Plaintiff's answer to defendant Dror's motion to quash

                                              UNITED STATES DISTRICT COURT

FOR THE SOUTHERN DISTRICT OF FLORIDA

MIAMI DIVISION

CASE NO.: 13-20190-CIV-GRAHAM/GOODMAN

AMIR A. KAMMONA,

Plaintiff,
v.
ONTECO CORPORATION, DROR
SVORAI, HAIM MAYAN, JORGE
SCHCOLNIK AND ACTION STOCK
TRANSFER CORPORATION,
Defendants.
PLAINTIFF'S ANSWER TO DEFENDANT'S DROR SVORAI MOTION TO QUASH SERVICE OF PROCESS.
The Plaintiff is filing this motion in order to oppose the Defendant's motion to quash.
The Plaintiff put a serious effort to serve the Defendant.In addition we can notice the following:

1- The process was served by the sheriff.
2- It took the Sheriff about 5 attempts or more (as shown in the proof of service submitted to the court) to achieve this service on that same address to reach make contact.There is no reason for such effort on a bad service.
3-The same Sheriff returned a non service on the address of Defendant Haim Mayan stating that the address was in correct [Exhibit 1].There is no reason for the sheriff to treat this differently if the address was incorrect.
4-To the best knowledge of the Plaintiff the address used is the address on the defendant's driver license at the time.
5-Service on the most recent address the defendant mentioned in his sec filings has failed.
According to Defendant Onteco Corporation filing with the SEC that address was changed more than two months before the Plaintiff filed his complaint on 1/17/2013.
6-On 4/2/2012 the Plaintiff filed Schedule 13d/A with the SEC and in it,at the top of the page, the Plaintiff declared that he intends to file a lawsuit against the Company.The filing is accessible through the SEC web site www.sec.gov.
7-Despite the fact that the Defendant was the CEO during the period starting from the date mentioned in point 5 above until his resignation on 11/9/2012 the company filings kept mentioning in its filing this or something of this sort:
"Management is not aware of any legal proceedings contemplated by any governmental authority or any other party involving us or our properties. As of the date of this Annual Report, no director, officer or affiliate (i) a party adverse to us in any legal proceeding, or (ii)has an adverse interest to us in any legal proceedings. Management is not aware of any other legal proceedings pending or that have been threatened against us or our properties".
 8-We can see an intentional attempt to avoid service even in this motion filed by the Defendant where he alleged a different address but did not give more than the city and county of that address.
9-Also,In an effort to inform the Defendants about the filed lawsuit the Plaintiff used a website to show the complaint filed with the court with the case number and all Defendants listed.In addition the Plaintiff also scanned actual size copies of all the summons issued by the court and also displayed them at that website.The complaint and the court summons are all accessible at the first page on that website.The address of that website is complaintandsummons.blogspot.com.
10- On 5/9/2013 the Plaintiff filed Schedule 13d in which the Plaintiff declared at the top that a lawsuit was filed and mentioned the case number in addition to the names of all defendants.The Plaintiff also mentioned the address of website(complaintandsummons.blogspot.com) mentioned in point 9 above.

PLAINTIFF'S ANSWER TO DEFENDANT, ONTECO CORPORATION’S MOTION TO DISMISS THE COMPLAINT

UNITED STATES DISTRICT COURT

FOR THE SOUTHERN DISTRICT OF FLORIDA

MIAMI DIVISION

CASE NO.: 13-20190-CIV-GRAHAM/GOODMAN

 

AMIR A. KAMMONA,

Plaintiff,

v.

ONTECO CORPORATION, DROR

SVORI, HAIM MAYAN, JORGE

SCHCOLNIK AND ACTION STOCK

TRANSFER CORPORATION,

Defendants.

PLAINTIFF'S ANSWER TO DEFENDANT, ONTECO CORPORATION’S MOTION TO DISMISS THE COMPLAINT.

Background

The Plaintiff,Amir A Kammona,filed the lawsuit described above on the Defendants on 1/17/2013 for the fraud and/or tort actions that were the cause and/or the proximate cause for the injury to the Plaintiff's ownership, value and rights in the public corporation(Defendant Onteco Corporation).

