney was interested in the imminent public offering, which was expected to yield a price of no less than ten dollars per share.ccFerguson further represented:
(i) He had been and was involved in meetings with high level officials from China, Germany, Canada, and Mexico regarding the company’s technology, and that global interest was strong;
(ii) He had travelled to China twice, and also to Mexico and the Philippines in furtherance of global interest in the company’s technology;
(iii) Two multi-billion dollar public housing contracts, one gl~obal and one in the United States, were nearing completion;
(iv) He had plans to meet with representatives of a North Dakota Indian tribe and two United States Senators to discuss contracts for construction of 29,000 homes on a reservation;
(v) He was working on deals for construction of 800,000 homes in Africa;
(vi) Plaintiff was not at risk of losing any money on her investments in Composite Industries, but rather a substantial return was guaranteed.
Plaintiff also was provided from tune to time with correspondence from
Ferguson, in which, among other things, he made reference to “public offering,” and “options for merging with several national and international companies.”
(4 In March 1998 Ferguson again contacted Plaintiff to induce purchase ‘,rf additional shares of Composite Industries. Ferguson stated and represented that the sons of Joseph Zawada were prepared to sell some of their shares of-zomposite Industries stock, and that Ferguson and Plaintiff had unique opportunity to purchase 1 million shares at fifty cents per share. Ferguson stated md represented that when the company went public, which was sure to occur in the next three to four weeks, the shares would be worth at least $10 per share. However, Ferguson said Plaintiff should not make her check out to the Zawada brothers, but rather to CS&S Enterprises. In reliance on these and other promises abd representations, Plaintiff remitted payment of $500,000.00, payable to CS&S Enterprises, for purchase of one million shares in March 1998.
(e) On or about April 1998 Ferguson contacted Plaintiff with a proposal or purchase of a “company name.” Ferguson represented that, in order for the promised public offering to go forward, a name was needed, and that for the amount of $700,000.00, the name “Affordable Homes” could be purchased. Ferguson proposed that he and Plaintiff join together in purchase of the name. When Plaintiff stated that she had already invested all her money in Composite Industries, Ferguson assured her that the significant returns to be made upon the public offering would mean she would never have to worry, and that an investment return would be enhanced if the “name rights” were first acquired.
Ferguson further represented that “Affordable Homes” was on the verge of going Public, which would result in significant return on the “name” investment. On the belief the investment was necessary in order to preserve her earlier investments, Plaintiff agreed.
(0 In late spring 1998 Plaintiff entered the hospital for knee replacement surgery, and remained hospitalized for about six weeks. While Plaintiff was in the hospital, she spoke with Ferguson, who represented that he had been in discussions with the “auditors,” and that the auditors had indicated he was $250,000.00 “short.” [color=red][/color]Ferguson proposed that Plaintiff 250,000.00, further to purchase of the “Affordable Homes” name. Ferguson Again represented that upon completion of the imminent public offering the amounts invested by Plaintiff would be returned, plus much more. In the belief the further payments were necessary to preserve her earlier investment, and while still in the hospital, Plaintiff caused annuities to be cashed, at significant penalty, and thereafter the amount of $250,000.00 was remitted by Plaintiff to Defendants.
64 Although Plaintiff had remitted substantial sums to Ferguson for purchase of shares of Composite Industries during the period January-April 1998, my August 1998 Plaintiff still had not received share certificates. Nor had Plaintiff ‘received anything in confirmation of her purported purchase of “name rights.”
Ferguson repeatedly promised and represented that he intended to travel to Montana personally to deliver the shares. On several occasions Ferguson told Plaintiff he had plans to deliver the shares, only to later cancel on some pretext. When Plaintiff inquired why the public offering had not yet occurred, Ferguson stated and represented the company was still moving forward, but that delays were inevitable.

See link (Law library Montana) http://www.siliconinvestor.com/readmsg.aspx?msgid=16323159