DBMM going to sue in Federal Court for reasons below.....to the tune of $600,000,000+ it looks like to me for matters that the little county court can't rule on......and Asher was previously fined $1.4M by the SEC for this same conduct.....WHOOPS.....
SUPREME COURT OF THE STATE OF NEW YORK
COUNTY OF NASSAU
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ASHER ENTERPRISES, INC.,
Plaintiff,
-againstDIGITAL
BRAND MEDIA & MARKETING GROUP,
INC. and LINDA PERRY,
Defendants.
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Index ? 600717
VERIFIED
ANSWER WITH
COUNTERCLAIM
Hon. _____________
Defendants, DIGITAL BRAND MEDIA & MARKETING GROUP, INC. and
LINDA PERRY, by and through their attorneys, MARSHAL SHICHTMAN &
ASSOCIATES, P.C., hereby answer the allegations set forth in Plaintiff’s complaint as
follows:
1. Deny information sufficient to form a belief as to the allegations set forth
in paragraphs 12, 15, 18 and there deny same.
2. Deny the truth of the allegations set forth in paragraphs 7, 9, 11, 13, 16,
19, 20, 21, 22, 23, 25, 26, 27, 29, and 30.
3. Except to admit that Defendant DIGITAL BRAND is a Florida
corporation doing business in New York, denies the truth of the
allegations set forth in paragraph 2.
4. Except to admit that Defendant LINDA PERRY is a New York resident
and Executive Director of DIGITAL BRAND, denies the truth of the
allegations set forth in paragraph 3.
FILED: NASSAU COUNTY CLERK 05/21/2015 03:30 PM INDEX NO. 600717/2014
NYSCEF DOC. NO. 70 RECEIVED NYSCEF: 05/21/2015
Page 2 of 11
5. Except to admit that Defendant DIGITAL BRAND executed a note on or
about February 1, 2013, denies the truth of the allegations set forth in
paragraph 6.
6. Except to admit that Defendant DIGITAL BRAND executed a note on or
about April 25, 2013, denies the truth of the allegations set forth in
paragraph 8.
7. Except to admit that Defendant DIGITAL BRAND executed a note on or
about June 5, 2013, denies the truth of the allegations set forth in
paragraph 10.
8. Except to admit that Defendant DIGITAL BRAND did not file a 10Q for
the period ending November 30, 2013, denies the truth of the allegations
set forth in paragraph 14.
Affirmative Defenses
9. Plaintiff’s claims are barred by reason of its failure to state a claim upon
which relief can be granted.
10. Plaintiff’s claims are barred by reason of its own culpable conduct, bad
faith, laches and/or unclean hands.
11. Plaintiff’s claims are barred by reason of statute of frauds.
12. Plaintiff’s claims are barred by reason of lack of privity.
13. Plaintiff’s claims are barred by reason of waiver.
14. Plaintiff’s claims are barred by reason of lack of personal jurisdiction.
15. Plaintiff’s claims are barred by reason of overvaluation of Plaintiff’s
claim.
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16. Plaintiff’s claims must be dismissed in the interests of justice.
17. Plaintiff lacks standing to maintain this action.
18. Plaintiff’s claims are barred by reason of usurious interest.
19. Plaintiff’s claims are barred by reason of its own failure to adhere to the
terms of the agreements and understandings between the parties.
20. Plaintiff’s claims are barred or offset by reason of the counterclaims
interposed by the Defendants herein as follows.
COUNTERCLAIMS
Common Facts
21. Plaintiff is well known as a “lender of last resort.”
22. Plaintiff has perfected a modus operandi whereby it preys upon publicly
trading companies in dire need of operating capital, and then makes
draconian loans convertible into common stock which it has no desire to
be repaid and seeks primarily to convert into cheap stock.
23. Plaintiff sets up its “loan arrangements” so that it can convert the
borrowing company’s debt into publicly trading stock at a usurious
multiple.
