Case 4:12-cv-02075 Document 1 Filed in TXSD on 07/10/12 Page 1 of 16 UNITED STATES DISTRICT COURT SOUTHERN DISTRICT OF TEXAS HOUSTON DIVISION ROBERT MORTON, RICHARD KOESTER, RUBEN G. PENA, BENEDICT E. ROGERS, JERRY D. BARTON, DONNA BARNHART, KEVIN BARNHART, PHILLIP DAMIAN, and DEBRA THIBODEAUX INDIVIDUALLY AND COLLECTIVELY AS REPRESENTATIVES OF THE IWECO INC. STOCK OPTION PLAN Plaintiffs NO. v. AMERICAN CAPITAL STRATEGIES LIMITED, JOHN F. COGGIN, MICHAEL R. LOGAN, KARL JOSEPH THOMA, MICHAEL STODDARD and 8350 MOSLEY CORPORATION f/k/a AERIFORM CORPORATION f/k/a IWECO, INC., Defendants PLAINTIFFS ORIGINAL COMPLAINT TO THE HONORABLE JUDGE OF SAID COURT: COME NOW, Plaintiffs, individually and collectively as representatives of IWECO Inc. Stock Ownership Plan, Robert Morton, Richard Koester, Ruben G. Pena, Benedict E. Rogers, Jerry D. Barton, Donna Barnhart, Kevin Barnhart, Phillip Damian, and Debra Thibodeaux, in the above-styled and numbered case, complain of the Defendants, American Capital Strategies Limited, John F. Coggin, Michael R. Logan, Karl Joseph Thoma, Michael Stoddard, and 8350 Mosley Corporation f/k/a Aeriform Corporation f/k/a IWECO (hereinafter Aeriform ), and for cause of action would respectfully show the court and jury as follows: 1
Case 4:12-cv-02075 Document 1 Filed in TXSD on 07/10/12 Page 2 of 16 I. NATURE OF THE ACTION 1. Plaintiffs bring this action as former employees of 8350 Moseley Corporation f/k/a Aeriform Corporation f/k/a IWECO, Inc. (hereinafter Aeriform ) whose majority shareholder was American Capital Strategies Limited, who were participants in the IWECO, Inc. Stock Ownership Plan (hereinafter ESOP ). 2. The facts demonstrate that the Defendants wasted the ESOP trust fund to enrich themselves at the expense of the Plaintiff-employees. 3. The Defendants were responsible for safeguarding the assets of the Plaintiffemployees and are liable for breaching their fiduciary duties under the Employment Retirement Income Security Act of 1974 (hereinafter ERISA ) 404(a), 405(a) (29 U.S.C. 1104(a), 1105(a)). These Defendants breached their duties of prudence, care and loyalty by, inter alia, imprudently permitting and/or causing the dramatic decline in the value of shares held by the Plaintiff-employees pursuant to ESOP. In the end, the Plaintiff-employees lost a large portion, if not all, of their retirement accounts and much of their life savings due to defendants' malfeasance and wrongful acts. II. JURISDICTION & VENUE 4. The Court has subject matter jurisdiction over this action under ERISA pursuant to 20 U.S.C. 1132(e)(1) and as a federal question pursuant to 28 U.S.C. 1331. 5. Venue is properly laid in this district pursuant to ERISA 502(e)(2) (29 U.S.C. 1132(e)(2)). Venue is also proper in this district under 28 U.S.C. 1391(b) and 9c) because substantial acts in furtherance of the alleged misconduct and/or its effects have occurred within 2
Case 4:12-cv-02075 Document 1 Filed in TXSD on 07/10/12 Page 3 of 16 this District, one or more of the Plaintiffs are domiciled in this district, and, upon information and belief, many of the Defendants are also domiciled and/or maintain offices and/or principal places of business in this District. III. PARTIES 6. The Plaintiff, Robert Morton, is an individual residing in Harris County, Texas. 7. The Plaintiff, Richard Koester, is an individual residing in Toledo, Ohio. 8. The Plaintiff, Ruben G. Pena, is an individual residing in Harris County, Texas. 9. The Plaintiff, Benedict E. Rogers, is an individual residing in Harris County, Texas. 10. The Plaintiff, Jerry D. Barton, is an individual residing in Harris County, Texas. 11. The Plaintiff, Donna Barnhart, is an individual residing in Calhoun County, Texas. 12. The Plaintiff, Kevin Barnhart, is an individual residing in Calhoun County, Texas. 13. The Plaintiff, Phillip Damian, is an individual residing in Montgomery County, Texas. 14. The Plaintiff, Debra Thibodeaux, is an individual residing in Harris County, Texas. 15. The Defendant, American Capital (hereinafter "ACS"), formally known as American Capital Strategies Limited, upon information and belief, is a multi-national investment company headquartered in Bethesda, Maryland, at 2 Bethesda Metro Center, 14 th Floor, Bethesda, Maryland 20814. Defendant is registered to do business in the State of Texas. A true and correct copy of this pleading may be served on its registered agent for service of process, CT 3