Memorandum of Law

Summery of Defendant's arguments

Defendant Onteco Corporation ("Onteco") argument for the dismissal of the Plaintiffs complaint against the Defendant was based on the following:

A-"the Complaint seeks relief that is essentially on behalf of the corporation or all similarly situated shareholders, rather than the Plaintiff as an individual; however Plaintiff has made no attempt to bring this as a derivative action and it must therefore be dismissed."

B-"the Complaint should be dismissed pursuant to Fed.R.Civ.P. 12(b)(6) and (9)(b) for failure to state a claim and lack of specificity."

C-The complaint should be dismissed for failure to serve the complaint within the 21 days time limit set by a court order issued on 4/9/2013.

 

 

Plaintiff's Answer

A-The derivative standing only argument

First,it is not clear why Defendant Onteco referred to Florida's law citations in this matter instead of the Federal law or the law of the state of incorporation which is Nevada.

Second,defendant Onteco's assertion that the complaint can stand only as a derivative complaint is wrong for the following reasons:

1-The dilution relief demands,in the Plaintiff's complaint, enables the Plaintiff to bring a direct lawsuit because dilution by issuing shares has a path for direct injury to shareholders that is separate from the injury path to shareholders that comes through the injury to the diluted company.A company may sell shares at the best prices possible and increase its assets significantly.Nevertheless shareholders may have a just direct cause of action on that company if the selling of those shares was not for their best interest and was mainly done to make them share ownership with the buyers of those shares.For the company itself things are better.Original shareholders,on the other hand,may see that they are not better because their ownership in the company was diluted.

Now,in the Plaintiff's case here,in addition to the direct injury to shareholders there is also an injury to the corporation that may give a derivative standing for the lawsuit but it certinly does not take away the direct standing to file a lawsuit.

 

2-Having a legitimate representation is a right that belongs to shareholder directly. Therefore, there is also a direct standing to bring this complaint starting with contesting that the board of directors were not chosen according to the Bylaws of Defendant Onteco Corporation which requires that

"The annual meeting of stockholders for the election of directors shall be held on a day during the first six months of each fiscal year, at a time, and at a place all as set by the Board of Directors. At said meeting the stockholders shall elect by plurality vote, a Board of Directors, and may transact such other business as may come before the meeting."

Electing the board of directors based on votes from the dilution fraud doesnt satisfy the requirement of the article of incorporation.Furthermore,to the best recollection of the Plaintiff ,who is the shareholder with the most legitimately owned shares,he doesn't remember receiving proxy voting materials or any voting opportunity given to him.

If the board of directors of the corporation did not reach their position according to the rules of the article of incorporation then they were illegitimate representation for shareholders and therefore shareholders can file lawsuits directly even for matters that affect them through the corporation only.

3-Even if we assume that the representation for shareholders was based on valid grounds,the level and amount of clear fraud and/or careless recklessness and disregard for shareholder interest that was described in the complaint gives a direct standing to bring this lawsuit demanding cancellation of the representation of the board of directors to shareholders. After cancelling this representation a direct standing would be correct to bring whatever demands currently can be brought only through a derivative standing.In other words,at the start,the standing comes from a claim seeking to cancel the representation to shareholders by the board because of all the bad things they did to the company rather than a claim seeking a relief from all those bad things.While those bad actions individually directly affected the corporation itself,altogether they also directly affected shareholders because through their frequency and intensity in careless disregard for shareholder interest those actions shows a completely severed representation connection of board directors to the shareholders and abolished that the board of directors should be accepted as a representation for shareholders.

It is also important to point out that although the complaint was filed as a direct standing complaint,it is ready to fit all the requirements of rule 23.1

 

B

1-The Federal Rules Of Civil Procedures ("FRCP") 12b(6) argument

It is very hard to see any merits for this allegation.The Plaintiff's complaint clearly contains claims "upon which relief can be granted".FRCP Rule 12b(6) is related to the entire complaint and not just the relief section.The actions of the Defendant Onteco Corporation described throughout the complaint are sufficient to make seeing granting a relief for all the dilution and other tort claims related to the complaint plausible.

