DEFENDANT SIGNATURE WORLDWIDE ADVISORS, LLC.’S ANSWER, AFFIRMATIVE DEFENSES AND DEMAND FOR JURY TRIAL
11/25/2009 33 ANSWER and affirmative defenses to 1 Complaint with Jury Demand by K & L International Enterprises, Inc., Signature Leisure, Inc., Jared E. Hochstedler, Signature Worldwide Advisors, LLC, Stephen W. Carnes, Lawrence A. Powalisz, Enzyme Enviromental Solutions, Inc..(Slaughter, Harrison) (Entered: 11/25/2009)
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UNITED STATES DISTRICT COURT
FOR THE MIDDLE DISTRICT OF FLORIDA
ORLANDO DIVISION
UNITED STATES SECURITIES AND EXHANGE COMMISSION,
Case No. 6:09-cv-1638-GAP-KRS
Plaintiff
v.
K&L INTERNATIONAL ENTERPRISES, INC.,
SIGNATURE LEISURE, INC., SIGNATURE
WORLDWIDE ADVISORS, LLC, STEPHEN W.
CARNES, LAWRENCE A. POWALISZ,
ENZYME ENVIRONMENTAL SOLUTIONS,
INC. and JARED E. HOCHSTEDLER,
Defendants.
__________________________________________/
DEFENDANT SIGNATURE WORLDWIDE ADVISORS, LLC.’S ANSWER, AFFIRMATIVE DEFENSES AND DEMAND FOR JURY TRIAL
Defendant, Signature Worldwide Advisors LLC. (“Signature Worldwide”), by the undersigned counsel, hereby answers and defends the Complaint filed by Plaintiff, United States Securities and Exchange Commission, as follows:
ANSWER
NATURE OF THE CASE
1. Signature Worldwide denies the allegations in Paragraph 1 that pertain to it. Signature Worldwide is without sufficient knowledge or information to admit or deny the allegations that pertain to other Defendants, and as such, therefore denies the remaining allegations.
2. Signature Worldwide is without sufficient knowledge or information to admit or deny the allegations that pertain to other Defendants, and as such, therefore denies the allegations in Paragraph 2.
3. Signature Worldwide denies the allegations in Paragraph 3 that pertain to it. Signature Worldwide is without sufficient knowledge or information to admit or deny the allegations that pertain to other Defendants, and as such, therefore denies the remaining allegations.
4. Signature Worldwide denies the allegations in Paragraph 4 that pertain to it. Signature Worldwide is without sufficient knowledge or information to admit or deny the allegations that pertain to other Defendants, and as such, therefore denies the remaining allegations.
5. Signature Worldwide denies the allegations in Paragraph 5 that pertain to it. Signature Worldwide is without sufficient knowledge or information to admit or deny the allegations that pertain to other Defendants, and as such, therefore denies the remaining allegations.
JURISDICTION AND VENUE
6. Signature Worldwide admits the allegations in Paragraph 6.
7. Signature Worldwide admits that Venue lies with this Court, however, Signature Worldwide is without sufficient knowledge or information to admit or deny the remaining allegations, and as such, therefore denies the remaining allegations in Paragraph 7.
DEFENDANTS
8. Signature Worldwide admits the allegations in Paragraph 8.
9. Signature Worldwide admits the allegations in Paragraph 9.
10. Signature Worldwide admits the allegations in Paragraph 10.
11. Signature Worldwide is without sufficient knowledge or information to admit or deny the allegations that pertain to other Defendants, and as such, therefore denies the allegations in Paragraph 11.
12. Signature Worldwide is without sufficient knowledge or information to admit or deny the allegations that pertain to other Defendants, and as such, therefore denies the allegations in Paragraph 12.
13. Signature Worldwide is without sufficient knowledge or information to admit or deny the allegations that pertain to other Defendants, and as such, therefore denies the allegations in Paragraph 13.
14. Signature Worldwide is without sufficient knowledge or information to admit or deny the allegations that pertain to other Defendants, and as such, therefore denies the allegations in Paragraph 14.
THE ISSUER COMPANIES
15. Signature Worldwide is without sufficient knowledge or information to admit or deny the allegations that pertain to other Defendants, and as such, therefore denies the allegations in Paragraph 15.
16. Signature Worldwide is without sufficient knowledge or information to admit or deny the allegations that pertain to other Defendants, and as such, therefore denies the allegations in Paragraph 16.
17. Signature Worldwide is without sufficient knowledge or information to admit or deny the allegations that pertain to other Defendants, and as such, therefore denies the allegations in Paragraph 17.