24. As a result of Plaintiff’s machinations, it is able to usurp common trading
stock from the borrowing company and then, effectively, dumps it into the
market and drive the price of borrowing company’s stock into near
oblivion while enjoying substantial profit.
25. Plaintiff deployed the aforementioned scheme as against the Defendants
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herein.
26. Plaintiff, unpon information and belief, employs the scheme upon not less
than 600 other public companies.
27. The Plaintiff knowingly, intentionally and willfully advanced sums to the
Defendants which it was aware could not be repaid.
28. The Plaintiff knowingly, intentionally and willfully advanced such sums to
the Defendants upon oppressive, usurious, improper, unlawful and unfair
terms.
29. The Plaintiff knowingly, intentionally and willfully advanced such sums to
the Defendants with the understanding that they were under extreme
economic duress and would accede to any terms that the Plaintiff dictated.
30. The Plaintiff knowingly, intentionally and willfully advanced such sums
with the understanding that it would receive trading common stock well in
excess of the value of the purported loans so that it could then engage in
its illicit and detrimental trading of such stock, all to its own benefit and
all to the detriment of the Defendants.
31. The Plaintiff’s Defendantrepeatedly and persistently contacted the
Defendant’s auditor which placed the Plaintiff in the position of a de facto
fiduciary and/or an “insider” as that term is defined by the Securities
Exchange Commission.
32. Upon information and belief, Plaintiff routinely contacts auditors to
receive insider information with all of its 600 companies it works with to
obtain insider information.
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33. The Plaintiff has acted in bad faith and with unclean hands.
34. The Plaintiff has improperly, unlawfully and illicitly traded the Plaintiffs’
stock and caused its market value to plummet into virtual nothingness.
Count I -- Fraud
35. Defendants repeat and reallege all of the allegations set forth in paragraphs
1 through 34 and if same were forth more fully set forth herein.
36. Plaintiff represented to the Defendants that it would work with Defendants
to get its company “vertical” and assist with restoring it to profitability.
37. Plaintiff knew that these representations of material fact were false at the
time the representations were made.
38. The representations were in fact false as judged by its ordinary course of
business with the Plaintiffs other clients, where the Plaintiff routinely
dumps stock into public markets, effectively destroying the public market
for the respective public company.
39. The intent of making the representations was to induce the Defendant to
enter into the loan arrangements.
40. The Defendant materially relied upon Plaintiffs statements to be true,
which was a material inducement to enter into the convertible loans.
41. By so inducing Defendants to enter into the agreements complained of, it
committed fraud in the inducement.
42. Plaintiff has sold BILLIONS of the Defendant’s shares into the public
market through the employment of the convertible loans to Defendant.
During the time Plaintiff has been selling into the market, the share price
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has dropped from $0.025 to $0.0002, almost a 1,000% decline.
43. Defendant, due to its decreased share price from the sell in by Plaintiff,
has been unable to attract other lenders, attract other business,
consummate any contemplated acquisitions and/or merger as a result from
Plaintiff’s tortious activities.
44. As a result of the foregoing, the Defendants were damaged in a sum that is
greater than all courts of limited jurisdiction but not less than one million
($1,000,000.00) dollars.
45. Pursuant to the laws, rules, regulations, and case law, Defendant is entitled
to punitive damages for actions for fraud. Said punitive damages are
calculated by the incurred damage to claimant multiplied by the number of
occurrences by the respondent, which is roughly 600 other public
companies.
46. The Plaintiff is accordingly liable to the Defendants in an amount that is
greater than all courts of limited jurisdiction but not less than six hundred
million ($600,000,000.00) dollars.
Count II – Stock Manipulation, Illegal Distribution and violation of §5 of the
Securities and Exchange Act of 1933
47. Defendants repeat and reallege all of the allegations set forth in paragraphs
1 through 46 and if same were forth more fully set forth herein.
48. By reason of Plaintiff’s improper, illicit and unlawful trading of
Defendants’ publicly trading common stock, Plaintiff wrongfully,
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improperly and/or unlawfully downwardly manipulated the price of such
stock by selling into the market billions of shares of common stock.
