In late 2017 the SEC filed charges against Ponzi admin Pedro Fort Berbel.
In an attempt to weasel out of liability, Fort filed a Motion to Dismiss on December 22nd of last year.
In his motion, Fort (right) presented four primary arguments;
- the relevant transactions occurred outside the United States between only foreign investors, so this means the SEC has no jurisdiction
- the SEC failed to show a reasonable likelihood that Fort will commit a future securities law violation
- the SEC’s complaint is an improper “shotgun” pleading and
- the claims against Fort as an individual fail because Fort was working as officer and director of Fort Marketing Group (a company he retained sole ownership of)
After analyzing each of Fort arguments, the court ruled ‘none of these arguments warrants dismissal of the (SEC’s) complaint‘.
The first argument was shut down based on the SEC’s allegation
that investors purchased Ad Packs by wiring money to one of
Fort’s seven U.S.-based bank accounts.
(The SEC) contends that at least some of these investors were located in the United States.
Based on those allegations, many of transactions at issue
involved a domestic purchase, and all of them involved a domestic sale.
Accordingly, the federal securities laws referenced in the Commission’s Complaint apply to Fort’s allegedly
The second argument failed because
Courts in this district hold that allegations of past securities law violations give rise to an inference that future violations may occur.
The “shotgun pleading” argument was shot down (no pun intended), on the basis that the SEC’s general allegations support each claim for relief, such that neither the Court nor Fort would have
to sift through the allegations to see which ones support the cause of action purportedly stated.
From what I gather a “shotgun pleading” is a spaghetti filing that doesn’t clearly identify or support requested claims for relief.
Fort’s claim that he can’t personally be held liable because he was working in his capacity as an officer and director of Fort Marketing Group (as ridiculous as that argument is), was rejected because it
overlooks allegations that Fort misappropriated millions of dollars from company accounts to fund his extravagant personal life.
Fort Marketing Group didn’t spend investor funds on a house in Florida, private jet charters, automobiles, cosmetic surgery and gambling debts – Pedro Fort did.
Accordingly Judge Moreno denied Fort’s motion in its entirety.
Looking forward, a March 19th order has scheduled a jury trial for September 17th, 2018.
In the meantime the case has been referred to mediation, with a resolution deadline set for July 20th.
A mediator was appointed on March 22nd.