SEC v. Spencer Pharmaceutical Inc Et Al Doc 115 Filed 01 Oct 14

8/11/2019 SEC v. Spencer Pharmaceutical Inc Et Al Doc 115 Filed 01 Oct 14

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f

UNITED

STATES DISTRICT COURT

FOR THE DISTRICT OF MASSACHUSETS

SECURITIES AND EXCHANGE COMMISSION,

Plaintiff,

v.

SPENCER PHARMACEUTICAL INC.

MAXIMILLIENARELLA

Civil Action No. 12cv-12334-IT

IAN

MORRICE

. ..

JEAN-FRANCOIS AMYOT

.c

HILBROY

ADVISORY INC.

lAB MEDIA INC.

o

c J '-n

_0 -

.

; > : r

Defendant.

00

-

.rt

... .

...

: . ,

W

DEFENDANT,

JEAN-FRANCOIS AMOYT S

MEMORANDUM

OF LAW

IN

SUPPORT


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4

,

a. The Plaint iff seeks disgorgement of ill gotten gains

from th

trading in th securities

of

Spencer Pharmaceutical, whereby all trading were according to th Plaintiff's own

finding in accounts owned and or at Tillerman Securities, Cunningham-Adams Small

ap Fund I, and Cunningham-Adams Green Fund.

b. None of th trades were entered by the defendants

c. None of th trading proceeds from Tillerman Securities, Cunningham-Adams Small

Cap Fund I and or Cunningham-Adams Green Fund were obtained by Jean-Francois

Amyot

d. The Defendants relied upon expert advice

to review, approve and provide a legal

opinion on all press releases and corporate filings disseminated to the public.

e. The Defendants relied upon expert advice to review, approve and provide a legal

opinion as to th eligibility to register shares "free trading" under Rule 144.

f. The Defendants relied upon expert advice, assistance and credibili ty of the office of

a Canadian Senator, its Special Advisor on Middle East and North Africa as well as

the government of Canada.

B CKGROUND

1 Rami ilabouni

Rami Ailabouni, a Canadian citizen, residing in Montreal, Quebec, Canada. According to his

curriculum vitae, Mr. Ailabouni is employed by the Canadian Government, and more specifically

th Senate of Canada. He has been employed by the Canadian Government since December

2008 to present. Mr. Ailabouni's

titl

is "Special Advisor on MENA (Middle East & North Africa)

Affairs. Still according to his curriculum vitae, Mr. Ailabouni's responsibility was to develop all

the necessary support nd aspects on political basis, which depends highly on economy, which

makes us act as a senior

investment

banking... , Mr. Ailabouni's previous employment was as

Vice-President, Investment Banking Syndication for Noor Capital of Abu Dhabi, United Arab

Emirates from January 2005 to December 2007. Mr. Ailabouni is said to be fully profic ient in

English and Arabic. (Schedule A)

Case 1:12-cv-12334-IT Document 115 Filed 10/01/14 Page 2 of 32


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Mr. Ailabouni carries a business card from the Canadian Senate

with

a

title

as Special Advisor

on MENA and Asia Pacific Affairs, with the address as Room 162-N, Centre Block, Ottawa,

Canada, K1AOA4 and with the telephone number 1-800-267-7362 (Schedule B)

Mr. Ailabouni and that of former Senator Rod Zimmer have the same telephone number, 1-800

267-7362 and Centre Block as

the

address. (Schedule D

On November 25, 2010,

Mr.

Ailabouni signed a

M A

Agreement / Mandate (Mergers and

Acquisitions)

with

Spencer Pharmaceutical Inc.

to

seek a suitable acquirer and or investor

for

Spencer Pharmaceutical and according to the agreement, Mr. Ailabouni had an exclusive right

for

the

territory

of

MENA including

but

not

limited

to

Kuwait and the United Arab Emirates.

Also according to the M A Agreement, his contacts were including but not limited to ADIA (Abu

Dhabi Investment Authority) , Al-Dorra, and Julfar pharmaceutical. (Schedule

C

2.

Rod

Zimmer

Mr. Rod Zimmer is Canadian Citizen, residing in Ottawa, Ontario, Canada. Mr. Zimmer is a

former

Canadian Liberal Senator

who

resigned from the Senate on August 2, 2013 after serving

eight years.

Mr.

Ailabouni reported

to

Mr.

Zimmer and was listed at

the time

as

Mr.

Zimmer s

staff in the Canadian Government websites and directory.

As Mr. Ailabouni s superior, Mr. Rod Zimmer provided the title of Special Advisor on MENA and

Asia Pacific and has approved the issuance of business cards with the said title. (Schedule B),

(Schedule D)

On December 10, 2010, a

letter

from

Hilbroy Advisory Inc. was sent to

Mr.

Zimmer

to

address

several items discussed in his office at the Parliament of Canada, including the pending

transaction

with

Al-Dorra and Spencer Pharmaceutical. In this letter, a formal request is made

by Hilbroy Advisory to discuss the important transaction. (Schedule E



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3

The anadian overnment

Mr.

Rami

Ailabouni and Mr. Zimmer were both employed by

the

Canadian government at the

time

of

the purchase offer by AI-Dorra, a company introduced by Mr. Ailabouni, the Special

Advisor on MENA, a title awarded by his employer the Canadian Government and confirmed by

is immediate superior the Senator Rod Zimmer.

4

Francis

Mailhot

Mr. Francis

ailhot

is a Canadian citizen residing in Blainville, Quebec, Canada. Mr. Mai lhot is

the sole officer and director as well as the sole shareholder of Rainmaker Venture Capital Inc., a

Canadian corporation.

