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The court stamped and conformed copy of litigation filed by George Sharp against American Resource Exploration (AREN) for the the spam email disseminated in the course of its pump and dump campaign.
Citation preview
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COMPLAINT
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George Sharp 3525 Del Mar Heights Road, #620 San Diego, CA 92130 (310) 498-4455 (619) 446-6717 fax In Propria Persona
SUPERIOR COURT OF THE STATE OF CALIFORNIA
COUNTY OF SAN DIEGO, CENTRAL DIVISION
GEORGE SHARP,
Plaintiff,
v.
America Exploration Resources, Inc.
and DOES 1 through 500, inclusive,
Defendants.
_____________________________________
) ) ) ) ) ) ) ) ) ) ) ) ) ) ) ) ) )
Case No.
COMPLAINT FOR VIOLATIONS OF
CALIFORNIA RESTRICTIONS ON
UNSOLICITED COMMERCIAL E-
MAIL ADVERTISERS (Cal. Bus. &
Prof. Code § 17529.5)
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COMPLAINT
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COMES NOW PLAINTIFF AND ALLEGES AS FOLLOWS:
1. At all times mentioned herein, Plaintiff Sharp, “SHARP” was a resident
of San Diego County, California. SHARP has become recognized internationally
as a crusader against penny stock fraud and has been loudly applauded for his
efforts. There is no question that penny stock fraud is a scourge of society, having
replaced confidence games like “Three Card Monte” and Ponzi-schemes and
pyramid schemes as a way to relieve innocent victims most susceptible to get-rich-
quick schemes, such as seniors, students and single mothers, of their savings.
Spam emails making false and deceiving claims, are just one of several methods
used to lure potential dupes into such schemes. To date, the Plaintiff has been
lauded on several reputable internet sites and has received hundreds of letters from
these victims, thanking him for his efforts to inhibit this fraud. SHARP is also
well known for prosecuting civil actions against penny stock frauds, designed to
enrich insiders, officers and financers of small public companies through the
marketing and sale of artificially overpriced and often intrinsically worthless stock
to an often unsuspecting public. SHARP has been interviewed by the press and
appeared on television with respect to penny stock schemes that he first exposed.
2. SHARP owns and at all times mentioned, owned a computer with an
internet connection. SHARP regularly uses this computer to access his email
accounts. This computer is located in the State of California in the County of San
Diego. SHARP received all spam emails referenced herein through his Internet
Service Provider, whose equipment is located in the State of California.
3. Defendant America Resources Exploration, Inc. (“AREN”), is a
publicly traded Nevada Corporation, trading on the Over-the-Counter market under
the symbol “AREN” and with a listed place of business at 113 Barksdale, Newark,
DE 19711.
4. Plaintiff is ignorant of the true names of defendants sued herein as
DOES 1 through 500, inclusive, and therefore sues these defendants by such
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COMPLAINT
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fictitious names. Plaintiff will amend this Complaint to allege their true names and
capacities when ascertained. Any allegation against any defendant shall apply to
each DOE defendant
5. Plaintiff is informed and believes, and on such information and belief
alleges, that at all times herein mentioned, each defendant was the agent of each
and every other defendant, and in doing the things alleged herein, was acting in the
course and scope of its/his agency and/or employment and was acting with the
consent, permission and/or authorization of each and every remaining defendant.
The acts and conduct of each defendant herein was ratified and approved by every
remaining defendant.
6. Jurisdiction is appropriate in this court as the Defendants maintained
continuous and systematic contact with the State of California by disseminating
these emails to thousands of residents who own and operate computers within this
State.
7. Plaintiff is informed and believes that the Defendants participated
and/or conspired in a scheme to disseminate spam emails which: (a) contained a
subject line that the Defendants knew would be likely to mislead a recipient, acting
reasonably under the circumstances, about a material fact regarding the contents or
subject matter of the message; (b) contained false and misleading information; (c)
concealed material facts; and, (d) falsified, misrepresented, or forged header
information. These emails were disseminated in order to encourage the Plaintiff
and other members of the general public to purchase the publicly traded common
stock of the Defendant AREN in order to create an artificial and inflated
marketplace for these stocks and to facilitate the divestiture of their holdings in
these stocks. At the commencement of this conduct, some or all of the Defendants
owned the vast majority of these stocks and stood to benefit almost exclusively
from the artificial market and price increase that resulted from this conduct.
