(MENAFN- iCrowdNewsWire) A judge of the Massachusetts Superior Court has now denied the efforts of the President/Chief Executive Officer, as well as a Director, of Guided Therapeutics Inc. (“GTI”) to prevent trial on individual civil claims against them in connection with fundraising, first provided to another company with which they were each connected, but which funds were ultimately lent to GTI. The claims are brought by a Massachusetts-based investor against them for violation of the Massachusetts state securities law, the Massachusetts unfair and deceptive trade practices statute, and conspiracy. GTI itself is not a party to the case and so there are no claims in the case against GTI.
The Massachusetts-based investor, GIUL, LLC, has sued Mark L. Faupel, now President and Chief Executive Officer of GTI, as well as Richard P. Blumberg, Esq., an attorney from the Seattle, Washington area, Blumberg now a Director of GTI, for securities violations among other things in connection with funds GIUL first provided to a company called Shenghuo Medical, LLC, which funds were lent to GTI. Mr. Blumberg, Esq., was a managing member of Shenghuo Medical at the time while Mr. Faupel was a consultant. Another managing member of Shenghuo Medical was also sued along with Shenghuo's corporate attorney. The court concluded that there was evidence presented to date plausibly establishing that both Mr. Faupel and Mr. Blumberg, Esq., were involved in this fundraising. The court further concluded that there was evidence presented to date plausibly proving that both Mr. Faupel and Mr. Blumberg, Esq., in connection with this fundraising, engaged in conduct that violated Massachusetts securities laws, Massachusetts law barring unfair and deceptive trade practices, and Massachusetts law against conspiracy. The suit does not allege that they engaged in this conduct as officers and directors of GTI. But the suit does allege that part of the benefit from their conduct accrued to GTI.
Messrs. Faupel and Blumberg, Esq., and the other defendants brought a motion for summary judgment to try and end GIUL's claims against them without trial. A judge of the Massachusetts Superior Court has now ruled denying the motion for summary judgment as to the securities claim, the unfair and deceptive trade practice claim, and the conspiracy claim and permitted these three claims to go to trial. He did grant summary judgment as to claims for breach of contract, breach of fiduciary duty, reach and apply, and fraud. As a result, Mr. Faupel and Mr. Blumberg, Esq., along with the other defendants, could be found liable at trial for securities violations, unfair and deceptive trade practices, and conspiracy with respect to fundraising that was lent to GTI.
The Court has now scheduled the trial for March 2024.
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