Rainmaker Global is a wholly owned subsidiary of Rainmaker Venture Capital., a Belize

Corporation.

Rainmaker Global received 10,000,000 free trading shares of Spencer Pharmaceutical, which

were deposited and sold at its account at

EFG

Bank in Geneva and or Julius Baer Bank.

Rainmaker Global received approximately 33%

of

all trading proceeds derived from the selling

of the Spencer Pharmaceutical shares deposited at Tillerman Securities and or registered in the

name of Cunningham-Adams Small

ap

Fund I and or Cunningham-Adams Green Fund.

Mr. Mailhot introduced Strategema Capital to Dr. Arella of Spencer Pharmaceutical to help in

the due-diligence and the pending transaction wi th AI-Dorra.

Mr. Mailhot hired and scheduled any and all promotional newsletters used in the securities

awareness campaign

of

Spencer Pharmaceutical.

Mr. Mailhot previously owned 50% of Finkelstein Capital Inc.



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5. Rainmaker Venture Capital Inc.

Rainmaker Venture Capital is a Canadian corporation located in Montreal, Quebec, Canada

Rainmaker Venture Capital received monetary compensation for hiring and scheduling

promotional newsletters from Hilbroy Advisory, and such monetary compensation was derived

from the trading

of

Spencer Pharmaceutical shares deposited at Tillerman Securities and or

registered in the name

of

Cunningham-Adams Small

Cap

Fund I and or Cunningham-Adams

Green Fund.

Rainmaker Venture Capital is the sole shareholder of

Rainmaker Global.

6. Rainmaker Global

Rainmaker Global is a Belize corporation own by Rainmaker Venture Capital Inc., and its sole

officer and director is Francis Mailhot.

Rainmaker Global received 10,000,000 free trading shares

from

Finkelstein Capital, and said

shares were deposited at EFG Bank in Geneva and any and all proceed

from

the sale of the said

shares were kept by Rainmaker Global and or its

own r

Rainmaker Venture Capital and or

Francis Mailhot. (Schedule F)

Rainmaker Global received approximately 33

of

all trading proceed from the sale

of

Spencer

Pharmaceutical deposited and in the name

of

Tillerman Securities and or Cunningham-Adams

Small

Cap

Fund I and or Cunningham-Adams Green Fund.

7. Christian Saunders

Christian Saunders is a Bahamian citizen, residing in Nassau, Bahamas.

Christian Saunders is

th

President

of

Tillerman Securities, a Bahamian brokerage firm.



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Christian Saunders is the sole signing person at Tillerman Securities and approved the account

opening for both Cunningham-Adams Small Cap Fund I and Cunningham-Adams Green Fund,

and whereby the account

for

Cunningham-Adams Small Cap Fund I was approved on March 16,

2011. (Schedule G)

Christian Saunders executed trades on behalf of Tillerman Securities and its clients. According

to the Plaintiff complaint, Tillerman Securities have executed sale order of approximately $5.8

million. (Schedule H)

8. Tillerman Securities

Tillerman Securities is a brokerage

firm

located in Nassau, Bahamas.

Tillerman Securities received 12,000,000 free trading shares from Finkelstein Capital and

deposited said shares with Penson Financial and or another

U

clearing and brokerage firm in

its own name on May 24, 2010. The account for Cunningham-Adams Small Cap Fund I was

not

approved unti l March 16, 2011. (Schedule F) and (Schedule G)

9. Cunningham-Adams Small Cap Fund I

Cunningham-Adams Small Cap Fund I is a company registered and located in the city

of

Panama, Panama.

Cunningham-Adams Small Cap Fund I's voting common shares are owned by Toyma Capital Inc.

and its participating shares are owned by several other shareholders including

ut

not limited

to Francis Mailhot, through his ownership

of

Rainmaker Global.

Cunningham-Adams Small Cap Fund I and Cunningham-Adams Green Fund are said to have sold

approximately $5.8 million

of

Spencer Pharmaceutical shares through their account at Tillerman

Securities. (Schedule H)



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10. Cunningham-Adams Green Fund

Cunningham-Adams Green Fund is a company registered and located in the city of Panama,

Panama.

Cunningham-Adams Green Fund voting common shares are owned by Toyma Capital Inc. and

its participating shares are owned by several other shareholders including but not limited to

Francis Mailhot, through his corporation Rainmaker Global.

Cunningham-Adams Small Cap Fund I and Cunningham-Adams Green Fund are said to have sold

approximately $5.8 million of Spencer Pharmaceutical shares through their account at Tillerman

Securities. (Schedule H)

11. Strategema Capital

Strategema Capital of Geneva was hired by Spencer Pharmaceutical on November 10, 2010 to

advise on purchase offer. Strategema Capital is owned by Maurice Hennequin also of Geneva,

Switzerland. Strategema Capital was introduced to Spencer Pharmaceutical or more precisely

to its president, Dr. Max Aralia by Francis Mailhot.

As per the press release, Strategema Capital is a boutique financial consultancy and research

company who will assist the company with the buyout offer . (Schedule I)

12. Sterling Stock

Investment

Ltd

Sterling Stock Investment Ltd. is a Slovakian corporation owned by Karol Schlosser. The

company was said to have an office at 4

th

Floor, Lawford House, Albert Place, London, UK

Sterling Stock Investment and its owner, president, Karol Schlosser, made representation

that

they held the funds in escrow of up to $500 million to conclude

the

purchase offer by and

between Al-Dora and Spencer Pharmaceutical.



