9/1/2015
JOHN MARK HANCOCK KNOXVILLE ATTORNEY
A
civil lawsuit alleging securities fraud, conversion of funds, breach of
fiduciary duties, and related matters has been filed against Knoxville
suspended attorney John Mark Hancock.
Attorney
M i c h a e l G u t h
Email: m i k e @ m i c h a e l g u t h .com
IN THE CIRCUIT COURT FOR XXXX COUNTY, TENNESSEE
XXXXXXXXXX, )
)
Plaintiff, )
)
v. ) Civ. No. 13-CV-4
)
JOHN MARK HANCOCK, ) JURY DEMAND
)
Defendant John Mark Hancock. )
AMENDED COMPLAINT
Comes the Plaintiff and sues the Defendant John Mark Hancock John Mark Hancock, suspended Knoxville attorney,, and as to the reasons therefor, would show this Honorable Court as follows:
1. The Plaintiff is a resident of Roane County, Tennessee. He is a licensed attorney but appears pro se as a party in this action.
2. The Defendant John Mark Hancock John Mark Hancock, suspended Knoxville attorney, is a resident of Knox County who lives at 1108 Montview Road, Knoxville, TN, 37914-5031.
3. This court has jurisdiction over this matter, because the acts and omissions complained of herein occurred in Roane County. Defendant John Mark Hancock made numerous false representations to Plaintiff, which were received by Plaintiff in Roane County and upon which Plaintiff relied in executing contracts and transferring funds as per Defendant John Mark Hancock’s instructions. Plaintiff purchased securities from his home in Roane County at the Defendant John Mark Hancock’s instruction.
BACKGROUND
4. In the fall of 2009, Defendant John Mark Hancock first contacted Plaintiff representing that Defendant John Mark Hancock was a licensed attorney who wanted to attend Plaintiff’s Continuing Legal Education (CLE) seminars to earn the necessary credits for annual relicensing. At the end of the first CLE seminar taught by Plaintiff that Defendant John Mark Hancock attended, and throughout the period in which Plaintiff and Defendant John Mark Hancock remained in contact, the Defendant John Mark Hancock represented to Plaintiff that Defendant John Mark Hancock was a multimillionaire with vast real estate holdings and active investments paying well over 100% annual returns in foreign exchange and stock market securities.
5. Defendant John Mark Hancock claimed he was doing so well as a professional investment advisor that he earned most (but not all) of his money that way, not from practicing law, i.e., Defendant John Mark Hancock chose to limit his law practice. Plaintiff asked why Defendant John Mark Hancock did not become licensed as an investment advisor or securities sales representative, and Defendant John Mark Hancock replied he did not need those licenses, because Defendant John Mark Hancock was able to establish a trust relationship with his clients by virtue of being an attorney at law. At the time Defendant John Mark Hancock misrepresented that he was an actively licensed attorney at law, the Defendant John Mark Hancock intended to deceive Plaintiff and others, so as to gain their trust in investing with a licensed attorney who was seemingly subject to the ethical disciplinary rules for attorneys.
6. Defendant John Mark Hancock attended three of Plaintiff’s CLE seminars over the course of a year and a half. During these seminars, Plaintiff would pose a question and then go around the room with each participant answering the question with respect to his or her current law practice. Defendant John Mark Hancock told all the lawyers present for these CLE seminars along with Plaintiff that his active law practice focused on real estate transactions, lobbying members of the state legislature, and representing UT football players as an agent to secure professional football contracts.
7. In reality, on June 15, 1994, the Tennessee Supreme Court suspended Defendant John Mark Hancock’s license to practice law and subsequently found Hancock in criminal contempt for continuing to hold himself out as a licensed attorney to members of the public and various business entities. In re Hancock, 970 S.W.2d 456 (Tenn. 1998). Hancock’s law license was originally suspended for acts of dishonesty including misrepresentation, misappropriation, and misuse of client funds, while running a securities firm, Riverview Investments, but Hancock withheld and fraudulently concealed all of this relevant information in soliciting Plaintiff’s trust and funds. The District Court in Knoxville permanently enjoined Hancock for his lifetime from violating the antifraud provisions of the federal securities acts.
8. Plaintiff did not learn about the suspension of Defendant John Mark Hancock’s law license until the middle of September 2012, nine months after the Defendant John Mark Hancock’s final fraud perpetrated against Plaintiff. As late as the first week of September 2012, Defendant John Mark Hancock was still holding himself out to Plaintiff as a licensed attorney.
9. Beginning with the first CLE seminar taught by Plaintiff that Defendant John Mark Hancock attended, the Defendant John Mark Hancock attempted to ensnare Plaintiff in a variety of investment schemes, each of which turned out to be fraudulently misrepresented by Defendant John Mark Hancock. However, Plaintiff did not learn that Defendant John Mark Hancock had fraudulently misrepresented these investments until he lost his entire life’s savings of $325,000 by following Defendant John Mark Hancock’s instructions for Plaintiff’s investments.
10. Defendant John Mark Hancock alleged that he owned and controlled Swiss bank accounts from which he made enormous profits and income from foreign exchange trading. With these Swiss bank accounts, Defendant John Mark Hancock claimed in in-person and telephone conversations that he was actively investing on behalf of himself, his mother, his medical doctor brother and his wife, the brother’s medical partner, and two alleged girlfriends [hereinafter “the Hancock family investors”] and obtaining annual rates of return ranging from 100% to 400%. By email dated 11/30/2009, Defendant John Mark Hancock wrote Plaintiff,
“the
FX account is where the big profits are made for both of us. you have enough in
your savings to participate in a good FX program. i would recommend putting it
all there & you will see it double annually net to you.”
By email dated 12/20/2009, Defendant John Mark Hancock wrote Plaintiff,
“XXXXXXX, if i said that i had clients quadrupling their money in FX after the split of commissions, i misspoke. i meant that sometimes i've quadrupled my own money in it, but now i settle for a fixed rate of tripling it. if you're willing to do this, here's what i'll do for you: a fixed 100% gain net to you on the amount that is invested outside of the Roth IRA in FX annually. that way you will never have to worry about monitoring the performance of the FX investment, as it will be a fixed rate that i'm providing for you. if you put all of the FX investment into the swiss brokerage, it will be in a totally private account that has no ties to the USA, which means that there will never be any reporting to the IRS. . . . XXXXXXX, you are correct that swiss banks that have american operations are required to cooperate with the USA IRS. however, the one that i use has no ties to the USA at all just for that reason. if any of their employees from the chairman & CEO on down ever revealed anything about any of their accounts to anyone, they will go to jail under swiss law. the treaty only affects those banks that also have USA operations or offices, not merely USA clients. however, i take care of that by having my swiss account denominated in the name of my panamanian company, not my own, & also use a german bank with no ties to the USA as a hedge, too.”
Defendant John Mark Hancock wrote Plaintiff by email on 1/13/2010 stating,
“also, you need to get out of the
mindset of there being any capital gains taxes to pay on any income earned from
anything i would do with your $300K overseas. this is the ONLY way to do it
that will work:
1. you wire the $300K to my swiss account. that takes it all out of the USA
& out of IRS jurisdiction, since it's going into a numbered, private
account with no name attached to it, mine or anyone else's.
