My bet is he is a very good Attorney and those "red flags" were just that "Tons of red flags" but the court did find that they were not violations of SEC law. The SEC again fails in meeting its burden of proof!
Count II: Did Lowy violate Section 10(b) of the Securities Exchange Act of 1934 and Rule 10b-5 by making misleading representations in LARI's Form 10-SB?
The Second Count alleged by the SEC, also pursuant to Section 10(b) and Rule 10b-5, is substantially similar to Count One. The representations in question and the evidence of scienter are the same. As discussed above, the SEC has failed to establish that Lowy acted with scienter and as such, no liability can attach for Count Two.
C. Count III: Did Lowy violate Rule 13b2-1 by, directly or indirectly, falsifying or causing to be falsified, LARI's books, records or accounts by including assets that did not exist and/or were materially overvalued?
Lowy argues that the SEC has not established that he, either directly or indirectly, made any of the alleged misstatements in LARI's books and records
However, it is again unnecessary for the Court to make the determination because the SEC has failed to establish that Lowy acted unreasonably, a prerequisite to 13b2-1 liability. See SEC v. Softpoint, Inc., 958 F.Supp. 846, 865-866 (S.D.N.Y.1997).
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