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18. Joseph Emas

Joseph mas is a Canadian citizen, who resides in Miami, Florida, United States of America. Mr.

mas

is a corporate lawyer. Mr. mas was retained by Spencer Pharmaceutical to review, and

advise the company and its management on any corporate communications, including but

not

limited to press releases, and financial filings.

19. The University of Quebec in ontreal

The University

of

Quebec in ontreal or (UQAM) is a French Canadian University located in

Montreal. UQAM signed a research agreement with Spencer Pharmaceutical for the research

and development of a drug delivery platform. Since UQAM was developing the technology on

behalf

of

Spencer, the University was aware

of

any and all patents, patents pending and

potential value of the technology being developed. UQAM was aware

of

all corporate

communications including but

not

limited to the press releases and financial filings issued by

Spencer Pharmaceuticals.

20. Dr. Alexandruu Mateescu

Dr. Alexandruu Mateescu is a Canadian citizen, residing in Montreal. Dr. Mateescu is a

professor at the University

of

Quebec in Montreal. Dr. Mateescu was

the

head

of

the UQAM

research facility and the person responsible for the research performed on behalf of Spencer

Pharmaceutical. Dr. Mateescu was an Advisory Board member of Spencer Pharmaceutical s

scientific advisory board. (Schedule J)

21. Diane Dalmy

Diane Dalmy is a United States citizen, residing in Denver, Colorado} United States. Diane

Dalmy is a securities attorney. Mrs. Dalmy reviewed all documents provided by Spencer

Pharmaceutical and its management Dr. Max Arella and Mr. Ian Morrice and issued a legal

opinion as to the registration

of

shares for both Cunningham-Adams Small Cap Fund I} and

Finkelstein Capital Inc.



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ARGUMENT

P RSONS NOT JOINED ND REASONS FORJOINDER DEFENDANTS

a) The Court should order Joinder defendants the people and entities listed

Further to discovery, the Court should join the following defendants pursuant to Rule

19, a, ii

of

the Federal Rules

of

Civil Procedure since denying the parties to be joined will

leave an existing party subject to a substantial risk

of

incurring double, multiple or

otherwise inconsistent obligations.

1. Rami Ailabouni

The court should order to be joined as defendant, Rami Ailabouni. Mr. Ailabouni was the

Special Advisor on MENA (Middle East and North Africa) for the Canadian Government. Mr.

Ailabouni introduced Spencer Pharmaceutical to the potential acquirer as per his Merger and

Acquisition Mandate with Spencer Pharmaceutical. The Merger and Acquisition mandate listed

AI-Dora as one

of

the potential investor and or acquirer. Mr. Ailabouni used his office as

"Special Advisor on MENA" to convince the management

of

Spencer Pharmaceutical as well

their advisor

th t

the offer was real, substantive and

th t

the company AI-Dora was a significant

company with

the

financial means to undertake and complete

the

acquisition of Spencer

Pharmaceutical. Mr. Ai labouni also introduced the person representing the AI-Dora as a

member of a Middle East Royal fami ly and referred to him as "His Excellency". Mr. Ailabouni is

bilingual and is fluent in both English and Arabic and as

the

person mandated by Spencer

Pharmaceutical and its management, he interacted with the

said buyer and obtained any and

all signed documents by

the

said offering party. Mr. Ailabouni used

the

influence of his title, his

office and the credibility

of

the Canadian government to substantiate this said buyout

transaction and all relevant information provided to Spencer Pharmaceutical and its

management, which they and

their

consultant included in

the dr ft

press releases.

Mr. Ailabouni's motives are unclear though we believe them to be monetary gain from a

"blackmail" scheme, or governmental "br ibe" scheme. He requested payments in the past for



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advance commissions, on repayment of loans by first nations in Canada and whereby said loans

were never paid and all under

the

pretext th t if the 100,000 was

not

paid,

th t

there would

be no way to recuperate the unpaid loans by the various First Nations, which were the

Woodland Cree First Nations ( 1,100,000 loan unpaid to Cunningham-Adams Small ap

Fund I)

and the Tall Cree Fist Nations ( 450,000 loan unpaid to Toyma Capital Inc.). The payment was

made to Mr. Ailabouni,

but

no assistance and or results were ever obtained and the loans

remain unpaid.

We also now understand and or believe th t at the time of the ongoing discussion between

Ailabouni, Spencer Pharmaceutical and the said buyer AL-Dora and its representative, Mr.

Alawaid and or Dr. Bandar,

th t

Mr. Ailabouni was battling cocaine, and

other

illegal drug

addiction. We understand him to have sought the help of rehabilitation centers in anada and

or the United States in the past 2 years, but do not have any details to

th t

effect other th t he

attended.

Mr. Ailabouni should be made a joinder defendant since by his reckless actions; he is said to

have creative a fictive buyout offer and has caused Spencer Pharmaceutical, its management,

Dr. Arella, Mr. Morrice and its consultants Hilbroy Advisory and, lAB Media to believe the

purchase offer and the said acquirer Al-Dora was substantive (real, important, meaningful and

considerable).

Mr. Ailabouni should be made a joinder defendant, since on the basis th t he is responsible for

the said buyout offer and th t he is a Canadian citizen and the court has already ruled, although

without prejudice th t this case is of the United States jurisdiction.

If joinder defendant of Mr. Ailabouni is denied by the court, this will create a significant

prejudice to the defendants.