2-The Federal Rules Of Civil Procedures ("FRCP") 9(b) argument

The Plaintiff's complaint satisfy the specificity requirement of rule 9(b).It is possible to make an argument for fraud at various levels from the claims in the lawsuit.

The Defendant said

"It is well-established that "[i]n order to state a claim under §10(b) and Rule 10b-5, a plaintiff must show the following: ‘(1) a misstatement or omission, (2) of material fact, (3) made with scienter, (4) on which plaintiff relied, (5) that proximately caused his injury."

Below we apply the five factors mentioned above to the fraud claim at the basic level in order to

show that all of those five factors are obvious and implied from the claims the Plaintiff made in his complaint.

 

1) a misstatement or omission

It is not hard to see the misstatement or omission in the tortuous actions of Defendant Onteco through its board of directors.The dilution and other tortuous actions makes the duty they had to work for the best interest of shareholders a misstatement or omission.

2)of material fact

It is clear that the board of directors work for the best interest of shareholders is a very important material fact to shareholders.

3) made with scienter

The embarrassment of bad intention is clear because of how clear the potential consequences of those tortuous actions were.

4) on which plaintiff relied

Any reasonable investor would relay on that the board of directors should work for the best interest of shareholders.

5) that proximately caused his injury

The dilution and other tortuous actions by the board of directors of defendant Onteco clearly were a proximate cause for the Plaintiff's injury.

In addition,even if the Plaintiff had failed to satisfy the specificity requirement of FRCP Rule 9(b) the complaint doesnt need to be dismissed because it contain clear claims of tortuous actions done by Defendant Onteco.As for the jurisdiction, there is also diversity jurisdiction for the court here based on the fact that the Plaintiff reside in different state from all the defendants and the value of the requested relief or the cost of $220233.57 the Plaintiff incurred to obtain his shares (this cost was not mentioned in the Plaintiff's complaint).

 

C-The complaint should be dismissed for failure to serve the complaint within the 21 days time limit set by a court order issued on 4/9/2013.

The Plaintiff filed his lawsuit on 1/17/2013 and Defendant Onteco was served within the 120 days allowed by FRCP Rule 4(m).As for the order of 4/9/21,which took away more than two weeks from the 120 days allowed by FRCP Rule 4(m),for the court to do what it believe to be just has much more priority than adjudicating based on that order.Nevertheless,although the Plaintiff did not see any justification for that order and was taken by surprise by it,he tried to comply with it from the first time he received it.Here are some of what the Plaintiff did to comply with that order:

On 4/15/2013 the next business day after the Plaintiff found that order in his mail box,4/15/2013,the Plaintiff started contacting process servers to perform service of process(email documented fact).The next day The Plaintiff continued to search for process server to serve the complaint and made contacts some of them are documented in email.On 5/17/2013 the Plaintiff hired a process serving company called Front Range Legal Process and paid $485 for the fastest type of service available,rush service (fact documented in credit card account).After the failure of this process server to serve on all Defendants the plaintiff went on to hire other process servers including multiple process servers at the same time.The plaintiff paid a total of $950.50 to various process servers.

Included with this answer to the Defendant's motion are the following exhibits to show some of the efforts and expense the Plaintiff took trying to serve the complaint:

EXHIBIT 1 Shows service of process charge of 4/17/2013 on the Plaintiff's Discover credit card account.

EXHIBIT 2 Shows various service of process charge on the Plaintiff's Chase credit card account

EXHIBIT 3 shows service of process charge on the Plaintiff's Capital One credit card account.

EXHIBIT 4 shows checks paid for service of process.

EXHIBIT 5 PAGES 1-5 shows service of process emails sent from the Plaintiff's email accounts.

 

 

WHEREFORE, Plaintiff,Amir A Kammona , respectfully requests that the court deny the Defendant's motion.

PLAINTIFF'S ANSWER TO DEFENDANT,JORGE SCHCOLNIK"S MOTION TO DISMISS.

UNITED STATES DISTRICT COURT

FOR THE SOUTHERN DISTRICT OF FLORIDA

MIAMI DIVISION

CASE NO.: 13-20190-CIV-GRAHAM/GOODMAN

　

AMIR A. KAMMONA,

Plaintiff,

v.

