Stanford University’s Vice President for Business Affairs and Chief Financial Officer, Randy Livingston, currently being sued for fraud by StartX company MedWhat, already has a history of two fraud cases against, online legal documents show.
Investors filed a class action suit in 2011 in San Mateo Country Court for securities fraud against Randy Livingston and Pacific Biosciences of California after losing Money in a 2010 IPO. Livingston served as CFO of that company before accepting a job at Stanford. Superior Court of California, County of San Mateo Case No. CIV-509210. Plaintiff Greg Young filed his Complaint for Violation of the Federal Securities Laws and Jury Demand against Pacific Biosciences of California, Inc. and CFO Randy Livingston.
Court records show Livingston was also sued for securities fraud in 2000, during the dotcom boom of Silicon Valley, for another IPO by OpenTV. Investor’s loses in that IPO stated in lawsuit Defendant Randy Livingston manipulated the prices and shares of IPO and also benefited personally from the manipulative schemes.
Stanford University and its CFO are currently embroiled in another fraud lawsuit with medical artificial intelligence company MedWhat involving alleged fraud by Stanford and its venture capital fund Stanford-StartX Fund LLC. Livingston announced on January 2019 in the StanfordDaily the shutting down of the fund after the lawsuit against Stanford was approved at San Francisco County Court. Whether both events are related is not clear, as the CFO goes on record on Silicon Valley Business Journal saying the MedWhat lawsuit ‘has absolutely no bearing’ on the discontinuation of the fund. The StanfordDaily announced in February 2019 its budget has been cut by half by Stanford University. Whether the timing of the reporting on the StartX lawsuit is related to the subsequent budget cuts is not known.
MedWhat claims for-profit Stanford-StartX Fund LLC, was manipulated and operated illegally by Randy Livingston, CFO of a non-profit tax exempt. Officially the Stanford-StartX Fund LLC was advertised as a venture capital firm ran by fund manager Suzanne Fletcher and startup friendly accelerator StartX, with a policy to help StartX member entrepreneurs. However, lawsuit claims the fund was illegally ran for profit motives from the non-profit University offices and by University employees without a venture capital license, and that Suzanne Fletcher and StartX were a front to evade taxes by Stanford in order to make and control investments directly.
Lack of separation of non-profit and for-profit was more evident when MedWhat stated in lawsuit the alleged fact that investments came from Stanford University and its own tax-exempt bank accounts, and not from an entity called Stanford-StartX Fund LLC. Under Federal tax laws commingling of assets between a for-profit and non-profit is illegal according the IRS website. Lawsuit also claims Stanford University employees emailed from @Stanford.edu email address communication instructions on how to advertise the investment, which included not mentioning the word Stanford University as an investor, only Stanford-StartX Fund LLC. MedWhat claims these conflicts of interest is what caused it damages in regards to how Regent Capital mislead MedWhat and how the Stanford-StartX Fund LL – or Stanford University since it’s not clear which entity is behind lawsuit – managed the situation. MedWhat claims in lawsuit Stanford’s tax evasion policy and intrusion of StartX is to blame.
According to lawsuit in SF court, when MedWhat needed the help of Stanford-StartX Fund LLC fund manager Suzanne Fletcher regarding conflicts with one of MedWhat’s Chinese investors in its Series A round who mislead MedWhat into making an investment, Stanford University and Randy Livingston pushed Fletcher aside and sued MedWhat instead of following StartX’s and Stanford-StartX Fund LLC founder-friendly policy in resolving issues.
Lawsuit claims Regent Capital has investments in competing companies of MedWhat and that Regent lied to MedWhat with a false investment confirmation to buy time into gathering more information on MedWhat’s business during an extended due diligence. In a bizarre twist of events, Stanford University’s lawyers confirm Suzanne Fletcher is not the manager of the Stanford-StartX Fund LLC, contradicting StartX’s website and Ms. Fletcher’s own LinkedIn and CrunchBase profile.
Mr. Livingston announced on StanfordDaily in January of 2019 the shutdown of the Stanford-StartX Fund, stating the event had “no bearing” on the MedWhat lawsuit and that the Fund succeed in its mission.
Mr. Livingston also currently serves on the boards of Genomic Health, eHealth, Pacific Biosciences and Stanford Management Company.
In the case of the OpenTV IPO class action lawsuit, Defendant Randall S. Livingston served, at the time of the Offering, as the Issuer’s Executive Vice President, Chief Financial Officer and as a member of the Board of Directors. Livingston signed the Registration Statement. During the Class Period, OpenTV’s ordinary shares traded as high as $245.75 per share on March 14, 2000, or more than 1128% above the IPO price.
