california department of corporations-complaint6. defendant erick h. hansen ("hansen") is...
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PRESTON DuFAUCHARD California Corporations Commissioner WAYNE STRUMPFER Deputy Commissioner ALA11 WE GER Lead Corporations Counsel JOHN R DREW (SB 69595) Corpora io s Counsel CALIFORNIA DEPARTMElTT OF CORPORATIO 71 Stevenson Street Suite 2100 San Francisco California 9410 5 Telephone (415) 972-8570 Attorneys for the Plaintiff
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LosAngeleS SL FILED perloT Court
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ive 0 rc 1C1erk
~LEY Deputy S
S WERIOR CO iRT OF THE STATE OF CALIFO- r1
FOR THE COUNTY OF LOS ANGELES
THE PEOPLE OF THE STATE OF CAL IFO LA by and t ough the CALIFORJL CORPORATIO S CO 11 10 fER
vs
ERICK H HAN SEN as an individual MltTTHEW RICHM O D as an individual ROB RE OLD as an in ivi ual
LUERAY TEe OLOGIE LLC a California irni cd lia ility co pany BLUE RAY TEC OLOOIE INC a California corporation and Docs 1 through 10inclusive
Defendan
BC3 92972 Case 10
CO 1PLAllT FOR C TE RE I F C IL PE ALTIES AND CILLAR RELIEF (CORPORATIO CODE SECTIONS 25530 amp 25535)
UNQUALIFIED OFFER amp SALE OF ECURlTIE (VIOLATIO S OF
CORP ORTIO S CODE SECTIO 25110)
FRAUD IN THE OFFER ro SALE OF ECURlT1ES (VIOLATIONS OF
CORP ORATIONS CODE SECTION 25401)
lOLATIO 1 OF DE 1ST A D REFRAIN ORDER I DE D BY THE CO S 10 iER
THE PEOPLE OF THE STATE OF CALIFORJ lA by and through Pres on DuFauchard
California Corporations Co issione ac ing to protec the public from lawful and frau ule t
sale s of sec es g this actio in e pu lie in e est The People of the S12 e of Califo a
allege
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T FO IN I rcn E RELIEF CI JL PENAL JES AND A TILLARY RELIEF
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VENUE iIl JURlSDI CTION
1 The California Corporati ons Commissioner CCommissioner) brings this action to
enjoin the defendants from violating the Corporate Securities Law of 1968 (CSL) (California
Corporations Code section 25000 et seq) and to request necessary civil penalties and ancillary
relief The Commissioner is authorized to administer and enforce the provisions of the CSL
2 The Commissioner brings this action pursuant to California Corporations Code
sections 25530 and Government Code section 11 180 et seq in his capacity as head of the
California Department of Corporat ions (Department)
3 The Defendants have transacted and continue to transact business within Los
Angeles County and throughout the State of California Defendants have offered securities to at
least one resident of Los Angeles County Further Defendants have sold securities to at least 12
investors who the Commissioner believes to be and so al leges on that information and bel ief
residents of the State of California raising at least $4000000 Further the Commissioner believes
and so alleges on information and belief that Defendants have sold securities to more than 35
investors In January of 2008 Defendant BlueRay Technologies LLc sent investors a Private
Placement Memorandum which stated in relevant part In December 2007 the Company
completed a private placement of 160 units of the Companys limited liability interests for a
purchase price of $25000 per unit raising total capital of $4000000 Defendant BlueRay
Technologies LLC was validly served at its Agent for Service of Process with a subpoena duces
tecum on February 142008 and has failed to respond Defendant Blue Ray Technologies Inc
does not have a valid address for its Agent for Service of Process and its status with the Secretary
of State is suspended The Commissioner asks leave of the court to amend this complaint upon
further discovery The violations of law described herein have occurred and will continue to occur
within Los Angeles County and throughout the State of California unless enjoined
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COMPLArNT FOR INJUNCTIVE RELIEF CIVIL PENALTI ES AND ANCILLARY RELIEF
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DEFEJI1)ANTS
4 Defendant BlueRay Technologies LLC IS a California limited liability
corporation fanned on December 5 2006 and maintains an agent for service of process at 4727
Wilshire Blvd Suite 601 Los Angeles CA 90010 The last known business address of BlueRay
Technologies LLC is 5170 Santa Monica Blvd 3 Flocr Los Angeles CA 90029
5 Defendant Blue Ray Technologies Inc is a suspended California corporation
formed on April 142004 and the last known business address for Defendant and agent for service
of process was at 24404 Hampton Drive Valencia CA 91355 which is no longer valid as of the
date of the filing of this comp laint
6 Defendant ERICK H HANSEN (Hansen) is an individual whose last known
residence was at 24404 Hampton Drive Valencia CA 91355 which is no longer valid and whose
last known business address was at 5170 Santa Monica Blvd3rd Floor Los Angeles CA 90029
Defendant Hansen is the Chief Executive Officer Director president and Chief Technology
Officer of Blue Ray Technologies Inc which is the manager of BlueRay Tec hnologies LLC
7 Defendant MATTH EW R1CH1101D (Richm ond) whose title is Investor
Relations at BlueRay Technologies LLC is an individual whose last known residence is
unknown and whose last known business address was at 5301 Beethoven Street Suite 130 Los
Angeles CA 90066
8 Defendant ROB REYNOLDS (Reynolds) whose title is Investor Relations at
BlueRay Technologies LLC is an individual whose last kn own residence is unknown and
whose last known business address was at 5170 Santa Monica Blvd 31d Floor Los Angeles CA
90029
9 Defendants sued herein under the fict itious names Does 1 throu gh 10 inclusive are
unknown to plaintiff who therefore sues such defendants by such fictitious names pursuant to the
provisions of Code of Civil Procedure section 474 The Commissi oner asks leave of the court to
amend the Complaint and allege the true names and capacities of such defendants at such time as
the same have been ascertained
COMPLAINT FOR INNNCTIVE RELlEF CIVIL PENALTIES AND ANCILLARY RELIEF
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STATEMENT OF FACTS
] O Beginning in October 2006 and continuing thereafter Defendants BlueRay
Technol ogies LLc Blue Ray Technol ogies Inc Hansen Richmon d and Reynolds and their
agents representatives and affiliates (collectively Defendants) have offered and sold
unqualified non-exempt securities to at least 12 investors residing in Cali fornia raising at least
$4000000 In a Private Placement Memorandum provided to unqualified investors dated
January 2008 Defendants Hansen and BlueRay Technologies LLC and Blue Ray Technologies
Inc stated that In December 2007 the Company completed a private placement of 160 units of
the Companys limited liability interests for a purchase price of $25000 per unit (the Class A
Units) raising total capital of $4000000 The prior private placement of Class A Units was
made pursuant to Regulation D of Rule 506 of the Securities Act of 1933 as amended The
Private Placement Memorandum failed to disclose the outstanding Desist and Refrain Orders
issued against Defendant Hansen by the Department of Corporations set out in paragraph 14
below
11 These securities included but are not limited to units of lim ited liability interests in
the form of shares in BlueRay Technologies LLL for the conside ration of $25000 per unit
12 Defendants offered and sold securities to California residents and non-residents for
the purpose of financing the operations of Blue Ray Technologies Inc which is to consist of
providing manufacturing services to various industries which allegedly will require the
manufacture of High Definition Optical Disks
13 Defendants solicited California residents and non-residents to invest in the
securities by way of general solicitation and by means of unsolicitcd telephone calls to investors
prior to determining whether the prospective purchaser was a qualified purchaser also known as
cold calling Defendants forwarded emails to prospective investors who had not been qualified
and said emails contained the Usernarne and Password to the restricted investor website
vWW blucrayllccom
14 Defendants made material misrepresentations including but not limited to omitting
to inform prospective investors that Defendant Hansen was served ith two Desist amp Refrain
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COMPL AINT FOR fNJl)NCnVE RELIEF CIVIL PENALTIES AND ANCILLARY RELIEF
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Orders by the Cali fornia Commissioner of Corporations on February 2 1999 for violatio ns of the
California Securities Law of 1968 (CSL) contained in California Corporations Code sections
25000 etseq
IS On February 2 1999 the Commissioner issued two Desist and Refrain Orders inter
alia (February 1999 Orders) The first was against Defendant Hansen and Hansen Entertainment
Inc and others for offering and selling unqualified non-exempt securi ties in vio lation of CSL
section 25110 and the second Order was against Defendant Hansen and Hansen Entertaimnent
Incbull and others for selling securi ties by means of any written or oral comm unication which
includes an untrue statement of a material fact or omits to state a material fact as set out in
Corporations Code section 25401 The February 1999 Orders issued under the authority granted
the Commissioner by Corporations Code section 25532 required Defendant Hansen and Hansen
Entertainm ent Inc to desist and refrain from the furth er violations of sections 251 10 and 2540) of
the CSL The February 1999 Orders were personally served on Defendant Hansen on February 2
1999
16 Neither Defendant Hansen nor Hansen Entertainment Inc requested an
administrative hearing to challenge the allegations and find ings in the February 1999 Orders The
February 1999 Orders are now final
l7 Notwithstand ing the February 1999 Orders Defendant Hansen is again offering
and sellin g securities that are unqua lified non-exempt securities to inve stors resid ing in California
and in other states
18 Notwithstanding the February 1999 Orders Defendants continue to offer securities
by way of general solicitations in the form of cold calls in the Los Angeles area and in other
counties in this state
19 Further Defendants have omitted to disclose material facts including but not
limited to the February 1999 Orders to investors and potent ial investors
FIRST CAUSE OF ACTION
OFFER AND SALE OF UNQUALI FIE D NON-EXEMPT SECURITI ES IN VIOLATION OF CORPORATIO NS CODE SECTION 251 10
(AGAINST ALL DEFEND ANTS)
COMPLAINT FOR TNJUNCTl VE RELIEF CIVIL PENALTIES AND ANCILLARY RELIEF
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20 Plaintiff incorporates by reference paragraphs J through 19 of this Complaint as
though fully set forth herein
21 CSL section 2S11 0 provides in pertinent part as follows
It is unlawful for any person to offer or sell in this state any security in an issuer transaction whether or not by or through underwriters unless such sale has been qualified under Section 251 JI 25J12 or 25 113 or unless such security or transaction is exempted or not subject to qualification under Chapter 1 [comm encing with Section 25100] of this part
(CaJ Corp Code sect 25110)
22 Beginning in October 2006 and continuing thereafter Defendants and each of
them offered and sold securities to at least 12 investors residing in California raising a
minimum of $4000000 Further Defendants have offered securities to at least two other
California residents and one non-resident
23 The investments offered and sold by Defendants are securities within the
meaning of CSL section 250 19 The securities include but are not necessarily limi ted to
units of limited liability interests in the form of shares in a limited liability company BlueRay
Technolgies LLC
24 The sales of securities were issuer transactions within the meaning of CSL
sections 25010 and 25011
25 Defendants and each of them offered and sold the securities i n this state
of California within the meaning of CSL sections 25008 and 25017
26 The Commissioner bas not issued a permit or other form of qualification
authorizing the offer and sale of the securi ties referred to here in in the State of California
27 The offer and sale of securities referred to he rein were not exempt from the
requirement of qualification under CSL section 251 10 Defendants and eac h of them
engaged in unsolicited phone sales cells to persons who were not qualified and had no prior
substantia l existing relationship wi th Defendants
28 Unless enjoined by this Court Defendants will continue to viol ate CSL section
25110
COMPLAINT FOR INJUNCTIVE RELIEF CIVIL PENALTIES AlD ANCILLARY RELIEF
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SECOND CA USE OF ACTION
MISREPRESEJIoTAn ON OR OMISSION OF MUERLL FA CTS IN lOLAnON OF CORPORAnONS CODE SECTION 25401
(AGAIN ST ALL DEFENDANTS)
29 Plaintiff incorporates by reference paragraphs 1 through 28 of this Complaint as
though fully set forth herei n
30 CSL sectio n 25401 states
It is unlawful for any person to offer or sell a security in this state or buy or offer to buy a security in this state by means of any written or oral communication whi ch includes an untrue statement of a material fact or omits to state a material fact necessary in order to make the statements made in the light of the circumstances under which they wer e made not misleading
(Cal Corp Code sect 25401)
31 In offering and selling the securities referred to herein Defendants and each of
them made untrue statements of material fact andor omitted to state material facts to some or all
of the investors The untrue statements andlor omissions include but are not necessarily limited to
the following
A Defendants represen ted they were affiliated with the Disney and Sony corporations
which in fact was not true
B Defendants omitted to disclose to investors and potential investors that Defendant
Hansen was the subject of two Desist and Refrain Orders issued by the Commissioner on February
2 1999 ordering that Defendant Hansen desist and refrain from the further offer or sale of
unqualified non-exempt securities in the State of California and to desist and refrain from the sale
of securities by the use of statements omitting material facts or the use of untrue statements of a
material fact
32 The misstatements and omissions referred to herein were material facts with in
the meaning of CSL section 2540 1 since they concerned matters that a reasonable investor
would consider in deciding whether to invest
33 Defendants offer and sale of securities were by means of misrepresentations and
omissions within the meanin g of CSL section 2540 1
COMPLANT FOR INJUNCTIVE RELIEF CIVIL PENALTIES A-lD ANCILLA RY RELIEF
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34 Some or all of Defendants misrepresentations and omissions of material fact took
place in this state of California within the meaning of CSL section 25008
35 Unless enjoined by this Court Defendants will continue to violate CSL section
25401
TIIIRD CAUSE OF ACTION
VIOLATI ON OF PRIOR DES IST AND REFRAIN ORDER ISSUED BY THE COMMISSIOIiER
(AGA INST DEFENDANT ERICK HANSEN BLUERAY T ECHNOLOGIES LLC AND BLUE RAY TECHN OLOGIES I Nc)
36 Plaintiff incorporates by referen ce paragraphs 1 through 35 of this Complaint as
though fully set forth herein
37 CSL section 25532 provides in pertinent part a follows
(a) If in the opinion of the commissioner (1) the sale of a security is subject to qualification under this law and it is being or has been offered or sold without first being qualifie d the commissioner may order the issuer or offeror of the security to desist and refrain from the further offer or sale of the securi ty until qualification has been made under this law
(Cal Corp Code sect 25532 (a))
38 On February 2 1999 the Commissioner issued Desist and Refrain Orders
(tFebruary 1999 Orders) agains t Defendant Hansen and Hansen Entertainment Inc for offering
and selling unqualified non-exempt securities in violation of CSL section 25110 and against
