By Hayden Boyce, Editor-in-Chief
• Mon, Sep 17, 2012
Local businessman and economist John Hartley will have to pay out close to $15million after a Florida court handed down a judgment against him on Wednesday September 12th, 2012.
The judgment, which was handed down in the United States District Court Southern District of Florida by judge James Cohn, was brought by multi-millionaire Edward Burger as trustee of the 2009 Hubbard Family and some other investors, as a result of Hartley’s involvement in a scam in which he and some of his friends were sued for selling elite shares in an electric-car company that they didn’t actually own.
The businessman and investors sued Hartley under Section 10(b) of the Securities and Exchange Act to recover substantial damages from Hartley related to $4.525 million which they invested to acquire shares in a company called Praetorian and/or G. Power, based on false representations that such interests would provide indirect ownership of Series A Preferred shares in Fisker Automotive Inc.
After making the investment, the businessmen never received the closing documents reflecting their shares in Praetorian. According to a copy of the court judgment which was obtained by The SUN, the complaint alleges that Mr. Hartley was a founding partner and member of Praetorian Fund, and that along with other defendants
Mattera, van Siclen, G. Power, and Praetorian Fund, “caused various documents to be prepared to promote the sale of shares in the LLC entity which would own the Fisker shares.”
The investors allege that a Private Placement Memorandum and subscription documents provided to them prior to their investments “represented that G. Power already owned $20 million in shares of Fisker.” They contend that as a director of Defendant Praetorian Fund, Mr.Hartley made misrepresentations contained in these documents and he participated in the scheme to deceive them.
Furthermore, the Amended Complaint contends that in early January 2011, Mr. Hartley and van Siclen met with a trustee of the Plaintiff 2009 Hubbard Family Trust, and discussed the investment, representing what a great investment it was. The investors allege that Mr. Hartley continued to cover up the fact that G. Power did not own any shares in Fisker.
Mr. Hartley opposed the Motion for Summary Judgment and has cross-moved to dismiss the Amended Complaint. However, the judge stressed that the undisputed facts before the Court establish that Mr. Hartley, in conjunction with Mattera and van Siclen, conspired to solicit investors to invest in various G. Power entities to capitalize The Praetorian Global Fund.
The judge said: “The uncontroverted testimony of van Siclen is that Mr. Hartley participated in the drafting of the Private Placement Memorandum and subscription documents that were provided to the Plaintiffs which contained the false statements regarding the Fisker shares. Mr. Hartley, along with van Siclen, personally met with a representative of the Plaintiff 2009 Hubbard Family Trust in January 2011, a meeting wherein Mr. Hartley affirmed his partnership with van Siclen and Mattera, promoted
what a great investment it was, and represented that the closing had yet to take place.
Mr. Hartley also responded to email inquiries from the Plaintiffs regarding the status of the closings. Thus, the Court finds that Plaintiffs have established the existence of a conspiracy amongst the Defendants and that Mr. Hartley may be held jointly and severally liable for the actions of the Defendants.”
The judge said he agrees with the investors that they have established Mr. Hartley’s liability for his own fraudulent misrepresentations, adding that the undisputed record before the Court reflects that Mr. Hartley participated in drafting the Private Placement Memorandum and other subscription documents which misrepresented that G. Power II already owned $20 million Fisker Shares, when it did not in fact own any shares.
The judge continued: “In his Motion to Dismiss, Mr. Hartley ignores that Plaintiffs, in part, base their fraud claims on his own conduct. In an attempt to minimize his own actions, Mr. Hartley argues that he cannot be held liable based on the January 2011 dinner because “it took place, at its highest, in a social context, and at its lowest, in a haze of alcohol.”
The judge also noted that even if the allegations of the Amended Complaint are insufficient to establish that Mr. Hartley himself operated a business or himself caused tortious conduct within Florida, the Court still has personal jurisdiction over him based on Plaintiffs’ well-plead allegations that he participated in a conspiracy with other defendants who did commit tortious acts within Florida.
“Even if the Court does not have personal jurisdiction over Mr. Hartley via the Florida Long Arm Statute, the Court still has personal jurisdiction by virtue of Federal Rule of Civil Procedure 4(k)(2). Mr. Hartley is also alleged to have been a founding partner and director of Defendant Praetorian Fund. Id. After at least one Plaintiff wired funds to the escrow agent, located in Florida, Mr. Hartley, along with van Siclen, is alleged to have met with a co-trustee of the 2009 Hubbard Family Trust wherein he emphasized what a wonderful investment it was. Mr. Hartley is also alleged to have made repeated representations to the Plaintiffs that the
Fisker shares were owned by G. Power. Id. These specific allegations coupled with the allegations of conspiracy regarding Mr. Hartley and the other Defendants is sufficient for the Court to conclude that Mr. Hartley has sufficient minimum contacts with the United States as a whole to justify personal jurisdiction.
Accordingly, the Court rejects any assertion by Mr. Hartley that the Court is without jurisdiction over him. Accordingly, the court finds that Mr. Hartley has failed to demonstrate good cause to have the admissions withdrawn or amended pursuant to Federal Rule of Civil Procedure.”
Ironically, Hartley is one of the directors of the Conch Farm who are trying to sue the Turks and Caicos Islands Government for US$50million. His wife Monique Allen, is the lawyer who filed the case against TCIG.