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COMPLAINT
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CHRONOLOGICAL FACTUAL HISTORY OF CLAIMS
8. From July 23, 2015 to August 20, 2015, the Plaintiff received no less
than 99 unsolicited emails from the Defendants soliciting the Plaintiff to purchase
of the common stock of Defendant AREN.
9. On or about August 6, 2015, OTC Markets Group, a United States
financial marketplace facilitating the trading of over-the-counter securities such as
AREN, tagged AREN with a status of “Caveat Emptor”. Among the reasons that
OTC Markets lists for assigning this status;
Promotion/Spam without Adequate Current Information —
The security is being promoted to the public, but adequate current
information about the company has not been made available to the
public. Adequate current information must be publicly available
during any period when a security is the subject of ongoing
promotional activities. At such instances, as a matter of policy, when
adequate current information is not made available, OTC Markets
Group will label the security as "Caveat Emptor." Promotional
activities may include spam email, unsolicited faxes or news releases,
whether they are published by the company or a third party.
10. The Plaintiff’s email address(es) at which he received the spams at
issue in this action are California email address(es). Pursuant to Cal. Bus. & Prof.
Code § 17529.1(b);
"California e-mail address" means 1) An e-mail address furnished by
an electronic mail service provider that sends bills for furnishing and
maintaining that e-mail address to a mailing address in this state; 2)
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COMPLAINT
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An e-mail address ordinarily accessed from a computer located in this
state; 3) An e-mail address furnished to a resident of this state.
The address(es) at which the Plaintiff received the commercial email are
ordinarily accessed from a computer located in California; and the Plaintiff is a
resident of California.
11. The commercial email advertisements at issue in this action are all
unsolicited because the Plaintiff did not provide direct consent to receive
advertisements from the Defendants [Cal. Bus. & Prof. Code § 17529.1 (c), (o),
(d), (a), (1)].
12. The Plaintiff alleges that the Defendants engaged in fraudulent and
deceptive actions by initiating (as defined by Cal. Bus. & Prof. Code§ 17529.1(i))
the sending of no less than 99 unlawful spams on behalf of themselves and the
other Defendants between July 23, 2015 and August 20, 2015, inclusive; and
because these emails (a) contained a subject line that the Defendants knew would
be likely to mislead a recipient, acting reasonably under the circumstances, about a
material fact regarding the contents or subject matter of the message; (b) contained
false and misleading information; (c) concealed material facts; and, (d) falsified,
misrepresented, or forged header information.
13. Defendants in this action are advertisers because they are persons or
entities that advertise through the use of commercial e-mail advertisements (in this
case encouraging the purchase of common stock). Advertisers are liable for
advertising in the spams, even if the SPAMMERS are the one who actually hit the
send button. Pursuant to Cal. Bus. & Prof. Code § 17529(k), G);
The true beneficiaries of spam are the advertisers who benefit from
the marketing derived from the advertisements.
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COMPLAINT
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There is a need to regulate the advertisers who use spam, as well as
the actual spammers, because the actual spammers can be difficult to
track down due to some return addresses that show up on the display
as "unknown" and many others being obvious fakes and they are often
located offshore.
14. The Plaintiff is informed and believes and thereon alleges that all the
Defendants caused the spams to be transmitted
15. The California Legislature defined liquidated damages to be $1,000
per spam. § 17529.5(b)(1 )(B)(ii). This figure is comparable with damages in other
areas of consumer protection law, e.g., $500-$1,500 statutory damages per junk
fax, 47 U.S.C. § 227(b)(3). The Plaintiff’s rightful and lawful assertion of the
California Legislature's liquidated damages amount of $1,000 per email is
necessary to further the Legislature's objective of protecting California residents
from unlawful spam.
WHEREFORE, Plaintiff prays judgment against the Defendants as follows:
(a) for a preliminary and permanent injunction against all defendants;
(b) Liquidated damages in the amount of One Thousand Dollars ($1,000)
for each of at least 99 spam emails soliciting the purchase of AREN stock, as
authorized by Cal. Bus. & Prof. Code § 17529.5(b)(l)(B)(ii), totaling $99,000
jointly and severally against all Defendants
(c) for cost of suit herein incurred;
(d) for such other and further relief as the court may deem proper.
///
///
///
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COMPLAINT
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Dated: August 20, 2015 By: George Sharp, In Propria Persona
_________________________________