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2 Rod Zimmer

The court should order to be joined as defendant Mr. Rod Zimmer. He is a

former

Liberal

Senator

of

anada and the direct superior

who

hired Rami Ailabouni and named him Special

Advisor on MENA . Mr. Zimmer was informed by Telephone and by Letter faxed and mailed to

his office of the transaction involving the said buyer AI-Dora and Spencer Pharmaceutical and

that his direct employee Mr. Ailabouni had introduced

the important

transaction. Since his

employee Mr. Ailabouni substantiated the said buyer and the transaction and Mr. Zimmer was

made aware of the involvement of his employee in organizing the said transaction, Mr. Zimmer

if any doubt existed should have made aware Spencer Pharmaceutical, its management and or

its consultant Hilbroy Advisory and or Jean-Francois Amyot that said transaction was not

sanctioned by his office and or conf irmed by his office. Instead, Mr. Zimmer made no comment

to the exception that Mr. Ailabouni was from a very wealthy and influential Middle Eastern

family and

that

he was glad

that

his office could have played a role in

the

said transaction.

Mr. Zimmer should be made a

joinder

defendant, since on the basis that he provided Mr.

Ailabouni with the title of Special Advisor on MENA and

with

the corresponding business

card. Also on the basis

that

Mr. Zimmer never denied the said transaction, and in support of

Mr. Ailabouni when he was made aware

of

the

said transaction said

the

Mr. Ailabouni was from

a very influential and wealthy family therefore provide his unconditional support to Mr.

Ailabouni and the said transaction. Mr. Zimmer is a Canadian citizen and the court has already

ruled, although without prejudice that this case is of the United States jurisdiction.

If joinder defendant of Mr Zimmer is denied by the court, this will create a significant prejudice

to the defendants.

3. The

anadian Government

The court should order to be joined as defendant the Canadian Government and or more

precisely if it wishes, the Canadian Senate. The Canadian Government was the employer of



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both Mr. Zimmer and Mr. Ailabouni at the time of the said purchase offer by Al-Dora of Spencer

Pharmaceutical.

The Canadian government authorized Mr. Zimmer to hire Mr. Ailabouni as well as name him as

Special Advisor on MENA, Middle East and North Africa . Therefore, by their authorization

of

the use of the title provided the tools to Mr. Ailabouni for deception in the said purchase

offer by AI-Dora.

If joinder defendant of the Canadian Government is denied by the court, this will create a

significant prejudice to the defendants.

4. Francis Mailhot

The court should order to be joined as defendant Francis Mailhot. Mr.

Mailhot

is the President

and sole director of RainMaker Venture Capital Inc. Mr. Mailhot was

the

President and sole

director of RainMaker Global, which received 10,000,000 Free Trading shares of Spencer

Pharmaceutical from Finkelstein Capital Inc.

Mr. Mailhot previously owned 50%

of

Finkelstein Capital Inc. and owned 50%

of

lAB Media Inc.

Mr. Mailhot also owned through RainMaker Venture Capital a website named

Hypergrowthstocks who

touted

the stock

of

Spencer Pharmaceutical. Mr.

Mailhot

along

with

lAB Media staff, managed, schedule and directed the hiring of newsletters to cover the press

releases issued by Spencer Pharmaceuticals.

Mr Mailhot

Mr. Mailhot received by direct wire a large percentage of the trading proceeds from shares

traded by Tillerman Securities, Cunningham-Adams Small Cap Fund I as well as Cunningham

Adams Green Fund. Approximately 33% of all proceeds from the trading of the Spencer

Pharmaceutical shares were transferred to RainMaker Global at an account at FG Bank in

Geneva.



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Mr. Mailhot through RainMaker Global traded and benefited

from

100

of the

proceeds

of the

sale of 10,000,000 shares of Spencer Pharmaceutical in

the

account of FG Bank and or Julius

Baer Bank in Geneva.

Mr. Mailhot referred Strategema Capital to Spencer Pharmaceutical and Dr. Arella in order to

perform a due-diligence on Al-Dora and assist in the said

buyout

transaction. Strategema

Capital failed in their duty and did not assist Spencer Pharmaceutical in their due-diligence.

If joinder defendant Francis

ailhot

is denied by the court, this will create a significant

prejudice

to

the defendants.

5. RainMaker Venture Capital Inc.

The court should order to be joined as defendant RainMaker Venture Capital Inc. RainMaker

Venture Capital Inc. owned and operated a website named Hypergrowthstocks.com. Mr.

Mailhot, as capacity of president and sole officer

of

RainMaker Venture Capital scheduled all

newsletters included

the

coverage by lAB Media.

If joinder defendant RainMaker Venture Capital is denied by

the

court, this will create a


6. RainMaker Global

The court should

order

to be joined as defendants RainMaker Global. RainMaker Global is a

Belize corporation owned by RainMaker Venture Capital and who's sole officer and director is

Francis Mailhot.

RainMaker Global was transferred 10,000,000 shares of Spencer Pharmaceuticals, and which

were deposited and sold at accounts at FG Bank and or Julius Baer Bank in Geneva.



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RainMaker Global received approximately 33 of all trading proceeds from the sale of Spencer

Pharmaceutical shares by Tillerman Securities, Cunningham-Adams Small Cap Fund I and or

Cunningham-Adams Green Fund.

If joinder defendant RainMaker Global is denied by the court, this will create a significant


7. Christian Saunders

The court should order to be joined as defendants Christian Saunders.

Mr

Saunders is the

President of Tillerman Securities. Mr. Saunders is the signing authority for Tillerman Securities.

He approved the reception and deposit

of

12,000,000 shares

of

Spencer Pharmaceutical in the

name of Tillerman Securities. Mr Saunders executed transactions to sell all shares of Spencer

Pharmaceutical from October 2010 to approximately the beginning of March 2011. Mr.