2. i can offer you no protection against any loss beyond swiss law, as i'm not
the FDIC or FSLIC. again, these funds are going overseas into uninsured
accounts in that they aren't insured by any US agency. however, they will be in
the safest place in the world, a swiss account. no bank accounts are safer than
swiss accounts. their laws are ironclad.
3. you misunderstood so very much about my FX traders. they are in hong kong,
not norway. the guy who is chairman of one of the trading companies i deal with
is a south african native who was educated in the UK, got his graduate degree
in the USA from an ivy league school, worked on wall street awhile, deals with
banks in singapore, & married a norwegian, which is why he lives there.
none of that is pertinent to your return, as i might not even use his traders
for your funds, as i deal with several FX traders & companies that are all
very sound.
4. the swiss bank & swiss broker i deal with has NO ties to the USA at all,
no US offices, etc. thus, they are not a party to any treaties with the IRS,
& all of their bank & brokerage employees would go to jail under swiss
law if they ever revealed anything about their accounts.
5. as you said, talk is cheap, but action counts. i'm not going to make you any
outlandish promises. i'm simply going to be very conservative & offer you a
doubling of your money by next year. once i've returned to you $600K by 2011,
you can decide what you want to do at that point. it will be placed in another
overseas account of your choice, as i will not wire back to the USA for any
reason from my swiss account, since that will defeat its privacy.
you won't get a better return for your money anywhere. i have no collateral to
offer you. you will simply have to trust me that i will do what i say i'll do,
which will be easy for me to accomplish. i have no way to get around any risk
management issues you may have. i tried to offer you plenty of protections
otherwise with the roth, but since you want to remove that from the equation,
there isn't any way to offer you such protections with this arrangement. you
said you trust me, so hopefully that is enough & you'll be true to your
word. there never seemed to be a trust issue in our agreement, just [your]
obsession with reporting to the IRS, which will be eliminated by this
arrangement on the savings in my swiss account being put into FX only.”
Defendant John Mark Hancock’s scores of representations were necessary to cast himself fraudulently as a very successful multimillionaire investor looking for other investors to join him in lucrative investments.
11. For the first ten months or so that Plaintiff knew Defendant John Mark Hancock, the Plaintiff rejected Defendant John Mark Hancock’s investment schemes, because each proposed scheme involved either (1) unethical and illegal “pump & dump” stock market manipulations, or (2) illegal income tax evasion with foreign exchange and foreign bank accounts.
FIRST CAUSE OF ACTION: FRAUD
12. Plaintiff incorporates by reference the allegations in the preceding paragraphs of this Amended Complaint as though the same were set forth in full herein.
13. Eventually, Defendant John Mark Hancock came up with an investment that garnered Plaintiff’s consideration in which Defendant John Mark Hancock represented, and upon which Plaintiff relied, that (1) Defendant John Mark Hancock personally did extensive due diligence on every stock he recommended to investors, (2) Defendant John Mark Hancock knew these companies inside and out, and top to bottom, (3) Defendant John Mark Hancock had an unblemished record of looking out for client funds and that all of his investment clients trusted his honesty completely with their investments, (4) that Defendant John Mark Hancock “worked [his butt] off” performing due diligence and eliminating foreseeable risk from his investments and thereby eliminating his clients’ need to perform their own sophisticated due diligence on the investments and justifying Hancock to receive 50% on any return he generated for his clients, (5) that the investment would involve holding a stock potentially for years based on fundamental value, not a quick trade as part of a “pump & dump” scheme, and (6) that Defendant John Mark Hancock was a very wealthy multimillionaire and had the financial means to make Plaintiff wealthy. Plaintiff relied on each of Defendant John Mark Hancock’s misrepresentations in choosing to become an investment client of the Defendant John Mark Hancock and follow Defendant John Mark Hancock’s investment instructions.
14. Defendant John Mark Hancock steadfastly refused to provide Plaintiff with what Defendant John Mark Hancock repeatedly claimed to be thoroughly researched and highly lucrative investment opportunities until Plaintiff signed a “Profit Sharing Agreement,” drafted by Defendant John Mark Hancock, which is attached hereto as Exhibit A. Although Defendant John Mark Hancock would have $0 at risk and Plaintiff would have 100% of his funds at risk, the Defendant John Mark Hancock expected Plaintiff to pay him a 50% commission on any returns to compensate Defendant John Mark Hancock for his exhaustive due diligence services. Defendant John Mark Hancock fraudulently represented that the returns he would generate for Plaintiff would be so high that even after paying Defendant John Mark Hancock a 50% commission, the returns would exceed any alternative investment opportunity available to Plaintiff.
15. Defendant John Mark Hancock represented to Plaintiff that Denarii Resources (hereafter stock symbol DNRR) was a gold mining company that owned gold mines. To further demonstrate his deep knowledge of the company, Defendant John Mark Hancock identified and represented to Plaintiff that DNRR owned gold mines in Canada and South America – information not available anywhere on the Internet or the financial media.
16. To convince Plaintiff that Defendant John Mark Hancock was indeed performing extensive due diligence, Defendant John Mark Hancock represented to Plaintiff that DNRR had secured loans from creditors that were to be repaid in gold, not dollars. Defendant John Mark Hancock seemingly could not have learned such details without doing extensive due diligence. Plaintiff relied on the Defendant John Mark Hancock’s misrepresentations in deciding to invest in DNRR. The Defendant John Mark Hancock did not express these loan terms as his subjective belief but as a known objective fact. In contrast, he also expressed his subjective belief that DNRR would within a few years be acquired by one of the gold mining companies trading on the American Stock Exchange at a price of $2/share or higher:
From: MARK
[mailto:[email protected]]
Sent: Tuesday, July 13, 2010 4:05 PM
To: XXXXXXXXXX,
Subject: Re: fidelity roth ira id
XXXXXXX, again, you must have faith in me that the picks will work for you. remember that dnrr is going to be a longterm investment relatively. i was planning on buying about $50,000.00 worth of it in your roth ira. i expect it to go to $1 in a 6 to 12 month period. that will make that $50,000 grow to from $500,000 to $1 million taxfree, depending on what price we get in at. anything below 10 cents a share is a huge bargain. . . . it could easily go to $3. it could also be taken from the OTC market to the AMEX. it could also get merged into a larger company at a huge premium to today's price. in any case, i expect it to be a life-changing stock for me & all my clients. . . . remember that this news is only the tip of the iceberg. dnrr has a $30 million loan in place now. since there are only about 70 million shares outstanding, the intrinsic value of the company with that asset alone is 40 cents a share, meaning that you would make 8 times your money upon liquidation, as the funds do NOT have to be paid back in cash. the value of this one mine alone is over $200 million & it is just one of many that is being acquired with that loan. it is also traded under a different symbol in germany on the berlin exchange, as you can see. . . . the people who loaned dnrr their money are NOT banks. they want to hold bullion, not cash it in. they have lots of cash & are looking to get paid in bullion. that basically invests them totally in the company because if the company doesn't produce any bullion, they don't owe them anything. there is no recourse for them to get cash. thus, they will make SURE that bullion is produced by the company, despite all of the mumbo-jumbo you read about them not being profitable, not being viable, etc., which is required by the sec & which language is found in the vast majority of the penny stocks we trade in. remember, all penny stocks are highly volatile. you might only make 10% on some. you might make 1,000% on others. in the long run, whether you make 500% & my Mom makes 600% or my brother makes 800% on a particular stock will be immaterial. you will be VERY satisfied with your returns, they will be FAR more than you will make elsewhere, even after splitting your profits with me, & you won't suffer the losses you've had with others. just sit back & enjoy the ride!”