ONTECO CORPORATION, DROR

SVORI, HAIM MAYAN, Schcolnik

SCHCOLNIK AND ACTION STOCK

TRANSFER CORPORATION,

Defendants.



PLAINTIFF'S ANSWER TO DEFENDANT,Jorge SCHCOLNIK("Schcolnik"),MOTION TO DISMISS THE COMPLAINT.

Background

The Plaintiff,Amir A Kammona,filed the lawsuit described above on the Defendants on 1/17/2013 for the fraud and/or tort actions that were the cause and/or the proximate cause for the injury to the Plaintiff's ownership, value and rights in the public corporation(Defendant Onteco Corporation).

Memorandum of Law

A-The Defendant claim that the complaint against him should be dismissed or quashed for insufficient process according to Federal Rules Of Civil Procedure("FRCP")12(b)(5).

The Plaintiff answers as follows:

1-The Plaintiff first made service of process on Defendant Onteco Corporation's (The "Company") previous address(19495 Biscayne Blvd.Suite 411 Aventura Florida)which was also what Defendant Schcolnik mentions as his address in his Securities And Exchange Commission ("SEC") filings. Service on that address failed for both the Company and Defendant Schcolnik [EXHIBIT 4] .

Then the Plaintiff noticed that in its 10-k filing with the SEC on 4/16/2013 the Company reported that on 11/8/2013 they changed to a different address. The address of Defendant Schcolnik was mentiond as a care of (c/o) of this new address.

That meant from the first day the Plaintiff filed his complaint until 4/16/2013,when the Company reported that change of address,any service of process attempt on the address reported by Defendant Schcolnik himself in his SEC filings as his current address would have also failed.

According to Defendant Onteco filings "Effective November 9, 2012, the Board of Directors accepted the consent of Mr. Schcolnik as the President, Secretary and Treasurer/Chief Financial Officer" after the resignation of the CEO,Defendant Dror Svorai.In addition,the SEC report filed on 4/16/2013 was signed by Defendant Schcolnik as the "Principal Executive Officer".

2-The Plaintiff arranged for service of process by Front Range Legal Process process server on Defendant Schcolnik at the new address mentioned in that SEC filing as the address of the Company and also the address for Defendant Schcolnik.That address is 2450 Hollywood Blvd, Suite 708 Hollywood, FL 33020.The process server sent me an email regarding the unavailability of that address [EXHIBIT 5].

The Plaintiff then hired a different process serving company called Process services Inc. to attempt service on that same address.After a while the process serving company sent me an affidavit of non-service [EXHIBIT 4 (lower part)].

That meant that service on an address that was mentioned by Defendant Schcolnik as his current address less than 10 days from the date on that email from the first process and 17 days from the affidavit of the second process server address has failed.

In both cases above the service of process failed on that address for both the Company and Defendant Schcolnik.

Nevertheless, the Company filed a SEC report on 5/21/2013,also signed by Defendant Schcolnik as "Chief Executive Officer(Principal Executive Officer) Chief Financial Officer(Principal Financial Officer)", in which it again mentioned the same address as its current address.

It also needs to be pointed out that all these events happened before 5/30/2013 when Defendant Schcolnik resigned from his position with the Company as mentioned in his motion.

3-It should be noted that the service of process address failure in point 1 and 2 is not like any service of process address failure.Unlike a situation where a Plaintiff find a defendant's address from different source,these addresses were provided by the Defendant Schcolnik himself.Furthermore,those addresses were provided in SEC filings where correct information is required.In addition,investors depend on information filed with the SEC and someone with a position like that Defendant Schcolnik had with the company has even more duty to himself to keep shareholders updated with the current and correct address if he cares about being notified about actions taken by shareholders.

4-What emphasizes the importance of keeping correct address by someone with a position in a company like that of Defendant Schcolnik is the fact that on 4/2/2012 the Plaintiff filed Schedule 13d/A with the SEC and in it,at the top of the page, the Plaintiff declared that he intends to file a lawsuit against the Company[EXHIBIT 6].The filing is accessible through the SEC web site www.sec.gov.