Defendant Hansen and Hansen Entertainment Inc for the offer and sale of securities by means of
written or oral communications which include an untrue statement of a material fact or omits to
state a material fact necessary in order to make the statements made in the light of circumstances
under which they were made not misleading in violation of CSL section 25401 The February
1999 Orders were personally served on Defendant Hansen on February 18 1999
39 Defendant Hansen did not request an administrative heari ng to challenge the
allegations and findings in the Febru ary 1999 Orders The February 1999 Orders are now final
40 Unless enjoined Defendant Hansen and BlueRay Technologies LLC and Blue
Ray Technologies Inc will continue to violate the February 1999 Desist and Refrain Orders issued
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COMPLArNTFOR INJUNCTIVE RELIEF CIVIL PENALTIES AND ANCILLA RY RELIEF
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by the Commissioner
PRAYER FOR RELIEF
WHEREFORE Plaintiff prays for judgment against Defendants BlueRay Technologies
LLC Blue Ray Technologies Inc ERlCK H HANSEN MATTHEW RlCHMOND ROB
REYNOLDS and Does I through 10 inclusively as follows
L INJUNCTIVE RELIEF FOR THE VIOLATIONS
For an Order of Preliminary Injunction and ultimately a Permanent Injunction pursuant
to California Corporations Code section 25530 restraining and enjoining all Defendants from
directly or indirectly
L Violating California Corporations Code section 25110 by offering to sell selling
arranging for the sale of issuing engaging in the business of selling negotiating for the sale of
any security of any kind unless such security or transaction is qualified and is not offered by
means of a general solicitation or cold calls in violation of Regulation D of Rule 506 of the
Securities Act of 1933 as amend ed
2 Violating California Corporations Code section 25401 by offering to sell or selling
securities including but not limited to the securities described in this Complaint by means of any
written or oral communication which includes any untrue statement of material fact or omits or
fails to state any material fact necessary in order to make the statements made in the light of the
circumstances under which they are made not misleading
3 Removing destroying mutilating concealing altering transferrin g or otherwise
disposing of in any manner any books records computer programs computer files computer
printouts correspondence brochures manuals or any other writing or document of any kind
as defined under California Evidence Code section 250 relating to the transactions and course of
conduct as alleged in the complaint of this action unless authorized by this Court and
4 Withdrawing from any company bank accoun t of BlueRay Technologies LLC or
Blue Ray Technologies Inc containing investor funds or disposing of any real or personal
property in their possession custody or control derived from investor funds without leave of the
COMPL ArNTFOR lNJUNCT1VE RELIEF CIVIL PENALTlES AND ANCILLARY RELIEF
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Court and
5 As to Defendants ERlCK H HANSEN and BLUERAY TECHNOLOGIES LLC
and BLUE RAY TECHNOLOGIES INC for an Order of Preliminary Injunction and ultimately
a Permanent Injunction pursuant to California Corporations Code section 25530 restraining and
enjoining Defendants Hansen BlueRay Technologies LLC and Blue Ray Technologies Inc
from vio lating th e Desist and Refrai n Orders issued by the California Corporations Commissioner
on February 2 1999 by offering and selling unqual ified non-exempt securities in violation of
California Corporations Code section 251 10 and by offerin g or selling by means of any wr in en or
oral communica tion which includes any untrue statement of material fact or omits or fai ls to state
any material fact necessary in order to make the statements made in the light of the circumstances Iunder which they are made not misleading in violation of California Corporations Code section
25401
II RESCISSION AND RESTITUTION
1 For a Final Judgment requiring Defendants to rescind each and all of the unlawful
transactions alleged in this Complaint pursuant to California Corporations Code section 25530
subdivision (b) as shall be determined by this Court to have occurred and further requiring
Defendants to pay full restitution to each person determined to have been subject to the
Defendants acts or practices which constitute violations of the Corporate Securities Law of 1968
in an amount of at least $4000000 or according to proof In addition to pay either the contracted
rate of interest or the legal rate of interest in the amount invested by the investors from the date of
their investments to the date of judgment herein
2 For a Final Judgment requiring Defendants to disgorge pursuant to California
Corporations Code section 25530 (b) to all known investors all benefits received including but
not limited to salaries commission fees profits and any other remuneration derived directly or
indirectly from the actions or practices which constitute violations of the Corporate Securities
Law of 1968
III CIVIL PENALTIES
For a Final Judgment requiring Defendants to pay the Department of Corporations
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COM PLAINT FOR lNJUN CTIVE RELIEF CIVIL PENALTIES AND ANCILLARY RELIEF
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$25000 00 as a civil penalty for each act in vio lation of the Corporate Securities Law of 1968
pursuant to California Corporations Code section 25535 in an amount of at least $900000 or
accordingto proof
IV OTHER RELIEF
For such otherand furtherrelief as this Court may deem necessary and proper
Dated Ma Y~12008
PRESTON DuFAUCHARD California Corporations Commissioner
By OlIN R DREWS lttorporations Counsel Attorney for the People of California
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COMPLAINT FOR INJUNCTIVE RELIEFCIVIL PENALTIES AND ANCILLARY RELIEF
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VENUE iIl JURlSDI CTION
1 The California Corporati ons Commissioner CCommissioner) brings this action to
enjoin the defendants from violating the Corporate Securities Law of 1968 (CSL) (California
Corporations Code section 25000 et seq) and to request necessary civil penalties and ancillary
relief The Commissioner is authorized to administer and enforce the provisions of the CSL
2 The Commissioner brings this action pursuant to California Corporations Code
sections 25530 and Government Code section 11 180 et seq in his capacity as head of the
California Department of Corporat ions (Department)
3 The Defendants have transacted and continue to transact business within Los
Angeles County and throughout the State of California Defendants have offered securities to at
least one resident of Los Angeles County Further Defendants have sold securities to at least 12
investors who the Commissioner believes to be and so al leges on that information and bel ief
residents of the State of California raising at least $4000000 Further the Commissioner believes
and so alleges on information and belief that Defendants have sold securities to more than 35
investors In January of 2008 Defendant BlueRay Technologies LLc sent investors a Private
Placement Memorandum which stated in relevant part In December 2007 the Company
completed a private placement of 160 units of the Companys limited liability interests for a
purchase price of $25000 per unit raising total capital of $4000000 Defendant BlueRay
Technologies LLC was validly served at its Agent for Service of Process with a subpoena duces
tecum on February 142008 and has failed to respond Defendant Blue Ray Technologies Inc
does not have a valid address for its Agent for Service of Process and its status with the Secretary
of State is suspended The Commissioner asks leave of the court to amend this complaint upon
further discovery The violations of law described herein have occurred and will continue to occur
within Los Angeles County and throughout the State of California unless enjoined
II
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COMPLArNT FOR INJUNCTIVE RELIEF CIVIL PENALTI ES AND ANCILLARY RELIEF
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DEFEJI1)ANTS
4 Defendant BlueRay Technologies LLC IS a California limited liability
corporation fanned on December 5 2006 and maintains an agent for service of process at 4727
Wilshire Blvd Suite 601 Los Angeles CA 90010 The last known business address of BlueRay
Technologies LLC is 5170 Santa Monica Blvd 3 Flocr Los Angeles CA 90029
5 Defendant Blue Ray Technologies Inc is a suspended California corporation
formed on April 142004 and the last known business address for Defendant and agent for service
of process was at 24404 Hampton Drive Valencia CA 91355 which is no longer valid as of the
date of the filing of this comp laint
6 Defendant ERICK H HANSEN (Hansen) is an individual whose last known
residence was at 24404 Hampton Drive Valencia CA 91355 which is no longer valid and whose
last known business address was at 5170 Santa Monica Blvd3rd Floor Los Angeles CA 90029
Defendant Hansen is the Chief Executive Officer Director president and Chief Technology
Officer of Blue Ray Technologies Inc which is the manager of BlueRay Tec hnologies LLC
7 Defendant MATTH EW R1CH1101D (Richm ond) whose title is Investor
Relations at BlueRay Technologies LLC is an individual whose last known residence is
unknown and whose last known business address was at 5301 Beethoven Street Suite 130 Los
Angeles CA 90066
8 Defendant ROB REYNOLDS (Reynolds) whose title is Investor Relations at
BlueRay Technologies LLC is an individual whose last kn own residence is unknown and
whose last known business address was at 5170 Santa Monica Blvd 31d Floor Los Angeles CA
90029
9 Defendants sued herein under the fict itious names Does 1 throu gh 10 inclusive are
unknown to plaintiff who therefore sues such defendants by such fictitious names pursuant to the
provisions of Code of Civil Procedure section 474 The Commissi oner asks leave of the court to
amend the Complaint and allege the true names and capacities of such defendants at such time as
the same have been ascertained
COMPLAINT FOR INNNCTIVE RELlEF CIVIL PENALTIES AND ANCILLARY RELIEF
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STATEMENT OF FACTS
] O Beginning in October 2006 and continuing thereafter Defendants BlueRay
Technol ogies LLc Blue Ray Technol ogies Inc Hansen Richmon d and Reynolds and their
agents representatives and affiliates (collectively Defendants) have offered and sold
unqualified non-exempt securities to at least 12 investors residing in Cali fornia raising at least
$4000000 In a Private Placement Memorandum provided to unqualified investors dated
January 2008 Defendants Hansen and BlueRay Technologies LLC and Blue Ray Technologies
Inc stated that In December 2007 the Company completed a private placement of 160 units of
the Companys limited liability interests for a purchase price of $25000 per unit (the Class A
Units) raising total capital of $4000000 The prior private placement of Class A Units was
made pursuant to Regulation D of Rule 506 of the Securities Act of 1933 as amended The
Private Placement Memorandum failed to disclose the outstanding Desist and Refrain Orders
issued against Defendant Hansen by the Department of Corporations set out in paragraph 14
below
11 These securities included but are not limited to units of lim ited liability interests in
the form of shares in BlueRay Technologies LLL for the conside ration of $25000 per unit
12 Defendants offered and sold securities to California residents and non-residents for
the purpose of financing the operations of Blue Ray Technologies Inc which is to consist of
providing manufacturing services to various industries which allegedly will require the
manufacture of High Definition Optical Disks
13 Defendants solicited California residents and non-residents to invest in the
securities by way of general solicitation and by means of unsolicitcd telephone calls to investors
prior to determining whether the prospective purchaser was a qualified purchaser also known as
cold calling Defendants forwarded emails to prospective investors who had not been qualified
and said emails contained the Usernarne and Password to the restricted investor website
vWW blucrayllccom
14 Defendants made material misrepresentations including but not limited to omitting
to inform prospective investors that Defendant Hansen was served ith two Desist amp Refrain
-4-
COMPL AINT FOR fNJl)NCnVE RELIEF CIVIL PENALTIES AND ANCILLARY RELIEF
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21
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23
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28
Orders by the Cali fornia Commissioner of Corporations on February 2 1999 for violatio ns of the
California Securities Law of 1968 (CSL) contained in California Corporations Code sections
25000 etseq
IS On February 2 1999 the Commissioner issued two Desist and Refrain Orders inter
alia (February 1999 Orders) The first was against Defendant Hansen and Hansen Entertainment
Inc and others for offering and selling unqualified non-exempt securi ties in vio lation of CSL
section 25110 and the second Order was against Defendant Hansen and Hansen Entertaimnent
Incbull and others for selling securi ties by means of any written or oral comm unication which
includes an untrue statement of a material fact or omits to state a material fact as set out in
Corporations Code section 25401 The February 1999 Orders issued under the authority granted
the Commissioner by Corporations Code section 25532 required Defendant Hansen and Hansen
Entertainm ent Inc to desist and refrain from the furth er violations of sections 251 10 and 2540) of
the CSL The February 1999 Orders were personally served on Defendant Hansen on February 2
1999
16 Neither Defendant Hansen nor Hansen Entertainment Inc requested an
administrative hearing to challenge the allegations and find ings in the February 1999 Orders The
February 1999 Orders are now final
l7 Notwithstand ing the February 1999 Orders Defendant Hansen is again offering
and sellin g securities that are unqua lified non-exempt securities to inve stors resid ing in California
and in other states
18 Notwithstanding the February 1999 Orders Defendants continue to offer securities
by way of general solicitations in the form of cold calls in the Los Angeles area and in other
counties in this state
19 Further Defendants have omitted to disclose material facts including but not
limited to the February 1999 Orders to investors and potent ial investors
FIRST CAUSE OF ACTION
OFFER AND SALE OF UNQUALI FIE D NON-EXEMPT SECURITI ES IN VIOLATION OF CORPORATIO NS CODE SECTION 251 10
(AGAINST ALL DEFEND ANTS)
COMPLAINT FOR TNJUNCTl VE RELIEF CIVIL PENALTIES AND ANCILLARY RELIEF
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24
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26
27
28
20 Plaintiff incorporates by reference paragraphs J through 19 of this Complaint as
though fully set forth herein
21 CSL section 2S11 0 provides in pertinent part as follows
It is unlawful for any person to offer or sell in this state any security in an issuer transaction whether or not by or through underwriters unless such sale has been qualified under Section 251 JI 25J12 or 25 113 or unless such security or transaction is exempted or not subject to qualification under Chapter 1 [comm encing with Section 25100] of this part
(CaJ Corp Code sect 25110)
22 Beginning in October 2006 and continuing thereafter Defendants and each of
them offered and sold securities to at least 12 investors residing in California raising a
minimum of $4000000 Further Defendants have offered securities to at least two other
California residents and one non-resident
23 The investments offered and sold by Defendants are securities within the
meaning of CSL section 250 19 The securities include but are not necessarily limi ted to
units of limited liability interests in the form of shares in a limited liability company BlueRay
