CMG Holdings Group Inc (CMGO)

[FergusVI]

We are well beyond that my friend...

CHICAGO, IL / ACCESSWIRE / September 8, 2016 / CMG Holdings Group, Inc. (OTC: CMGO): CMG Holdings Group, Inc. ("CMG" or the "Company") today announces an important recent decision regarding the Civil RICO complaint it filed against Hudson Gray, Studio AG and defendants associated with these entities. Defendants, former XA executives Joseph Wagner, Jean Wilson, Darren Andereck, Jessie Lomma, Michael Day and their alleged co-conspirators Remgio Gudin and Estelle Pizzo, filed a motion to dismiss CMG's RICO Conspiracy claims, along with several of its common law claims. Judge J. Paul Oetken of the U.S. District Court in the Southern District of New York issued his 27-page ruling yesterday, September 7, 2016.

The Court not only denied defendants' motion to dismiss CMG's RICO claims, but also denied their motion to dismiss almost all of CMG's other claims. Referring to the complaint as "sprawling" and describing CMG as having pleaded the underlying schemes "in deep detail," Judge Oetken explained CMG had pled "pervasive and particularized allegations of fraudulent behavior" and he concluded that the complaint "plausibly alleged" the existence of a long-term, conspiratorial criminal agreement.

The Court refused to dismiss CMG's claim for ten times compensatory damages (punitive damages) for all damages arising from non-RICO predicate crimes (for which treble damages are sought), noting the "comprehensive nature" of the alleged scheme to deprive the owners of profits and defendants' alleged extensive efforts to conceal what they had done. "Based on CMG's allegations, this case may present a rare occasion where punitive damages may potentially be justified."

Judge Oetken made note of the "chutzpah with which Defendants allegedly executed their schemes" to defraud CMG over a five-year period and sustained CMG's claims of breach of fiduciary duty (and aiding and abetting same), misrepresentation and unfair competition, theft of corporate opportunities, and tortious interference with contract, business relationships and prospective advantage claims.

Glenn Laken, CEO and CMG Chairman, commenting on the decision, stated: "We are pleased with Judge Oetken's decision and very much look forward to proving our case and finally receiving justice for our shareholders." Compensatory damages sought by CMG total $20 million.