49. By reason of Plaintiff’s improper, illicit and unlawful trading of
Defendants’ publicly trading common stock, Plaintiff wrongfully,
improperly and/or unlawfully engaged in and/or abetted the illegal
distribution of such stock by selling in vast quantities of stock into the
market, in aggregate constituting a distribution by selling newly issued
stock directly into the market and Plaintiff is not registered to do
underwriting.
50. Defendant is in the class sought to be protected by §5 of the Securities and
Exchange Act of 1933.
51. As a result of the foregoing, the Defendants were damaged in a sum that is
greater than all courts of limited jurisdiction but not less than one million
($1,000,000.00) dollars.
52. The Plaintiff is accordingly liable to the Defendants in an amount that is
greater than all courts of limited jurisdiction but not less than one million
($1,000,000.00) dollars.
Count III – Tortious Interference
53. Defendants repeat and reallege all of the allegations set forth in paragraphs
1 through 52 and if same were forth more fully herein.
54. By reason of Plaintiff’s de facto fiduciary status, Plaintiff was in a position
to directly interfere with and/or otherwise influence Defendants’ various
contractual, representation and/or professional relationships by making the
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Defendant’s stock remarkably unappealing to potential business partners
and creditors.
55. Plaintiff knowingly, intentionally and willfully exploited its unique
position and adversely affected Defendants’ above described relationships,
again to Plaintiff’s advantage and to Defendants’ detriment.
56. As a result of the foregoing, the Defendants were damaged in a sum that is
greater than all courts of limited jurisdiction but not less than one million
($1,000,000.00) dollars.
57. The Plaintiff is accordingly liable to the Defendants in an amount that is
greater than all courts of limited jurisdiction but not less than one million
($1,000,000.00) dollars.
Count IV - Conversion
58. Defendants repeat and reallege all of the allegations set forth in paragraphs
1 through 52 and if same were forth more fully herein.
59. Plaintiff acting in bad faith, wrongfully induced Defendant to enter into
the convertible loan agreements, wrongfully engaged in an illegal
distribution contrary to §5 of the Securities and Exchange Act of 1933.
60. As a result of Plaintiff’s aggregate bad faith, Plaintiff sold BILLIONS of
shares into a thinly traded market, thus exerting undue control over the
stock and drove the stock price down over 1,000%.
61. As a result of Plaintiff’s relentless conversion and unmitigated selling into
the market, the Plaintiff exerted wrongful control over the stock of the
Defendant, driving the stock ever downward.
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62. The Defendant has suffered material damage by the significant decrease in
the stock price by the tarnishing of credit and deterring of potential
business partners.
63. As a result of the foregoing, the Defendants were damaged in a sum that is
greater than all courts of limited jurisdiction but not less than one million
($1,000,000.00) dollars.
64. The Plaintiff is accordingly liable to the Defendants in an amount that is
greater than all courts of limited jurisdiction but not less than one million
($1,000,000.00) dollars.
Count I – Fraud $1,000,000, actual damages
$600,000,000 punitive damages
Count II – Stock Manipulation &
Illegal Distribution
$1,000,000
Count III – Interference with
Prospective Ecnomic Advantage
$1,000,000
Count IV – Conversion $1,000,000
Total $604,000,000
WHEREFORE, the answering Defendants demand judgment as against the
Plaintiff dismissing the complaint in its entirety together judgment on the counterclaims,
the costs and disbursements of this action, punitive damages, reasonable attorneys fees,
and such other and further relief as this Court deems just and proper.
Dated: Carle Place, New York
May 16, 2014
Yours, etc.
____________________________________ Marshal Shichtman & Associates, P.C.
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Attorneys for Defendants
One Old Country Road, Suite 360
Carle Place, New York 11514
(516) 741-5222 tel
(516) 741-5212 fax
To:
NAIDICH WURMAN BIRNBAUM
& MADAY, LLP
Attorneys for Plaintiff
80 Cuttermill Road, Suite 410
Great Neck, New York 11021
(516) 498-2900 tel