FACTS
18. Signature Worldwide denies the allegations in Paragraph 18 that pertain to it. Signature Worldwide is without sufficient knowledge or information to admit or deny the allegations that pertain to other Defendants, and as such, therefore denies the remaining allegations.
THE REVENGE PROMISSORY NOTES
19. Signature Worldwide is without sufficient knowledge or information to admit or deny the allegations that pertain to other, and as such, therefore denies the allegations in Paragraph 19.
20. Signature Worldwide is without sufficient knowledge or information to admit or deny the allegations that pertain to other Defendants, and as such, therefore denies the allegations in Paragraph 20.
21. Signature Worldwide is without sufficient knowledge or information to admit or deny the allegations that pertain to other Defendants, and as such, therefore denies the allegations in Paragraph 21.
22. Signature Worldwide is without sufficient knowledge or information to admit or deny the allegations that pertain to other Defendants, and as such, therefore denies the allegations in Paragraph 22.
23. Signature Worldwide is without sufficient knowledge or information to admit or deny the allegations that pertain to other Defendants, and as such, therefore denies the allegations in Paragraph 23.
24. Signature Worldwide is without sufficient knowledge or information to admit or deny the allegations that pertain to other Defendants, and as such, therefore denies the allegations in Paragraph 24.
THE WRAP-AROUND AGREEMENTS:
AN OVERVIEW
25. Signature Worldwide admits that it entered into agreements with Cross Atlantic, International Power and Enzyme Environmental, and that the documentation for those transactions must be read as a whole. Signature Worldwide further admits that the terms and conditions contained in the documentation governed the transactions in question. Signature Worldwide is without sufficient knowledge or information to admit or deny the remaining allegations and the allegations that pertain to other Defendants, and as such, therefore denies the allegations in Paragraph 25.
26. Signature Worldwide is without sufficient knowledge or information to admit or deny the allegations, and as such, therefore denies the allegations in Paragraph 26.
THE CROSS ATLANTIC WRAP-AROUND AGREEMENTS
27. Signature Worldwide admits that it entered into agreements with Cross Atlantic, and that the documentation for those transactions must be read as a whole. Signature Worldwide further admits that the terms and conditions contained in the documentation governed the transactions in question. Signature Worldwide is without sufficient knowledge or information to admit or deny the allegations that pertain to Cross Atlantic, and as such, therefore denies the allegations in Paragraph 27.
28. Signature Worldwide admits that it entered into agreements with Cross Atlantic, and that the documentation for those transactions must be read as a whole. Signature Worldwide further admits that the terms and conditions contained in the documentation governed the transactions in question. Signature Worldwide is without sufficient knowledge or information to admit or deny the allegations that pertain to Cross Atlantic, and as such, therefore denies the allegations in Paragraph 28.
29. Signature Worldwide admits that it entered into agreements with Cross Atlantic, and that the documentation for those transactions must be read as a whole. Signature Worldwide further admits that the terms and conditions contained in the documentation governed the transactions in question. Signature Worldwide is without sufficient knowledge or information to admit or deny the allegations that pertain to Cross Atlantic, and as such, therefore denies the allegations in Paragraph 29.
30. Signature Worldwide admits that it entered into agreements with Cross Atlantic, and that the documentation for those transactions must be read as a whole. Signature Worldwide further admits that the terms and conditions contained in the documentation governed the transactions in question. Signature Worldwide is without sufficient knowledge or information to admit or deny the allegations that pertain to Cross Atlantic, and as such, therefore denies the remaining allegations in Paragraph 30.
THE REVENGE DESIGNS WRAP-AROUND AGREEMENTS
31. Signature Worldwide is without sufficient knowledge or information to admit or deny the allegations that pertain to other Defendants, and as such, therefore denies the allegations in Paragraph 31.
32. Signature Worldwide is without sufficient knowledge or information to admit or deny the allegations that pertain to other Defendants, and as such, therefore denies the allegations in Paragraph 32.
33. Signature Worldwide is without sufficient knowledge or information to admit or deny the allegations that pertain to other Defendants, and as such, therefore denies the allegations in Paragraph 33.
34. Signature Worldwide is without sufficient knowledge or information to admit or deny the allegations that pertain to other Defendants, and as such, therefore denies the allegations in Paragraph 34.
THE ENZYME ENVIRONMENTAL WRAP-AROUND AGREEMENTS
35. Signature Worldwide admits that it entered into agreements with Enzyme Environmental, and that the documentation for those transactions must be read as a whole. Signature Worldwide further admits that the terms and conditions contained in the documentation governed the transactions in question. Signature Worldwide is without sufficient knowledge or information to admit or deny the allegations that pertain to other Defendants, and as such, therefore denies the remaining allegations in Paragraph 35.
