Oregon Cannabis Securities Litigation: Another (!) Fraud Lawsuit
The maturation of the Oregon cannabis industry in the past few years has been accompanied by a tremendous increase in mergers and acquisitions and a flood of investment capital into the marketplace. Not surprisingly our commercial litigators have seen a marked increase in the number of securities lawsuits both here in Oregon and elsewhere. As we’ve written about extensively, there is a right way and wrong way to raise capital – whether for marijuana or hemp – and all too frequently we see businesses issue “securities” without taking the appropriate steps to ensure compliance with securities laws or investors get fleeced.
An investor lawsuit recently filed in Multnomah County alleging causes of action under Oregon Securities Laws highlights risks to companies, their owners, and investors. The case is Chung v. Martin et al. (Feel free to email me if you’d like a copy of the complaint). Plaintiff David Chung and his company Elevated Society LLC (together “Plaintiffs”) contend that Defendants Martin, Woodruff, We Clone LLC, and We Close Prospect LLC (together “Defendants”) sold unregistered securities in violation of Oregon law and made untrue statements in connection with the sale of securities in violation of Oregon law. According to