Looks like this was filed on the 15th. Excuse any errors from my OCR software. But here's John's reply to Doo-buy's motion to dismiss. Not as many spelling errors as Doo-buy's motion, but still a couple. LOL.
OPPOSITION TO MOTION TO DISMISS
AND NOW, Plaintiff John Perotti, who opposes the motion to dismiss:
I. BACKGROUND
Plaintiff John Perotti (“Perotti”) brought this instant action against Atlantis Technology Group, Inc. (“ATNO”) for violations of §10(b) of the Exchange Act. Specifically, Perotti avers that the defendant issued a series of false and misleading press releases to the public in an effort to dupe them into buying their common stock in what is known as a “pump and dump” scheme. Perotti explains in his suit that the defendant, despite claiming it is preparing the roll-out of a nationwide internet television network, actually has no bona fide business activity and fabricated the entire scenario. See Entry 1.
Notwithstanding ATNO’s grandiose claims of a nationwide rollout of its internet television network, it filed a motion with this Court to proceed without counsel because it only has $1,500.00 in the bank. See Entry 3. This is something that ATNO may not do because a corporation must be represented by legal counsel. See Entry 6.
ATNO also filed a document that it called an “Answer to Complaint and Motion to Dismiss.” See Entries 4 and 5. Although hard to ascertain, it appears that the defendant claims that the suit may not proceed because Perotti is incarcerated and, therefore, may not make investments. The rest of the motion asserts bald denials of the fraud scheme, something that is not properly before the Court on a motion to dismiss.
For the reasons set forth below, Perotti asks that this Court deny the motion to dismiss.
II. STANDARD OF REVIEW
Contrary to the defendant’s suggestions, this Court cannot simply dismiss a Complaint because the defendant denies the allegations or believes that the plaintiff is a bad person. On the contrary, a Rule 12(b)(6) motion to dismiss tests the legal sufficiency of a claim. A claim may be dismissed on if “it appears beyond doubt that the plaintiff can prove no set of facts in support of his claim which would entitle him to relief.” Conley v. Gibson, 355 U.S. 41, 45-46 (1957); Cahill v. Liberty Mut. Ins. Co., 80 F3d 336, 338 (9th Cir. 1996). In deciding such a motion, all material allegations of the complaint are accepted as true, as well as all reasonable inferences to be drawn from them. Cahill, 80 F3d at 338. Dismissal is only proper where there is no cognizable legal theory or an absence of sufficient facts alleged to support a cognizable legal theory. Balistreri v. Pacifica Police Dept., 901 F2d 696, 699 (9th Cir. 1988).
III. DISCUSSION
A. Plaintiff may control his property while incarcerated.
ATNO’s first assertion, which it repeats throughout its motion to dismiss, is that this Court must dismiss the action because Perotti is incarcerated and, therefore, may not control his assets by purchasing stock. This argument lacks merit.
There is no statute prohibiting inmates from investing their assets. The Federal Bureau of Prisons’ regulations allow inmates to control their legitimately obtained assets. 28 C.F.R. 506.2(b) explains how checks from dividends for stocks are deposited to an inmate account. ATNO provides no citation to any authority determining that an inmate may not invest his money.
B. A Certificate of Service is not needed on a Complaint
Contrary to ATNO’s position, Rule 5, F.R.Cv.P. does not apply to the original Complaint. Original process is served pursuant to Rule 4 via summons or otherwise. To the extent ATNO is claiming a lack of service, it voluntarily appeared in this case to challenge the suit, thus waiving formal service of a summons. Regardless, the lawsuit and summons is in the hands of a process server and will be or has been served by personal service within the time constraints of process.
C. A “disclaimer” does not allow the defendant to defraud.
The defendant points to boiler-plate language it alleges it included in its press releases. According to the defendant, a simple disclosure about forward-looking statements allows them to issue false and misleading information to the public. This position lacks merit.
Section 10(b) of the Exchange Act prohibits “any manipulative or deceptive device” in connection with the sale of securities. Certainly, issuing false press releases inferring that the company maintains a viable business when, in reality, it has no business, constitutes a deceptive device.
The defendant misunderstands that the purpose of the statutes Perotti sued under “embrace a fundamental purpose. . . to substitute a philosophy of full disclosure for the philosophy of caveat emptor.” Affiliated Ute Citizens of Utah v. United States, 406 U.S. 128, 151 (1972).
Plaintiffs may sue under private rights of action that the courts have found to be implied by the terms of §§10(b) of the Act. Superintendent of Ins. Of N.Y. v. Bankers Life, 404 U.S. 6, 13, n. 9 (1971).
Adding a disclaimer to the bottom of brazenly false press releases meant to induce people to buy stock does not eliminate a cause of action for securities fraud.
D. ATNO is the only defendant.
As a reason to dismiss, ATNO avers, “Plaintiff did not sue el al and therefore this case is strictly limited to ATNO and it’s officers. Any mention of any other individuals and false allegation is a moot point.”
The allegations within the lawsuit explain that the company and its agents orchestrated a fraud scheme in concert with third parties. The actions taken by the third parties are relevant to the averments of a fraud scheme and the scienter of the plan.
While there are no parties other than defendant ATNO, additional parties may be joined. Non-joinder is never a reason to dismiss. See Fed. R. Civ. Proc. 21.
E. All of ATNO’s other defenses are incomprehensible.
The plaintiff attempted to respond to the motion to dismiss in an appropriate manner consistent with the Court’s rules. However, in reading the motion to dismiss, certain matters appear convoluted, confused, and patently frivolous. Perotti cannot determine whether ATNO is merely venting and rambling, or whether they are attempting to raise legal defenses in their brief. Regardless, the clear incoherence of the pleading is why this Court should not allow ATNO to be represented by an officer.
Indeed, issues raised in the motion include copying the “best answer –chosen by voters” about stock splits, promises that ATNO “will attach all correspondence to this Honorable Court to prove plaintiff as [sic] in the past 10-20 years has [sic] done nothing but waste the Courts [sic] time and the peoples [sic] money, and that “what the plaintiff does not tell this honorable Court is that the CEO of ATNO received an email from a supplier’s attorney who GOTV was negotiating with stating they had or were getting a ceased [sic] and desist order stopping GOTV from using its name.”
Perotti simply cannot respond to these ramblings. While the latter statement of ATNO actually corroborates the fraud claim, the rest of the information appears nonsensical at best.
IV. CONCLUSION
This Court must deny the motion to dismiss. In addition, as an officer of a corporation may not represent the company, the defendant must be warned that it needs to hire legal counsel or suffer a default judgment.
WHEREFORE, Plaintiff John Perotti respectfully requests that this Court deny the motion to dismiss and require ATNO to appoint legal counsel or suffer a default judgment.
Respectfully submitted,
__________________________
John Perotti
