Power3 Medical Products shareholders Richard Kraniak and Roger Kazanowski filed a motion last week to dismiss a lawsuit brought by the company against them alleging insider trading.
According to the memorandum submitted by the defendants, Power3's complaint failed to "allege sufficient facts to state a claim for liability" under the Securities Exchange Act and the Securities Act, and failed to "plead with specificity necessary elements for these claims."
Power3 filed the suit on April 14, claiming that Kraniak and Kazanowski illegally profited from insider information regarding Power3's acquisition of stem cell firm StemTronix. On May 28 the defendants filed a motion in United States District Court for the Southern District of Texas to have the charges dismissed. As of that date, neither defendant had been served.
According to the memorandum, Power3's complaint provided no specific allegations as to when Kraniak and Kazanowski "purportedly executed any purchase or sale of Power3 securities," "the identity of the purchaser or seller, or the alleged trading profits or losses by anyone," "the nature of the purported 'inside information,'" "the materiality of the information as of the time of the alleged purchase or sale," "the intent of the issuer to impose confidentiality upon the information," or how the defendants "purportedly came into contact with the information."
Both Richard Martini, attorney for Power3, and Thomas Taylor, the lawyer filing the motion on behalf of the defendants, were unavailable for comment.
Last month, Peter Sarkesian, a lawyer for Kraniak and Kazanowski, told ProteoMonitor that if the matter was not resolved, his clients intended to file a counterclaim against the company and its officers "for breach of contract, misrepresentation, very probably defamation, breach of their fiduciary duty to the company and its shareholders, and in all probability there will be security law violations that we will allege, as well, on the part of the officers" (PM 5/7/2010).