Technolgies LLC
24 The sales of securities were issuer transactions within the meaning of CSL
sections 25010 and 25011
25 Defendants and each of them offered and sold the securities i n this state
of California within the meaning of CSL sections 25008 and 25017
26 The Commissioner bas not issued a permit or other form of qualification
authorizing the offer and sale of the securi ties referred to here in in the State of California
27 The offer and sale of securities referred to he rein were not exempt from the
requirement of qualification under CSL section 251 10 Defendants and eac h of them
engaged in unsolicited phone sales cells to persons who were not qualified and had no prior
substantia l existing relationship wi th Defendants
28 Unless enjoined by this Court Defendants will continue to viol ate CSL section
25110
COMPLAINT FOR INJUNCTIVE RELIEF CIVIL PENALTIES AlD ANCILLARY RELIEF
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28
SECOND CA USE OF ACTION
MISREPRESEJIoTAn ON OR OMISSION OF MUERLL FA CTS IN lOLAnON OF CORPORAnONS CODE SECTION 25401
(AGAIN ST ALL DEFENDANTS)
29 Plaintiff incorporates by reference paragraphs 1 through 28 of this Complaint as
though fully set forth herei n
30 CSL sectio n 25401 states
It is unlawful for any person to offer or sell a security in this state or buy or offer to buy a security in this state by means of any written or oral communication whi ch includes an untrue statement of a material fact or omits to state a material fact necessary in order to make the statements made in the light of the circumstances under which they wer e made not misleading
(Cal Corp Code sect 25401)
31 In offering and selling the securities referred to herein Defendants and each of
them made untrue statements of material fact andor omitted to state material facts to some or all
of the investors The untrue statements andlor omissions include but are not necessarily limited to
the following
A Defendants represen ted they were affiliated with the Disney and Sony corporations
which in fact was not true
B Defendants omitted to disclose to investors and potential investors that Defendant
Hansen was the subject of two Desist and Refrain Orders issued by the Commissioner on February
2 1999 ordering that Defendant Hansen desist and refrain from the further offer or sale of
unqualified non-exempt securities in the State of California and to desist and refrain from the sale
of securities by the use of statements omitting material facts or the use of untrue statements of a
material fact
32 The misstatements and omissions referred to herein were material facts with in
the meaning of CSL section 2540 1 since they concerned matters that a reasonable investor
would consider in deciding whether to invest
33 Defendants offer and sale of securities were by means of misrepresentations and
omissions within the meanin g of CSL section 2540 1
COMPLANT FOR INJUNCTIVE RELIEF CIVIL PENALTIES A-lD ANCILLA RY RELIEF
1
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3
4
5
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34 Some or all of Defendants misrepresentations and omissions of material fact took
place in this state of California within the meaning of CSL section 25008
35 Unless enjoined by this Court Defendants will continue to violate CSL section
25401
TIIIRD CAUSE OF ACTION
VIOLATI ON OF PRIOR DES IST AND REFRAIN ORDER ISSUED BY THE COMMISSIOIiER
(AGA INST DEFENDANT ERICK HANSEN BLUERAY T ECHNOLOGIES LLC AND BLUE RAY TECHN OLOGIES I Nc)
36 Plaintiff incorporates by referen ce paragraphs 1 through 35 of this Complaint as
though fully set forth herein
37 CSL section 25532 provides in pertinent part a follows
(a) If in the opinion of the commissioner (1) the sale of a security is subject to qualification under this law and it is being or has been offered or sold without first being qualifie d the commissioner may order the issuer or offeror of the security to desist and refrain from the further offer or sale of the securi ty until qualification has been made under this law
(Cal Corp Code sect 25532 (a))
38 On February 2 1999 the Commissioner issued Desist and Refrain Orders
(tFebruary 1999 Orders) agains t Defendant Hansen and Hansen Entertainment Inc for offering
and selling unqualified non-exempt securities in violation of CSL section 25110 and against
Defendant Hansen and Hansen Entertainment Inc for the offer and sale of securities by means of
written or oral communications which include an untrue statement of a material fact or omits to
state a material fact necessary in order to make the statements made in the light of circumstances
under which they were made not misleading in violation of CSL section 25401 The February
1999 Orders were personally served on Defendant Hansen on February 18 1999
39 Defendant Hansen did not request an administrative heari ng to challenge the
allegations and findings in the Febru ary 1999 Orders The February 1999 Orders are now final
40 Unless enjoined Defendant Hansen and BlueRay Technologies LLC and Blue
Ray Technologies Inc will continue to violate the February 1999 Desist and Refrain Orders issued
-8-
COMPLArNTFOR INJUNCTIVE RELIEF CIVIL PENALTIES AND ANCILLA RY RELIEF
ltJJ
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by the Commissioner
PRAYER FOR RELIEF
WHEREFORE Plaintiff prays for judgment against Defendants BlueRay Technologies
LLC Blue Ray Technologies Inc ERlCK H HANSEN MATTHEW RlCHMOND ROB
REYNOLDS and Does I through 10 inclusively as follows
L INJUNCTIVE RELIEF FOR THE VIOLATIONS
For an Order of Preliminary Injunction and ultimately a Permanent Injunction pursuant
to California Corporations Code section 25530 restraining and enjoining all Defendants from
directly or indirectly
L Violating California Corporations Code section 25110 by offering to sell selling
arranging for the sale of issuing engaging in the business of selling negotiating for the sale of
any security of any kind unless such security or transaction is qualified and is not offered by
means of a general solicitation or cold calls in violation of Regulation D of Rule 506 of the
Securities Act of 1933 as amend ed
2 Violating California Corporations Code section 25401 by offering to sell or selling
securities including but not limited to the securities described in this Complaint by means of any
written or oral communication which includes any untrue statement of material fact or omits or
fails to state any material fact necessary in order to make the statements made in the light of the
circumstances under which they are made not misleading
3 Removing destroying mutilating concealing altering transferrin g or otherwise
disposing of in any manner any books records computer programs computer files computer
printouts correspondence brochures manuals or any other writing or document of any kind
as defined under California Evidence Code section 250 relating to the transactions and course of
conduct as alleged in the complaint of this action unless authorized by this Court and
4 Withdrawing from any company bank accoun t of BlueRay Technologies LLC or
Blue Ray Technologies Inc containing investor funds or disposing of any real or personal
property in their possession custody or control derived from investor funds without leave of the
COMPL ArNTFOR lNJUNCT1VE RELIEF CIVIL PENALTlES AND ANCILLARY RELIEF
1
2
3
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26
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Court and
5 As to Defendants ERlCK H HANSEN and BLUERAY TECHNOLOGIES LLC
and BLUE RAY TECHNOLOGIES INC for an Order of Preliminary Injunction and ultimately
a Permanent Injunction pursuant to California Corporations Code section 25530 restraining and
enjoining Defendants Hansen BlueRay Technologies LLC and Blue Ray Technologies Inc
from vio lating th e Desist and Refrai n Orders issued by the California Corporations Commissioner
on February 2 1999 by offering and selling unqual ified non-exempt securities in violation of
California Corporations Code section 251 10 and by offerin g or selling by means of any wr in en or
oral communica tion which includes any untrue statement of material fact or omits or fai ls to state
any material fact necessary in order to make the statements made in the light of the circumstances Iunder which they are made not misleading in violation of California Corporations Code section
25401
II RESCISSION AND RESTITUTION
1 For a Final Judgment requiring Defendants to rescind each and all of the unlawful
transactions alleged in this Complaint pursuant to California Corporations Code section 25530
subdivision (b) as shall be determined by this Court to have occurred and further requiring
Defendants to pay full restitution to each person determined to have been subject to the
Defendants acts or practices which constitute violations of the Corporate Securities Law of 1968
in an amount of at least $4000000 or according to proof In addition to pay either the contracted
rate of interest or the legal rate of interest in the amount invested by the investors from the date of
their investments to the date of judgment herein
2 For a Final Judgment requiring Defendants to disgorge pursuant to California
Corporations Code section 25530 (b) to all known investors all benefits received including but
not limited to salaries commission fees profits and any other remuneration derived directly or
indirectly from the actions or practices which constitute violations of the Corporate Securities
Law of 1968
III CIVIL PENALTIES
For a Final Judgment requiring Defendants to pay the Department of Corporations
-1 -
COM PLAINT FOR lNJUN CTIVE RELIEF CIVIL PENALTIES AND ANCILLARY RELIEF
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$25000 00 as a civil penalty for each act in vio lation of the Corporate Securities Law of 1968
pursuant to California Corporations Code section 25535 in an amount of at least $900000 or
accordingto proof
IV OTHER RELIEF
For such otherand furtherrelief as this Court may deem necessary and proper
Dated Ma Y~12008
PRESTON DuFAUCHARD California Corporations Commissioner
By OlIN R DREWS lttorporations Counsel Attorney for the People of California
- 11 -
COMPLAINT FOR INJUNCTIVE RELIEFCIVIL PENALTIES AND ANCILLARY RELIEF
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DEFEJI1)ANTS
4 Defendant BlueRay Technologies LLC IS a California limited liability
corporation fanned on December 5 2006 and maintains an agent for service of process at 4727
Wilshire Blvd Suite 601 Los Angeles CA 90010 The last known business address of BlueRay
Technologies LLC is 5170 Santa Monica Blvd 3 Flocr Los Angeles CA 90029
5 Defendant Blue Ray Technologies Inc is a suspended California corporation
formed on April 142004 and the last known business address for Defendant and agent for service
of process was at 24404 Hampton Drive Valencia CA 91355 which is no longer valid as of the
date of the filing of this comp laint
6 Defendant ERICK H HANSEN (Hansen) is an individual whose last known
residence was at 24404 Hampton Drive Valencia CA 91355 which is no longer valid and whose
last known business address was at 5170 Santa Monica Blvd3rd Floor Los Angeles CA 90029
Defendant Hansen is the Chief Executive Officer Director president and Chief Technology
Officer of Blue Ray Technologies Inc which is the manager of BlueRay Tec hnologies LLC
7 Defendant MATTH EW R1CH1101D (Richm ond) whose title is Investor
Relations at BlueRay Technologies LLC is an individual whose last known residence is
unknown and whose last known business address was at 5301 Beethoven Street Suite 130 Los
Angeles CA 90066
8 Defendant ROB REYNOLDS (Reynolds) whose title is Investor Relations at
BlueRay Technologies LLC is an individual whose last kn own residence is unknown and
whose last known business address was at 5170 Santa Monica Blvd 31d Floor Los Angeles CA
90029
9 Defendants sued herein under the fict itious names Does 1 throu gh 10 inclusive are
unknown to plaintiff who therefore sues such defendants by such fictitious names pursuant to the
provisions of Code of Civil Procedure section 474 The Commissi oner asks leave of the court to
amend the Complaint and allege the true names and capacities of such defendants at such time as
the same have been ascertained
COMPLAINT FOR INNNCTIVE RELlEF CIVIL PENALTIES AND ANCILLARY RELIEF
5
10
15
20
25
1
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3
4
6
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STATEMENT OF FACTS
] O Beginning in October 2006 and continuing thereafter Defendants BlueRay
Technol ogies LLc Blue Ray Technol ogies Inc Hansen Richmon d and Reynolds and their
agents representatives and affiliates (collectively Defendants) have offered and sold
unqualified non-exempt securities to at least 12 investors residing in Cali fornia raising at least
$4000000 In a Private Placement Memorandum provided to unqualified investors dated
January 2008 Defendants Hansen and BlueRay Technologies LLC and Blue Ray Technologies
Inc stated that In December 2007 the Company completed a private placement of 160 units of
the Companys limited liability interests for a purchase price of $25000 per unit (the Class A
Units) raising total capital of $4000000 The prior private placement of Class A Units was
made pursuant to Regulation D of Rule 506 of the Securities Act of 1933 as amended The
Private Placement Memorandum failed to disclose the outstanding Desist and Refrain Orders
issued against Defendant Hansen by the Department of Corporations set out in paragraph 14
below
11 These securities included but are not limited to units of lim ited liability interests in
the form of shares in BlueRay Technologies LLL for the conside ration of $25000 per unit
12 Defendants offered and sold securities to California residents and non-residents for
the purpose of financing the operations of Blue Ray Technologies Inc which is to consist of
providing manufacturing services to various industries which allegedly will require the
manufacture of High Definition Optical Disks
13 Defendants solicited California residents and non-residents to invest in the
securities by way of general solicitation and by means of unsolicitcd telephone calls to investors
prior to determining whether the prospective purchaser was a qualified purchaser also known as
cold calling Defendants forwarded emails to prospective investors who had not been qualified
and said emails contained the Usernarne and Password to the restricted investor website
vWW blucrayllccom
14 Defendants made material misrepresentations including but not limited to omitting
to inform prospective investors that Defendant Hansen was served ith two Desist amp Refrain
-4-
COMPL AINT FOR fNJl)NCnVE RELIEF CIVIL PENALTIES AND ANCILLARY RELIEF
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21
22
23
24
26
27
28
Orders by the Cali fornia Commissioner of Corporations on February 2 1999 for violatio ns of the
California Securities Law of 1968 (CSL) contained in California Corporations Code sections
25000 etseq
IS On February 2 1999 the Commissioner issued two Desist and Refrain Orders inter
alia (February 1999 Orders) The first was against Defendant Hansen and Hansen Entertainment
Inc and others for offering and selling unqualified non-exempt securi ties in vio lation of CSL
section 25110 and the second Order was against Defendant Hansen and Hansen Entertaimnent
Incbull and others for selling securi ties by means of any written or oral comm unication which
includes an untrue statement of a material fact or omits to state a material fact as set out in
Corporations Code section 25401 The February 1999 Orders issued under the authority granted
the Commissioner by Corporations Code section 25532 required Defendant Hansen and Hansen
Entertainm ent Inc to desist and refrain from the furth er violations of sections 251 10 and 2540) of
the CSL The February 1999 Orders were personally served on Defendant Hansen on February 2
1999
16 Neither Defendant Hansen nor Hansen Entertainment Inc requested an
administrative hearing to challenge the allegations and find ings in the February 1999 Orders The
