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Note: Dr. Bruce Kingsley (Investor) invested USD 1,750,000 in Accredited Investor Resources LLC, a company owned by Brian Sly (Owner) based on the promotion of the investment by Anthony Huff (Fraudster) a company manager. Investor was offered an investment with 30% annual rate of return, 20% nominal return, and 10% for consulting services by Fraudster. Fraudster's offer to Investor was that Fraudster would personally reimburse Investor for his investment, if Investor chose to leave the company within a 5 year period. No other investor had a similar investment condition. This offer was backed by a standby LC from Park Avenue Bank in New York. Investor's investment was conditional on the specific deal that Fraudster had made him for recompense of his investment.

Fraudster immediately absconded with the money after the deal was made, in addition to large amounts of money from the company. The bank had only issued the LC because Fraudster had bribed several bank officials. The company failed, costing the investment of all the investors involved, including USD 1,750,000 from Investor and USD 3,000,000 from Owner. The bank also failed so Investor could not claim the money guaranteed to him by the false LC. Fraudster and one bank official face pending criminal charges, and the other bank official is in jail.

The case presented is one of joint and several liability, where Investor sued Owner, as the owner of the business that Fraudster represented, for securities fraud. Investor sued Owner for USD 1,227,916, on the grounds that that amount represents his comparative liability among the defendants. Investor is specifically requesting a new trial on the grounds that he did not request further jury deliberations with clarifications on the definition of "securities" to the jury.

The United States District Court for the District of Arizona, Wake, J., denied the motion on the grounds that post-verdict alteration is not appropriate in this case. Though liability was found on the part of Owner, because of "omitted statements of material fact", they were not considered "misleading" to the verdict of the case, so no damages were awarded.

Comment: Issuer's bankruptcy avoids the interesting question of whether bribery of an LC banker by the applicant constitutes a defense for an issuer.

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