17. On January 13, 2012, Defendant John Mark Hancock informed Plaintiff that DNRR (now shown under stock symbol DDCC) owned no gold mines and apparently never did own gold mines. However, at that point, Plaintiff had lost approximately $180,000 by investing in DNRR in reliance on Defendant John Mark Hancock’s fraudulent misrepresentations. If Plaintiff now tried to sell his 3+ million shares in DDCC, he would receive a selling price less than $0.01/share.
18. Defendant John Mark Hancock made either knowingly, without belief in their truth, or recklessly, with regard to the truth, fraudulent representations to Plaintiff concerning DNRR’s active gold mines, the location of these active gold mines, and the loan to DNRR to be paid back in gold bullion. Defendant John Mark Hancock made these misrepresentations in order to both mislead Plaintiff into thinking DNRR was an actively mining gold stock and obtain an undue advantage through Plaintiff’s DNRR stock purchases, which shored up the Hancock family investors’ DNRR holdings. Plaintiff was injured by the enormous loss in value of the funds he invested in DNRR in reliance upon Defendant John Mark Hancock’s misrepresentations.
19. Defendant John Mark Hancock fraudulently represented himself to the public as an astute investment advisor doing business as Hancock & Associates, as shown in Exhibit A. To these prospective investors, the Defendant John Mark Hancock fraudulently misrepresented his due diligence on a wide array of securities as he stated in an email dated 12/13/2009.
what we do is profile a company, make the subscribers aware of it & why we think it is a good company to invest in. it is no "pump & dump." the companies hire us to promote the intrinsic value of their company. we are not regulated by the SEC, since we're merely an advisory service & don't trade the stock on behalf of anyone. what i do with my own investment advisory service is also totally separate & apart from my partial ownership in the websites. i recommend many other investments for others according to their tolerance for risk, such as stocks, bonds, commodities, options, futures, real estate, REIT's, ETF's, etc. while i may have power of attorney to do the investing for most all of my clients for convenience purposes, i never trade something against their will or without fully informing them of what i'm doing & why & with their complete informed consent in writing at least thru an email.
Over time, Defendant John Mark Hancock’s ignorance and fraud regarding his proposed investments became common knowledge, so that Defendant John Mark Hancock admitted by email letter dated Dec. 6, 2012, that his other investor clients “are very upset with me.”
20. In July 2010, Defendant John Mark Hancock, acting as if he were a licensed attorney, drafted a contract for a website investment that was executed by Plaintiff and the Defendant John Mark Hancock’s investment partner, Parker Mitchell. Plaintiff negotiated back and forth with Defendant John Mark Hancock on the terms of the contract, which was edited and drafted entirely by Defendant John Mark Hancock, as if he were a licensed attorney at law drawing up a legal document between two third parties. As shown in Exhibit B, Defendant John Mark Hancock then gave Plaintiff bank wiring instructions to send $145,000 by interstate wire transfer to Defendant John Mark Hancock’s business partner. A copy of the cover page for this interstate bank wire transfer is attached hereto as Exhibit D.
21. In order to allay Plaintiff’s concerns, Defendant John Mark Hancock fraudulently represented that he personally and the Hancock family investors had similar positions to Plaintiff’s $145,000 investment in these websites, and the Hancock family investors were all glad that they had invested. Defendant John Mark Hancock even boldly described himself as an “owner” and “co-owner” of the websites, and not just a simple investor. Plaintiff subsequently learned after the default on that investment that Defendant John Mark Hancock had taken his own money completely out of the website investments using Plaintiff’s own funds, and that the Hancock family investors were completely out of the website investment as well during the Plaintiff’s investment period of July 2010 – January 2012. When they had invested in the websites in prior years, the Hancock family investors had risked only small amounts on the order of $10,000, not the enormous $145,000 investment that Defendant John Mark Hancock knowingly and fraudulently misrepresented as safe to Plaintiff.
From: MARK
[mailto:[email protected]]
Sent: Wednesday, July 07, 2010 1:19 PM
To: XXXXXXXXXX,
Subject: Re: agreements
ok, good, thanks. by the way,
i have a friend who is a cpa in charlotte who just invested $200K into the
websites with parker, so you are in good company with him, me, & others of
my friends who are reaping the great returns. do you have any idea how hard it
is to find to find a fixed rate of 10% per month on your money anywhere? it's
nearly unheard of. remember that your social security number isn't used &
no 1099 is sent out, so it is up to you whether you report the income or not.
where else can you find a deal like that? he's never been audited. you are
essentially in an unregistered investment as a partner with profit shares being
paid out, so there is no formal reporting. parker simply lists the
payments to you & me & others as general business deductions on his own
return, the normal costs of doing business in the normal course of business.
nowhere else can you find such a great deal, i assure you. i don't sell it to
anyone. i just make it available to people & they gobble it up once they
understand it. i have another friend who has a winery in california who is
going to put about $500K into it soon. it will be the start of making you
wealthy.
22. No CPA in Charlotte, NC, nor any winery owner in California, ever invested in Parker Mitchell’s websites, nor did Defendant John Mark Hancock have any other investment clients who were “gobbling up” the website investment opportunity, and the same was known to the Defendant John Mark Hancock, who falsely and fraudulently represented these facts and others to Plaintiff so as to induce the Plaintiff a few days later to wire $145,000 to the Defendant John Mark Hancock’s business partner, Parker Mitchell, as per the Defendant John Mark Hancock’s instructions shown in Exhibit B.
23. Unknown to the Plaintiff and therefore without Plaintiff’s informed consent or authorization, Defendant John Mark Hancock had prearranged for his investment partner to send Defendant John Mark Hancock approximately $17,100 from the proceeds of the $145,000 wire funds transfer. This $17,100 payment amounted to a kickback or unauthorized commission paid to Defendant John Mark Hancock using Plaintiff’s funds, even though Defendant John Mark Hancock assured Plaintiff, and even put in writing in the agreement shown in Exhibit A, that Plaintiff would not compensate Hancock for the website investment. The $17,100 payment refunded Defendant John Mark Hancock with the entire amount of Defendant John Mark Hancock’s website investment: Defendant John Mark Hancock placed Plaintiff’s life’s savings in a risky website investment of which Defendant John Mark Hancock wanted no part for himself and had his own investment completely and simultaneously refunded using Plaintiff’s funds.
