Section 21(E) of the Exchange Act [15 U.S.C. §78u-5] provides a safe harbor for forward-looking statements that is not available to USSE in this case as Rivera claims. [List, ¶ 4] Section 21(E)(b)(C) excludes penny stock companies from any such safe harbor. Moreover, Section 21(E)?s safe harbor provision and the bespeaks caution doctrine apply to forward-looking statements only, and not to material omissions or misstatements of historical fact. In re Constellation Energy Group, Inc. Securities Litigation, Fed. Sec. L. Rep. P 95,837, D.Md., 2010. Here, any application of the safe harbor rule is ineffective both because USSE has always been a penny stock [Facts, ¶ 1] and, more critically, because misrepresentations like USSE has a “fully operational plant in production” materially misstates an historical fact and is not forward-looking in any regard.
Case 5:08-cv-00245-DCB-JMR Document 79 Filed 11/24/10 Page 15 of 23
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