Justia Securities Law Opinion Summaries

Advent Medical Products, Inc., founded in 2004 by Randall Fincke, sought to develop and market manual and automatic defibrillators. After obtaining FDA clearance for some products in 2010, Advent began soliciting investments primarily through Fincke’s brother in New Hampshire. From 2012 to 2017, thirteen investors purchased securities, typically a promissory note, call option, and put option, without the company registering these securities as required under New Hampshire’s Uniform Securities Act. Product development was delayed due to regulatory changes requiring more stringent FDA approval, battery defects, enforcement actions in Massachusetts, and the COVID-19 pandemic.The New Hampshire Bureau of Securities Regulation initiated an administrative proceeding alleging illegal sales of unregistered securities and misrepresentation of material facts to investors between 2010 and 2016. After a hearing, the Bureau’s director found the respondents liable for both violations, imposed a $345,000 fine for 138 violations, ordered rescission of the investments totaling $480,000, awarded $60,000 in costs, and issued a permanent injunction against offering or selling securities in New Hampshire. The director subsequently denied motions to reconsider.The Supreme Court of New Hampshire reviewed the director’s orders, applying a standard that only errors of law or unjust/unreasonable orders by a clear preponderance of evidence would warrant reversal. The Court reversed the director’s findings that the respondents misrepresented material facts, determining that omissions about Fincke’s prior lawsuits were permissible and statements about product readiness were not proven false when made. The Court also reversed findings related to certain exemptions and extraterritorial sales, vacated the imposed penalties and injunction, and remanded for further proceedings. The Court affirmed that joint and several liability and the award of investigative costs were appropriate. The director’s orders were affirmed in part, reversed in part, vacated in part, and remanded. View "Appeal of Advent Medical Products, Inc." on Justia Law

Plaintiff Curtis Ridlon was formerly employed as an investment adviser. In April 2017, the New Hampshire Bureau of Securities Regulation (Bureau) brought an administrative enforcement action against Ridlon, alleging that he charged clients approximately $2.8 million in improper fees. The relief sought by the Bureau included civil penalties of up to $3,235,000, restitution in the amount of $1,343,427.20, and disgorgement of up to $1,513,711.09. By agreement of the parties, Ridlon filed a declaratory judgment petition in the trial court asserting that he was constitutionally entitled to a jury trial and seeking to enjoin the administrative proceedings from continuing. In response, the Bureau filed a motion to dismiss. The trial court denied the Bureau’s motion, ruling that Part I, Article 20 of the State Constitution afforded Ridlon the right to a jury trial, and enjoining any further administrative proceedings by the Bureau. The New Hampshire Supreme Court disagreed with the superior court’s judgment: “the cases cited by the trial court, and relied upon by Ridlon on appeal for the proposition that claims involving statutory penalties above the constitutional limit obligate a trial by jury, do not address the applicability of the jury trial right under the State Constitution to what we have described as “purely statutory” causes of action. When assessing the right to a jury trial in such circumstances, we have explained that we must “consider the comprehensive nature of the statutory framework to determine whether the jury trial right extends to the action. . . . the statutory procedures established by the legislature for the regulation of securities ‘militate[ ] against any implication of a trial by jury.’” The trial court’s judgment was reversed and the matter remanded for further proceedings. View "Ridlon v. New Hampshire Bureau of Securities Regulation" on Justia Law