36. Signature Worldwide admits that it entered into agreements with Enzyme Environmental, and that the documentation for those transactions must be read as a whole. Signature Worldwide further admits that the terms and conditions contained in the documentation governed the transactions in question. Signature Worldwide is without sufficient knowledge or information to admit or deny the allegations that pertain to other Defendants, and as such, therefore denies the remaining allegations in Paragraph 36.
37. Signature Worldwide admits that it entered into agreements with Enzyme Environmental, and that the documentation for those transactions must be read as a whole. Signature Worldwide further admits that the terms and conditions contained in the documentation governed the transactions in question. Signature Worldwide is without sufficient knowledge or information to admit or deny the allegations that pertain to other Defendants, and as such, therefore denies the remaining allegations in Paragraph 37.
38. Signature Worldwide admits that it entered into agreements with Enzyme Environmental, and that the documentation for those transactions must be read as a whole. Signature Worldwide further admits that the terms and conditions contained in the documentation governed the transactions in question. Signature Worldwide is without sufficient knowledge or information to admit or deny the allegations that pertain to other Defendants, and as such, therefore denies the remaining allegations in Paragraph 38.
39. Signature Worldwide admits that it entered into agreements with Enzyme Environmental, and that the documentation for those transactions must be read as a whole. Signature Worldwide further admits that the terms and conditions contained in the documentation governed the transactions in question. Signature Worldwide is without sufficient knowledge or information to admit or deny the allegations that pertain to other Defendants, and as such, therefore denies the remaining allegations in Paragraph 39.
40. Signature Worldwide admits that it entered into agreements with Enzyme Environmental, and that the documentation for those transactions must be read as a whole. Signature Worldwide further admits that the terms and conditions contained in the documentation governed the transactions in question. Signature Worldwide is without sufficient knowledge or information to admit or deny the allegations that pertain to other Defendants, and as such, therefore denies the remaining allegations in Paragraph 40.
THE INTERNATIONAL POWER WRAP-AROUND AGREEMENTS
41. Signature Worldwide is without sufficient knowledge or information to admit or deny the allegations that pertain to other Defendants, and as such, therefore denies the allegations in Paragraph 41.
42. Signature Worldwide is without sufficient knowledge or information to admit or deny the allegations that pertain to other Defendants, and as such, therefore denies the allegations in Paragraph 42.
43. Signature Worldwide is without sufficient knowledge or information to admit or deny the allegations that pertain to other Defendants, and as such, therefore denies the allegations in Paragraph 43.
44. Signature Worldwide is without sufficient knowledge or information to admit or deny the allegations that pertain to other Defendants, and as such, therefore denies the allegations in Paragraph 44.
COUNT I
DEFENDANTS’ OFFER AND SALE OF UNREGISTERED SECURITIES IN VIOLATION OF SECTIONS 5 (a) AND 5 (c) OF THE SECURITIES ACT
(Against Defendants K&L International Enterprises, Inc., Signature Leisure, Inc., Signature Worldwide Advisors, LLC, Stephen W. Carnes and Lawrence A. Powalisz)
45. Signature Worldwide incorporates by reference its responses to Paragraphs 1 through 44 of the Answer as if its responses to those allegations were fully repeated herein.
46. Signature Worldwide denies the allegations in Paragraph 46 that pertain to it. Signature Worldwide is without sufficient knowledge or information to admit or deny the allegations that pertain to other Defendants, and as such, therefore denies the remaining allegations.
47. Signature Worldwide denies the allegations in Paragraph 47 that pertain to it. Signature Worldwide is without sufficient knowledge or information to admit or deny the allegations that pertain to other companies and Defendants, and as such, therefore denies the remaining allegations in Paragraph 47.
48. Signature Worldwide denies the allegations in Paragraph 48 that pertain to it. Signature Worldwide is without sufficient knowledge or information to admit or deny the allegations that pertain to other Defendants, and as such, therefore denies the remaining allegations.
49. Signature Worldwide denies the allegations in Paragraph 49 that pertain to it. Signature Worldwide is without sufficient knowledge or information to admit or deny the allegations that pertain to other Defendants, and as such, therefore denies the remaining allegations.
COUNT II
DEFENDANTS’ OFFER AND SALE OF UNREGISTERED SECURITIES IN VIOLATION OF SECTIONS 5 (a) AND 5 (c) OF THE SECURITIES ACT
(Against Defendants Enzyme Environmental Solutions, Inc. and Jared E. Hochstedler)
50. Signature Worldwide incorporates by reference its responses to Paragraphs 1 through 49 of the Answer as if its responses to those allegations were fully repeated herein.
