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PENOBSCOT, ss. CIVIL ACTION
DOCKET NO. CV-04-042
SECURITIES ADMINISTRATOR, )
v. ) COMPLAINT
WILLIAM A. GOURLEY, )
BARBARA R. GOURLEY, and )
BILL & BARB GOURLEY, INC. )
1. The State of Maine and Securities Administrator (collectively, “the State”) bring this action against William A. Gourley, Barbara R. Gourley, and Bill & Barb Gourley, Inc. for violations of the Revised Maine Securities Act, 32 M.R.S.A. §§ 10101-10713 (1999 and Supp. 2003) in that they sold unregistered securities, in violation of 32 M.R.S.A. § 10401 (1999), and committed deceptive and other prohibited acts in connection with the sale of securities, in violation of 32 M.R.S.A. § 10201 (1999).
2. This Court has jurisdiction pursuant to 32 M.R.S.A. §§ 10602-10603 (1999 and Supp. 2003).
4. Defendants William A. Gourley and Barbara R. Gourley (collectively, “the Gourleys”) are adult individuals who are married to each other and reside in Dexter Maine.
Bill & Barb Gourley, Inc. (“B&BG”) is a
15. For several years, Defendants have not had sufficient assets to make the required payments to existing investors without issuing and selling an increasing number of new notes.
Act prohibits the offer or sale of securities that are not registered in
18. Under the Act, a person shall not, in connection with the offer, sale, or purchase of any security, directly or indirectly: (a) employ any device, scheme, or artifice to defraud; (b) make any untrue statement of a material fact or omit to state a material fact necessary in order to make the statements made, in light of the circumstances under which they are made, not misleading; or (c) engage in any act, practice, or course of business that operates as a fraud or deceit upon any person. 32 M.R.S.A. § 10201 (1999).
19. The Securities Administrator may refer violations of the Act to the Attorney General for enforcement, and the Attorney General may initiate a civil action in the Superior Court. 32 M.R.S.A. § 10602(1)(D) (1999).
20. In an enforcement action under the Act, the Court may grant a variety of legal and equitable remedies, including injunctions, civil penalties, restitution to investors and disgorgement. 32 M.R.S.A. § 10603 (1999).
21. The State repeats and realleges paragraphs 1 through 20 as if set forth fully herein.
22. Each time they offered for sale or sold a note, Defendants committed a separate violation of the prohibition in 32 M.R.S.A. § 10401 against the sale of unregistered securities.
23. The State repeats and realleges paragraphs 1 through 22 as if set forth fully herein.
24. Defendants made untrue statements of material fact by representing to prospective investors that their business was a profitable enterprise and that the notes presented less risk than the stock market.
25. Defendants failed to state material facts necessary to make their statements to prospective investors not misleading by not telling the prospective investors the number of existing investors, the amount owed to those investors, the value of the real estate that secured the investments, and the value of existing corporate or personal assets.
26. Defendants engaged in acts, practices, and a course of business that operated as a fraud and deceit upon their investors by making the untrue and misleading statements and omissions described above, and by operating a business that necessarily relied on a constant influx of new investors in order to make payments to existing investors.
27. Each time they made misleading statements or omissions and each time they engaged in acts, practices, or course of business that operated as a fraud or deceit upon their investors, Defendants committed a separate violation of 32 M.R.S.A. § 10201.
REQUEST FOR RELIEF
WHEREFORE, the State requests that this Honorable Court grant the following relief:
1. If necessary, a preliminary injunction freezing Defendants’ assets and restraining Defendants from removing, transferring, alienating, pledging or otherwise impairing any assets.
2. A permanent injunction prohibiting
Defendants from offering or selling securities in
3. An order requiring Defendants to make full restitution to each of the investors by returning all monies to them plus interest;
4. An order requiring Defendants to disgorge all funds received in connection with the securities transactions described above;
5. A civil penalty of $10,000 against each Defendant for each violation of the Act;
6. If necessary, an order appointing a receiver or conservator for Defendants or Defendants’ assets; and
7. Such other and further relief as this Court deems appropriate.
s/Michael J. Colleran
MICHAEL J. COLLERAN
Assistant Attorney General
6 State House Station
Tel. (207) 626-8800
Bar. No. 9247
Attorney for Plaintiffs