5-Also,In an effort to inform the Defendants about the filed lawsuit the Plaintiff used a website to show the complaint filed with the court with the case number and all Defendants listed.In addition the Plaintiff also scanned actual size copies of all the summons issued by the court and also displayed them at that website.The complaint and the court summons are all accessible at the first page on that website.The address of that website is complaintandsummons.blogspot.com [EXHIBIT 8 (showing first page and summon page for the Defendant)] and it has been showing the materials currently on it since 5/6/2013.

6-On 5/9/2013 the Plaintiff filed Schedule 13d in which the Plaintiff declared at the top that a lawsuit was filed and mentioned the case number in addition to the names of all defendants[EXHIBIT 7].The Plaintiff also mentioned the address of website(complaintandsummons.blogspot.com) mentioned in point 5 above.

7-Despite announcing in SEC filing the intention to file a lawsuit then the lawsuit itself as mentioned in point 4 and 7 on 4/2/2012 and 5/9/2013 respectively,the Company kept alleging in all its filings with the SEC that they do not know of any legal proceedings pending or threatened against the company.That continued even after Defendant Schcolnik started signing these reports as the "Principal Executive Officer".Here is what both of the last two SEC reports since Defendant Schcolnik became the Principal Executive Officer filed by the company on 4/16/2013 and 5/21/2013 contain regarding this matter:

"Management is not aware of any legal proceedings contemplated by any governmental authority or any other party involving us or our properties.As of the date of this Annual Report, no director, officer or affiliate (i) a party adverse to us in any legal proceeding, or (ii)has an adverse interest to us in any legal proceedings. Management is not aware of any other legal proceedings pending or that have been threatened against us or our properties".

8-The Plaintiff also tried to communicate through email with defendant Schcolnik. In the past year the Plaintiff sent and received email from the Company using the address info@onteco.com.The Plaintiff used this same email address to send an email containing the Plaintiff's complaint and court summons as attachments.On 5/4/2013 the Plaintiff sent that email to info@onteco.com and jorge@onteco.com,among others[EXHIBIT 3].The Plaintiff received emails confirming the proper delivery of emails directed to those addresses [EXHIBIT 1 AND EXHIBIT 2].

9-Since service on the two most recent company addresses had failed,the plaintiff decided to search for the residential address for Defendant Schcolnik.Then the Plaintiff hired for another process server who later informed the Plaintiff that the Defendant was served at the address the Plaintiff found as the defendant's address.That process server is PPS Services Inc. which is a member of the Florida Association of Professional Process Servers.

10-The Plaintiff had no reason to select this address had he found a different more probable address.

B-The Previous dismissal claim

The Defendant's claim in foot note 1 of the first page of his motion that the complaint was Previously dismissed could be misleading.First,the complaint was dismissed because the Plaintiff himself filed for a voluntary dismissal without prejudice.Second,the Plaintiff did not try to hide that he previously filed a similar complaint and checked the box that indicated it was related to a previous filing when he made this second filing.

C-The insufficient factual allegations claim

Also at the foot notes of the first page the Defendant claims that the Defendant was mentioned only twice and that all of the allegations forming the basis of the complaint happened well before the Defendant joins the Company and therefor had absolutely nothing to do with the Defendant.

First,the complaint is a notice pleading complaint.Therefore not everything can be mentioned.

Second,joining the board of directors of the company is not a simple direct thing but a significant thing that imply other things and can lead to other future things.The Defendant supported the continuation of system that caused substantial and clear fraud and/or tort to shareholders.The former sole director in the board,Defendant Dror Svorai,unjustly took the company from shareholders.By joining the board of directors this Defendant became part of a group using something they do not have the right to use.The unreasonable actions from the board of directors before the Defendant joined the Company were very clear.In addition,as mentioned in point 4 in part A of this motion answer the Plaintiff filed a SEC schedule 13d report on 4/2/2012 in which he declared at the top of first page his intention to file a lawsuit. Moreover, as mentioned in part A the Defendant even reached the highest position possible.Also,from 11/9/2012 to 12/18/2013 the Defendant was the sole member of the board of Directors of the Company(Defendant Onteco Corporation).