Saunders approved

the

Cunningham-Adams Small Cap Fund I account on March 16, 2011,

which is after the bulk ofthe supposed trading by Cunningham-Adams Small Cap Fund

I.

The trading by Tillerman Securities

of the

shares of Spencer Pharmaceutical were executed and

approved by Christian Saunders.

If

joinder defendant Christian Saunders is denied by the court, this will create a significant


8. Tillerman Securities

The court should order to be joined as defendants Tillerman Securities. Tillerman Securities

accepted, authorized and deposited 12,000,000 shares

of

Spencer Pharmaceutical in its name.

Tillerman Securities executed the sale

of

the shares

of


The Plaintiff claims the sale

of

Spencer Pharmaceutical at Tillerman Securities were that of

Cunningham-Adams Small Cap Fund I, however, the account was only approved on March 16,



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2011 and therefore Tillerman Securities have sold shares either short or in a front running

scheme and have benefited from the sale

of

said shares, and not the defendant as

the

Plaintiff

claims.

In addition, Tillerman Securities would have charged a significant commission for shares

th t

would have been sold in the account of Cunningham-Adams Small Cap Fund I and Cunnigham

Adams Green Fund once they were approved.

If Joinder defendant Tillerman Securities is denied by the court, this will create a significant


9

Cunningham Adams Small ap

Fund

I

The court should order to be joined as defendants Cunningham-Adams Small

ap

Fund

I.

The

Plaintiff claims th t 5.8 million in proceeds were obtained by Cunningham-Adams Small ap

Fund J and its sister fund Cunningham-Adams Green Fund, yet failed to join them as

defendants.

Cunningham-Adams Small Cap Fund I is a Panama corporation and as such a separate legal

entity, with its bank accounts, brokerage accounts, and bylaws, and the piercing of the

corporate veil is not a unilateral decision to be taken by the plaintiff.

The Plaintiff failed to join Cunningham-Adams Small Cap Fund I and or its sister company,

Cunningham-Adams Green Fund, in order to circumvent

US

corporate law and or

th t

of a

foreign jurisdict ion, in this case Panama.

It is clear from the summons th t the Plaintiff believes most of the allege illicit trading profits

arising from the sale of Spencer Pharmaceutical shares were obtained in accounts in the name

of

Cunningham-Adams Small Cap Fund I and or Cunningham-Adams Green Fund.



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The bylaws

of

Cunningham-Adams Small

ap

Fund I, as well as its corporate structure, and

operational procedures clearly demonstrate a separate legal entity and the defendant did not

have unity

of

interest and ownership, and or wrongful conduct and or proximate cause and

therefore Cunningham-Adams Small Cap Fund I must be made a joinder defendant.

Cunningham-Adams Small Cap Fund l's trading was effected by two full time traders. The only

directions and or order was a blanket order to make a profit for the Cunningham-Adams Small

ap Fund I without regards to any filings, press releases made by portfolio companies.

In addition, traders entered all trades through an online platform and did not speak with any

one at either Hilbroy Advisory and or any

of

the defendants when entering a sell and or buy

order nor required any authorization to do so.

If Joinder defendant Cunningham-Adams Small Cap Fund I is denied by the court, this wil l

create a significant prejudice to the defendants.

10. Cunningham-Adams Green Fund

The court should order to be joined as defendants Cunningham-Adams Green Fund. The

Plaintiff claims

th t

5.8 million in proceeds were obtained by Cunningham-Adams Green Fund

and its sister fund Cunningham-Adams Small Cap Fund I, yet failed to join them as defendants.

Cunningham-Adams Green Fund is a Panama corporation and as such a separate legal entity,

with its own bank accounts, brokerage accounts, and bylaws, and the piercing

of

the corporate

veil is not a unilateral decision to be taken by the plaintiff.

The Plaintiff failed to join Cunningham-Adams Green Fund and or its sister company,

Cunningham-Adams Small ap Fund, in order to circumvent US corporate law and or th t

of

a

foreign jurisdiction, in this case Panama.



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It is clear from the summons

th t the

Plainti ff believes most of the allege illicit trading profits

arising from the sale of Spencer Pharmaceutical shares were obtained in accounts in the name

of Cunningham-Adams Green Fund and or Cunningham-Adams Small Cap Fund I.

The bylaws

of

Cunningham-Adams Green Fund, as well as its corporate structure, and

operational procedures clearly demonstrate a separate legal entity and the defendant did not

have unity of interest and ownership, and

or

wrongful conduct and

or

proximate cause and

therefore Cunningham-Adams Small Green Fund must be made a

joinder

defendant.

Cunningham-Adams Green Fund s trading was effected by two full time traders. The only

directions and or order was a blanket order to make a profit for the Cunningham-Adams Small

Cap Fund I

without

regards to any filings, press releases made by

portfolio

companies.

In addition, traders entered all trades through an online

pl tform

and did

not

speak

with

any

one at either Hilbroy Advisory and or any of the defendants when entering a sell and or buy

order nor required any authorization to do so.

If Joinder defendant Cunningham-Adams Green Fund I is denied by

the

court, this will create a

significant prejudice to

the

defendants.

11 Strategema Capital

The court should order to be joined as defendants Strategema Capital. Strategema was hired

by Spencer Pharmaceutical to assist in the Due-Diligence and with the buyout transaction.

