248 F. Supp. 3d 796
N.D. Tex.2017Background
- Lohr, a Dallas widow, alleges defendants (Gilman, Mintons, McGlamery, OMG, Wavetech) ran a fraudulent investment scheme in purported oil/biofuel "OMG Technology" and "Water Separation Technology," inducing her to invest $540,000.
- The Mintons (church acquaintances) promoted the investments and introduced Lohr to Gilman, making religiously framed assurances and endorsements.
- Gilman solicited Lohr, claimed proprietary/licensed technology supported by independent testing, and instructed her to wire funds to his account; OMG was formed by McGlamery two weeks after Lohr’s initial $40,000 wire.
- Lohr alleges multiple subsequent transfers to Gilman for equity interests in OMG and Wavetech; she never received formal documents, K-1s, or confirmations promised.
- Pleading asserts federal securities fraud (Section 10(b)/Rule 10b-5), RICO, Securities Act and Exchange Act claims, Texas Blue Sky, statutory and common-law fraud, and related state-law claims; defendants moved to dismiss under Rules 12(b)(6) and 9(b).
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Section 10(b)/Rule 10b-5 fraud (Claim 1) | Lohr alleges specific misrepresentations by Gilman and the Mintons induced purchase of securities and pleads scienter by facts like post-investment formation of OMG | Gilman and Mintons say fraud not pled with particularity and scienter not adequately alleged | Denied: court finds Rule 9(b)/PSLRA satisfied and strong inference of scienter (e.g., company formed after investment) |
| Securities Act §§5(a), 5(c) unregistered offering (Claim 2) | Lohr asserts unregistered offer/sale by Gilman, OMG, Wavetech | Defendants argue no private right of action under §5; plaintiff did not respond | Granted: Claim 2 dismissed with prejudice for failure to state a claim |
| Exchange Act §15(a) unregistered broker (Claim 3) | Lohr alleges Gilman acted as unregistered broker soliciting investors | Defendants argue no private right of action under §15(a) and pleading insufficient to show broker conduct | Granted: Claim 3 dismissed with prejudice (no private right / insufficient pleading) |
| RICO (Claim 4) | Lohr characterizes predicate acts as mail/wire/bank fraud tied to securities sales | Defendants argue PSLRA bars RICO claims premised on securities fraud | Granted: Claim 4 dismissed with prejudice as barred by PSLRA amendment |
| Statutory/common-law fraud and Texas Blue Sky (Claims 5–7) | Lohr relies on same factual allegations supporting federal securities claim | Defendants challenge particularity and elements | Denied as to Gilman, Wavetech, OMG, and the Mintons; sustained as to McGlamery (fraud allegations against him lack particularity) |
| Corporate veil, aiding/abetting, money had and received, declaratory relief, conspiracy (Claims 8–12) | Lohr alleges sham companies, misuse of funds, and concerted misconduct | Defendants move to dismiss for failure to state claims against certain defendants | Most state-law claims survive against Gilman, OMG, Wavetech, and the Mintons; claims 6,10,11,12 against McGlamery dismissed without prejudice for deficient pleadings (leave to amend by 4/20/2017) |
Key Cases Cited
- Bell Atlantic Corp. v. Twombly, 550 U.S. 544 (plausibility standard for Rule 12(b)(6))
- Ashcroft v. Iqbal, 556 U.S. 662 (legal conclusions not presumed true at pleading stage)
- Tellabs, Inc. v. Makor Issues & Rights, Ltd., 551 U.S. 308 (PSLRA scienter inference standard)
- Stoneridge Inv. Partners, LLC v. Scientific–Atlanta, Inc., 552 U.S. 148 (elements for Section 10(b) claim)
- Owens v. Jastrow, 789 F.3d 529 (Rule 9(b) particularity requirements in Fifth Circuit)