Also,at the same day the Defendant became the second board member in the two members board of directors of the Company (8/31/2012) he received a 50000000 (post January 2012 reversed split)shares.

In addition,after the Defendant became part of the board the Company took these additional fraudulent/tortuous steps.

1- Decided to spin off the NexPhase subsidiary into another company.

2- Decided to do share exchange with a private Florida corporation company called Cyber Centers Worldwide Corporation.

3-Did another reverse split.This time the reverse split was at a rate of one share for every two thousands shares.

D-Court Order of 4/9/2013

The Defendant argued in its motion that the Plaintiff failed to comply with the court order of 4/9/2013 and also failed to provide a reason or good cause to the court regarding that failure.

Although the Plaintiff did not see any justification for that order and was taken by surprise by it,he tried to comply with it from the first time he received it.The Plaintiff did not provide the court for good cause not because a good cause does not exist but because FRCP Rule 4(m)states that dismissal of a complaint for not complying with the 120 day time limit to serve the complaint happens "after notice to the Plaintiff" .While the order of 4/9/2013 shortened the 120 day time limit it did not indicate that there will not be a notice to the Plaintiff before it issue a dismissal.That is why the Plaintiff thought that he may need to wait for such notice before explaining his good cause to the court.

This same issue was also raised in Defendant Onteco Corporation's motion to dismiss and was answered with more details there because of the availability of more space for exhibits.

It should be noted that the Defendant failed to comply with FRCP Rule 5(a) by not delivering a copy of this motion to the Plaintiff.The defendant also did not include the Plaintiff in his certificate of service filed with the motion.There is a ground for the Defendant's motion to be considered in effective because of that.

See International Controls Corp. v. Vesco, 556 F.2d 665,669 (2d Cir. 1977)(amended complaint remains inchoate until served under Rule 5(a)).

The Plaintiff was able to find this motion and respond because he used the PACER system over the Internet.

Wherefore the Plaintiff is respectfully requesting that the court either deny the Defendant motion or ,if the court sees that service of process is still required on the address the Defendant alleged as his address in his affidavit,order service on the Defendant by United States marshal or deputy marshal or by a person specially appointed by the court with the cost of that on the Plaintiff.

Safeguarding my freedom of expression

In order to protect my freedom of expression I reserved an address on the web I can use if I want to.

That address is: www.uemcs.com
It is currently empty.

Plaintiff Answer To Defendant's Action Motion To Dismiss

UNITED STATES DISTRICT COURT

FOR THE SOUTHERN DISTRICT OF FLORIDA

MIAMI DIVISION

CASE NO.: 13-20190-CIV-GRAHAM/GOODMAN

　

 AMIR A. KAMMONA,



Plaintiff,

v.

ONTECO CORPORATION, DROR

SVORI, HAIM MAYAN, JORGE

SCHCOLNIK AND ACTION STOCK

TRANSFER CORPORATION,

Defendants.

PLAINTIFF'S ANSWER TO DEFENDANT, ACTION STOCK TRANSFER CORPORATION’S MOTION TO DISMISS THE COMPLAINT.

Background

The Plaintiff,Amir A Kammona,filed the lawsuit described above on the Defendants on 1/17/2013 for the fraud and/or tort actions that were the cause and/or the proximate cause for the injury to the Plaintiff's ownership, value and rights in the public corporation(Defendant Onteco Corporation).
 　

Memorandum of Law

Summery of Defendant's arguments
 Defendant Action Stock Transfer Corporation ("Action") based its argument

for the dismissal of the Plaintiffs complaint against the Defendant was based

on the following reasons:

1-That the complaint should be dismissed because the Plaintiff failed to state a claim upon which relief can be granted (FRCP (Federal Rules Of Civil Procedure) 12(b)6).