February 1999 Orders are now final
l7 Notwithstand ing the February 1999 Orders Defendant Hansen is again offering
and sellin g securities that are unqua lified non-exempt securities to inve stors resid ing in California
and in other states
18 Notwithstanding the February 1999 Orders Defendants continue to offer securities
by way of general solicitations in the form of cold calls in the Los Angeles area and in other
counties in this state
19 Further Defendants have omitted to disclose material facts including but not
limited to the February 1999 Orders to investors and potent ial investors
FIRST CAUSE OF ACTION
OFFER AND SALE OF UNQUALI FIE D NON-EXEMPT SECURITI ES IN VIOLATION OF CORPORATIO NS CODE SECTION 251 10
(AGAINST ALL DEFEND ANTS)
COMPLAINT FOR TNJUNCTl VE RELIEF CIVIL PENALTIES AND ANCILLARY RELIEF
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12
13
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20
21
22
23
24
25
26
27
28
20 Plaintiff incorporates by reference paragraphs J through 19 of this Complaint as
though fully set forth herein
21 CSL section 2S11 0 provides in pertinent part as follows
It is unlawful for any person to offer or sell in this state any security in an issuer transaction whether or not by or through underwriters unless such sale has been qualified under Section 251 JI 25J12 or 25 113 or unless such security or transaction is exempted or not subject to qualification under Chapter 1 [comm encing with Section 25100] of this part
(CaJ Corp Code sect 25110)
22 Beginning in October 2006 and continuing thereafter Defendants and each of
them offered and sold securities to at least 12 investors residing in California raising a
minimum of $4000000 Further Defendants have offered securities to at least two other
California residents and one non-resident
23 The investments offered and sold by Defendants are securities within the
meaning of CSL section 250 19 The securities include but are not necessarily limi ted to
units of limited liability interests in the form of shares in a limited liability company BlueRay
Technolgies LLC
24 The sales of securities were issuer transactions within the meaning of CSL
sections 25010 and 25011
25 Defendants and each of them offered and sold the securities i n this state
of California within the meaning of CSL sections 25008 and 25017
26 The Commissioner bas not issued a permit or other form of qualification
authorizing the offer and sale of the securi ties referred to here in in the State of California
27 The offer and sale of securities referred to he rein were not exempt from the
requirement of qualification under CSL section 251 10 Defendants and eac h of them
engaged in unsolicited phone sales cells to persons who were not qualified and had no prior
substantia l existing relationship wi th Defendants
28 Unless enjoined by this Court Defendants will continue to viol ate CSL section
25110
COMPLAINT FOR INJUNCTIVE RELIEF CIVIL PENALTIES AlD ANCILLARY RELIEF
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SECOND CA USE OF ACTION
MISREPRESEJIoTAn ON OR OMISSION OF MUERLL FA CTS IN lOLAnON OF CORPORAnONS CODE SECTION 25401
(AGAIN ST ALL DEFENDANTS)
29 Plaintiff incorporates by reference paragraphs 1 through 28 of this Complaint as
though fully set forth herei n
30 CSL sectio n 25401 states
It is unlawful for any person to offer or sell a security in this state or buy or offer to buy a security in this state by means of any written or oral communication whi ch includes an untrue statement of a material fact or omits to state a material fact necessary in order to make the statements made in the light of the circumstances under which they wer e made not misleading
(Cal Corp Code sect 25401)
31 In offering and selling the securities referred to herein Defendants and each of
them made untrue statements of material fact andor omitted to state material facts to some or all
of the investors The untrue statements andlor omissions include but are not necessarily limited to
the following
A Defendants represen ted they were affiliated with the Disney and Sony corporations
which in fact was not true
B Defendants omitted to disclose to investors and potential investors that Defendant
Hansen was the subject of two Desist and Refrain Orders issued by the Commissioner on February
2 1999 ordering that Defendant Hansen desist and refrain from the further offer or sale of
unqualified non-exempt securities in the State of California and to desist and refrain from the sale
of securities by the use of statements omitting material facts or the use of untrue statements of a
material fact
32 The misstatements and omissions referred to herein were material facts with in
the meaning of CSL section 2540 1 since they concerned matters that a reasonable investor
would consider in deciding whether to invest
33 Defendants offer and sale of securities were by means of misrepresentations and
omissions within the meanin g of CSL section 2540 1
COMPLANT FOR INJUNCTIVE RELIEF CIVIL PENALTIES A-lD ANCILLA RY RELIEF
1
2
3
4
5
6
7
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34 Some or all of Defendants misrepresentations and omissions of material fact took
place in this state of California within the meaning of CSL section 25008
35 Unless enjoined by this Court Defendants will continue to violate CSL section
25401
TIIIRD CAUSE OF ACTION
VIOLATI ON OF PRIOR DES IST AND REFRAIN ORDER ISSUED BY THE COMMISSIOIiER
(AGA INST DEFENDANT ERICK HANSEN BLUERAY T ECHNOLOGIES LLC AND BLUE RAY TECHN OLOGIES I Nc)
36 Plaintiff incorporates by referen ce paragraphs 1 through 35 of this Complaint as
though fully set forth herein
37 CSL section 25532 provides in pertinent part a follows
(a) If in the opinion of the commissioner (1) the sale of a security is subject to qualification under this law and it is being or has been offered or sold without first being qualifie d the commissioner may order the issuer or offeror of the security to desist and refrain from the further offer or sale of the securi ty until qualification has been made under this law
(Cal Corp Code sect 25532 (a))
38 On February 2 1999 the Commissioner issued Desist and Refrain Orders
(tFebruary 1999 Orders) agains t Defendant Hansen and Hansen Entertainment Inc for offering
and selling unqualified non-exempt securities in violation of CSL section 25110 and against
Defendant Hansen and Hansen Entertainment Inc for the offer and sale of securities by means of
written or oral communications which include an untrue statement of a material fact or omits to
state a material fact necessary in order to make the statements made in the light of circumstances
under which they were made not misleading in violation of CSL section 25401 The February
1999 Orders were personally served on Defendant Hansen on February 18 1999
39 Defendant Hansen did not request an administrative heari ng to challenge the
allegations and findings in the Febru ary 1999 Orders The February 1999 Orders are now final
40 Unless enjoined Defendant Hansen and BlueRay Technologies LLC and Blue
Ray Technologies Inc will continue to violate the February 1999 Desist and Refrain Orders issued
-8-
COMPLArNTFOR INJUNCTIVE RELIEF CIVIL PENALTIES AND ANCILLA RY RELIEF
ltJJ
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7
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9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
by the Commissioner
PRAYER FOR RELIEF
WHEREFORE Plaintiff prays for judgment against Defendants BlueRay Technologies
LLC Blue Ray Technologies Inc ERlCK H HANSEN MATTHEW RlCHMOND ROB
REYNOLDS and Does I through 10 inclusively as follows
L INJUNCTIVE RELIEF FOR THE VIOLATIONS
For an Order of Preliminary Injunction and ultimately a Permanent Injunction pursuant
to California Corporations Code section 25530 restraining and enjoining all Defendants from
directly or indirectly
L Violating California Corporations Code section 25110 by offering to sell selling
arranging for the sale of issuing engaging in the business of selling negotiating for the sale of
any security of any kind unless such security or transaction is qualified and is not offered by
means of a general solicitation or cold calls in violation of Regulation D of Rule 506 of the
Securities Act of 1933 as amend ed
2 Violating California Corporations Code section 25401 by offering to sell or selling
securities including but not limited to the securities described in this Complaint by means of any
written or oral communication which includes any untrue statement of material fact or omits or
fails to state any material fact necessary in order to make the statements made in the light of the
circumstances under which they are made not misleading
3 Removing destroying mutilating concealing altering transferrin g or otherwise
disposing of in any manner any books records computer programs computer files computer
printouts correspondence brochures manuals or any other writing or document of any kind
as defined under California Evidence Code section 250 relating to the transactions and course of
conduct as alleged in the complaint of this action unless authorized by this Court and
4 Withdrawing from any company bank accoun t of BlueRay Technologies LLC or
Blue Ray Technologies Inc containing investor funds or disposing of any real or personal
property in their possession custody or control derived from investor funds without leave of the
COMPL ArNTFOR lNJUNCT1VE RELIEF CIVIL PENALTlES AND ANCILLARY RELIEF
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
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Court and
5 As to Defendants ERlCK H HANSEN and BLUERAY TECHNOLOGIES LLC
and BLUE RAY TECHNOLOGIES INC for an Order of Preliminary Injunction and ultimately
a Permanent Injunction pursuant to California Corporations Code section 25530 restraining and
enjoining Defendants Hansen BlueRay Technologies LLC and Blue Ray Technologies Inc
from vio lating th e Desist and Refrai n Orders issued by the California Corporations Commissioner
on February 2 1999 by offering and selling unqual ified non-exempt securities in violation of
California Corporations Code section 251 10 and by offerin g or selling by means of any wr in en or
oral communica tion which includes any untrue statement of material fact or omits or fai ls to state
any material fact necessary in order to make the statements made in the light of the circumstances Iunder which they are made not misleading in violation of California Corporations Code section
25401
II RESCISSION AND RESTITUTION
1 For a Final Judgment requiring Defendants to rescind each and all of the unlawful
transactions alleged in this Complaint pursuant to California Corporations Code section 25530
subdivision (b) as shall be determined by this Court to have occurred and further requiring
Defendants to pay full restitution to each person determined to have been subject to the
Defendants acts or practices which constitute violations of the Corporate Securities Law of 1968
in an amount of at least $4000000 or according to proof In addition to pay either the contracted
rate of interest or the legal rate of interest in the amount invested by the investors from the date of
their investments to the date of judgment herein
2 For a Final Judgment requiring Defendants to disgorge pursuant to California
Corporations Code section 25530 (b) to all known investors all benefits received including but
not limited to salaries commission fees profits and any other remuneration derived directly or
indirectly from the actions or practices which constitute violations of the Corporate Securities
Law of 1968
III CIVIL PENALTIES
For a Final Judgment requiring Defendants to pay the Department of Corporations
-1 -
COM PLAINT FOR lNJUN CTIVE RELIEF CIVIL PENALTIES AND ANCILLARY RELIEF
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22
23
24
25
26
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28
$25000 00 as a civil penalty for each act in vio lation of the Corporate Securities Law of 1968
pursuant to California Corporations Code section 25535 in an amount of at least $900000 or
accordingto proof
IV OTHER RELIEF
For such otherand furtherrelief as this Court may deem necessary and proper
Dated Ma Y~12008
PRESTON DuFAUCHARD California Corporations Commissioner
By OlIN R DREWS lttorporations Counsel Attorney for the People of California
- 11 -
COMPLAINT FOR INJUNCTIVE RELIEFCIVIL PENALTIES AND ANCILLARY RELIEF
5
10
15
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28
STATEMENT OF FACTS
] O Beginning in October 2006 and continuing thereafter Defendants BlueRay
Technol ogies LLc Blue Ray Technol ogies Inc Hansen Richmon d and Reynolds and their
agents representatives and affiliates (collectively Defendants) have offered and sold
unqualified non-exempt securities to at least 12 investors residing in Cali fornia raising at least
$4000000 In a Private Placement Memorandum provided to unqualified investors dated
January 2008 Defendants Hansen and BlueRay Technologies LLC and Blue Ray Technologies
Inc stated that In December 2007 the Company completed a private placement of 160 units of
the Companys limited liability interests for a purchase price of $25000 per unit (the Class A
Units) raising total capital of $4000000 The prior private placement of Class A Units was
made pursuant to Regulation D of Rule 506 of the Securities Act of 1933 as amended The
Private Placement Memorandum failed to disclose the outstanding Desist and Refrain Orders
issued against Defendant Hansen by the Department of Corporations set out in paragraph 14
below
11 These securities included but are not limited to units of lim ited liability interests in
the form of shares in BlueRay Technologies LLL for the conside ration of $25000 per unit
12 Defendants offered and sold securities to California residents and non-residents for
the purpose of financing the operations of Blue Ray Technologies Inc which is to consist of
providing manufacturing services to various industries which allegedly will require the
manufacture of High Definition Optical Disks
13 Defendants solicited California residents and non-residents to invest in the
securities by way of general solicitation and by means of unsolicitcd telephone calls to investors
prior to determining whether the prospective purchaser was a qualified purchaser also known as
cold calling Defendants forwarded emails to prospective investors who had not been qualified
and said emails contained the Usernarne and Password to the restricted investor website
vWW blucrayllccom
14 Defendants made material misrepresentations including but not limited to omitting
to inform prospective investors that Defendant Hansen was served ith two Desist amp Refrain
-4-
COMPL AINT FOR fNJl)NCnVE RELIEF CIVIL PENALTIES AND ANCILLARY RELIEF
5
10
15
20
25
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4
6
7
8
9
11
12
13
14
16
17
18
19
21
22
23
24
26
27
28
Orders by the Cali fornia Commissioner of Corporations on February 2 1999 for violatio ns of the
California Securities Law of 1968 (CSL) contained in California Corporations Code sections
25000 etseq
IS On February 2 1999 the Commissioner issued two Desist and Refrain Orders inter
alia (February 1999 Orders) The first was against Defendant Hansen and Hansen Entertainment
Inc and others for offering and selling unqualified non-exempt securi ties in vio lation of CSL
section 25110 and the second Order was against Defendant Hansen and Hansen Entertaimnent
Incbull and others for selling securi ties by means of any written or oral comm unication which
includes an untrue statement of a material fact or omits to state a material fact as set out in
Corporations Code section 25401 The February 1999 Orders issued under the authority granted
the Commissioner by Corporations Code section 25532 required Defendant Hansen and Hansen
Entertainm ent Inc to desist and refrain from the furth er violations of sections 251 10 and 2540) of
the CSL The February 1999 Orders were personally served on Defendant Hansen on February 2
1999
16 Neither Defendant Hansen nor Hansen Entertainment Inc requested an
