Astrid Gottfried and husband Ralf Gottfried are suing Northstar Electronics Inc., Wilson Russell and Gordon Monk, who was doing business as Performance Capital Advisors, because they claim they were “lured into an investment scheme perpetrated by the defendants through, among other things, fraudulent and negligent misrepresentations and the illegal distribution of securities in B.C.”
Monk, the Gottfrieds allege, told them that he was a licensed investment advisor and then touted an investment in Northstar Electronics Inc., which was not listed or traded on any exchange but rather was simply quoted on the Over The Counter Bulletin Board (OTCBB) exchange.
The Gottfrieds say they were promised “high” and “guaranteed” returns so they invested $360,000 in Northstar. The investment flopped and the Gottfrieds learned that Monk was not licensed as an advisor, according to the notice of civil claim.
Instead, the Gottfrieds allege, he was earning compensation from Northstar for raising funds.
The Gottfrieds are suing Russell because he was CEO of Northstar at all material times and he omitted telling the Gottfrieds some of the same material things that they allege Monk omitted, they say.
For example, the Gottfrieds allege that both men omitted telling them that shares of stock in Northstar would be subject to trading restrictions that rendered the investments as non-liquid.
Russell also made false representations, the Gottfrieds allege, such as that he wanted to give them the opportunity to make lots of money.
The Gottfrieds bought shares in May, June and July 2011.
On July 13, 2011, Russell told Astrid Gottfried that an investment in Northstar would lead to an immediate 40% gain and that the stock price was expected to move higher over the coming months, she claims.
Instead, the stock sank from more than $0.10 per share to $0.03 per share when the Gottfrieds attempted to pull their money out.
Northstar refused to satisfy the Gottfrieds put options in May 2012.
By late July, the company’s stock (PINK:NEIK) was trading at less than $0.02.
The Gottfrieds are seeking recission of loan agreements, damages and costs.
None of the allegations has been proven in court.