2-That the complaint should be dismissed because the Plaintiff failed to satisfy the particularity requirement for fraud claims (FRCP 9(b))

3-That the complaint should be dismissed because the court lack personal jurisdiction (FRCP 12(b)2)
 　
 Plaintiff's Answer:
 The Defendant's motion should be denied. Here are the answers for the arguments raised by the Defendant

1-That the Plaintiff failed to state a claim upon which relief can be granted

(FRCP 12(b)6).
 Defendant Action claim that the Plaintiff's complaint failed to state a claim upon which relief can be granted is false. The Plaintiff showed in point 55 and 56 in the complaint how according to Defendant Onteco Corporation the number of shares in the market was significantly increased with shares that were restricted. The Plaintiff also referred to a big increase in the trading volume and big decrease in the stock price in points like 45 and 49.Allowing such enormous number of restricted shares to enter the market and be freely tradeable there can clearly put a huge pressure on the price.A transfer agent is responsible for arranging for the restricted shares to inter the market. Based on what was reported by Defendant Onteco Corporation, Defendant Action,being the transfer agent of Defendant Onteco Corporation, violated the law by allowing restricted shares to enter the market before the elapse of the waiting period required by Securities and Exchange Commission ("SEC") under 17 C.F.R § 230.144 ("SEC Rule 144") and was a proximate cause for the price of the stock going down and in turn all the injury resulted from that to the Plaintiff.

The Plaintiff's complaint also showed in point 43,44 and 47 how the Plaintiff alone was able to buy in the open market shares that significantly exceed what Defendant Action should have allowed to be sold in the market according to SEC Rule 144.



2-That the Plaintiff failed to satisfy the particularity requirement for fraud

claims (FRCP 9(b))
 Defendant Action claim that the Plaintiff's complaint should be dismissed because it did not satisfy the particularity pleading requirement of rule FRCP 9(b) should be denied for two reasons each one of them is sufficient by itself. These reasons are:

A-It makes false claim

B-It makes a wrong demand for its claim.

　

A-The Defendant making false claim

While the Plaintiff might have not mentioned Defendant Action more than twice,as the Defendant mentioned in its motion,the complaint alleged the necessary requirement to satisfy FRCP Rule 9 (b).I quote from the Defendant's motion:

["[i]n order to state a claim under §10(b) and Rule 10b-5, a plaintiff must show the following: „(1) a misstatement or omission, (2) of material fact, (3) made with scienter, (4) on which plaintiff relied, (5) that proximately caused his injury." Ziemba v. Cascade Intern., Inc., 256 F.3d 1194, 1202 (11th Cir. 2001) (quoting Bryant v. Avado Brands, Inc., 187 F.3d 1271 (11th Cir. 1999). ]

Below we take the five factors mentioned above in the same order they were mentioned in order to show that all of those five factors are obvious and implied from the allegations the Plaintiff made in his complaint.

(1) a misstatement or omission

As mentioned in the complaint Defendant Action,being the transfer agent of Defendant Onteco Corporation,violated the law by allowing restricted shares to enter and be sold in the market before the elapse of the waiting period requirement of SEC Rule 144.Since the Defendant was required to be restricted by the law in its work as a transfer agent, the violation of SEC Rule 144by Defendant Action meant that Defendant Action's acceptance to work as the transfer agent for Defendant Onteco Corporation became a misstatement or omission and/or containing misstatement or omission regarding this matter.

(2) of material fact

It is clear that information about Defendant's Action violation of the law by allowing that significant amount of restricted shares to enter the market is material fact to investors.

(3) made with scienter

The scienter intention is very probable since there is little probability that a transfer agent corporation would miss that it was allowing all those shares to enter the market before the elapse of the waiting period requirement of SEC Rule 144.

(4) on which plaintiff relied

The Plaintiff, like any shareholder or potential buyer for the stock else, relies on that a transfer agent should be restricted by SEC Rule 144.

(5) that proximately caused his injury

The Plaintiff referred to a big increase in the trading volume and big decrease in the stock price in points like 45 and 49.The effect of very big number of shares entering the market without waiting the required period under SEC Rule 144 is a reasonable proximate cause for the price of the stock going down and causing injury to the Plaintiff. As an indication for the availability of those shares in the market The Plaintiff's complaint also showed in point 43,44 and 47 how the Plaintiff alone was able to buy in the open market shares that significantly exceed what Defendant Action should have allowed to be sold in the market according to SEC Rule 144.