administrative hearing to challenge the allegations and find ings in the February 1999 Orders The
February 1999 Orders are now final
l7 Notwithstand ing the February 1999 Orders Defendant Hansen is again offering
and sellin g securities that are unqua lified non-exempt securities to inve stors resid ing in California
and in other states
18 Notwithstanding the February 1999 Orders Defendants continue to offer securities
by way of general solicitations in the form of cold calls in the Los Angeles area and in other
counties in this state
19 Further Defendants have omitted to disclose material facts including but not
limited to the February 1999 Orders to investors and potent ial investors
FIRST CAUSE OF ACTION
OFFER AND SALE OF UNQUALI FIE D NON-EXEMPT SECURITI ES IN VIOLATION OF CORPORATIO NS CODE SECTION 251 10
(AGAINST ALL DEFEND ANTS)
COMPLAINT FOR TNJUNCTl VE RELIEF CIVIL PENALTIES AND ANCILLARY RELIEF
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7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
20 Plaintiff incorporates by reference paragraphs J through 19 of this Complaint as
though fully set forth herein
21 CSL section 2S11 0 provides in pertinent part as follows
It is unlawful for any person to offer or sell in this state any security in an issuer transaction whether or not by or through underwriters unless such sale has been qualified under Section 251 JI 25J12 or 25 113 or unless such security or transaction is exempted or not subject to qualification under Chapter 1 [comm encing with Section 25100] of this part
(CaJ Corp Code sect 25110)
22 Beginning in October 2006 and continuing thereafter Defendants and each of
them offered and sold securities to at least 12 investors residing in California raising a
minimum of $4000000 Further Defendants have offered securities to at least two other
California residents and one non-resident
23 The investments offered and sold by Defendants are securities within the
meaning of CSL section 250 19 The securities include but are not necessarily limi ted to
units of limited liability interests in the form of shares in a limited liability company BlueRay
Technolgies LLC
24 The sales of securities were issuer transactions within the meaning of CSL
sections 25010 and 25011
25 Defendants and each of them offered and sold the securities i n this state
of California within the meaning of CSL sections 25008 and 25017
26 The Commissioner bas not issued a permit or other form of qualification
authorizing the offer and sale of the securi ties referred to here in in the State of California
27 The offer and sale of securities referred to he rein were not exempt from the
requirement of qualification under CSL section 251 10 Defendants and eac h of them
engaged in unsolicited phone sales cells to persons who were not qualified and had no prior
substantia l existing relationship wi th Defendants
28 Unless enjoined by this Court Defendants will continue to viol ate CSL section
25110
COMPLAINT FOR INJUNCTIVE RELIEF CIVIL PENALTIES AlD ANCILLARY RELIEF
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15
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19
20
21
22
23
24
25
26
27
28
SECOND CA USE OF ACTION
MISREPRESEJIoTAn ON OR OMISSION OF MUERLL FA CTS IN lOLAnON OF CORPORAnONS CODE SECTION 25401
(AGAIN ST ALL DEFENDANTS)
29 Plaintiff incorporates by reference paragraphs 1 through 28 of this Complaint as
though fully set forth herei n
30 CSL sectio n 25401 states
It is unlawful for any person to offer or sell a security in this state or buy or offer to buy a security in this state by means of any written or oral communication whi ch includes an untrue statement of a material fact or omits to state a material fact necessary in order to make the statements made in the light of the circumstances under which they wer e made not misleading
(Cal Corp Code sect 25401)
31 In offering and selling the securities referred to herein Defendants and each of
them made untrue statements of material fact andor omitted to state material facts to some or all
of the investors The untrue statements andlor omissions include but are not necessarily limited to
the following
A Defendants represen ted they were affiliated with the Disney and Sony corporations
which in fact was not true
B Defendants omitted to disclose to investors and potential investors that Defendant
Hansen was the subject of two Desist and Refrain Orders issued by the Commissioner on February
2 1999 ordering that Defendant Hansen desist and refrain from the further offer or sale of
unqualified non-exempt securities in the State of California and to desist and refrain from the sale
of securities by the use of statements omitting material facts or the use of untrue statements of a
material fact
32 The misstatements and omissions referred to herein were material facts with in
the meaning of CSL section 2540 1 since they concerned matters that a reasonable investor
would consider in deciding whether to invest
33 Defendants offer and sale of securities were by means of misrepresentations and
omissions within the meanin g of CSL section 2540 1
COMPLANT FOR INJUNCTIVE RELIEF CIVIL PENALTIES A-lD ANCILLA RY RELIEF
1
2
3
4
5
6
7
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34 Some or all of Defendants misrepresentations and omissions of material fact took
place in this state of California within the meaning of CSL section 25008
35 Unless enjoined by this Court Defendants will continue to violate CSL section
25401
TIIIRD CAUSE OF ACTION
VIOLATI ON OF PRIOR DES IST AND REFRAIN ORDER ISSUED BY THE COMMISSIOIiER
(AGA INST DEFENDANT ERICK HANSEN BLUERAY T ECHNOLOGIES LLC AND BLUE RAY TECHN OLOGIES I Nc)
36 Plaintiff incorporates by referen ce paragraphs 1 through 35 of this Complaint as
though fully set forth herein
37 CSL section 25532 provides in pertinent part a follows
(a) If in the opinion of the commissioner (1) the sale of a security is subject to qualification under this law and it is being or has been offered or sold without first being qualifie d the commissioner may order the issuer or offeror of the security to desist and refrain from the further offer or sale of the securi ty until qualification has been made under this law
(Cal Corp Code sect 25532 (a))
38 On February 2 1999 the Commissioner issued Desist and Refrain Orders
(tFebruary 1999 Orders) agains t Defendant Hansen and Hansen Entertainment Inc for offering
and selling unqualified non-exempt securities in violation of CSL section 25110 and against
Defendant Hansen and Hansen Entertainment Inc for the offer and sale of securities by means of
written or oral communications which include an untrue statement of a material fact or omits to
state a material fact necessary in order to make the statements made in the light of circumstances
under which they were made not misleading in violation of CSL section 25401 The February
1999 Orders were personally served on Defendant Hansen on February 18 1999
39 Defendant Hansen did not request an administrative heari ng to challenge the
allegations and findings in the Febru ary 1999 Orders The February 1999 Orders are now final
40 Unless enjoined Defendant Hansen and BlueRay Technologies LLC and Blue
Ray Technologies Inc will continue to violate the February 1999 Desist and Refrain Orders issued
-8-
COMPLArNTFOR INJUNCTIVE RELIEF CIVIL PENALTIES AND ANCILLA RY RELIEF
ltJJ
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7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
by the Commissioner
PRAYER FOR RELIEF
WHEREFORE Plaintiff prays for judgment against Defendants BlueRay Technologies
LLC Blue Ray Technologies Inc ERlCK H HANSEN MATTHEW RlCHMOND ROB
REYNOLDS and Does I through 10 inclusively as follows
L INJUNCTIVE RELIEF FOR THE VIOLATIONS
For an Order of Preliminary Injunction and ultimately a Permanent Injunction pursuant
to California Corporations Code section 25530 restraining and enjoining all Defendants from
directly or indirectly
L Violating California Corporations Code section 25110 by offering to sell selling
arranging for the sale of issuing engaging in the business of selling negotiating for the sale of
any security of any kind unless such security or transaction is qualified and is not offered by
means of a general solicitation or cold calls in violation of Regulation D of Rule 506 of the
Securities Act of 1933 as amend ed
2 Violating California Corporations Code section 25401 by offering to sell or selling
securities including but not limited to the securities described in this Complaint by means of any
written or oral communication which includes any untrue statement of material fact or omits or
fails to state any material fact necessary in order to make the statements made in the light of the
circumstances under which they are made not misleading
3 Removing destroying mutilating concealing altering transferrin g or otherwise
disposing of in any manner any books records computer programs computer files computer
printouts correspondence brochures manuals or any other writing or document of any kind
as defined under California Evidence Code section 250 relating to the transactions and course of
conduct as alleged in the complaint of this action unless authorized by this Court and
4 Withdrawing from any company bank accoun t of BlueRay Technologies LLC or
Blue Ray Technologies Inc containing investor funds or disposing of any real or personal
property in their possession custody or control derived from investor funds without leave of the
COMPL ArNTFOR lNJUNCT1VE RELIEF CIVIL PENALTlES AND ANCILLARY RELIEF
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
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Court and
5 As to Defendants ERlCK H HANSEN and BLUERAY TECHNOLOGIES LLC
and BLUE RAY TECHNOLOGIES INC for an Order of Preliminary Injunction and ultimately
a Permanent Injunction pursuant to California Corporations Code section 25530 restraining and
enjoining Defendants Hansen BlueRay Technologies LLC and Blue Ray Technologies Inc
from vio lating th e Desist and Refrai n Orders issued by the California Corporations Commissioner
on February 2 1999 by offering and selling unqual ified non-exempt securities in violation of
California Corporations Code section 251 10 and by offerin g or selling by means of any wr in en or
oral communica tion which includes any untrue statement of material fact or omits or fai ls to state
any material fact necessary in order to make the statements made in the light of the circumstances Iunder which they are made not misleading in violation of California Corporations Code section
25401
II RESCISSION AND RESTITUTION
1 For a Final Judgment requiring Defendants to rescind each and all of the unlawful
transactions alleged in this Complaint pursuant to California Corporations Code section 25530
subdivision (b) as shall be determined by this Court to have occurred and further requiring
Defendants to pay full restitution to each person determined to have been subject to the
Defendants acts or practices which constitute violations of the Corporate Securities Law of 1968
in an amount of at least $4000000 or according to proof In addition to pay either the contracted
rate of interest or the legal rate of interest in the amount invested by the investors from the date of
their investments to the date of judgment herein
2 For a Final Judgment requiring Defendants to disgorge pursuant to California
Corporations Code section 25530 (b) to all known investors all benefits received including but
not limited to salaries commission fees profits and any other remuneration derived directly or
indirectly from the actions or practices which constitute violations of the Corporate Securities
Law of 1968
III CIVIL PENALTIES
For a Final Judgment requiring Defendants to pay the Department of Corporations
-1 -
COM PLAINT FOR lNJUN CTIVE RELIEF CIVIL PENALTIES AND ANCILLARY RELIEF
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18
19
20
21
22
23
24
25
26
27
28
$25000 00 as a civil penalty for each act in vio lation of the Corporate Securities Law of 1968
pursuant to California Corporations Code section 25535 in an amount of at least $900000 or
accordingto proof
IV OTHER RELIEF
For such otherand furtherrelief as this Court may deem necessary and proper
Dated Ma Y~12008
PRESTON DuFAUCHARD California Corporations Commissioner
By OlIN R DREWS lttorporations Counsel Attorney for the People of California
- 11 -
COMPLAINT FOR INJUNCTIVE RELIEFCIVIL PENALTIES AND ANCILLARY RELIEF
5
10
15
20
25
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4
6
7
8
9
11
12
13
14
16
17
18
19
21
22
23
24
26
27
28
Orders by the Cali fornia Commissioner of Corporations on February 2 1999 for violatio ns of the
California Securities Law of 1968 (CSL) contained in California Corporations Code sections
25000 etseq
IS On February 2 1999 the Commissioner issued two Desist and Refrain Orders inter
alia (February 1999 Orders) The first was against Defendant Hansen and Hansen Entertainment
Inc and others for offering and selling unqualified non-exempt securi ties in vio lation of CSL
section 25110 and the second Order was against Defendant Hansen and Hansen Entertaimnent
Incbull and others for selling securi ties by means of any written or oral comm unication which
includes an untrue statement of a material fact or omits to state a material fact as set out in
Corporations Code section 25401 The February 1999 Orders issued under the authority granted
the Commissioner by Corporations Code section 25532 required Defendant Hansen and Hansen
Entertainm ent Inc to desist and refrain from the furth er violations of sections 251 10 and 2540) of
the CSL The February 1999 Orders were personally served on Defendant Hansen on February 2
1999
16 Neither Defendant Hansen nor Hansen Entertainment Inc requested an
administrative hearing to challenge the allegations and find ings in the February 1999 Orders The
February 1999 Orders are now final
l7 Notwithstand ing the February 1999 Orders Defendant Hansen is again offering
and sellin g securities that are unqua lified non-exempt securities to inve stors resid ing in California
and in other states
18 Notwithstanding the February 1999 Orders Defendants continue to offer securities
by way of general solicitations in the form of cold calls in the Los Angeles area and in other
counties in this state
19 Further Defendants have omitted to disclose material facts including but not
limited to the February 1999 Orders to investors and potent ial investors
FIRST CAUSE OF ACTION
OFFER AND SALE OF UNQUALI FIE D NON-EXEMPT SECURITI ES IN VIOLATION OF CORPORATIO NS CODE SECTION 251 10
(AGAINST ALL DEFEND ANTS)
COMPLAINT FOR TNJUNCTl VE RELIEF CIVIL PENALTIES AND ANCILLARY RELIEF
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3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
20 Plaintiff incorporates by reference paragraphs J through 19 of this Complaint as
though fully set forth herein
21 CSL section 2S11 0 provides in pertinent part as follows
It is unlawful for any person to offer or sell in this state any security in an issuer transaction whether or not by or through underwriters unless such sale has been qualified under Section 251 JI 25J12 or 25 113 or unless such security or transaction is exempted or not subject to qualification under Chapter 1 [comm encing with Section 25100] of this part
(CaJ Corp Code sect 25110)
22 Beginning in October 2006 and continuing thereafter Defendants and each of
them offered and sold securities to at least 12 investors residing in California raising a
minimum of $4000000 Further Defendants have offered securities to at least two other
California residents and one non-resident
23 The investments offered and sold by Defendants are securities within the
meaning of CSL section 250 19 The securities include but are not necessarily limi ted to
units of limited liability interests in the form of shares in a limited liability company BlueRay
Technolgies LLC
24 The sales of securities were issuer transactions within the meaning of CSL
sections 25010 and 25011
25 Defendants and each of them offered and sold the securities i n this state
