NEW YORK, May 14, 2014 (GLOBE NEWSWIRE) -- Gardy & Notis, LLP has filed a class action lawsuit in the United States District Court for the District of Massachusetts, Case No. 14-CV-12058, on behalf of Samuel E. Griffith, and all similarly-situated persons and entities who purchased TelexFree "memberships" between January 1, 2012 and the present. The action is brought against the management and top promoters of TelexFree, Inc., TelexFree LLC, TelexFree Financial, Inc., and Telex Mobile Holdings, Inc. (collectively, "TelexFree"), and alleges that the "memberships" offered and sold to Plaintiff and the Class were unregistered securities, the selling of which violated Section 12(a)(1) of the Securities Act of 1933.
The action alleges that TelexFree was an illegal pyramid scheme whereby Defendants offered and/or sold "memberships" that promised investment returns of over 200% per year and did not require investors to perform any actual work or sell any TelexFree product.
On April 14, 2014, TelexFree filed for Chapter 11 bankruptcy, admitting that it cannot meet its obligations to its members and sought authority to reject all its current obligations to Class members. On April 15, 2014, the United States Securities and Exchange Commission filed an action in the District of Massachusetts against TelexFree and the same Defendants for securities fraud in violation of Section 10(b) of the Securities Exchange Act of 1934, fraud in the offer or sale of securities, in violation of Section 17(a) of the Securities Act of 1933 (the "Securities Act"), and for the offer or sale of unregistered securities, in violation of Section 5 of the Securities Act. On the same day, the Massachusetts Securities Division Enforcement Section filed an administrative complaint against TelexFree and Common Cents Communications, Inc., a predecessor of TelexFree, for securities fraud and for the sale of unregistered securities.
Plaintiff seeks rescission and damages on behalf of the Class. The plaintiff is represented by Gardy & Notis, LLP, which has expertise in prosecuting investor class actions and extensive experience in actions involving financial fraud.
If you purchased a TelexFree membership and you wish to serve as lead plaintiff, you may move the Court no later than 60 days from today (no later than July 14, 2014). Any member of the putative class may move the Court to serve as lead plaintiff through counsel of their choice, or may choose to do nothing and remain a member of the proposed class.
If you wish to discuss this action or have any questions concerning this notice, please contact Orin Kurtz, Gardy & Notis, LLP, 126 East 56th Street, New York, New York 10022. Phone: (212) 905-0509; email: firstname.lastname@example.org; website: www.gardylaw.com.
Source:Gardy & Notis, LLP