Velocity Investments LLC Case Dismissed For Lack Of Subject Matter Jurisdiction
As one of the more prominent and successful penny stock investors, Velocity Investments LLC has developed a reputation for aggressively pursuing claims in class action lawsuits involving injury claims. In 2021, Velocity Investments LLC was named as a defendant in a Washington State Lawsuit which alleged that the company’s founders and leaders had neglected to conduct proper research prior to offering the stock on the market. As a result of this lawsuit, Velocity Investments was forced to change the name of its business and its mailing address. The plaintiffs’ lawyer claimed that the defendants failed to take reasonable precautions to protect the public from the risk posed by the business. On appeal, the Washington State Supreme Court declined to grant class-action status to the case. In doing so, the court emphasized that although the conduct of the business owners had been negligent, they did not act with “reckless disregard” as required by the statute of limitations that allows victims of personal injury to seek damages against those responsible for such negligence.
The facts underlying this lawsuit are complex and intertwined.
Plaintiffs contend that the defendants deliberately ignored information that suggested that Acme Pharmaceuticals Inc. was a poor investment. The evidence against them consisted of letters that one of their directors had written advising investors to purchase Acme Pharmaceuticals, despite the fact that the company was not profitable. At a later meeting, at a conference to discuss the lawsuit, the attorneys for the defendant discussed ways to settle the lawsuit without going to trial.
One of the attorneys representing the investors, Robert Keene, suggested that the defendant (Velocity Investments LLC) could settle the claim without going to trial.
According to Mr. Keene, the investors would settle for a number of reasons, including the fact that there was no real chance of winning the case. One of the lawyers for the investors, Mark Wigley, indicated that he would consider going to trial only if the plaintiff did not agree to a settlement. Mr. Wigley also implied that the investors would lose their opportunity to present their case in court. Mr. Wigley further stated that the statute of limitations for filing a civil lawsuit against a corporation expired on the date that the lawsuit was filed.
Two months after the conference, on November 6, 2021, the shareholders voted to terminate Mr. Keene as their representative on the board.
On the same day, Mr. Keene died in an accident. Mr. Wigley was named acting CEO and general counsel, and Mr. Patrick Swayze, a Velocity Investments LLC director, was designated to be the new president. Mr. Wigley and Mr. Swayze were also named co-directors and officers of the company. As a result of these changes, the lawsuit was delayed until a later date. The lawsuit was filed by the shareholders against Mr. Keene’s former wife, Amber, and Mr. Keene’s son, Austin.
Plaintiffs’ claim against Mr. Wigley and Mr. Swayze is negligence. They contend that they acted in a reckless and negligent manner when they advised investors in Velocity Investments LLC of the risk of purchasing shares in the company and then did nothing to protect those investors from the risk of the transaction. According to the plaintiffs, Mr. Wigley failed to appropriately warn investors of the risks associated with the investment, and Mr. Swayze did not provide adequate training to investors about the dangers of purchasing the investment. Additionally, the plaintiffs argue that they were forced to file the lawsuit against Mr. Wigley and Mr. Swayze due to their injuries that occurred during the course of their employment with Velocity Investments.
The defendants respond to the complaint.
They maintain that the claim is barred by the statute of limitations. They argue that the claim should have been filed against them as the principal and not as an individual investor. In addition, they maintain that the claim is barred because it is irrelevant to whether the investors insured the debt of the defendant, which is a necessary element of the underlying claim. In short, they argue that because the underlying claim does not involve the conduct of a transaction, it is irrelevant to the liability of the defendant.
The claim is also dismissed for lack of subject matter jurisdiction. The claim was filed within three years of the date of injury, when injury compensation is calculated based on a 24-month period. It is also irrelevant whether or not the claim was pursued at the time the underlying contract was entered into, or whether any damages ever arose from such conduct. If the claim was pursued at any time during that period, the defendant is vicariously liable for those damages.
Finally, the claim fails to state a cause of action. The complaint must specifically state the claim for damages.
Even if the claim was within the statute of limitations, the plaintiff would still have to pursue it against the defendant unless the claim was judicially waived. Because the claim was improperly filed and the defendant never agreed to move for summary judgment, this summary judgment ruling permits the defendants to escape liability and permit the injured parties to obtain the monetary damages they seek.