of California within the meaning of CSL sections 25008 and 25017
26 The Commissioner bas not issued a permit or other form of qualification
authorizing the offer and sale of the securi ties referred to here in in the State of California
27 The offer and sale of securities referred to he rein were not exempt from the
requirement of qualification under CSL section 251 10 Defendants and eac h of them
engaged in unsolicited phone sales cells to persons who were not qualified and had no prior
substantia l existing relationship wi th Defendants
28 Unless enjoined by this Court Defendants will continue to viol ate CSL section
25110
COMPLAINT FOR INJUNCTIVE RELIEF CIVIL PENALTIES AlD ANCILLARY RELIEF
Ul c
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14
15
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18
19
20
21
22
23
24
25
26
27
28
SECOND CA USE OF ACTION
MISREPRESEJIoTAn ON OR OMISSION OF MUERLL FA CTS IN lOLAnON OF CORPORAnONS CODE SECTION 25401
(AGAIN ST ALL DEFENDANTS)
29 Plaintiff incorporates by reference paragraphs 1 through 28 of this Complaint as
though fully set forth herei n
30 CSL sectio n 25401 states
It is unlawful for any person to offer or sell a security in this state or buy or offer to buy a security in this state by means of any written or oral communication whi ch includes an untrue statement of a material fact or omits to state a material fact necessary in order to make the statements made in the light of the circumstances under which they wer e made not misleading
(Cal Corp Code sect 25401)
31 In offering and selling the securities referred to herein Defendants and each of
them made untrue statements of material fact andor omitted to state material facts to some or all
of the investors The untrue statements andlor omissions include but are not necessarily limited to
the following
A Defendants represen ted they were affiliated with the Disney and Sony corporations
which in fact was not true
B Defendants omitted to disclose to investors and potential investors that Defendant
Hansen was the subject of two Desist and Refrain Orders issued by the Commissioner on February
2 1999 ordering that Defendant Hansen desist and refrain from the further offer or sale of
unqualified non-exempt securities in the State of California and to desist and refrain from the sale
of securities by the use of statements omitting material facts or the use of untrue statements of a
material fact
32 The misstatements and omissions referred to herein were material facts with in
the meaning of CSL section 2540 1 since they concerned matters that a reasonable investor
would consider in deciding whether to invest
33 Defendants offer and sale of securities were by means of misrepresentations and
omissions within the meanin g of CSL section 2540 1
COMPLANT FOR INJUNCTIVE RELIEF CIVIL PENALTIES A-lD ANCILLA RY RELIEF
1
2
3
4
5
6
7
8 c 0 9 ~
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22
23
24
25
26
27
28
34 Some or all of Defendants misrepresentations and omissions of material fact took
place in this state of California within the meaning of CSL section 25008
35 Unless enjoined by this Court Defendants will continue to violate CSL section
25401
TIIIRD CAUSE OF ACTION
VIOLATI ON OF PRIOR DES IST AND REFRAIN ORDER ISSUED BY THE COMMISSIOIiER
(AGA INST DEFENDANT ERICK HANSEN BLUERAY T ECHNOLOGIES LLC AND BLUE RAY TECHN OLOGIES I Nc)
36 Plaintiff incorporates by referen ce paragraphs 1 through 35 of this Complaint as
though fully set forth herein
37 CSL section 25532 provides in pertinent part a follows
(a) If in the opinion of the commissioner (1) the sale of a security is subject to qualification under this law and it is being or has been offered or sold without first being qualifie d the commissioner may order the issuer or offeror of the security to desist and refrain from the further offer or sale of the securi ty until qualification has been made under this law
(Cal Corp Code sect 25532 (a))
38 On February 2 1999 the Commissioner issued Desist and Refrain Orders
(tFebruary 1999 Orders) agains t Defendant Hansen and Hansen Entertainment Inc for offering
and selling unqualified non-exempt securities in violation of CSL section 25110 and against
Defendant Hansen and Hansen Entertainment Inc for the offer and sale of securities by means of
written or oral communications which include an untrue statement of a material fact or omits to
state a material fact necessary in order to make the statements made in the light of circumstances
under which they were made not misleading in violation of CSL section 25401 The February
1999 Orders were personally served on Defendant Hansen on February 18 1999
39 Defendant Hansen did not request an administrative heari ng to challenge the
allegations and findings in the Febru ary 1999 Orders The February 1999 Orders are now final
40 Unless enjoined Defendant Hansen and BlueRay Technologies LLC and Blue
Ray Technologies Inc will continue to violate the February 1999 Desist and Refrain Orders issued
-8-
COMPLArNTFOR INJUNCTIVE RELIEF CIVIL PENALTIES AND ANCILLA RY RELIEF
ltJJ
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2
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4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
by the Commissioner
PRAYER FOR RELIEF
WHEREFORE Plaintiff prays for judgment against Defendants BlueRay Technologies
LLC Blue Ray Technologies Inc ERlCK H HANSEN MATTHEW RlCHMOND ROB
REYNOLDS and Does I through 10 inclusively as follows
L INJUNCTIVE RELIEF FOR THE VIOLATIONS
For an Order of Preliminary Injunction and ultimately a Permanent Injunction pursuant
to California Corporations Code section 25530 restraining and enjoining all Defendants from
directly or indirectly
L Violating California Corporations Code section 25110 by offering to sell selling
arranging for the sale of issuing engaging in the business of selling negotiating for the sale of
any security of any kind unless such security or transaction is qualified and is not offered by
means of a general solicitation or cold calls in violation of Regulation D of Rule 506 of the
Securities Act of 1933 as amend ed
2 Violating California Corporations Code section 25401 by offering to sell or selling
securities including but not limited to the securities described in this Complaint by means of any
written or oral communication which includes any untrue statement of material fact or omits or
fails to state any material fact necessary in order to make the statements made in the light of the
circumstances under which they are made not misleading
3 Removing destroying mutilating concealing altering transferrin g or otherwise
disposing of in any manner any books records computer programs computer files computer
printouts correspondence brochures manuals or any other writing or document of any kind
as defined under California Evidence Code section 250 relating to the transactions and course of
conduct as alleged in the complaint of this action unless authorized by this Court and
4 Withdrawing from any company bank accoun t of BlueRay Technologies LLC or
Blue Ray Technologies Inc containing investor funds or disposing of any real or personal
property in their possession custody or control derived from investor funds without leave of the
COMPL ArNTFOR lNJUNCT1VE RELIEF CIVIL PENALTlES AND ANCILLARY RELIEF
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
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28
Court and
5 As to Defendants ERlCK H HANSEN and BLUERAY TECHNOLOGIES LLC
and BLUE RAY TECHNOLOGIES INC for an Order of Preliminary Injunction and ultimately
a Permanent Injunction pursuant to California Corporations Code section 25530 restraining and
enjoining Defendants Hansen BlueRay Technologies LLC and Blue Ray Technologies Inc
from vio lating th e Desist and Refrai n Orders issued by the California Corporations Commissioner
on February 2 1999 by offering and selling unqual ified non-exempt securities in violation of
California Corporations Code section 251 10 and by offerin g or selling by means of any wr in en or
oral communica tion which includes any untrue statement of material fact or omits or fai ls to state
any material fact necessary in order to make the statements made in the light of the circumstances Iunder which they are made not misleading in violation of California Corporations Code section
25401
II RESCISSION AND RESTITUTION
1 For a Final Judgment requiring Defendants to rescind each and all of the unlawful
transactions alleged in this Complaint pursuant to California Corporations Code section 25530
subdivision (b) as shall be determined by this Court to have occurred and further requiring
Defendants to pay full restitution to each person determined to have been subject to the
Defendants acts or practices which constitute violations of the Corporate Securities Law of 1968
in an amount of at least $4000000 or according to proof In addition to pay either the contracted
rate of interest or the legal rate of interest in the amount invested by the investors from the date of
their investments to the date of judgment herein
2 For a Final Judgment requiring Defendants to disgorge pursuant to California
Corporations Code section 25530 (b) to all known investors all benefits received including but
not limited to salaries commission fees profits and any other remuneration derived directly or
indirectly from the actions or practices which constitute violations of the Corporate Securities
Law of 1968
III CIVIL PENALTIES
For a Final Judgment requiring Defendants to pay the Department of Corporations
-1 -
COM PLAINT FOR lNJUN CTIVE RELIEF CIVIL PENALTIES AND ANCILLARY RELIEF
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9
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11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
$25000 00 as a civil penalty for each act in vio lation of the Corporate Securities Law of 1968
pursuant to California Corporations Code section 25535 in an amount of at least $900000 or
accordingto proof
IV OTHER RELIEF
For such otherand furtherrelief as this Court may deem necessary and proper
Dated Ma Y~12008
PRESTON DuFAUCHARD California Corporations Commissioner
By OlIN R DREWS lttorporations Counsel Attorney for the People of California
- 11 -
COMPLAINT FOR INJUNCTIVE RELIEFCIVIL PENALTIES AND ANCILLARY RELIEF
c 0-~ 0 a
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1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
20 Plaintiff incorporates by reference paragraphs J through 19 of this Complaint as
though fully set forth herein
21 CSL section 2S11 0 provides in pertinent part as follows
It is unlawful for any person to offer or sell in this state any security in an issuer transaction whether or not by or through underwriters unless such sale has been qualified under Section 251 JI 25J12 or 25 113 or unless such security or transaction is exempted or not subject to qualification under Chapter 1 [comm encing with Section 25100] of this part
(CaJ Corp Code sect 25110)
22 Beginning in October 2006 and continuing thereafter Defendants and each of
them offered and sold securities to at least 12 investors residing in California raising a
minimum of $4000000 Further Defendants have offered securities to at least two other
California residents and one non-resident
23 The investments offered and sold by Defendants are securities within the
meaning of CSL section 250 19 The securities include but are not necessarily limi ted to
units of limited liability interests in the form of shares in a limited liability company BlueRay
Technolgies LLC
24 The sales of securities were issuer transactions within the meaning of CSL
sections 25010 and 25011
25 Defendants and each of them offered and sold the securities i n this state
of California within the meaning of CSL sections 25008 and 25017
26 The Commissioner bas not issued a permit or other form of qualification
authorizing the offer and sale of the securi ties referred to here in in the State of California
27 The offer and sale of securities referred to he rein were not exempt from the
requirement of qualification under CSL section 251 10 Defendants and eac h of them
engaged in unsolicited phone sales cells to persons who were not qualified and had no prior
substantia l existing relationship wi th Defendants
28 Unless enjoined by this Court Defendants will continue to viol ate CSL section
25110
COMPLAINT FOR INJUNCTIVE RELIEF CIVIL PENALTIES AlD ANCILLARY RELIEF
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5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
SECOND CA USE OF ACTION
MISREPRESEJIoTAn ON OR OMISSION OF MUERLL FA CTS IN lOLAnON OF CORPORAnONS CODE SECTION 25401
(AGAIN ST ALL DEFENDANTS)
29 Plaintiff incorporates by reference paragraphs 1 through 28 of this Complaint as
though fully set forth herei n
30 CSL sectio n 25401 states
It is unlawful for any person to offer or sell a security in this state or buy or offer to buy a security in this state by means of any written or oral communication whi ch includes an untrue statement of a material fact or omits to state a material fact necessary in order to make the statements made in the light of the circumstances under which they wer e made not misleading
(Cal Corp Code sect 25401)
31 In offering and selling the securities referred to herein Defendants and each of
them made untrue statements of material fact andor omitted to state material facts to some or all
of the investors The untrue statements andlor omissions include but are not necessarily limited to
the following
A Defendants represen ted they were affiliated with the Disney and Sony corporations
which in fact was not true
B Defendants omitted to disclose to investors and potential investors that Defendant
Hansen was the subject of two Desist and Refrain Orders issued by the Commissioner on February
2 1999 ordering that Defendant Hansen desist and refrain from the further offer or sale of
unqualified non-exempt securities in the State of California and to desist and refrain from the sale
of securities by the use of statements omitting material facts or the use of untrue statements of a
material fact
32 The misstatements and omissions referred to herein were material facts with in
the meaning of CSL section 2540 1 since they concerned matters that a reasonable investor
would consider in deciding whether to invest
33 Defendants offer and sale of securities were by means of misrepresentations and
omissions within the meanin g of CSL section 2540 1
COMPLANT FOR INJUNCTIVE RELIEF CIVIL PENALTIES A-lD ANCILLA RY RELIEF
1
2
3
4
5
6
7
8 c 0 9 ~
ro 0 ~ 10 o
0 ~ 11
U ~ 120 ~
c 13 Q)
E -t 14 ro o Q) 15
0 16
ro c 17 0 ~
~
18 ro U 19 ~
0 Q) 20 ~
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(f) 2 1
22
23
24
25
26
27
28
34 Some or all of Defendants misrepresentations and omissions of material fact took
place in this state of California within the meaning of CSL section 25008
35 Unless enjoined by this Court Defendants will continue to violate CSL section
25401
TIIIRD CAUSE OF ACTION
VIOLATI ON OF PRIOR DES IST AND REFRAIN ORDER ISSUED BY THE COMMISSIOIiER
(AGA INST DEFENDANT ERICK HANSEN BLUERAY T ECHNOLOGIES LLC AND BLUE RAY TECHN OLOGIES I Nc)
36 Plaintiff incorporates by referen ce paragraphs 1 through 35 of this Complaint as
though fully set forth herein
37 CSL section 25532 provides in pertinent part a follows
(a) If in the opinion of the commissioner (1) the sale of a security is subject to qualification under this law and it is being or has been offered or sold without first being qualifie d the commissioner may order the issuer or offeror of the security to desist and refrain from the further offer or sale of the securi ty until qualification has been made under this law
(Cal Corp Code sect 25532 (a))
38 On February 2 1999 the Commissioner issued Desist and Refrain Orders
(tFebruary 1999 Orders) agains t Defendant Hansen and Hansen Entertainment Inc for offering
and selling unqualified non-exempt securities in violation of CSL section 25110 and against
