Suit Filed Seeking $19.87 Million from Department of Securities

Article excerpt

A lawsuit seeking $19.86 million in actual and punitive damages from the Oklahoma Department of Securities, for alleged slander and alleged willful misuse of its power to administer state securities laws, has been filed by two Oklahoma broker-dealers, John C. Roberts and James Frank Lillard, and Intershares, a Delaware corporation.

Also named as defendants in the lawsuit were: Susan Bryant, administrator of the securities department; Chris Condren, general counsel for securities department, and Scott Wallace, an individual. Bryant and Condren also were named individually as defendants, according to the lawsuit, which was filed late Friday in U.S. District Court in Oklahoma City.

In their federal lawsuit, the plaintiffs alleged that Bryant and Condren had engaged in certain individual acts, which "were purposely committed in a conspiracy to harm the plaintiffs with a willful, wanton and malicious intent to put plaintiffs out of business."

Condren declined comment Wednesday. He referred all questions to Assistant Attorney General David Lee, who is representing him in the case.

The plaintiffs' federal lawsuit was filed as an answer to the allegations of securities fraud, which the state securities department made against them on April 8, in a lawsuit filed in Oklahoma County District Court.

Those allegations were concerned with transactions involved in the sale of unregistered shares of stock in Money Plus Inc., an Oklahoma corporation.

On April 8, Oklahoma County District Judge Richard W. Freeman issued a temporary restraining order against Roberts, Lillard and Intershares, at the request of the state securities department.

Gary Richardson, a Tulsa attorney representing the plaintiffs, acknowledged that filing a federal slander lawsuit against a state agency was "pretty unusual," in response to a question.

"It's pretty unusual," he said, "because it's highly unusual for a state agency to conduct itself in the way that Chris Condren has. Most of the complaint addresses his (Condren's) conduct.

"A state agency that has the power the securities department has," he said, "can just destroy someone, if they get reckless."

About a year ago, Richardson said he filed another lawsuit against the Oklahoma Department of Securities on behalf of another plaintiff, Financial Investment Network, based in Edmond.

"The securities department," he said, "in that case, made some pretty reckless and outlandish statements, and ended up having to dismiss the petition. But that was after they had really damaged some people."

In their federal lawsuit, Roberts, Lillard and Intershares alleged that:

- Condren, in the scope of his state duties, conspired with Bryant to begin a campaign to violate plaintiffs' constitutional rights by telephoning persons interested in meeting with plaintiffs' officers to misrepresent that they were under investigation for fraud, forgery and illegal business practices. …