24. Plaintiff was unaware of the Defendant John Mark Hancock’s ulterior motive in pressuring Plaintiff to wire his remaining $145,000 in life savings to Defendant John Mark Hancock’s investment partner. Defendant John Mark Hancock fraudulently alleged to the investment partner that Plaintiff had authorized the $17,100 kickback payment to Defendant John Mark Hancock. Defendant John Mark Hancock’s investment partner, Parker Mitchell, relied on Defendant John Mark Hancock’s fraudulent lie and sent him back $17,100 from Plaintiff’s funds as Defendant John Mark Hancock requested by means of interstate bank wire transfer. Copies of the outgoing bank wire transfer from Money Sports, Inc.’s Bank of America account totaling $17,100 and copies of the incoming bank wire transfers to Defendant John Mark Hancock’s Suntrust Bank account are attached hereto as Exhibit E.
25. As shown in the Website Investment agreement, drafted by Defendant John Mark Hancock, and attached hereto as Exhibit C, the document intentionally reads, by trick or contrivance, as if Defendant John Mark Hancock’s investment partner had the full $145,000 at his disposal. In fact, Defendant John Mark Hancock knowingly and fraudulently concealed the kickback payment paid to Defendant John Mark Hancock by leaving the amount shown in Exhibit C as $145,000, rather than $127,900, so that Defendant John Mark Hancock would not have to justify to Plaintiff why he redrafted the agreement to reflect a $127,900 investment.
26. Defendant John Mark Hancock fraudulently told Plaintiff that he would advise Parker Mitchell that the $145,000 represented Plaintiff’s life savings and that Mitchell needed to invest the funds in such a way as to preserve the capital. Plaintiff relied on Defendant John Mark Hancock’s misrepresentations when he wired the funds to Defendant John Mark Hancock’s partner, Parker Mitchell, in July 2010. The $145,000 transfer benefited Defendant John Mark Hancock directly by obtaining subscriptions to a website that would be used to promote the value of DNRR stock, which was held by Defendant John Mark Hancock and the Hancock family investors. Defendant John Mark Hancock fraudulently concealed that Plaintiff’s life savings would be spent recklessly to buy advertising to convince other market investors to subscribe to a stock promotion newsletter that would aim, inter alia, to create demand for DNRR shares.
27. Defendant John Mark Hancock subsequently admitted to Plaintiff in September 2012 that he did not perform any due diligence on the stocks he recommended to investors but merely acted on information that he claimed he received from his business partner without any further investigation of the accuracy of the information. Defendant John Mark Hancock’s admission meant that he did not “work his butt off” but rather lazily sat back and tried to exploit Parker Mitchell’s information by using it, without Parker Mitchell’s permission, to recruit investment clients such as Plaintiff. Defendant John Mark Hancock sought to make Parker Mitchell the scapegoat for Defendant John Mark Hancock’s failed investments recommended to his clients, but Defendant John Mark Hancock actually made up most of his representations with pure fraudulent intent. At the time he was an investment client of Defendant John Mark Hancock, Plaintiff had no idea that the Defendant John Mark Hancock had misrepresented his lack of sophistication with stock market investments, his net worth, and the required due diligence that he performed. Had he known of the truth of Defendant John Mark Hancock’s misrepresentations, Plaintiff never would have executed a contract to be one of Defendant John Mark Hancock’s investment clients, wired $145,000 to Defendant John Mark Hancock’s business partner, or executed the $180,000 securities purchases in DNRR as instructed by the Defendant John Mark Hancock.
28. But for the Defendant John Mark Hancock’s fraudulent misrepresentations and the Defendant John Mark Hancock’s failure to comply with his court-ordered lifetime ban on violating the antifraud provisions of the federal securities acts, Plaintiff never would have heard of the securities investments that ultimately cost Plaintiff $180,000 as well as the $145,000 website investment co-owned by Defendant John Mark Hancock.
29. Defendant John Mark Hancock’s misrepresentations harmed and injured Plaintiff. Based upon these misrepresentations, Plaintiff is entitled to compensatory damages and special damages for suffering. The above-mentioned acts of Defendant John Mark Hancock were willful and fraudulent. Plaintiff is therefore entitled to punitive damages, in addition to compensatory and special damages, in an amount to be determined by the jury at time of trial.
SECOND
CAUSE OF ACTION: INTENTIONAL INFLICTION
OF EMOTIONAL DISTRESS
30. Plaintiff incorporates by reference the allegations in the preceding paragraphs of this Amended Complaint as though the same were set forth in full herein. At the time Plaintiff invested with Defendant John Mark Hancock, the Defendant John Mark Hancock knew that Plaintiff was facing steadily decreasing income, because Plaintiff repeatedly informed Defendant John Mark Hancock that the Baltimore-based law firm that referred clients to Plaintiff was ceasing operations in Tennessee. The Defendant John Mark Hancock knew Plaintiff’s underemployed status meant Plaintiff could not earn income to offset the enormous capital losses inflicted upon Plaintiff by Defendant John Mark Hancock’s schemes.
31. On May 31, 2011, Plaintiff asked Defendant John Mark Hancock if Defendant John Mark Hancock’s investment partner would default on his payment to Plaintiff due on or about Jan. 15, 2012, based on the poor performance of DNRR. On May 31, 2011, Defendant John Mark Hancock reassured Plaintiff that his partner would pay him the full return expected in January 2012:
“i am confident that parker will have your money to you in january. i have done my investigations of him & have faith he will be able to do that. he isn't accepting any more investors into the website opportunity until he gets those in it now paid off. he is getting more companies hiring him the latter part of the year to profile their stocks. many small cap penny stocks didn't have the cash to hire him to do promotions this spring, so he had to take stock in lieu of cash, but that is changing, & he has the profits from his stocks he got to work with now, too.”
32. On Aug. 1, 2011, Defendant John Mark Hancock again reassured Plaintiff that he would be paid back in full by Defendant John Mark Hancock’s investment partner:
i know virtually all of Tennessee's Congressional delegation on a first-name basis, as well as most of the state legislators & those in other states, too. i played church league softball with my Congressman growing up & also serve on the board of directors of a charity that his sister runs. i can be very effective in perhaps adding a governmental relations component to your varied services you provide. also, you may have clients that will be interested in some of my investments if u find any that are wealthy. . . . XXXXXXX, i will be glad to fill him in on forex anytime. as for this $50K opportunity, it is unique, in that you would be guaranteed triple your money in a year, a much higher yield fixed rate return than traditional forex trading because of the specific investment vehicle being used here. it would be a way for you to jumpstart your forex trading, too, in that the profits could be put into the traditional forex programs. if there is any way you could put together a consortium of people in which you might want to participate, such as two of you at $25K each or 5 of you at $10K each, let me know. the attorney whose office you used for your CLE in oak ridge who married my friend might be a candidate. looking back, i wish we had put your funds in forex rather than parker's website, but we will be able to do that soon enough now anyway. however, please keep this other deal in the forefront of your mind, as it won't last long & won't be repeated at such a low amount. most of these deals require a minimum $500K investment rather than just $50K, which is only available as of last nite since a partner failed to perform with his funds. i also have a european casino stock that is branching into gambling directly on your cellphone that will soon explode in value. they are doing a private placement in which you can get in at a 20% discount to market price & i expect the stock to immediately triple in value. if you don't have the ability to put together $50K for the special forex deal, try to put together $30K or so on that one & you will be rewarded. i will send you full info on it once you tell me that you or someone you know wants to move on it, as that one will also be sold out & the private placement fully subscribed very soon. thanks, mark (emphasis added)
33. By letter dated Nov. 7, 2011, Plaintiff
again advised Defendant John Mark Hancock of his dwindling income and asked if
the proceeds from his website investment could be used to generate income in
the FX markets. Defendant John Mark
Hancock replied that same day, “XXXXXXX, i think he is going to transfer it to you
directly. no problem with that [FX income] strategy.” Plaintiff is informed and believes and thereon alleges that by
Nov. 7, 2011, at the time he reassured Plaintiff that all was well with
Plaintiff’s investment, the Defendant John Mark Hancock knew that he and his
partner would be defaulting on all payments to Plaintiff, and thus Defendant
John Mark Hancock’s reassurances were reckless and intentionally malicious.