Strategema failed to perform any due-diligence as required by their mandate and therefore had

they completed

their

mandate,

they

would have advised Spencer Pharmaceutical

not

to

pursue

the said buyout offer by said Al-Dora and this entire civil complaint would not have been filed.

They should be held responsible for their action and or lack thereof.



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If Joinder defendant Strategema Capital is denied by the court, this will create a significant

prejudice to the defendants

12. Sterling Stock nvestment l td

The court should order to be joined as defendants Sterling Stock Investment Ltd. Sterling Stock

Investment was said to be a private investment

firm

located in London,

UK

Sterling Stock

Investment provided several letters to Spencer Pharmaceutical as it relates to funds they were

holding in escrow to complete the acquisition of Spencer Pharmaceutical by said AI-Dora.

Mr. Ailabouni spoke highly of Sterling Stock Investment as a firm that he and his family had

worked

with

in the past.

At and or around the time of the letters by Sterling Stock Investment, very little information

could be found on the internet, and the company s website was limited to a contact

information. However, Sterling Stock Investment has a website today and is said to be a luxury

yacht charter company.

If Joinder defendant Sterling Stock Investment Ltd. is denied by the court, this will create a

significant prejudice to the defendants

13. Carol Schlosser

The court should order to be joined as defendants Mr. Carol Schlosser.

Mr. Carol Schlosser is the sole representative, officer and director of Sterling Stock Investment

Ltd. Mr. Schlosser authored

the

letters

to

Spencer Pharmaceutical as it relates to a

confirmation

that

his company was holding funds to be used by said AI-Dora

to

acquire Spencer

Pharmaceutical.



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..

,

The shares registered to

Mr

Houle were deemed issued at the closing

of

the reverse merger,

and therefore at the same time as shares issued to Cunningham-Adams Small Cap Fund I and to

Finkelstein Capital. Mr. Houle registered the shares under rule 144 and therefore according to

the plain tif f has also violated section 17(a)(1) and (3) as well as section lO(b).

If Joinder defendant Alain Houle is denied by the court, this will create a significant prejudice to

the defendants.

15 Stephane Goulet

The court should order to be joined as defendants Stephane Goulet.

Mr. Goulet was issued and or transferred shares of Spencer Pharmaceutical to his personal

name, to his wife's name and to his corporat ion's name, Gous Inc. Mr. Goulet is a friend of Dr.

Arella and a longtime business associate.

Mr. Goulet registered free trad ing the shares that were in the name

of

his holding company,

Gous Inc. Mr. Goulet deposited shortly before the announcement of

the

said buyout by AL

Dora and sold all the shares between October 2010 and January 2011 and therefore Mr. Goulet

through his holding company, profited in the same manner as the Plaintiff claims the funds

Cunningham-Adams Small Cap Fund I and Cunningham-Adams Green fund i

Although we do not have any information as to the reason

why

Mr Goulet was issued and or

transferred shares of Spencer Pharmaceutical, it is a fact

that

he sold all of his shares in the

timeframe.

The shares registered to Mr Goulet were deemed issued at the closing of the reverse merger,

and therefore at the same

time

as shares issued to Cunningham-Adams Small Cap Fund I and to

Finkelstein Capital. Mr. Houle registered the shares under rule 144 and therefore according to

the plainti ff has also violated section 17(a)(1) and (3) as well as section lO(b).



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If

Joinder defendant Stephane Goulet is denied by

the

court, this will create a significant


16. Gous Inc.

The court should order to be joined as defendants Gous Inc.

Gous Inc was issued and

or

transferred shares of Spencer Pharmaceutical. Gous Inc. is the

holding company of Stephane Goulet.

Gous Inc registered

free

trading

the

shares and deposited shortly before

the

announcement

of

the

said

buyout

by AL-Dora and sold all the shares between October 2010 and January 2011

and therefore Gous Inc. profited in the same manner as the Plaintiff claims the funds

Cunningham-Adams Small Cap Fund I and Cunningham-Adams Green fund did

Although we do not have any information as to the reason why Gous Inc. was issued and or

transferred shares of Spencer Pharmaceutical,

it

is a fact

that

it sold all of his shares in the

timeframe.

The shares registered to Gous Inc were deemed issued at the closing of the reverse merger, and

therefore at

the

same time as shares issued

to

Cunningham-Adams Small Cap Fund I and

to

Finkelstein Capital. Gous Inc. registered the shares under rule 144 and therefore according to

the

plaintiff

has also violated section 17 a) 1) and 3) as well as section lO b).

If Joinder

defendant

Gous Inc. is denied by

the

court, this

will

create a significant prejudice

to

the defendants



24/32

17. Anne Yamashita

The court should order to be joined as defendants Anne Yamashita.

Mrs. Yamashita is

Mr

Stephane Goulet s wife. Mrs. Yamashita was issued and or transferred

shares of Spencer Pharmaceutical to her personal name.

Mrs. Yamashita through her husband and his holding company profited from the trading in


If Joinder defendant Anny Yamashita is denied by the court, this will create a significant


18. Joseph Emas

The court should order to be joined as defendants Joseph Emas

Mr. Emas was retained by Spencer Pharmaceutical and its management, Dr. Arella and Mr.

Morrice to review, advise, and approve the content of press releases and filings issued by the

company.

Mr.

Emas

attended meetings

with

Ailabouni and the said representatives

of

AI-Dora. Mr.

Emas

is a securities lawyer and should have prevented the said buyout and related information to be

released to the public and should have advised Spencer Pharmaceutical and its management to

keep all information private until such time as the said offer was further substantiated and not

only rely on

Mr

Ailabouni,

the

office of Rod Zimmer and

the

credibility of

the

Canadian

government.