Case 4:12-cv-02075 Document 1 Filed in TXSD on 07/10/12 Page 4 of 16 Corporation System, 350 N. St. Paul Street, Dallas, Texas 75201. American Capital is a party in interest pursuant to ERISA within the meaning of 29 U.S.C. 1002(14). 16. The Defendant, John F. Coggin, upon information and belief, is an individual residing in Harris County, Texas. A true and correct copy of this pleading may be served at his address at 2517 Nasa Parkway, Seabrook, Harris County, Texas 77586. 17. The Defendant, Michael R. Logan, upon information and belief, is an individual residing in Harris County, Texas. A true and correct copy of this pleading may be served at his address at 2902 Cedar Placid Circle, Houston, Texas 77068. 18. The Defendant, Karl Joseph Thoma, upon information and belief, is an individual residing in Port Saint Lucie, Florida. A true and correct copy of this pleading may be served at his address 7239 Reserve Creek Drive, Port Saint Lucie, Florida 34986. 19. The Defendant, Michael Stoddard, upon information and belief, is an individual residing in Cambridge, Maryland. A true and correct copy of this pleading may be served at his address 307 High Street, Apt. 203, Cambridge, Dorchester County, Maryland 21613. 20. The Defendant, Aeriform Corporation, upon information and belief, is a foreign corporation doing business in the state of Texas. A true and correct copy of this pleading may be served on Aeriform c/o 8350 Mosley Corporation, 7239 Reserve Creek Drive, Port St. Lucie, Florida 34986. Aeriform Corporation is a party in interest pursuant to ERISA within the meaning of 29 U.S.C. 1002(14). 4
Case 4:12-cv-02075 Document 1 Filed in TXSD on 07/10/12 Page 5 of 16 IV. FACTUAL ALLEGATIONS 21. Aeriform is or was a Texas based company formerly engaged in the manufacturing and distribution of industrial gases. It was formerly named IWECO which was, at the time, a subsidiary of Union Carbide Corporation. In October of 1990, IWECO was purchased by its employees pursuant to an employee stock ownership plan (the ESOP). The plan was established for the exclusive benefit of all its employees and their beneficiaries. On January 18, 1993, the company executed an amended and restated ESOP document retroactive to October 3, 1990. 22. The company submitted the restated ESOP to the Internal Revenue Service for a determination letter in 1993. The IRS issued a favorable determination for the ESOP in February, 1994 subject to the adoption of an amendment by the corporation. The amendment was adopted by the company on March 23, 1994. The creation of the ESOP permitted the employees to purchase IWECO from Union Carbide. The ESOP also allowed employees to accumulate company stock for their retirement and provided additional benefits in the event of death, total disability, or other termination of employment. The Plaintiffs are or were all participants in the ESOP. 23. In 1996, IWECO changed its name to Aeriform Corporation. Management of Aeriform began making various acquisitions which were financed by borrowing from the Defendant, American Capital Strategies Limited, at above market interest rates. Pursuant to these loan agreements, American Capital Strategies Limited acquired warrants to Aeriform stock. American Capital Strategies Limited exercised these warrants, eventually becoming the majority shareholder in Aeriform, and was able to appoint members to the Board of Directors of 5
Case 4:12-cv-02075 Document 1 Filed in TXSD on 07/10/12 Page 6 of 16 Aeriform. On information and belief, these loans for American Capital Strategies Limited were at very high interest rates and were designed as a loan to own scheme. By 2004, American Capital Strategies Limited had appointed enough directors to control the board of Aeriform Corporation. Several members of the Aeriform and ACS management received large bonuses out of the loan transactions from American Capital Strategies Limited. 24. Defendants, Coggin and Logan and others, participated in these bonuses. The affect of the accumulation of debt, bonuses paid to the corporate officers and the exorbitant interest rate paid to American Capital resulted in a dramatic decline in the value of shares held by the employees pursuant to ESOP. The share value dropped from $37.50 in 1998 to $0.03 in 2004. The employees were not notified of the September 30, 2004 value of their stock until April 12, 2006 when they received their ESOP account statement for the plan year ending September 30, 2004. At that time, they were advised that the drop in the company stock was primarily the result of company debt level and market condition. In 2007, the Board of Directors which was controlled by American Capital Strategies Limited sold the assets of the corporation to Airgas Corporation for approximately $90,000,000.00. The proceeds of the sale went entirely to American Capital Strategies Limited for repayment of debt, interest and other obligations -- resulting in a windfall profit to ACS while the ESOP members were left with worthless stock. Mr. Thoma and other fiduciaries failed to exercise their fiduciary duties and allowed the ESOP funds to be wasted without appropriate action or oversight. 