The Registration Statement/Prospectus was materially false and misleading due to its failure to disclose the material fact that the Underwriter Defendants were charging customers commissions that were unfair, unreasonable, and excessive as consideration for receiving allocations of shares in the IPO.
Defendants’ conduct alleged herein had the effect of inflating the price of the Issuer’s ordinary shares above the price that would have otherwise prevailed in a fair and open market throughout the Class Period.
Each of the Individual Defendants, either personally or through an attorney-in-fact, signed the Registration Statement or was a Director or person performing similar functions for the Issuer at the time of the IPO.
The Defendants named in this Claim are liable to Plaintiffs and other members of the Class who purchased or otherwise acquired shares of the Issuer’s ordinary shares traceable to the IPO.
Each of the Individual Defendants was a control person of the Issuer with respect to the IPO by virtue of that individual’s position as a senior executive officer and/or Director of the Issuer.
The Individual Defendants, by virtue of their managerial and/or board positions with the Company, controlled the Issuer as well as the contents of the Registration Statement at the time of the IPO. Each of the Individual Defendants was provided with or had unlimited access to copies of the Registration Statement and had the ability to either prevent its issuance or cause it to be corrected.
As a result, the Individual Defendants are liable under Section 15 of the Securities Act for the Issuer’s primary violation of Section 11 of the Securities Act. 70. By virtue of the foregoing, Plaintiffs and other members of the Class who purchased or otherwise acquired the Issuer’s shares traceable to the IPO are entitled to damages against the Individual Defendants.
The Individual Defendants had beneficial ownership of substantial personal holdings in the Issuer’s common stock as of the IPO. In total, the officers and directors of OpenTV owned 158,586 shares of the Issuer before the IPO. These holdings, which were purchased or otherwise acquired at prices below the IPO price, substantially increased in value as a result of the misconduct alleged herein.
The Individual Defendants were motivated by the fact that the artificially inflated price of the Issuer’s shares in the aftermarket would enable the Individual Defendants to 04/20/2002 12:54 AM EST – 28 – sell their personal holdings in the Issuer’s securities at artificially inflated prices in the aftermarket or otherwise. In this case, according to Form 144 filings, the Individual Defendants sold or intended to sell their personal holdings in the following transactions: between June 1, 2000 and November 28, 2001, Defendant Steenkamp filed Form 144s reflecting the intent to sell approximately 170,000 shares and between June 1, 2000 and January 30, 2001, Defendant Livingston filed Form 144s reflecting the intent to sell 75,000 shares.
During the Class Period, the Issuer and the Individual Defendants carried out a plan, scheme and course of conduct which was intended to and, throughout the Class Period, did: (a) deceive the investing public, including Plaintiffs and other members of the Class, as alleged herein; (b) artificially inflate and maintain the market price of and demand for the Issuer’s common stock; and (c) induce Plaintiffs and other members of the Class to acquire the Issuer’s common stock at artificially inflated prices. In furtherance of this unlawful course of conduct, the Issuer and the Individual Defendants took the actions set forth herein
The Issuer and the Individual Defendants prepared and reviewed documents alleged to contain the materially false and misleading statements and/or omissions complained of 04/20/2002 12:54 AM EST – 30 – herein. In addition, the Individual Defendants had access to drafts of these documents prior to their filing with the SEC and dissemination to the public.
The Individual Defendants acted as controlling persons of the Issuer within the meaning of Section 20(a) of the Exchange Act as alleged herein and culpably participated in the wrongdoing. By virtue of their high-level positions, and their ownership and contractual rights, participation in and/or awareness of the Issuer’s operations and/or intimate knowledge of the underwriting of the IPO, the Individual Defendants had the power to influence and control and did influence and control, directly or indirectly, the decision-making of the Issuer, including the content and dissemination of the various documents that contain the materially false and misleading statements and/or omissions complained of herein. The Individual Defendants were provided with or had unlimited access to copies of these documents prior to or shortly after they were filed with the SEC and/or disseminated to the public and had the ability to prevent their filing and/or dissemination or cause the documents to be corrected. 117. Each of these Individual Defendants had direct and supervisory involvement in the day-to-day operations of the Issuer and, therefore, is presumed to have had the power to control or influence the particular transactions giving rise to the securities violations herein, and exercise the same
By virtue of their positions as controlling persons of the Issuer, the Individual Defendants are liable pursuant to Section 20(a) of the Exchange Act. As a direct and proximate result of this wrongful conduct, Plaintiffs and other members of the Class were damaged thereby.
This news story is under development and will be updated soon.
for additional information on lawsuit.
Source: https://medium.com/the-start/the-evolution-of-our-community-34ec4770e4e9
For more information on the lawsuit visit https://webapps.sftc.org Case Number CGC18565596