If Joinder defendant Joseph Emas is denied by the court, this will create a significant prejudice

to the defendants



25/32

19. University

of

Quebec in ontreal (UQAM)

The court should order to be joined as defendants the University of Quebec in Montreal

(UQAM).

UQAM signed a research agreement with Spencer Pharmaceutical. UQAM performed all

research on behalf

of

Spencer Pharmaceutical. UQAM was aware of

the

press releases issued

by Spencer Pharmaceutical and its management as it relates to the agreement with UQAM, the

research undertaken, the result of said research and the patents derived from said research.

The Plaintiff claims

that

no patent was ever obtained by Spencer Pharmaceutical from the

research performed by UQAM and

that

no intellectual

property

existed and or no favorable

results were ever obtained

from

said research.

It is clear

that

in the event, the Plaintiff did not make unsubstantiated statements

that

the

University of Quebec in Montreal, should be joined as a defendant as a result

of

the false or

erroneous information released by Spencer pharmaceutical of which they were fully aware and

have participated in drafting. The fact that

the

University is underfunded, could have resulted

in the decision to over look

the

erroneous information disseminated to

the

public

without

regards to potential losses or liabili ties upon

the

University, the company and or its personnel.

If joinder defendant University of Quebec in Montreal is denied by the court, this will create a


20. Dr. Alexandruu Mateescu

The court should

order

to be joined as defendants Dr. Alexandruu Mateescu.

Dr. Mateescu was the head scientist responsible for the UQAM research agreement with

Spencer Pharmaceutical. Dr. Mateescu oversaw all research for and on behalf of Spencer

Pharmaceutical. Dr. Mateescu was a member

of

the Scientific Advisory

of

Spencer



26/32

Pharmaceutical.

Dr. Mateescu owned a significant amount of shares

of

Spencer

Pharmaceutical.

Dr. Mateescu was aware of all press releases issued by Spencer Pharmaceutical and its

management and have participated in drafting said press releases.

Plaintiffs claims are that there are no patents, no intellectual properties, and no significant

results derived from said research and therefore Dr. Mateescu knowingly assisted Spencer

Pharmaceutical and its management to disseminate the false and or erroneous information to

the

public and or should have prevented said information to be released to

the

public and as

such should be joined as a defendant.

If joinder defendant Dr. Alexandruu Mateescu is denied by the court, this will create a


21. Diane Dalmy

The court should order to be joined as defendant Diane Dalmy.

Diane Dalmy is a securities attorney retained by Spencer Pharmaceutical and its management,

Dr. Arella and

Mr

Morrice to assist, review, research and provide a legal opinion

letter

to

register free trading shares of Cunningham-Adams Small Cap Fund I, Finkelstein Capital, Alain

Houle and Gous Inc.

According to

the

Plaintiff, said shares should not have been registered free trading and it

resulted in an alleged violation

of

section 5

of

the

securities act. Her actions

of

providing a

legal opinion and supporting material by itself

the

violation of section 5. Spencer

Pharmaceutical, its management and shareholders relied on the expertise of a securities lawyer

in order to have

the

said shares registered free trading .



27/32

Notwithstanding

that the

shares were actually only deposited and sold over 12 months from

issuance, or issued date and

that

no securities were sold in violation

of

section 5, Diane Dalmy

should be joined as a defendant,

for her

erroneous research and conclusion as

to

the validity

of

registration into free trading

the

said shares as well as the issuance

of

the legal opinions to

enable the registration.

If joinder defendant Diane Dalmy is denied by the court, this will create a significant prejudice

to the defendants.

22. Mitchell Segal

The court should

order

to

be

joined

as defendant Mitch Segal.

Mitch egal was retained by Spencer Pharmaceutical and its management

to

render an opinion

as to

whether

there was adequate current information concerning Spencer Pharmaceutical as

published on the Pink Sheets News Service within the meaning of Rule 144 (c) (2) under the

Securities Act

of

1933.

Mr

egal

is a securities attorney.

Mr.

Segal has examined documents, such as corporate

records, and has

met

the board of directors and management of Spencer Pharmaceutical. Mr.

egal reviewed the Information and Disclosure Statement and financials filed by Spencer

Pharmaceutical as well as its shareholders list.

Mr. egal issued a legal opinion to the Pink OTe Markets as it relates the research, review and

analysis of the

information

made public by Spencer Pharmaceutical and its management.

The Plaintiff claims that the information released to the public was false and or misleading and

therefore Mr. Segal's work was either not performed and or lacked integrity and as such Mr.

Segalshould be joined as a defendant.



28/32

./

If joinder defendant Mitchell Segal is denied by the court, this will create a significant prejudice

to the defendants.

23 lexey Nikitin

The court should order to be joined as defendant Alexey Nikitin.

Mr. Nikitin is the sole representative, officer and or director of Lesco Mr. Nikitin authored

several letters address to Spencer Pharmaceutical as it concerns the said potential buyout offer.

Mr. Nikitin signed the let ter as Chief Financial Officer of Lesco Mr. Nikitin described Lesco as a

Financial Advisory firm, representing a large private equity with

the

interest in acquiring


In the letters authored by Mr. Nikitin, a website was provided at the time; www.les-co.ru

however, no content was available and it was said to be under construction. However, the

same website address today with a similar logo provides

for

a description of the company as a

leading manufacturer

of

high quality environmentally fr iendly products.