Defendant Hansen and Hansen Entertainment Inc for the offer and sale of securities by means of
written or oral communications which include an untrue statement of a material fact or omits to
state a material fact necessary in order to make the statements made in the light of circumstances
under which they were made not misleading in violation of CSL section 25401 The February
1999 Orders were personally served on Defendant Hansen on February 18 1999
39 Defendant Hansen did not request an administrative heari ng to challenge the
allegations and findings in the Febru ary 1999 Orders The February 1999 Orders are now final
40 Unless enjoined Defendant Hansen and BlueRay Technologies LLC and Blue
Ray Technologies Inc will continue to violate the February 1999 Desist and Refrain Orders issued
-8-
COMPLArNTFOR INJUNCTIVE RELIEF CIVIL PENALTIES AND ANCILLA RY RELIEF
ltJJ
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Q
0 ~
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1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
by the Commissioner
PRAYER FOR RELIEF
WHEREFORE Plaintiff prays for judgment against Defendants BlueRay Technologies
LLC Blue Ray Technologies Inc ERlCK H HANSEN MATTHEW RlCHMOND ROB
REYNOLDS and Does I through 10 inclusively as follows
L INJUNCTIVE RELIEF FOR THE VIOLATIONS
For an Order of Preliminary Injunction and ultimately a Permanent Injunction pursuant
to California Corporations Code section 25530 restraining and enjoining all Defendants from
directly or indirectly
L Violating California Corporations Code section 25110 by offering to sell selling
arranging for the sale of issuing engaging in the business of selling negotiating for the sale of
any security of any kind unless such security or transaction is qualified and is not offered by
means of a general solicitation or cold calls in violation of Regulation D of Rule 506 of the
Securities Act of 1933 as amend ed
2 Violating California Corporations Code section 25401 by offering to sell or selling
securities including but not limited to the securities described in this Complaint by means of any
written or oral communication which includes any untrue statement of material fact or omits or
fails to state any material fact necessary in order to make the statements made in the light of the
circumstances under which they are made not misleading
3 Removing destroying mutilating concealing altering transferrin g or otherwise
disposing of in any manner any books records computer programs computer files computer
printouts correspondence brochures manuals or any other writing or document of any kind
as defined under California Evidence Code section 250 relating to the transactions and course of
conduct as alleged in the complaint of this action unless authorized by this Court and
4 Withdrawing from any company bank accoun t of BlueRay Technologies LLC or
Blue Ray Technologies Inc containing investor funds or disposing of any real or personal
property in their possession custody or control derived from investor funds without leave of the
COMPL ArNTFOR lNJUNCT1VE RELIEF CIVIL PENALTlES AND ANCILLARY RELIEF
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
Ul c 0 -ro 0 ~
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27
28
Court and
5 As to Defendants ERlCK H HANSEN and BLUERAY TECHNOLOGIES LLC
and BLUE RAY TECHNOLOGIES INC for an Order of Preliminary Injunction and ultimately
a Permanent Injunction pursuant to California Corporations Code section 25530 restraining and
enjoining Defendants Hansen BlueRay Technologies LLC and Blue Ray Technologies Inc
from vio lating th e Desist and Refrai n Orders issued by the California Corporations Commissioner
on February 2 1999 by offering and selling unqual ified non-exempt securities in violation of
California Corporations Code section 251 10 and by offerin g or selling by means of any wr in en or
oral communica tion which includes any untrue statement of material fact or omits or fai ls to state
any material fact necessary in order to make the statements made in the light of the circumstances Iunder which they are made not misleading in violation of California Corporations Code section
25401
II RESCISSION AND RESTITUTION
1 For a Final Judgment requiring Defendants to rescind each and all of the unlawful
transactions alleged in this Complaint pursuant to California Corporations Code section 25530
subdivision (b) as shall be determined by this Court to have occurred and further requiring
Defendants to pay full restitution to each person determined to have been subject to the
Defendants acts or practices which constitute violations of the Corporate Securities Law of 1968
in an amount of at least $4000000 or according to proof In addition to pay either the contracted
rate of interest or the legal rate of interest in the amount invested by the investors from the date of
their investments to the date of judgment herein
2 For a Final Judgment requiring Defendants to disgorge pursuant to California
Corporations Code section 25530 (b) to all known investors all benefits received including but
not limited to salaries commission fees profits and any other remuneration derived directly or
indirectly from the actions or practices which constitute violations of the Corporate Securities
Law of 1968
III CIVIL PENALTIES
For a Final Judgment requiring Defendants to pay the Department of Corporations
-1 -
COM PLAINT FOR lNJUN CTIVE RELIEF CIVIL PENALTIES AND ANCILLARY RELIEF
Ul c 0-ro 0 ~
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1
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3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
$25000 00 as a civil penalty for each act in vio lation of the Corporate Securities Law of 1968
pursuant to California Corporations Code section 25535 in an amount of at least $900000 or
accordingto proof
IV OTHER RELIEF
For such otherand furtherrelief as this Court may deem necessary and proper
Dated Ma Y~12008
PRESTON DuFAUCHARD California Corporations Commissioner
By OlIN R DREWS lttorporations Counsel Attorney for the People of California
- 11 -
COMPLAINT FOR INJUNCTIVE RELIEFCIVIL PENALTIES AND ANCILLARY RELIEF
Ul c
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8
9
10
11
12
13
14
15
16
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18
19
20
21
22
23
24
25
26
27
28
SECOND CA USE OF ACTION
MISREPRESEJIoTAn ON OR OMISSION OF MUERLL FA CTS IN lOLAnON OF CORPORAnONS CODE SECTION 25401
(AGAIN ST ALL DEFENDANTS)
29 Plaintiff incorporates by reference paragraphs 1 through 28 of this Complaint as
though fully set forth herei n
30 CSL sectio n 25401 states
It is unlawful for any person to offer or sell a security in this state or buy or offer to buy a security in this state by means of any written or oral communication whi ch includes an untrue statement of a material fact or omits to state a material fact necessary in order to make the statements made in the light of the circumstances under which they wer e made not misleading
(Cal Corp Code sect 25401)
31 In offering and selling the securities referred to herein Defendants and each of
them made untrue statements of material fact andor omitted to state material facts to some or all
of the investors The untrue statements andlor omissions include but are not necessarily limited to
the following
A Defendants represen ted they were affiliated with the Disney and Sony corporations
which in fact was not true
B Defendants omitted to disclose to investors and potential investors that Defendant
Hansen was the subject of two Desist and Refrain Orders issued by the Commissioner on February
2 1999 ordering that Defendant Hansen desist and refrain from the further offer or sale of
unqualified non-exempt securities in the State of California and to desist and refrain from the sale
of securities by the use of statements omitting material facts or the use of untrue statements of a
material fact
32 The misstatements and omissions referred to herein were material facts with in
the meaning of CSL section 2540 1 since they concerned matters that a reasonable investor
would consider in deciding whether to invest
33 Defendants offer and sale of securities were by means of misrepresentations and
omissions within the meanin g of CSL section 2540 1
COMPLANT FOR INJUNCTIVE RELIEF CIVIL PENALTIES A-lD ANCILLA RY RELIEF
1
2
3
4
5
6
7
8 c 0 9 ~
ro 0 ~ 10 o
0 ~ 11
U ~ 120 ~
c 13 Q)
E -t 14 ro o Q) 15
0 16
ro c 17 0 ~
~
18 ro U 19 ~
0 Q) 20 ~
ro ~
(f) 2 1
22
23
24
25
26
27
28
34 Some or all of Defendants misrepresentations and omissions of material fact took
place in this state of California within the meaning of CSL section 25008
35 Unless enjoined by this Court Defendants will continue to violate CSL section
25401
TIIIRD CAUSE OF ACTION
VIOLATI ON OF PRIOR DES IST AND REFRAIN ORDER ISSUED BY THE COMMISSIOIiER
(AGA INST DEFENDANT ERICK HANSEN BLUERAY T ECHNOLOGIES LLC AND BLUE RAY TECHN OLOGIES I Nc)
36 Plaintiff incorporates by referen ce paragraphs 1 through 35 of this Complaint as
though fully set forth herein
37 CSL section 25532 provides in pertinent part a follows
(a) If in the opinion of the commissioner (1) the sale of a security is subject to qualification under this law and it is being or has been offered or sold without first being qualifie d the commissioner may order the issuer or offeror of the security to desist and refrain from the further offer or sale of the securi ty until qualification has been made under this law
(Cal Corp Code sect 25532 (a))
38 On February 2 1999 the Commissioner issued Desist and Refrain Orders
(tFebruary 1999 Orders) agains t Defendant Hansen and Hansen Entertainment Inc for offering
and selling unqualified non-exempt securities in violation of CSL section 25110 and against
Defendant Hansen and Hansen Entertainment Inc for the offer and sale of securities by means of
written or oral communications which include an untrue statement of a material fact or omits to
state a material fact necessary in order to make the statements made in the light of circumstances
under which they were made not misleading in violation of CSL section 25401 The February
1999 Orders were personally served on Defendant Hansen on February 18 1999
39 Defendant Hansen did not request an administrative heari ng to challenge the
allegations and findings in the Febru ary 1999 Orders The February 1999 Orders are now final
40 Unless enjoined Defendant Hansen and BlueRay Technologies LLC and Blue
Ray Technologies Inc will continue to violate the February 1999 Desist and Refrain Orders issued
-8-
COMPLArNTFOR INJUNCTIVE RELIEF CIVIL PENALTIES AND ANCILLA RY RELIEF
ltJJ
-0C
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Q
0 ~
-U0-c OJ E t ro Q OJ
0
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(-f)
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
by the Commissioner
PRAYER FOR RELIEF
WHEREFORE Plaintiff prays for judgment against Defendants BlueRay Technologies
LLC Blue Ray Technologies Inc ERlCK H HANSEN MATTHEW RlCHMOND ROB
REYNOLDS and Does I through 10 inclusively as follows
L INJUNCTIVE RELIEF FOR THE VIOLATIONS
For an Order of Preliminary Injunction and ultimately a Permanent Injunction pursuant
to California Corporations Code section 25530 restraining and enjoining all Defendants from
directly or indirectly
L Violating California Corporations Code section 25110 by offering to sell selling
arranging for the sale of issuing engaging in the business of selling negotiating for the sale of
any security of any kind unless such security or transaction is qualified and is not offered by
means of a general solicitation or cold calls in violation of Regulation D of Rule 506 of the
Securities Act of 1933 as amend ed
2 Violating California Corporations Code section 25401 by offering to sell or selling
securities including but not limited to the securities described in this Complaint by means of any
written or oral communication which includes any untrue statement of material fact or omits or
fails to state any material fact necessary in order to make the statements made in the light of the
circumstances under which they are made not misleading
3 Removing destroying mutilating concealing altering transferrin g or otherwise
disposing of in any manner any books records computer programs computer files computer
printouts correspondence brochures manuals or any other writing or document of any kind
as defined under California Evidence Code section 250 relating to the transactions and course of
conduct as alleged in the complaint of this action unless authorized by this Court and
4 Withdrawing from any company bank accoun t of BlueRay Technologies LLC or
Blue Ray Technologies Inc containing investor funds or disposing of any real or personal
property in their possession custody or control derived from investor funds without leave of the
COMPL ArNTFOR lNJUNCT1VE RELIEF CIVIL PENALTlES AND ANCILLARY RELIEF
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
Ul c 0 -ro 0 ~
a 0 0 -0
~
~
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= ro
-00 Q)
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27
28
Court and
5 As to Defendants ERlCK H HANSEN and BLUERAY TECHNOLOGIES LLC
and BLUE RAY TECHNOLOGIES INC for an Order of Preliminary Injunction and ultimately
a Permanent Injunction pursuant to California Corporations Code section 25530 restraining and
enjoining Defendants Hansen BlueRay Technologies LLC and Blue Ray Technologies Inc
from vio lating th e Desist and Refrai n Orders issued by the California Corporations Commissioner
on February 2 1999 by offering and selling unqual ified non-exempt securities in violation of
California Corporations Code section 251 10 and by offerin g or selling by means of any wr in en or
oral communica tion which includes any untrue statement of material fact or omits or fai ls to state
any material fact necessary in order to make the statements made in the light of the circumstances Iunder which they are made not misleading in violation of California Corporations Code section
25401
II RESCISSION AND RESTITUTION
1 For a Final Judgment requiring Defendants to rescind each and all of the unlawful
transactions alleged in this Complaint pursuant to California Corporations Code section 25530
subdivision (b) as shall be determined by this Court to have occurred and further requiring
Defendants to pay full restitution to each person determined to have been subject to the
Defendants acts or practices which constitute violations of the Corporate Securities Law of 1968
in an amount of at least $4000000 or according to proof In addition to pay either the contracted
rate of interest or the legal rate of interest in the amount invested by the investors from the date of
their investments to the date of judgment herein
2 For a Final Judgment requiring Defendants to disgorge pursuant to California
Corporations Code section 25530 (b) to all known investors all benefits received including but
not limited to salaries commission fees profits and any other remuneration derived directly or
indirectly from the actions or practices which constitute violations of the Corporate Securities
Law of 1968
III CIVIL PENALTIES
For a Final Judgment requiring Defendants to pay the Department of Corporations
-1 -
COM PLAINT FOR lNJUN CTIVE RELIEF CIVIL PENALTIES AND ANCILLARY RELIEF
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9
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13
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16
17
18
19
20
21
22
23
24
25
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27
28
$25000 00 as a civil penalty for each act in vio lation of the Corporate Securities Law of 1968
pursuant to California Corporations Code section 25535 in an amount of at least $900000 or
accordingto proof
IV OTHER RELIEF
For such otherand furtherrelief as this Court may deem necessary and proper
Dated Ma Y~12008
PRESTON DuFAUCHARD California Corporations Commissioner
By OlIN R DREWS lttorporations Counsel Attorney for the People of California
- 11 -
COMPLAINT FOR INJUNCTIVE RELIEFCIVIL PENALTIES AND ANCILLARY RELIEF
1