34. On Dec. 4, 2011, Defendant John Mark Hancock wrote to
Plaintiff:
“XXXXXXX, [DNRR to DDCC] was just a simple name change. nothing changed
otherwise. the new people in charge are going to really make it take off with a
focus on the gold mining. they had some issues with some overseas investors but
now they are out of the picture. i expect us to still reap big profits from
this by next year. as for forex, i'll get you more info on it by next month.
the program has changed somewhat but is still lucrative. i also have a great
investment program in london that will pay a fixed rate that is higher than
forex is paying now. they loan out business capital at very high interest
rates. hope you're having a very happy holiday season! sincerely, your friend,
mark”
For the first time in 200+ email messages, the Defendant John Mark
Hancock signed his email “your friend,” because the Defendant John Mark Hancock
had a guilty conscience and knew that he was about to default on payment to
Plaintiff and was trying to forestall legal action by pretending everything was
just fine in terms of the investment return and that, as a friend, he was
looking out for Plaintiff’s best interests.
35. One week before Defendant John Mark Hancock would notify Plaintiff of his default, the Defendant John Mark Hancock wrote on January 4, 2012,
“XXXXXXX, my network ranges far & wide, since i have had clients
worldwide & have real estate worldwide, so most of my contacts are from
others i know, which are friends of friends. please put some vague 50% annual
return investment opportunities on your linkedin profile & see what comes
up. i've found that doctors are great at generating income from their practices
but are some of the poorest businessmen & investors in the world. my
brother, who is an MD, is a great example of that. he would be lost without me
to guide him in his investments. with my guidance, he has become a
multimillionaire, as have many of my clients. i will make you one, too. many of
my investments i've recommended over the years have hit it big for my clients,
some of which i've participated in & others that i wish i had. of course,
some have gone bust but those have been few compared to the big winners.”
The Defendant John Mark Hancock’s dual motive in sending Plaintiff this glowing message was to forestall legal action (protect his own self-interests) and intensify the shock and horror that would be inflicted on Plaintiff the following week with the devastating news of the default on the payment to Plaintiff and dismal prospects for DDCC (no gold mines).
36. The combined effect of the total loss of Plaintiff’s life’s savings by Defendant John Mark Hancock’s fraud coupled with Plaintiff’s negligible income caused Plaintiff extremely severe emotional trauma, i.e., any reasonable person would characterize the Defendant John Mark Hancock’s behavior as “outrageous conduct” to inflict this degree of trauma.
37. In advising Plaintiff of the Defendant John Mark Hancock’s default, Defendant John Mark Hancock gleefully added to Plaintiff’s shock and horror of these devastating financial losses with his email messages dated January 13, 2012:
There was no investment fraud at
all on the part of Parker. Your deal was with him, not me. There was no
contractual agreement between you & me regarding the funds put into his
websites. . . . I don't see any grounds at all for "investment fraud"
on even a civil basis, much less a criminal one. Going to the
"authorities" would be pointless, as there is no one regulating the
investment you made in the websites. It was simply a business venture that
crashed due to the economy, much like many other businesses have. . . . Turning
to litigation & making this adversarial will only make things worse for
everyone & hamper his ability to do what he can to help all of us. He can't
do anything if he's in jail. As far as I know, he has no attachable assets
& neither do I, so a judgment would be worthless,
as you well know from your law practice. . . . At the time, the investments
with Parker were doing well. I was not compensated for bringing you to Parker.
Please remember that I have lost substantial money, too. As a sophisticated
investor, we are both responsible for our own diligence. . . . I was not aware
that things had gotten so bad with the websites, since I haven't been involved
in them for a while. . . . I am sure that Parker can & will explain in
detail where the money went. It certainly didn't go into my pocket.
38. The preceding messages confirmed Defendant John Mark Hancock’s malicious and reckless intent when he indicated that he had no attachable assets, i.e., he had assets, but those were shielded from angry creditor lawsuits by being placed offshore and/or registered in some other entity’s name. Where Defendant John Mark Hancock repeatedly told Plaintiff that Defendant John Mark Hancock was entitled to 50% commissions based on Defendant John Mark Hancock’s extensive due diligence on any security he recommended, upon default the Defendant John Mark Hancock claimed Plaintiff was responsible for his own due diligence, thereby attempting to extricating Defendant John Mark Hancock from any civil liability. Defendant John Mark Hancock also lied about Plaintiff’s funds not going into the Defendant John Mark Hancock’s pocket. The gist of the Defendant John Mark Hancock’s reckless and intentional messages was “don’t bother trying to sue me, because you won’t collect anything.” Defendant John Mark Hancock also repeatedly threatened to bankrupt any judgment Plaintiff obtained against him.
39. As a millionaire who to this day owns highly lucrative foreign exchange investments and vast real estate holdings in the USA and abroad, the Defendant John Mark Hancock could have made Plaintiff whole. Instead, the Defendant John Mark Hancock denied that he had any legal liability to Plaintiff whatsoever, denied that he acted as an agent for his business partner in instructing Plaintiff to wire funds to Money Sports, Inc., contradicted himself by subsequently denying that he received any compensation for bringing Plaintiff into the website investment, asserted he was judgment proof, and subsequently in December 2012, denied that he had performed any due diligence on DNRR or any other stock he recommended to his investment clients. The Defendant John Mark Hancock exploited Plaintiff as a mark for his fraudulent investment schemes, and the Defendant John Mark Hancock did so with reckless abandon for the emotional trauma that his multiple frauds would inflict on Plaintiff.
40. Tennessee recognizes a tort cause of action
for “intentional infliction of emotional distress” or “outrageous
conduct.” The elements of this cause of
action are that the Defendant John Mark Hancock's
conduct was (1) intentional or reckless, (2) so outrageous that it is
not tolerated by civilized society, and (3) resulted in serious mental injury
to the plaintiff. The first element is
met by the Defendant John Mark Hancock’s intentional or reckless
misrepresentations, fraudulent concealments, conversion of client funds, and
intentional breaches of trust. The
second element is met by the loss of Plaintiff’s entire life’s savings, in
reliance upon the fraudulent statements of the Defendant John Mark Hancock,
coupled with the fact that Plaintiff’s income is so limited that he is now at
the federal poverty level and cannot replace those lost savings. The third element has been met by the severe
mental anguish and stress that Defendant John Mark Hancock inflicted upon
Plaintiff.
