Judge Sam A. Lindsay of the U.S. District Court for the Northern District of Texas has thrown out a securities fraud lawsuit accusing sports franchisor Brent L. Coralli of inducing investor Lee Purser to put $400K into an “emerging lottery” game operation in Peru. Other defendants in the case: Jet Text, LLC, Sting Group Holdings, Coralli Inc. Texas Titans Futbol LLC, and Royal Nations, LLC.
Per the plaintiff’s Texas securities case, Coralli approached Purser about a Peruvian mobile lottery. The supposed opportunity would allow investors to buy into the “emerging” operation that would be licensed there and have no competition. This type of lottery lets participants use cell phones and texting instead of scratch-off cards and paper tickets to purchase chances. Coralli allegedly promised that there would millions of dollars in gaming profits from Corporacion Galena, which is the Peruvian affiliate of British interactive gaming and mobile company Managed Gaming Solutions, and he boasted of having close ties with then-Peruvian President Alan Garcia Perez.
Purser claims that he and Corralli made an agreement that for a $400,000 investment, Purser and his affiliates would own 10% of Silverstrings Investments, a strategic partner of Management gaming Solutions and an industry expert, and that the investment would be protected by Jet Text. However, he is now claiming that Jet Text never gave him proof of his investment, which he made in two installments.
The lottery license was, indeed, awarded to Galena, with 20 year rights. However, Purser says that afterwards he did not hear from those involved and that the money he paid never went to Silverstrings or Galena. He believes that the Peruvian venture was executed to launder money, commit crimes, corruption, and fraud, violate state and federal laws, and harm Purser and his interests. He wants damages for securities fraud and breach of contract.
The defendants, including Coralli, had moved to have the case dismissed, under Rule 12(b)(6) of the Federal Rule of Civil Procedure, the Federal Rules of Civil Procedure, and the Private Securities Litigation Reform Act. Purser, however, filed an “Opposition” to their motions while noting that the original complaint needed to be amended to provide more specificity about what statements were misleading and why.
Now, Judge Lindsay is dismissing the case. He found that the plaintiff’s allegations are not enough to back a federal securities law claim. In particular, he noted the “conclusory” allegations reached about the behavior and motives of defendants and determined that while Purser may have brought up the possibility that Coralli had taken part in wrongdoing this is not enough to demonstrate that the plaintiff is entitled to relief. Lindsay also said that Purser did not identify the misleading statements or name those that made them. The Judge declined to exercise supplemental jurisdiction over the plaintiff’s state law claims involving breach of duty, contract breach, and fraud.
‘About That $200,000 …’, Courthouse News, December 1, 2011
Read the Opinion (PDF)
More Blog Posts:
Houston-Based Receiver Files $1.8B Class Action Filed Against Law Firms Accused of Helping R. Allen Stanford Carry Out His $7B Ponzi Scam, Stockbroker Fraud Blog, December 5, 2012
SEC Clawback Lawsuit Against Two Former Arthrocare Corp. Executives Over Fraud Scheme Can Proceed, Says District Court in Texas, Stockbroker Fraud Blog, November 24, 2012
SEC Gets Initial Victory in Lawsuit Against SIPC Over Payments Owed to Stanford Ponzi Scam Investors, Institutional Investor Securities Fraud Blog, February 10, 2012
To speak with an experienced Texas securities lawyer, contact Shepherd Smith Edwards and Kantas, LTD, LLP today.