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34 Some or all of Defendants misrepresentations and omissions of material fact took
place in this state of California within the meaning of CSL section 25008
35 Unless enjoined by this Court Defendants will continue to violate CSL section
25401
TIIIRD CAUSE OF ACTION
VIOLATI ON OF PRIOR DES IST AND REFRAIN ORDER ISSUED BY THE COMMISSIOIiER
(AGA INST DEFENDANT ERICK HANSEN BLUERAY T ECHNOLOGIES LLC AND BLUE RAY TECHN OLOGIES I Nc)
36 Plaintiff incorporates by referen ce paragraphs 1 through 35 of this Complaint as
though fully set forth herein
37 CSL section 25532 provides in pertinent part a follows
(a) If in the opinion of the commissioner (1) the sale of a security is subject to qualification under this law and it is being or has been offered or sold without first being qualifie d the commissioner may order the issuer or offeror of the security to desist and refrain from the further offer or sale of the securi ty until qualification has been made under this law
(Cal Corp Code sect 25532 (a))
38 On February 2 1999 the Commissioner issued Desist and Refrain Orders
(tFebruary 1999 Orders) agains t Defendant Hansen and Hansen Entertainment Inc for offering
and selling unqualified non-exempt securities in violation of CSL section 25110 and against
Defendant Hansen and Hansen Entertainment Inc for the offer and sale of securities by means of
written or oral communications which include an untrue statement of a material fact or omits to
state a material fact necessary in order to make the statements made in the light of circumstances
under which they were made not misleading in violation of CSL section 25401 The February
1999 Orders were personally served on Defendant Hansen on February 18 1999
39 Defendant Hansen did not request an administrative heari ng to challenge the
allegations and findings in the Febru ary 1999 Orders The February 1999 Orders are now final
40 Unless enjoined Defendant Hansen and BlueRay Technologies LLC and Blue
Ray Technologies Inc will continue to violate the February 1999 Desist and Refrain Orders issued
-8-
COMPLArNTFOR INJUNCTIVE RELIEF CIVIL PENALTIES AND ANCILLA RY RELIEF
ltJJ
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7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
by the Commissioner
PRAYER FOR RELIEF
WHEREFORE Plaintiff prays for judgment against Defendants BlueRay Technologies
LLC Blue Ray Technologies Inc ERlCK H HANSEN MATTHEW RlCHMOND ROB
REYNOLDS and Does I through 10 inclusively as follows
L INJUNCTIVE RELIEF FOR THE VIOLATIONS
For an Order of Preliminary Injunction and ultimately a Permanent Injunction pursuant
to California Corporations Code section 25530 restraining and enjoining all Defendants from
directly or indirectly
L Violating California Corporations Code section 25110 by offering to sell selling
arranging for the sale of issuing engaging in the business of selling negotiating for the sale of
any security of any kind unless such security or transaction is qualified and is not offered by
means of a general solicitation or cold calls in violation of Regulation D of Rule 506 of the
Securities Act of 1933 as amend ed
2 Violating California Corporations Code section 25401 by offering to sell or selling
securities including but not limited to the securities described in this Complaint by means of any
written or oral communication which includes any untrue statement of material fact or omits or
fails to state any material fact necessary in order to make the statements made in the light of the
circumstances under which they are made not misleading
3 Removing destroying mutilating concealing altering transferrin g or otherwise
disposing of in any manner any books records computer programs computer files computer
printouts correspondence brochures manuals or any other writing or document of any kind
as defined under California Evidence Code section 250 relating to the transactions and course of
conduct as alleged in the complaint of this action unless authorized by this Court and
4 Withdrawing from any company bank accoun t of BlueRay Technologies LLC or
Blue Ray Technologies Inc containing investor funds or disposing of any real or personal
property in their possession custody or control derived from investor funds without leave of the
COMPL ArNTFOR lNJUNCT1VE RELIEF CIVIL PENALTlES AND ANCILLARY RELIEF
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
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Court and
5 As to Defendants ERlCK H HANSEN and BLUERAY TECHNOLOGIES LLC
and BLUE RAY TECHNOLOGIES INC for an Order of Preliminary Injunction and ultimately
a Permanent Injunction pursuant to California Corporations Code section 25530 restraining and
enjoining Defendants Hansen BlueRay Technologies LLC and Blue Ray Technologies Inc
from vio lating th e Desist and Refrai n Orders issued by the California Corporations Commissioner
on February 2 1999 by offering and selling unqual ified non-exempt securities in violation of
California Corporations Code section 251 10 and by offerin g or selling by means of any wr in en or
oral communica tion which includes any untrue statement of material fact or omits or fai ls to state
any material fact necessary in order to make the statements made in the light of the circumstances Iunder which they are made not misleading in violation of California Corporations Code section
25401
II RESCISSION AND RESTITUTION
1 For a Final Judgment requiring Defendants to rescind each and all of the unlawful
transactions alleged in this Complaint pursuant to California Corporations Code section 25530
subdivision (b) as shall be determined by this Court to have occurred and further requiring
Defendants to pay full restitution to each person determined to have been subject to the
Defendants acts or practices which constitute violations of the Corporate Securities Law of 1968
in an amount of at least $4000000 or according to proof In addition to pay either the contracted
rate of interest or the legal rate of interest in the amount invested by the investors from the date of
their investments to the date of judgment herein
2 For a Final Judgment requiring Defendants to disgorge pursuant to California
Corporations Code section 25530 (b) to all known investors all benefits received including but
not limited to salaries commission fees profits and any other remuneration derived directly or
indirectly from the actions or practices which constitute violations of the Corporate Securities
Law of 1968
III CIVIL PENALTIES
For a Final Judgment requiring Defendants to pay the Department of Corporations
-1 -
COM PLAINT FOR lNJUN CTIVE RELIEF CIVIL PENALTIES AND ANCILLARY RELIEF
Ul c 0-ro 0 ~
CL
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7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
$25000 00 as a civil penalty for each act in vio lation of the Corporate Securities Law of 1968
pursuant to California Corporations Code section 25535 in an amount of at least $900000 or
accordingto proof
IV OTHER RELIEF
For such otherand furtherrelief as this Court may deem necessary and proper
Dated Ma Y~12008
PRESTON DuFAUCHARD California Corporations Commissioner
By OlIN R DREWS lttorporations Counsel Attorney for the People of California
- 11 -
COMPLAINT FOR INJUNCTIVE RELIEFCIVIL PENALTIES AND ANCILLARY RELIEF
ltJJ
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8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
by the Commissioner
PRAYER FOR RELIEF
WHEREFORE Plaintiff prays for judgment against Defendants BlueRay Technologies
LLC Blue Ray Technologies Inc ERlCK H HANSEN MATTHEW RlCHMOND ROB
REYNOLDS and Does I through 10 inclusively as follows
L INJUNCTIVE RELIEF FOR THE VIOLATIONS
For an Order of Preliminary Injunction and ultimately a Permanent Injunction pursuant
to California Corporations Code section 25530 restraining and enjoining all Defendants from
directly or indirectly
L Violating California Corporations Code section 25110 by offering to sell selling
arranging for the sale of issuing engaging in the business of selling negotiating for the sale of
any security of any kind unless such security or transaction is qualified and is not offered by
means of a general solicitation or cold calls in violation of Regulation D of Rule 506 of the
Securities Act of 1933 as amend ed
2 Violating California Corporations Code section 25401 by offering to sell or selling
securities including but not limited to the securities described in this Complaint by means of any
written or oral communication which includes any untrue statement of material fact or omits or
fails to state any material fact necessary in order to make the statements made in the light of the
circumstances under which they are made not misleading
3 Removing destroying mutilating concealing altering transferrin g or otherwise
disposing of in any manner any books records computer programs computer files computer
printouts correspondence brochures manuals or any other writing or document of any kind
as defined under California Evidence Code section 250 relating to the transactions and course of
conduct as alleged in the complaint of this action unless authorized by this Court and
4 Withdrawing from any company bank accoun t of BlueRay Technologies LLC or
Blue Ray Technologies Inc containing investor funds or disposing of any real or personal
property in their possession custody or control derived from investor funds without leave of the
COMPL ArNTFOR lNJUNCT1VE RELIEF CIVIL PENALTlES AND ANCILLARY RELIEF
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
Ul c 0 -ro 0 ~
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28
Court and
5 As to Defendants ERlCK H HANSEN and BLUERAY TECHNOLOGIES LLC
and BLUE RAY TECHNOLOGIES INC for an Order of Preliminary Injunction and ultimately
a Permanent Injunction pursuant to California Corporations Code section 25530 restraining and
enjoining Defendants Hansen BlueRay Technologies LLC and Blue Ray Technologies Inc
from vio lating th e Desist and Refrai n Orders issued by the California Corporations Commissioner
on February 2 1999 by offering and selling unqual ified non-exempt securities in violation of
California Corporations Code section 251 10 and by offerin g or selling by means of any wr in en or
oral communica tion which includes any untrue statement of material fact or omits or fai ls to state
any material fact necessary in order to make the statements made in the light of the circumstances Iunder which they are made not misleading in violation of California Corporations Code section
25401
II RESCISSION AND RESTITUTION
1 For a Final Judgment requiring Defendants to rescind each and all of the unlawful
transactions alleged in this Complaint pursuant to California Corporations Code section 25530
subdivision (b) as shall be determined by this Court to have occurred and further requiring
Defendants to pay full restitution to each person determined to have been subject to the
Defendants acts or practices which constitute violations of the Corporate Securities Law of 1968
in an amount of at least $4000000 or according to proof In addition to pay either the contracted
rate of interest or the legal rate of interest in the amount invested by the investors from the date of
their investments to the date of judgment herein
2 For a Final Judgment requiring Defendants to disgorge pursuant to California
Corporations Code section 25530 (b) to all known investors all benefits received including but
not limited to salaries commission fees profits and any other remuneration derived directly or
indirectly from the actions or practices which constitute violations of the Corporate Securities
Law of 1968
III CIVIL PENALTIES
For a Final Judgment requiring Defendants to pay the Department of Corporations
-1 -
COM PLAINT FOR lNJUN CTIVE RELIEF CIVIL PENALTIES AND ANCILLARY RELIEF
Ul c 0-ro 0 ~
CL
0 ~
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8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
$25000 00 as a civil penalty for each act in vio lation of the Corporate Securities Law of 1968
pursuant to California Corporations Code section 25535 in an amount of at least $900000 or
accordingto proof
IV OTHER RELIEF
For such otherand furtherrelief as this Court may deem necessary and proper
Dated Ma Y~12008
PRESTON DuFAUCHARD California Corporations Commissioner
By OlIN R DREWS lttorporations Counsel Attorney for the People of California
- 11 -
COMPLAINT FOR INJUNCTIVE RELIEFCIVIL PENALTIES AND ANCILLARY RELIEF
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
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Court and
5 As to Defendants ERlCK H HANSEN and BLUERAY TECHNOLOGIES LLC
and BLUE RAY TECHNOLOGIES INC for an Order of Preliminary Injunction and ultimately
a Permanent Injunction pursuant to California Corporations Code section 25530 restraining and
enjoining Defendants Hansen BlueRay Technologies LLC and Blue Ray Technologies Inc
from vio lating th e Desist and Refrai n Orders issued by the California Corporations Commissioner
on February 2 1999 by offering and selling unqual ified non-exempt securities in violation of
California Corporations Code section 251 10 and by offerin g or selling by means of any wr in en or
oral communica tion which includes any untrue statement of material fact or omits or fai ls to state
any material fact necessary in order to make the statements made in the light of the circumstances Iunder which they are made not misleading in violation of California Corporations Code section
25401
II RESCISSION AND RESTITUTION
1 For a Final Judgment requiring Defendants to rescind each and all of the unlawful
transactions alleged in this Complaint pursuant to California Corporations Code section 25530
subdivision (b) as shall be determined by this Court to have occurred and further requiring
Defendants to pay full restitution to each person determined to have been subject to the
Defendants acts or practices which constitute violations of the Corporate Securities Law of 1968
in an amount of at least $4000000 or according to proof In addition to pay either the contracted
rate of interest or the legal rate of interest in the amount invested by the investors from the date of
their investments to the date of judgment herein
2 For a Final Judgment requiring Defendants to disgorge pursuant to California
Corporations Code section 25530 (b) to all known investors all benefits received including but
not limited to salaries commission fees profits and any other remuneration derived directly or
indirectly from the actions or practices which constitute violations of the Corporate Securities
Law of 1968
III CIVIL PENALTIES
For a Final Judgment requiring Defendants to pay the Department of Corporations
-1 -
COM PLAINT FOR lNJUN CTIVE RELIEF CIVIL PENALTIES AND ANCILLARY RELIEF
Ul c 0-ro 0 ~
CL
0 ~
0-0-c tD E t ro CL tD
0
ro c 0 ~-ro
0-0
-tD
)
-ro U
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
$25000 00 as a civil penalty for each act in vio lation of the Corporate Securities Law of 1968
pursuant to California Corporations Code section 25535 in an amount of at least $900000 or
accordingto proof
IV OTHER RELIEF
For such otherand furtherrelief as this Court may deem necessary and proper
Dated Ma Y~12008
PRESTON DuFAUCHARD California Corporations Commissioner
By OlIN R DREWS lttorporations Counsel Attorney for the People of California
- 11 -
COMPLAINT FOR INJUNCTIVE RELIEFCIVIL PENALTIES AND ANCILLARY RELIEF
Ul c 0-ro 0 ~
CL
0 ~
0-0-c tD E t ro CL tD
0
ro c 0 ~-ro
0-0
-tD
)
-ro U
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
$25000 00 as a civil penalty for each act in vio lation of the Corporate Securities Law of 1968
pursuant to California Corporations Code section 25535 in an amount of at least $900000 or
accordingto proof
IV OTHER RELIEF
For such otherand furtherrelief as this Court may deem necessary and proper
Dated Ma Y~12008
PRESTON DuFAUCHARD California Corporations Commissioner
By OlIN R DREWS lttorporations Counsel Attorney for the People of California
- 11 -
COMPLAINT FOR INJUNCTIVE RELIEFCIVIL PENALTIES AND ANCILLARY RELIEF
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