41. Defendant John Mark Hancock’s intentional infliction of emotional distress resulted in injury and damage to Plaintiff, who has suffered. Based upon these misrepresentations, Plaintiff is entitled to compensatory and special damages for suffering. The above-mentioned acts of Defendant John Mark Hancock were willful and intentional. Plaintiff is therefore entitled to punitive damages, in addition to special damages, in an amount to be determined by the jury at time of trial.
THIRD
CAUSE OF ACTION: BREACH OF CONTRACT
42. Plaintiff incorporates by reference the allegations in the preceding paragraphs of this Amended Complaint as though the same were set forth in full herein.
43. The Website Investment Agreement shown in Exhibit C represents a contract negotiated by Defendant John Mark Hancock between Plaintiff and Parker Mitchell, doing business as Money Sports, Inc. Defendant John Mark Hancock was Mitchell’s business partner and a one-half owner in the website in which Plaintiff invested with this contract.
44. This one page agreement contained all of the terms, conditions, and requirements for accepting the offer to pay 10% monthly interest for a period of twelve months. No other conditions, prerequisites, or reservations were ever brought to the Plaintiff’s attention.
45. Plaintiff has performed all conditions, covenants, and promises by him on his part to be performed in accordance with the terms and conditions of the agreement.
46. Defendant John Mark Hancock and his business partner, Parker Mitchell, advised Plaintiff on Jan. 13, 2012, that none of the money owed to Plaintiff would be paid to him: a complete and utter default on the contract. This act or declaration constituted a breach of contract with Plaintiff. This act or declaration by Defendant John Mark Hancock also constituted a violation of Tennessee state law and has resulted in injury and damage to Plaintiff.
47. Defendant John Mark Hancock was acting as an agent for Parker Mitchell when Defendant John Mark Hancock solicited Plaintiff’s investment in the website and drafted every word of the agreement. As an agent, Defendant John Mark Hancock is jointly and severally liable for the default by his principal on payment of the return on Plaintiff’s investment. Separately, Defendant John Mark Hancock used Plaintiff’s own funds to acquire a 50% ownership in the website in which Plaintiff invested and in which Defendant John Mark Hancock and Mitchell had a partnership. The Defendant John Mark Hancock’s act of subterfuge had the legal effect of creating an unincorporated business partnership between Defendant John Mark Hancock and Parker Mitchell. The Defendant John Mark Hancock is thus jointly and severally liable for his business partner’s default on payment to Plaintiff.
48. Accordingly, Plaintiff is entitled to recover from Defendant John Mark Hancock $319,000, which represents the principal plus return on investment contractually negotiated by Defendant John Mark Hancock and stipulated in the agreement, shown as Exhibit C, drafted word for word by Defendant John Mark Hancock. [$145,000 + (12 x $14,500) = $319,000]. The $319,000 was owed to Plaintiff as of January 15, 2012, and none of those funds have been returned to Plaintiff. Plaintiff thus seeks both pre-judgment and post-judgment interest at the statutory interest rate on these damages.
FOURTH CAUSE OF ACTION: BREACH OF FIDUCIARY DUTY
49. Plaintiff incorporates by reference the allegations in the preceding paragraphs of this Amended Complaint as though the same were set forth in full herein. Defendant John Mark Hancock established a fiduciary relationship with Plaintiff, in which Defendant John Mark Hancock assumed the role of a diligent financial advisor who directed Plaintiff’s investments, and Plaintiff was obligated to trust the Defendant John Mark Hancock’s honesty and fair dealings and the accuracy of Defendant John Mark Hancock’s numerous representations. By email dated Dec. 1, 2009, Defendant John Mark Hancock described the trust he solicited and obtained from Plaintiff and other investment clients as follows:
“XXXXXXX, the basic premise of all of this
is trust. all of my clients trust me totally & implicitly. they are very happy
with their results. i don't flaunt it like madoff did, as i never reveal who
any of my other clients are to others. . . . in the "new normal" of
investing, the risk-reward ratios have changed. if you will put that same trust
in me that my Mom, my girlfriends, & others that i've met at club leconte
have, you will be happy. . . . i'm putting a lot of faith & trust in you
that you will pay me the 50% on everything beyond the $350,000 you will have
already paid that i will have earned beyond this coming year, as i will easily
hit that benchmark in 2010. the allotment would come out in 2020 when you turn
60. . . . if you don't want to give me your ID & password. giving it to me
is no different than giving it to your Dad or any other family member. if you
trust someone, it makes no difference. . . . XXXXXXX, i do want to help you, as
you have been someone that has helped me & you help others. i know what i
can do & can't do. i try to keep everything simple. i also want to be
conservative in what i promise & then exceed expectations. things can
always change from the past & i want to be able to be sure i can do what i
tell you i'll do & for you to know you can trust me. you have said many times that you fear
losing communications with me. i have had the same address & phone number
all my life, & the same email address since the internet was born. i'm as
stable as you can find. while i travel, my home base will always be knoxville.
i go back 7 generations here on both sides of my family. my roots are strong
& deep here & will never be changed. . . . i can re-draft the agreement
to allow me to continue to re-invest if you want. i can't overpromise, so it's
best that we leave it at 100% for now. it can possibly be renegotiated after a
year up to 125%, depending on economic conditions at the time worldwide. not
only do i have deep roots in the community & many pieces of real estate
that i own debtfree all over the country, but i am one of the most trustworthy
people you will ever meet. . . . i have complete trust in them, just like i'm
asking you to have it in me. remember, however, that i'm NOT proposing putting
all or even a majority of your money into FX. i would invest some into websites
& other things that will allow me to return to you what i've promised you.
it shouldn't matter to you whether i make just the same as you or less than you
or more than you on your money, as long as you get what's promised you. . . .
put your trust in someone that you know & that is local & always will
be. remember that my clients are up 400% in 2009. once we do this first deal, i
will open doors for you that you never dreamed possible.”
50. Plaintiff, who was in a position of vulnerability, entered into a fiduciary relationship, thereby vesting confidence, good faith, reliance and trust in Hancock whose aid, advice or protection was sought with respect to investment of Plaintiff’s life savings. In such a relation, good conscience and as well as applicable investment advisor regulations and laws required Hancock to act at all times for the sole benefit and interest of Plaintiff. A fiduciary duty is the highest standard of care at either equity or law. As a fiduciary, Hancock would be expected to be extremely loyal to the Plaintiff to whom he owed the duty: he must not put his personal interests before the duty, and must not profit from his position as a fiduciary, unless the principal consents.
51. The Defendant John Mark Hancock used Plaintiff’s own funds to secure a 50% ownership in the website investment for Defendant John Mark Hancock, thus violating his fiduciary duty as a professional investment advisor by favoring himself at the expense of his investment client, the Plaintiff. The Plaintiff did not consent to this exploitation.
52. Defendant John Mark Hancock presented himself to the public as a professional investment advisor, and the fiduciary duty is critical to and at the core of being a good investment adviser. Defendant John Mark Hancock described his professional advisory services by email dated 12/13/2009 as follows:
what we do is profile a company, make the subscribers aware of it & why we think it is a good company to invest in. it is no "pump & dump." the companies hire us to promote the intrinsic value of their company. we are not regulated by the SEC, since we're merely an advisory service & don't trade the stock on behalf of anyone. what i do with my own investment advisory service is also totally separate & apart from my partial ownership in the websites. i recommend many other investments for others according to their tolerance for risk, such as stocks, bonds, commodities, options, futures, real estate, REIT's, ETF's, etc. while i may have power of attorney to do the investing for most all of my clients for convenience purposes, i never trade something against their will or without fully informing them of what i'm doing & why & with their complete informed consent in writing at least thru an email.