25. Sometime on or around July 15, 2009, Plaintiffs were notified in a letter written by ESOP Trustee and American Capital Strategies CFO, Defendant Karl Joe Thoma, of the dissolution of Aeriform. Although dated July 15, 2009, the letter was nor received by many of the ESOP members until early 2010. The letter also informed Plaintiffs that as a result of the 6
Case 4:12-cv-02075 Document 1 Filed in TXSD on 07/10/12 Page 7 of 16 dissolution, all claims against the company were to be paid in full in order of priority. The letter further went on to state that there were insufficient funds to satisfy all claims, thus no assets were left to be distributed to Plaintiffs as stockholders of the Corporation. As a direct result of the action of the Defendants, the company stock was worthless and the participating employees of Aeriform lost their entire retirement account savings. Many of these employees had worked more than 20 years to accumulate company stock pursuant to the ESOP plan by making contributions every month out of their salaries. The Plaintiffs and other participants of the ESOP plan were left with nothing. V. CAUSE OF ACTION COUNT I THE DEFENDANTS OWED FIDUCIARY AND CO-FIDUCIARY DUTIES TO PLAINTIFFS 26. Plaintiffs incorporate by reference all of the preceding paragraphs of this Complaint as if set forth fully herein. 27. The ESOP never qualified as a 404(c) Plan. 28. The ESOP is not and has never been a 404(c) Plan, i.e., a plan that complies with regulations promulgated by the Defendant of Labor under ERISA 404(c), 29 U.S.C. 1104(c) and purports to relieve the plan s fiduciaries of liability for the results of participants exercise of control over their investment decisions. In order to qualify as a 404(c) plan, a plan must provide plan participants with a broad range of diversified investment options, liberal opportunities to transfer assets among allocations, and sufficient information to make sound investment decisions. 29 C.F.R. 2550.404c. At all times relevant to this action, the ESOP did not satisfy those requirements. Equally important, such a plan must put participants explicitly on 7
Case 4:12-cv-02075 Document 1 Filed in TXSD on 07/10/12 Page 8 of 16 notice that it intends to qualify under 404(c). Id This is also something the ESOP has never done. 29. The failure of the ESOP to qualify as a 404(c) plan means that at all times Defendants in charge of the ESOP including the Trustees, Directors, and Executives were and are liable in their capacities as fiduciaries for the results of all investment decisions taken with respect to the ESOP s assets, including decisions ostensibly made, in whole or in part, by ESOP participants themselves. 30. At all relevant times, American Capital Strategies Limited, and each named Defendant, was (and acted as) a fiduciary within the meaning of ERISA 3(21)(A), 29 U.S.C. 1002(21)(A) with respect to the ESOP. 31. ERISA imposes strict fiduciary duties upon plan fiduciaries. ERISA 404(a), 29 U.S.C. 1104(a), states, in relevant part, that: [A] fiduciary shall discharge his duties with respect to a plan solely in the interest of the participants and beneficiaries and 1. for the exclusive purpose of (i) (ii) (B) (C) (D) providing benefits to participants and their beneficiaries; and defraying reasonable expenses of administering the plan; with the care, skill, prudence, and diligence under the circumstances then prevailing that a prudent man acting in a like capacity and familiar with such matters would use in the conduct of an enterprise of like character and with like aims; by diversifying the investments of the plan so as to minimize the risk of large losses, unless under the circumstances it is clearly prudent not to do so; and in accordance with the documents and instruments governing the plan insofar as such documents and instruments are consistent with the provisions of this title and Title IV. 8