B-The Defendant making wrong demand for its claim.

Even if the Plaintiff's complaint failed in satisfying the fraud pleading particularity requirement of FRCP Rule 9(b) that shouldn't lead to a dismissal.That is because the claims in the plaintiff's complaint against Defendant Action describes clear tort action or wrong done that was the proximate cause to the Plaintiff's injury on which the complaint can stand without the need for the fraud allegation.

In addition, there is also diversity jurisdiction for the court here based on the fact that the Plaintiff reside in different state from all the defendants and the value of the requested relief or the cost of $220233.57 the Plaintiff incurred to obtain his shares (this cost was not mentioned in the Plaintiff's complaint).



3-That the court lack personal jurisdiction (FRCP 12(b)2)
 1-Court has personal jurisdiction under 15 USC & 78aa and FRCP 4(K)(1)(C).

The court has personal jurisdiction because of the Defendant's violation for the securities Law codified at 15 U.S.C. § 78a as described in point 1 above.The violation of 15 U.S.C. § 78a brings nationwide personal jurisdiction authorized by congress under 15 U.S.C. § 78aa.

See Leasco Data Processing Equip. Corp. v. Maxwell, 468 F.2d 1326, 1339 (2d Cir. 1972) (provision of Securities Exchange Act, 15 U.S.C. § 78aa, relating to jurisdiction and venue is intended to extend personal jurisdiction to full reach permitted by Due Process Clause).

See also

Busch v. Buchman, Buchman, & O’Brien, Law Firm, 11 F.3d 1255, 1258 (5th Cir. 1994) (when federal court is attempting to exercise personal jurisdiction over defendant in action based on federal statute providing for nationwide service of process, relevant inquiry is whether defendant has had minimum contacts with United States, not with forum state).

In addition,four out of the five defendants named in the complaint reside in the state of Florida.The Plaintiff himself is resident in the state of Tennessee.

2-The court also has personal jurisdiction over the defendant Action based on the combination of :

A- constitutionally sufficient minimum contact

B- sufficient satisfaction for the Florida long-arm requirement.

　

A-Satisfying the constitutionally minimum contact requirement

Defendant Onteco Corporation is located in Florida. Defendant Action was the transfer agent of Defendant Onteco Corporation.By accepting being the transfer agent for a corporation located in Florida Defendant Action clearly availed itself to the privilege of conducting activities in the state of Florida ,thus invokingthe benefits and protections of Florida's Law.In addition,the claims in the complaint filed by the Plaintiff are all resulted from Defendant's Action work as the transfer agent for Defendant Onteco Corporation.

B-Satisfying Florida's long-arm requirement

Satisfying Florida's long-arm requirement was met from these two paths each one of them is sufficient on it own.

1-Satisfying Florida's long- arm requirement through Fla. Stat. § 48.193 (1)(a)

Defendant Onteco Corporation maintains its main office in Florida.Defendant Action was the transfer agent of Defendant Onteco Corporation.Being the agent of Defendant Onteco Corporation meant that to the Plaintiff,who is a shareholder of Onteco Corporation,Defendant Action was the face and extension to Defendant Onteco Corporation in matters related to the transfer agent tasks to which the plaintiff's claims regarding Defendant Action belong.In other words,Defendant Action should be treated as if it was a corporation in Florida in matters related to the claims in Plaintiff's complaint because it represented a corporation in Florida in matters from which the Plaintiff's claims arise.

2-Satisfying the Florida long arm requirement through Fla. Stat. § 48.193(1)(b)

Defendant Action committed a tortious act against Defendant Onteco Corporation by violating the law allowing significant number of restricted shares to be sold in the market before the elapse of SEC Rule 144 waiting period requirement.That action helped in taking and keeping the stock price of the public corporation low and caused injury to the corporation.Since Onteco corporation is a resident of the State of Florida and the claims in the Plaintiff's complaint regarding Defendant Action were based on those same actions from Defendant Action,the long-arm requirement of the State of Florida apply here according to Fla. Stat. § 48.193(1)(b).



　
 WHEREFORE, Plaintiff,Amir A Kammona , respectfully requests that the court deny the Defendant's motion. ??