53. In a very practical sense, if an investment adviser, such as the Defendant John Mark Hancock, bases his decisions large and small and everyday doing what is right by the client, in all likelihood the decisions will be right under the securities laws. Any investment advisor fiduciary relationship requires the investment adviser to know his client’s circumstances and ability to earn income. Defendant John Mark Hancock, as an investment advisor, failed to perform due diligence and safeguard Plaintiff’s life’s savings for retirement and recommend appropriate investments that would not be expected to result in any loss to the principal amount, i.e., preservation of capital as that term is used in the investment advisory industry.
54. Tennessee follows the common law with respect to duties imposed on a professional investment adviser. The common law establishes as implied contractual terms to any investment adviser fiduciary relationship that the fiduciary, here Defendant John Mark Hancock, (1) must put clientsʼ interest first, (2) must act with utmost good faith, (3) must provide full and fair disclosure of all material facts, (4) must not mislead clients, and (5) must expose all conflicts of interest to clients. These responsibilities overlap in many ways. If an adviser is putting clients interests first, then the adviser will not mislead clients. And if the adviser is not misleading clients, then it is providing full and fair disclosure, including disclosure of any conflicts of interest. The key here is to disclose material conflicts of interest in a “full and a fair” manner and to ensure the client understands any material conflicts of interest before taking action.
55. Defendant John Mark Hancock breached his fiduciary duties owed to Plaintiff by (1) placing his own greedy self-interests above those of his client; (2) by acting in bad faith, including lying about his record of honesty, his standing as an attorney, his conversion of Plaintiff’s funds to his own personal use, favoring the Hancock family investors with early securities purchases at the expense of Plaintiff and his other clients, and misrepresenting his due diligence activities; (3) by failing to provide full and fair disclosure of all material facts including, but not limited to, the fact that he was not performing exhaustive due diligence, which supposedly justified his exorbitant 50% commissions, purchasing shares of stock for the Hancock family investors at lower prices and then using Plaintiff’s funds to shore up the value of those Hancock family investments by subsequent purchases at higher prices, failing to disclose that he had no attachable property and thus was judgment proof from any creditor lawsuits, failing to disclose the $17,100 kickback payment, and declaring DNRR owned multiple gold mines; (4) repeatedly misleading Plaintiff; and (5) failing to expose the conflicts of interest in getting himself out of the website investment through the unauthorized conversion of Plaintiff’s funds, placing the Hancock family investors’ interests above and in conflict with those of his clients, and exploiting the Plaintiff to benefit the Hancock family of investors rather than acting in Plaintiff’s best interests, and failing to expose the conflict in using Plaintiff’s funds to secure a 50% ownership position for Defendant John Mark Hancock in the website.
56. Defendant John Mark Hancock had a duty of care to know his client and select appropriate investments and breached his fiduciary duties by failing to take the precautions that any reasonable professional investment advisor would have taken with Plaintiff’s retirement life savings. Defendant John Mark Hancock’s conduct and level of care was far below the applicable standard of care for a reasonable investment advisor amounts to a breach of his duty. “But for” the Defendant John Mark Hancock’s multiple breaches of his investment advisor duties, Plaintiff never would have transferred $145,000 to Defendant John Mark Hancock’s business partner nor would he have invested $180,000 in illiquid and now virtually worthless DDCC stock.
57. Plaintiff seeks recovery from Defendant John Mark Hancock under the alternative theories of fiduciary relationship, confidential relationship, constructive fraud, and fraudulent concealment -- all parts of the same concept. Defendant John Mark Hancock’s advisory relationship created a duty to disclose the extent of his due diligence and all conflicts of interest. The Defendant John Mark Hancock’s breach of that duty constitutes constructive fraud or fraudulent concealment, springs from the confidence and trust reposed by Plaintiff in Defendant John Mark Hancock, who by reason of his claimed specific skill, knowledge, training, judgment or expertise, was in a superior position to advise or act on behalf of the Plaintiff who bestowed trust and confidence in him. Once the relationship existed, Hancock had a duty to speak, and mere silence on his self-dealing and his shady conversion of Plaintiff’s funds constitutes fraudulent concealment.
58. Plaintiff was harmed and injured by the Defendant John Mark Hancock’s intentional and willful breaches of his fiduciary and confidential relationship duties, and thus Plaintiff is entitled to punitive damages for these intentional and willful breaches. In addition, as a result of the Defendant John Mark Hancock’s breaches, Plaintiff has suffered mental anguish and lost substantial capital. Thus, Plaintiff is thus also entitled to compensatory and special damages based on this Cause of Action.
FIFTH
CAUSE OF ACTION: NEGLIGENCE
59. Plaintiff incorporates by reference the allegations in the preceding paragraphs of this Amended Complaint as though the same were set forth in full herein. When Defendant John Mark Hancock was providing professional financial or investment advice to Plaintiff, Defendant John Mark Hancock was required to exercise the utmost good faith, loyalty, and honesty toward Plaintiff. As a professional investment advisor who even created and held out to the general public his own investment advisory firm, Defendant John Mark Hancock implicitly represented to Plaintiff that Defendant John Mark Hancock had an adequate basis for the opinions or advice being provided. Defendant John Mark Hancock was required to disclose facts that were material to Plaintiff’s decision-making.
60. Defendant John Mark Hancock is liable to Plaintiff in tort, even in the absence of contractual privity between Plaintiff and Defendant John Mark Hancock, when: (a) the Defendant John Mark Hancock acted in the course of his business, profession, or employment, or in a transaction in which he had a pecuniary (as opposed to gratuitous) interest; and (b) the Defendant John Mark Hancock supplied faulty information, on DNRR and the reliability of the website investment return, meant to guide Plaintiff in his business transactions; and (c) the Defendant John Mark Hancock failed to exercise reasonable care in obtaining or communicating the information – especially as pertains to Defendant John Mark Hancock’s lack of any due diligence on DNRR or his investment partner’s financial ability to pay the return Defendant John Mark Hancock negotiated; and (d) the Plaintiff justifiably relied upon the information.
61. By email dated 12/13/2009, Defendant John Mark Hancock stated,
you will see what the website says once
we get our agreement signed. however, you will know about all these things
BEFORE they come out on the website. the stock we're going to invest in is a
gold mining stock that is ready to explode. they have holdings both in the US
& abroad, & they have enough value that even in liquidation they would
be worth far more than we're buying their shares at. they just got a $30
million loan to acquire another gold mine, & the value of that mine is
about $200 million once the ore is mined at today's gold prices, which continue
to rise. they are a prime takeover candidate & will be ready to be listed
on the AMEX early next year, though they are trading merely over the counter now.
we make no outlandish or false claims. our track record is solid in everything
we've done. however, i make other investments for clients outside of the stocks
that we recommend on the websites, such as the ford stock that went from 70
cents to $7 when we owned it & is still climbing.