Case 4:12-cv-02075 Document 1 Filed in TXSD on 07/10/12 Page 9 of 16 32. ERISA fiduciaries have a duty to speak truthfully, to not mislead participants and to disclose truthful information on their own initiative when participants need such information to exercise their rights under the plan. 33. At all relevant times, Defendants also were co-fiduciaries of the other Defendants within the meaning of ERISA 405, 29 U.S.C. 1105. ERISA 405, 29 U.S.C. 1105, states, in relevant part, that: In addition to any liability which he may have under any other provision of this part, a fiduciary with respect to a plan shall be liable for a breach of fiduciary responsibility of another fiduciary with respect to the same plan in the following circumstances: (1) if he participates knowingly in, or knowingly undertakes to conceal, an act or omission of such other fiduciary, knowing such act or omission is a breach; or (2) if, by his failure to comply with section 404(a)(1) in the administration of his specific responsibilities which give rise to his status as a fiduciary, he has enabled such other fiduciary to commit a breach; or (3) if he has knowledge of a breach by such other fiduciary, unless he makes reasonable efforts under the circumstances to remedy the breach. 34. Each Defendant knowingly participated in these fiduciary breaches of its cofiduciaries, enabled its co-fiduciaries to commit such fiduciary breaches by its own failure to comply with the provisions of ERISA 404(a), 29 U.S.C. 1104(a), and had knowledge of the breaches of its co-fiduciaries and failed to make reasonable efforts to remedy such breaches as detailed herein. 35. In addition to their liability as fiduciaries, Defendants have liability, to the extent they acted with respect to the Plan in a non-fiduciary capacity, as a knowing participant in the fiduciary breaches of the other Defendants. American Capital Strategies Limited was and is a party in interest to the Plan within the meaning of ERISA; 3(14), 29 U.S.C. 1002(14), because it was and is (a) a fiduciary of the ESOP; (b) a person providing services to the Plan; (c) 9
Case 4:12-cv-02075 Document 1 Filed in TXSD on 07/10/12 Page 10 of 16 an employer with some employees covered by the Plan; and/or (d) a corporation fifty percent or more which is owned directly or indirectly by persons described in subparagraphs (a), (b), or (c). As such, they had a duty under ERISA 502(a)(3), 29 U.S.C. 1132(a)(3) to refrain from participating in any breaches of fiduciary duty with respect to the ESOP when, as here, it had actual or constructive knowledge of such breaches. 36. Defendants knowingly participated in their own and the other ESOP fiduciaries breaches described above, with actual or constructive knowledge of those breaches, in violation of ERISA 502(a)(3), 29 U.S.C. 1132(a)(3). 37. But for these breaches of fiduciary duty, the Plaintiffs retirement assets would not have been wasted but rather, would have been invested in the most profitable alternative investment available. 38. As a direct and proximate result of the breaches of fiduciary duty alleged herein, the Plaintiff-employees lost their entire value in the ESOP. 39. Pursuant to ERISA 502(a)(2), 29 U.S.C. 1132(a)(2) and 29 U.S.C. 1109(a), Defendants are liable to restore the losses caused by the Defendants breaches of their fiduciary duties. COUNT II THE DEFENDANTS BREACHED THEIR FIDUCIARY DUTY TO MONITOR THE PLAN AND THEIR FIDUCIARY DUTY OF LOYALTY TO THE PLAN (ERISA duty of prudence ERISA 404(a)(1)(A)-(B), 29 U.S.C. 1104(a)(1)(A)-(B) 40. Plaintiffs incorporate the allegations contained in the previous paragraphs of this Complaint as if set forth fully herein. 41. The Defendants breached their fiduciary duties by failing to monitor the activities of the day to day ESOP manager, and by abdicating their role as fiduciaries of all participants to 10
Case 4:12-cv-02075 Document 1 Filed in TXSD on 07/10/12 Page 11 of 16 include those who were last employed by IWECO, Inc. (i.e. the IWECO, Inc. Participants / Plaintiff-employees). 42. At the time of and around the events previously described, Defendants and their respective agent and representative failed to ensure the prudence of the IWECO, Inc. stock as a plan investment and indeed directly or indirectly failed to exercise their duty to monitor the activities of the company and the ESOP plan. 43. Defendants failed to inform the plan participants, misrepresented material facts to the plan participants and/or concealed from the participants that the ESOP was being wasted. Defendants failed to act solely in the interest of the participants for the exclusive purpose of providing [them] benefits (ERISA duty of loyalty) and with the care, skill, prudence, and diligence under the circumstances then prevailing that a prudent [person] acting in a like capacity and familiar with such matters would use (ERISA duty of prudence). ERISA 404(a)(1)(A)- (B), 29 U.S.C. 1104(a)(1)(A)-(B). 44. As ESOP Trustee, and under the ESOP Trust Agreement, Defendant Karl Joe Thoma and other fiduciaries breached his/their duty to bring a derivative action based on his knowledge of the Defendants breach of fiduciary duties referenced within. 45. Pursuant to ERISA 502(a)(2), 29 U.S.C. 1132(a)(2) and 20 U.S.C. 1109(a), Defendants are liable to restore the losses caused by the Defendants breaches of their fiduciary duties. COUNT III FAILURE TO MONITOR THE PLANS INVESTING FIDUCIARIES AND/OR FAILURE TO DISCLOSE TO THE INVESTING FIDUCIARIES MATERIAL FACTS 46. Plaintiffs incorporate by reference all of the preceding paragraphs of this Complaint as if set forth fully herein. 11
