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Court Finds Film Investor's Lawsuit Targeted Defendants' Free Speech Rights

The introductory paragraph in Ojjeh v. Brown, 2019 Cal. App. LEXIS 1304, suggests that the case may involve allegations of securities fraud:

"Defendants Stephen Brown (Brown) and Ignite Channel, Inc. (Ignite) solicited and obtained $180,000 in investments from plaintiff Bassel Ojjeh to produce a documentary film on the refugee crisis in Syria.  Plaintiff later sued, claiming that no 'significant' or 'substantial' work had been performed on the film, and that defendants had breached their contractual obligations, defrauded him of his investments, and used his investments for purposes unrelated to the film."

Although the opinion repeatedly refers to the plaintiff's "investment", it does not concern the securities laws.  Instead, the issue was whether the claims should be stricken under California's anti-SLAPP law (Code Civ. Proc. § 425.16).   The trial court thought not, ruling that the defendants' activities were not in furtherance of their exercise of free speech in connection with an asserted issue of public interest.  The Court of Appeal disagreed and reversed.

As a securities lawyer, I took note of the Court of Appeal's conclusion that the defendants' allegedly fraudulent "solicitation of investment funding" was of "no consequence" at this procedural stage.  One wonders whether this might provide purchase to defendants in securities law cases who claim that the solicitation of investments, even if fraudulent, was in furtherance of their exercise of their free speech rights.

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