The newest additions to the SEC v TelexFree, Inc. case are below, 2 motions with supporting Memorandums. Below are the docket entries:
|05/13/2014||107||MOTION TO DISMISS FOR FAILURE TO STATE A CLAIM by Santiago De La Rosa.(Magee, Scott) (Entered: 05/13/2014)|
|05/13/2014||108||MEMORANDUM in Support re 107 MOTION TO DISMISS FOR FAILURE TO STATE A CLAIM filed by Santiago De La Rosa. (Magee, Scott) (Entered: 05/13/2014)|
|05/13/2014||109||MOTION TO DISMISS FOR FAILURE TO STATE A CLAIM by Randy N. Crosby.(Mack, Benjamin) (Entered: 05/13/2014)|
|05/13/2014||110||MEMORANDUM in Support re 109 MOTION TO DISMISS FOR FAILURE TO STATE A CLAIM filed by Randy N. Crosby. (Mack, Benjamin) (Entered: 05/13/2014)|
Mr. De LA Rosa’s motion states:
Pursuant to Fed. R. Civ. P. 12(b)(6), Defendant Santiago De La Rosa moves to dismiss the two causes of action brought against him with prejudice for the reasons set forth in his accompanying memorandum of law.
The accompanying Memorandum states:
The problems with the SEC’s theory—especially with respect to De La Rosa—is the complete absence of meaningful allegations that De La Rosa made any misrepresentations and the absence of meaningful allegations that De La Rosa (or any of the promoters) believed that they were involved with anything other than a legitimate VoIP business.
De La Rosa had no knowledge of the underlying accounting at Telexfree. And the SEC does not
allege any facts showing that he did. Instead, the SEC merely seeks to meet its burden of
alleging the violations by lumping De La Rosa together with other defendants and alleging that
they all acted knowingly as the SEC “checked the boxes” in reciting the elements of the claims
for relief at the tail end of the Complaint. That vague, conclusory sort of pleading fails to meet
any standard accepted in Federal Courts, let alone the applicable standard of pleading with
particularity under Fed. R. Civ. P. 9(b).
Mr. Crosby’s motion seems to quibble about him not having a middle name or initial, in addition to opening with this:
On April 15, 2014, the SEC filed a Complaint against TelexFree, Inc., TelexFree, LLC (together, “TelexFree”) and its principals (Merrill, Wanzeler, Craft, and Labriola), alleging that they had orchestrated a pyramid scheme and, thereby, violated the Federal securities laws. The vast majority of the Complaint is devoted to their alleged activities. The remaining allegations — and the only allegations at issue here — concern four alleged “primary promoters” of TelexFree, including Randy Crosby (“Mr. Crosby”). There is no apparent rationale for why these four promoters were singled out from the thousands of promoters of TelexFree. Neither is it evident
why Mr. Crosby would be named in the Complaint rather than treated as a victim himself, which more aptly describes his role.
Played the “victim”card a bit early, eh?
The argument made in both Motions is that the SEC has failed to state an actual claim or failed to demonstrate that either individual made “Any Untrue Or Misleading Statements of Material Fact”. Let’s see, this is MLM, and pyramid shaped; they promised ROI paid by new members. They say you can make lots of money placing ads on the internet. So did ASD… Nothing illegal there, right?
Part of the primary argument in both motions regards the number of public statements made by De La Rosa and Crosby, only two YouTube videos doe De La Rosa and four public statements attributed to Mr. Crosby. I guess a higher number would have made things better??
I have added these to the Files website.