Does the United States Securities Laws Protect Foreign Investors? | Russell L. Forkey, P.A. | Florida

Does the United States Securities Laws Protect Foreign Investors? | Russell L. Forkey, P.A. | Florida
http://www.forkeylaw.com/Does-the-United-States-Securities-Laws-Protect-Foreign-Investors.shtml
Federal and Florida Securities Fraud and Misrepresentation Litigation Attorney, Russell L. Forkey, Esq.
Oil investment defendant seeks dismissal of SEC suit, contends feds lack jurisdiction
Attorneys for a Florida man accused of masterminding a $25 million oil-well investment fraud that preyed on overseas investors have asked federal Judge Sam Cummings to dismiss a lawsuit.
Attorneys for a Florida man accused of masterminding a $25 million oil-well investment fraud that preyed on overseasinvestors have asked federal Judge Sam Cummings to dismiss a lawsuit filed just more than a year ago by the Securities and Exchange Commission.
Attorneys for Justin Solomon filed a motion late Tuesday in U.S. District Court in Lubbock arguing the judge should throw out the case, based on a U.S. Supreme Court decision sharply restricting the SEC's reach in overseas securities disputes where activities within the United States may have played a minor role in the alleged fraudulent activities.
Additionally, Solomon's lawyers say, even if the alleged frauds - which involved boiler room sales operations in Costa Rica and Thailand - occurred, the SEC's original complaint fails to show Solomon ever made any misleading or fraudulent statements.
SEC spokeswoman Judith Burns said the agency had no immediate comment on the motion.
About six weeks ago, Solomon's attorneys filed a motion seeking more time to complete settlement talks with the SEC. That pleading said both sides had a tentative agreement over liability issues and injunctive relief, and sought an extension to resolve some issues relating to disgorgement - a legal term for making someone surrender ill-gotten gains - and penalties.
On Tuesday, Cummings signed a procedural order setting deadlines for amending the pleadings, and other motions, and required both sides to have all other pretrial motions completed by April 16, 2012.
The SEC sued Solomon, and three businesses he controlled, on June 16, 2010, alleging they used high-pressure sales tactics to sell equity positions in six oil and gas ventures in Texas, and made false statements about how much of the investment would be kept as commissions.
Eight days later, the U.S. Supreme Court ruled in an 8-0 decision that U.S.securities fraud laws don't apply to investment schemes occurring outside the United States, even the schemes result in some domestic impact.
The SEC complaint alleges more than 400 overseas investors put up as much as $25 million on the ventures with Boca Raton-based Seisma Oil Research and two Aruban companies, Seisma Energy Research and Permian Asset Management.
The complaint also alleges investors were not told the truth in sales pitches about how much money would be invested in the operations, and how much would be kept as commissions.
SEC attorneys, in their original complaint, said only $9.5 million was actually invested, and that the Solomon-managed companies never bought shares in two of the six gas-and-oil ventures.
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