Legal Question in Investment Law in Tennessee

fraud suspected

A small group of investors with over $1,000,000 in investments can not get any kind of straight answer from the company invested in. It has been this way about 4 months now. Lately, we have been told the money is lost.

We all knew the possibility of a risky invesmtent, but this smells very much like fraud in that we don't get any answers are dodged and delayed as often as possible.

This company is based in Tennessee with all the investors scattered throughout the country.

1) The first question is, do we have any right to see the accounting books and what would it take to see them?

2) What does it take to get the FBI or DA to investigate this company and its owner? We have tried, but no one seems to care or be doing anything.

3) if an attorney is required, would it be best to get one in Tennessee near the business, or does that matter?

4) What are the chances we can recover losses and find out the truth?

5) How much can we expect to spend in just trying to find out the truth?

Thank you.

a very nervous and agitated investor


Asked on 9/08/08, 7:28 pm

1 Answer from Attorneys
Bryan C. Becker Your Lawyer for Life.

Re: fraud suspected

I am sorry you are going through this, but you are doing the right thing in pursing this as early and as aggressively as you can. Most often in these cases the earlier you can go after the potential fraud - the better - as assets quickly disappear.

1) As investors, you would have a right to see the general accounting of the company. You don't mention the corporate form of this company, e.g., but both state corporation law as well as SEC laws have strict guidelines in this area that need to be adhered to by corporate management.

2) I am not sure who you tried to contact with the FBI/DA, but if the company is incorporated in TN, have you tried the state AG's office?

3) It is not necessary for the attorney to be located in TN. Given that you are located in CA and investors are located throughout the country, a federal court remedy is likely. It may be necessary for your CA counsel to engage local TN counsel eventually to advise, but if it was me, I would prefer my own CA counsel to lead the case.

4) This is a tough one to answer, but with an attorney who can devote the time and resources to the matter you may be more successful than you may think. That being said, time is of the essence and hopefully this is not as bad as it first appears.

5)Another tough question, as attorneys will likely approach the fee issue in different ways. Our practice offers fixed, flat-fee legal solutions for clients, in addition to accepting cases on contingency.

If you would like to speak further about this, I would be happy to offer my thoughts. Feel free to contact me.

Warmly,

Bryan

Bryan Becker

619.400.4929

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Answered on 9/08/08, 7:43 pm


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