51. Signature Worldwide is without sufficient knowledge or information to admit or deny the allegations that pertain to other Defendants, and as such, therefore denies the allegations in Paragraph 51.
52. Signature Worldwide is without sufficient knowledge or information to admit or deny the allegations that pertain to other Defendants, and as such, therefore denies the allegations in Paragraph 52.
53. Signature Worldwide is without sufficient knowledge or information to admit or deny the allegations that pertain to other Defendants, and as such, therefore denies the allegations in Paragraph 53.
54. Signature Worldwide denies the allegations in Paragraph 54 that pertain to it. Signature Worldwide is without sufficient knowledge or information to admit or deny the allegations that pertain to other Defendants, and as such, therefore denies the remaining allegations.
REQUEST FOR RELIEF
WHEREFORE, the Defendant, Signature Worldwide Advisors, LLC. respectfully requests that the Court dismiss Count I of the Complaint and that it be awarded all costs and all other relief the Court deems equitable and just; and The Defendant demands a Trial by Jury as to all issues raised in any and all counts of the Complaint that are so triable.
AFFIRMATIVE DEFENSES
1. Failure to state a claim for which relief can be granted.
2. The securities that are the subject of the Complaint were exempt from registration, under Section 4 (1) of the Securities Act of 1933 (“Securities Act”). Signature Worldwide did not act as an issuer, underwriter or dealer in any of the transactions listed in the Complaint.
3. The securities that are the subject of the Complaint were exempt from registration, under Section 4 (2) of the Securities Act. Signature Worldwide was not involved in a public offering.
4. Signature Worldwide acted in good faith and relied on advice of counsel when selling the securities that are the subject of the Complaint. Signature Worldwide received a written opinion from counsel, after full disclosure, and relied upon said opinion.
5. To the extent that Sections 5(a) and 5(c) of the Securities Act apply, and without acknowledging or admitting that any violations occurred, the Complaint fails to state a basis upon which the Plaintiff would be entitled to a Permanent Injunction.
6. To the extent that Sections 5(a) and 5(c) of the Securities Act apply, and without acknowledging or admitting that any violations occurred, the Complaint fails to state a basis upon which Plaintiff would be entitled to a Penny Stock Bar.
7. To the extent that Sections 5(a) and 5(c) of the Securities Act apply, and without acknowledging or admitting that any violations occurred, the Complaint fails to state a basis upon which the Plaintiff would be entitled to disgorgement and prejudgment interest.
8. To the extent that Sections 5(a) and 5(c) of the Securities Act apply, and without acknowledging or admitting that any violations occurred, the Complaint fails to state a basis upon which the Plaintiff would be entitled to a civil penalty.
9. Signature Worldwide reserves the right to assert additional defenses as they become known.
Respectfully submitted this 25th day of November, 2009.
/s/Irving M. Einhorn
IRVING M. EINHORN
Law Offices of Irving. M. Einhorn
1710-10th Street
Manhattan Beach, California 90266
ime@einhornlaw.com
/s/Harrison T. Slaughter, Jr.
HARRISON T. SLAUGHTER, JR.
Florida Bar No. 194822
111 N. Orange Avenue, Suite 700
Orlando, Florida 32801
Telephone: 407-849-6161
Facsimile: 407-843-3738
Butch@leventhal-slaughter.com
CERTIFICATE OF SERVICE
I hereby certify that on the 25th day of November 2009, I electronically filed the foregoing document with the Clerk of the Court by using the CM/ECF system which will also send a notice of electronic filing to the following:
Jonathan Stephen Polish
Securities & Exchange Commission
175 West Jackson Street, Suite 900
Chicago, Illinois 60604
Margaret Gembala Nelson
Securities & Exchange Commission
175 West Jackson Street, Suite 900
Chicago, Illinois 60604
Thomas J. Meier
Securities & Exchange Commission
175 West Jackson Street, Suite 900
Chicago, Illinois 60604
I further certify that I caused to be sent by electronic mail the foregoing document to the
following:
Thomas W. Farlow
Thomas E. Satrom
Frost Brown Todd LLC
201 N. Illinois Street, Suite 1900
Indianapolis, Indiana 46204
e-mail: tfarlow@fbtlaw.com
e-mail: tsatrom@fbtlaw.com
Charles M. Greene
Law Offices of Chares M. Greene, PA
28 E Washington Street
Orlando, Florida 32801
e-mail: cmglaw@cmgpa.com
Daniel Bobilya
Bobilya & Reidy LLP
127 W. Berry Street
Suite 300
Fort Wayne, Indiana 46802
e-mail: dbobilya@b-rlegal.com
Dated: November 25, 2009 |