Case 4:12-cv-02075 Document 1 Filed in TXSD on 07/10/12 Page 12 of 16 47. At all relevant times, Defendants acted as fiduciaries, within the meaning of ERISA 3(21)(A), 29 U.S.C. 1002(21)(A) with respect to the ESOP to the extent that they were charged with, responsible for, and/or otherwise assumed, the duty of selecting, monitoring, and, when and if necessary, removing other Defendant fiduciaries. Included in these Defendants duties was the duty to monitor the manner in which other fiduciaries were investing the ESOP s assets. 48. Defendants had an affirmative duty to disclose to the investing fiduciaries such material facts about the financial condition of IWECO, Inc., that these Defendants knew or should have known the investing fiduciaries needed in order to make sufficiently-informed decisions, based on accurate information, concerning those investments. 49. At all relevant times, each Defendant also was, and acted as, a co-fiduciary of the other Defendants and the other Plan fiduciaries within the meaning of ERISA 405, 20 U.S.C. 1105. 50. All of the Defendants breached the fiduciary duties and co-fiduciary duties they owed Plaintiffs, the ESOP, and the IWECO, Inc. Participants and beneficiaries by: (i) appointing fiduciaries to manage Plan assets who these Defendants knew or should have known were not qualified to loyally and prudently manage the ESOP s assets; (ii) failing to adequately monitor the investing fiduciaries investment of ESOP assets; (iii) failing to adequately monitor the ESOP s other fiduciaries implementation of the terms of the Plans, including but not limited to the investment of assets; (iv) failing to disclose to the investing fiduciaries material facts concerning the financial condition of IWECO, Inc., that they knew or should have known were material to loyal and prudent investment decisions concerning the use of IWECO, Inc. s stock or to implement the terms of the ESOP; (v) failing to remove fiduciaries who they knew or should 12
Case 4:12-cv-02075 Document 1 Filed in TXSD on 07/10/12 Page 13 of 16 have known were not qualified to loyally and prudently manage the ESOP s assets; (vi) knowingly participating in the investing fiduciaries breaches by accepting the benefits of those known breaches, both personally and on behalf of other Defendants; (vii) failing to remedy those fiduciaries breaches, having knowledge of them. 51. Pursuant to ERISA 502(a)(2), 29 U.S.C. 1132(a)(2) and ERISA 409(a), 29 U.S.C. 1109(a), Defendants are liable to restore the losses suffered by the Plaintiffs. COUNT IV DEFENDANTS' VIOLATED Section 10(b) of the Securities Act of 1934, THE TEXAS SECURITIES ACT and 17 C.F.R. Section 240.10(b)5) 52. Plaintiffs incorporate by reference all of the preceding paragraphs of this Complaint as if fully set forth herein. 53. The Defendants made materially false or misleading statements or omitted to state material facts necessary to make a statement not misleading, in the following particulars: a. Between the years 1998 and 2004, there was a minimal disclosure to ESOP participants concerning Aeriform s financial condition. ACS, for all intents and purposes, began running the company in 2004 and communication concerning the stockholder s financial position ceased at this time. b. Defendants ACS and Karl Joe Thoma and other fiduciaries failed to notify Aeriform employees of the September 30, 2004 value of Aeriform stock until April 20, 2006; c. Defendants misrepresented the value of the stock and financial condition of the company; d. Defendants generally failed to keep the plan members informed. 54. At the time the 10(b)(5) Defendants made these material false statements and/or material omissions they intended to deceive Plaintiffs and other ESOP participants. 55. Plaintiffs were ignorant of the falsity of the representations and were ignorant of the existence of the facts that were omitted and relied on these statements by the Defendants. 13