61. Defendant John Mark Hancock argues that he can escape tort liability by claiming that he personally believes to this day that DDCC owns gold mines, and has proven gold reserves, and obtained a loan that was to be repaid in gold buillion. All of these facts are patently false, and Defendant John Mark Hancock had a duty to verify the truth and accuracy of these representations before using them to convince his investment client, Plaintiff, to purchase DNRR stock. The Defendant John Mark Hancock’s conduct fell far below the standard of a reasonable investment advisor.
62. Defendant John Mark Hancock had a duty to investigate his investment partner and ensure that he had the financial means to pay back the stated return on the $145,000 funds wired to him. Although Defendant John Mark Hancock claims he thoroughly checked out his investment partner, in reality the Defendant John Mark Hancock negligently failed to conduct any reasonable investigation into his partner’s financial net worth and ability to repay the investment principal plus return contractually negotiated by Defendant John Mark Hancock as shown in Exhibit C.
63. “But for” the negligently false statements and omissions of truthful statements by the Defendant John Mark Hancock, Plaintiff would never have lost $180,000 by investing in DNRR or lost $145,000 by wiring these funds to Defendant John Mark Hancock’s business partner. Plaintiff relied on the Defendant John Mark Hancock’s misinformation and omissions, which were the proximate or legal cause of Plaintiff’s financial losses.
64. In addition to financial losses of more than $325,000, the Defendant John Mark Hancock’s negligence caused Plaintiff to suffer, and therefore Plaintiff is entitled to both compensatory and special damages for this Cause of Action in an amount to be determined by jury at time of trial.
SIXTH
CAUSE OF ACTION: CONVERSION
65. Plaintiff incorporates by reference the allegations in the preceding paragraphs of this Amended Complaint as though the same were set forth in full herein. Defendant John Mark Hancock converted $17,100 of Plaintiff’s funds to the Defendant John Mark Hancock’s own personal use in exclusion or defiance of Plaintiff’s rights. As shown by the wire transfers contained in Exhibit E, Defendant John Mark Hancock by trick and fraudulent misrepresentations obtained a deposit of $17,100 into Defendant John Mark Hancock’s personal checking account at Suntrust Bank drawn directly by prior arrangement with Parker Mitchell from the $145,000 funds wired by Plaintiff as shown in Exhibit D.
66. The Defendant John Mark Hancock wrongfully took these funds, exercised dominion over them in defiance of Plaintiff’s rights, and illegally assumed ownership of the funds. The Plaintiff had no control or power over funds deposited into the Defendant John Mark Hancock’s personal checking account and thereby excluded Plaintiff’s rights over his own funds. Thus Defendant John Mark Hancock personally dispossessed Plaintiff of these funds and actively used Defendant John Mark Hancock’s business partner to wire the funds to Defendant John Mark Hancock’s account.
67. The amount of the conversion is specific and capable of identification as the $17,100 transferred by interstate bank wires as shown in Exhibit E. These identifiable funds are deemed a chattel for purposes of conversion, and Plaintiff never authorized any kind of kickback payment to the Defendant John Mark Hancock and thereby never relinquished any right to possess or ownership of these funds.
68. Trover lies in this case where Plaintiff's money has come into the Defendant John Mark Hancock's possession and has been converted without the Plaintiff's express or implied assent that the relation of debtor and creditor should arise. Trover lies for the conversion of the $17,100, where there was a contractual obligation to keep the $145,000 funds intact as delivered to Parker Mitchell d/b/a Money Sports, Inc.
69. These funds were wrongfully received by Defendant John Mark Hancock by means of lies and fraudulent misrepresentations that Plaintiff had authorized the transfer of the $17,100 to Defendant John Mark Hancock. At the instant of conversion, Plaintiff had an absolute right to these funds for the intended purpose of satisfying his obligation for the investment agreement shown as Exhibit C.
70. The Defendant John Mark Hancock’s conversion
was willful and fraudulent. Plaintiff
is therefore entitled to punitive damages in an amount to be determined by the
jury at time of trial. In addition,
Plaintiff is entitled to compensatory damages of $17,100 plus pre-judgment and
post-judgment interest for this Cause of Action.
SEVENTH
CAUSE OF ACTION: STATUTORY VIOLATIONS
71. Plaintiff incorporates by reference the allegations in the preceding paragraphs of this Amended Complaint as though the same were set forth in full herein. DNRR securities are "goods" for the purposes of the Tennessee Consumer Protection Act, Tenn. Code Ann. § 47-18-101 et seq. (2005), and the Defendant John Mark Hancock’s investment counseling and advice is likewise a "service." Accordingly, Defendant John Mark Hancock’s providing investment counseling to Plaintiff was a consumer transaction. The Act explicitly proscribes the Defendant John Mark Hancock’s unfair or deceptive acts or practices in connection with consumer transactions. Tenn. Code Ann. § 47-18-104(a), (b)(27). Defendant John Mark Hancock’s acts or practices in connection with the marketing or purchase of securities, including the website investment to promote stock purchases, are covered by the Tennessee Consumer Protection Act.
72. Defendant John Mark Hancock violated Tenn. Code Ann. § 48-2-121, by unlawfully, in connection with the sale or purchase of any security in this state, directly or indirectly, making untrue statements of material facts or omitting to state material facts necessary in order to make the statements made, in the light of the circumstances under which they are made, not misleading.
73. Plaintiff has an implied right of private action under Section 10(b) of the Securities Exchange Act of 1934, 15 U.S.C. § 78j(b) (2009), and Rule 10b-5, 17 C.F.R. § 240.10b-5 (2009). The Defendant John Mark Hancock violated the statute and regulation by (1) employing schemes and artifices to defraud the Plaintiff, or (2) making numerous untrue statements of material fact or omitting to state a material fact necessary in order to make the statements made, in the light of the circumstances under which they were made, not misleading, or (3) by engaging in a practice or course of business which operated as a fraud or deceit upon Plaintiff in connection with the purchase of DNRR stock and the investment in the securities promotion website.
74. In Tenn. Code Ann. § 48-2-122(d), the General Assembly explicitly included reliance as an element of the private right of action against investment advisors for false or misleading statements. Defendant John Mark Hancock violated Tenn. Code Ann. § 48-2-122(d) by inducing Plaintiff to purchase shares in DNRR through false and misleading statements about DNRR’s gold mines, repayment of a loan with gold bullion, and other facts identified in preceding paragraphs of this Amended Complaint. Plaintiff relied on the accuracy of Defendant John Mark Hancock’s representations in placing his orders to purchase DNRR shares at the Defendant John Mark Hancock’s instruction. Plaintiff is entitled to recover civil damages from the Defendant John Mark Hancock under Tenn. Code Ann. § 48-2-122(e).
75. Defendant John Mark Hancock’s violation of these statutes and regulations has injured and harmed Plaintiff, who therefore seeks compensatory, special, and punitive damages from the Defendant John Mark Hancock in an amount to be determined by the jury at time of trial.
WHEREFORE,
Plaintiff XXXXXXXXXX demands a jury and prays for judgment against the Defendant
John Mark Hancock as follows:
Respectfully submitted this 4th day of November, 2013.
XXXXXXXXXX, Plaintiff pro se