The undisputed evidence in this case establishes the core misrepresentations that USSE had a “fully operational plant in production” and was “ready for Green Fuel production.” The undisputed evidence also proves other repeated misrepresentations: that USSE had engaged a prominent investment banker; that a prominent industry figure had joined its board; that USSE had purchased its production facility in Natchez; that USSE had patented technology; that USSE owned patent pending technology; that USSE sold fertilizer in April 2007 and was a revenue producing company; and that USSE had developed an OD-66 certified product that it would begin shipping in 72 hours. The core misrepresentations are supported by undisputed collateral facts that USSE could not produce 6,000 gallons of fuel per day as Rivera repeatedly claimed; that USSE’s equipment had never been continuously operated for more than four or five days; and that USSE had no reasonable basis to claim that it could produce fuel for $0.50 per gallon. Rivera’s attempt to create an issue of fact as to whether USSE could produce five gallons of fuel from each bushel of soybeans fails because Boone’s affidavit fails to address the undisputed fact that the biocrude from the Rivera Process, even in the mini-reactor, contains some percentage of water, which might be higher than 25%. The Response offers no evidence to contradict the testimony of Brent (Rivera’s trusted plant manager), Smith (the chemical engineer), and Mazer (Rivera’s almost constant companion for a year) that the USSE equipment never produced as much as half of 6,000 gallons per day, that the USSE biocrude output contained significant amounts of water that had to be removed to produce any fuel, that USSE never had a product to sell and that the USSE equipment was experimental and never operated continuously for longer that four or five days.
Each of these material misrepresented facts establishes a violation of Section 10(b) of the Exchange Act and Rule 10b-5 thereunder, as alleged in the complaint. Together, they stablish repeated material misrepresentations to USSE investors that allowed enough USSE shares to be sold for Rivera to continue falsely promoting the company.
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