Case 4:12-cv-02075 Document 1 Filed in TXSD on 07/10/12 Page 14 of 16 56. Plaintiffs relied on and were damaged by these materials false statements and/or material omissions as set forth herein. 57. The transactions described herein constitute transactions involving the sale or exchange of a security as that term is defined by the Texas courts. Defendants' conduct, in particular their misrepresentations, were designed, directly or indirectly, with the intent to deceive or defraud or with reckless disregard for the truth. Therefore, under the Texas Securities Act, these Defendants who aided in the wasting of the ESOP assets are jointly and severally liable to the same extent as if they were the primary violator under the Texas Securities Act. Furthermore, all the defendants were generally aware that false material representations were made. Defendants, jointly and severally, rendered substantial assistance in this violation of the Act and either intended to deceive Plaintiffs or aided one another with reckless disregard for the truth or the law. Furthermore, these Defendants who aided these violations of the Texas Securities Act had a duty to disclose the false material representations under Texas Business and Commerce Code Section 27.01 et. seq. 58. These violations of the Texas Securities Act were a direct and proximate cause of the damages suffered by Plaintiffs as set forth in this complaint. COUNT V DEFENDANT VIOLATED 18 U.S.C. Sects. 1962(c) 59. Plaintiffs incorporate by reference all of the preceding paragraphs of this Complaint as if fully set forth herein. 60. Defendants are persons within the meaning of 18 U.S.C. 1961 (4). 61. From 2004-present the Defendants have engaged in a pattern of racketeering activity by violating 10 U.S.C. 664, which makes it a crime to embezzle, steal, or unlawfully 14
Case 4:12-cv-02075 Document 1 Filed in TXSD on 07/10/12 Page 15 of 16 and willfully abstract moneys, securities or funds from an employee welfare benefit plan. This pattern of racketeering has included the use of the interstate mail system to transmit false and misleading information about the buy-out and merger, to communicate among themselves in furtherance of the conspiracy to defraud Plaintiffs. 62. Defendants used this pattern of racketeering to operate and manage an enterprise engaged in activities affecting interstate commerce, in violation of 18 U.S.C. 1962(c). 63. Defendants actions injured Plaintiffs business and property by depleting Plaintiffs retirement funds. Plaintiffs have sustained damages, including attorneys fees, in an amount that the Court should determine at trial. VI. PRAYER FOR RELIEF WHEREFORE, premises considered the Plaintiffs pray that upon final hearing or trial hereof, the Court enter a Judgment on behalf of the Plaintiffs jointly and severally against the Defendants as herein stated, as follows: A. That this Court order that each of the Defendants are liable to the ESOP and/or Plaintiffs individually for violating the duties, responsibilities and obligations imposed on them as fiduciaries and co-fiduciaries by ERISA. To the extent that recovery under the ERISA claims for breach of fiduciary duties (other than the claim for statutory penalty) can only be received by the ESOP, this request for relief is made on behalf of the ESOP. B. That this Court order all such appropriate equitable relief in order to remedy Defendants willful egregious and repeated violations of the statutory laws of the United States, including but not limited to restitution of Plaintiffs lost benefits, with interest, and equitable apportionment of those benefits to the individual Plaintiffs. 15
Case 4:12-cv-02075 Document 1 Filed in TXSD on 07/10/12 Page 16 of 16 C. That this Court award to Plaintiffs reasonable costs and attorneys fees. D. That this Court grant such other relief as may be just and proper in equity and/or as allowed under ERISA to include any appropriate civil penalties. E. That this Court grant such other and further relief as may be proper under Plaintiffs claims under Section 10(b) of the Securities Act of 1934 and 17 C.F.R. Section 240.10(b)5, and 18 U.S.C. Sects. 1962(c) and the Texas Securities Act. Respectfully submitted, MALONEY MARTIN, L.L.P. By: /s/ Michael J. Maloney. Michael J. Maloney Texas Bar No. 12883550 The Clocktower Building 3401 Allen Parkway, Suite 100 Houston, Texas 77019 713) 759-1600 (telephone) (713) 759-6930 (facsimile) DWAYNE R. DAY, P.C. Dwayne Day Texas Bar No. 00795314 The Clocktower Building 3401 Allen Parkway, Suite 100 Houston, Texas 77019 (713) 284-1618 (telephone) (713) 759-6930 (facsimile) Attorneys for Plaintiffs 16