Mr. Nikitin s letters and confirmation by Mr. Ailabouni

of

them and

the

link between the letters,

AI-Dora and the confirmation

of

Mr. Ailabouni, the office

of

Senator Rod Zimmer and the

credibility awarded by the government

of

Canada has cause

the

defendants to believe the

letters to be substantiated and has resulted in Spencer Pharmaceutical and its management as

well as its advisers to dr ft and release information to the public which were either false or

misleading.

If joinder defendant Alexey Nikit inl is denied by the court, this will create a significant prejudice

to the defendants.



29/32

24. Lesco

The court should order to be joined as defendant esco

Several letters from the company Lescowere sent by fax to Spencer Pharmaceutical as it relates

to said buyout offers and Al-Dora. Although at the t ime, there was no website for the company

and only a under construction notice appeared at

their UR

address www.les-co.ru , today is a

different story and esco describes itself as a leading manufacturer of high quality

environmentally friendly products.

It is clear

from

the letters that there is a link between Les-co, the author, Mr. Nikitin, Mr.

Ailabouni and the said buyer AI-Dora.

If joinder defendant Lesco is denied by the court, this will create a significant prejudice to the

defendants.

25. Dr. Bandar AI-Dhafiri

The court should order to be joined as defendant Dr. Bandar AI-Dhafiri

Dr. AI-Dhafiri is the signing officer and Chairman

of

said Al-Dora as confirmed by Mr. Ailabouni,

the office

of

Senator Zimmer and

the

Canadian Government. Dr. AI-Dhafiri s signature appears

along with a corporate seal on several documents including

but

not limited to said purchase

offer agreement signed on December 8, 2010.

Although none

of

the defendants have met Dr. AI-Dhafiri, all signatures were obtained by Mr.

Ailabouni and he confirmed

the

signatures has being authentic, which substantiated the offer,

and the existence of Al-Dora, and Dr. AI-Dhafiri.

f

joinder defendant Dr. Bandar AI-Dhafiri is denied by the court, this will create a significant




30/32

26. L utorite des Marches Financiers du Quebec. (AMF)

The court should order to be joined as defendant L utorite Des Marches Financiers du Quebec

(AMF).

The AMF is said to have begun an investigation on Spencer Pharmaceutical on July 12, 2010.

The AMF closely followed Spencer Pharmaceutical unfold, reviewed every press releases, and

were therefore fully aware of the said buyout by said Al-Dora and did nothing to request more

information, or use its bestowed powers to stop or at the very least to temporarily stop

the

events from unfolding.

As the regulatory body mandated by the government

of

Quebec to regulate the province s

financial markets and provide assistance to consumers of financial products and services, the

AMF had a duty to seek immediate injunction and request

that

the shares of Spencer

Pharmaceutical be temporarily suspended until such time as all information pertaining to the

said buyout offer, and or about said Al-Dora was provided, reviewed, and confi rmed. Instead,

the AMF opted to standby, collect information and allow erroneous and false information be

distributed to the public and

that

starting on July 12, 2010.

It is the AMF s mission to supervise the activities connected with the distribution of financial

products, and to supervise stock market and monitor

the

securities market. The AMF oversight

activities of Securities is overseeing the proper operations of securities markets and ensuring

the protection

of

investors. In addition, they analyse disclosure documents regarding securities

distributions or public offering, make sure that reporting issuers provide securities holders, and

the other market participants with the financial statements, Management, Discussion and

Analysis and

other

documents required by law and regulations. The AMF must also ensure

that

securities issuers and other financial sector participants adhere to their obligations.

Clearly the AMF s failed to act on its mandate and since they had known and or have

investigated every press release, filings since July 12, 2010, the AMF had an obligation to act



31/32

and seek the suspension

of

the shares of Spencer Pharmaceutical, and request further

justifications, and information from the management

of

Spencer Pharmaceutical and from the

said acquirer AI-Dora. Had the AMF acted on its mission

of

oversight of financial markets, the

Plaintiff's claims would have been non-existent and therefore we request the court to joined

the AMF as a defendant.

If joinder defendant Autorite des Marches Financiers du Quebec is denied by the court, this will

create a significant prejudice to the defendants.

b) The Court should order th Plaintiff to amend its civil complaint and or Statement of

claims

to

include th people and ent ities listed as defendants

The information obtained during the discovery period has provided enough evidence to the

Plaintiff to amend its civil complaint and or Statement of claims to include the people and

entities we have requested to be joined as defendants.

The Plaintiff's civil action is not a "vanilla" civil action, as the Securities and xchange

Commission, the Plainti ff should not be satisfied to obtain a judgment and or partial judgment

from a defendant or defendants, but should seek the truth and pursue all possible defendants

regardlessof cost, tim and or degree

of

difficulties.

The court should not allow the bundling of unrelated defendants to have the effect of

subjecting a defendant to substantial risk of incurring double, multiple or otherwise

inconsistent obligations.



32/32

c) The Court should order a stay of the proceedings until such time as the Plainti ff has

amended its civil

complaint and or statement

of

claims


Plaintiff to amend its civil complaint and or Statement of claims to include the people and

entities we have requested to be joined as defendants.

It is therefore in the

interest of this court to order a stay

of the

proceedings indefinitely and

provide the necessary time

for

the Plainti ff to amend its civil complaint and or statement of

claims as well as serve the amended summons to the

joinder

defendants.

d) The Court should dismiss

this

civil action

for

defendant Jean-Francois

myot


Plaintiff to dismiss defendant Jean-Francois Amyot from these proceedings.

Respectfully

September 23, 2014

Defendant


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SEC v. Spencer Pharmaceutical Inc Et Al Doc 115 Filed 01 Oct 14

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