SAN FRANCISCO, Jan. 13 /PRNewswire/ -- Dr. David Gane, the former President and CEO of Dicom Imaging Systems, Inc., a dental imaging company, has been cleared of all claims of securities fraud brought by the Securities and Exchange Commission.
After a three-year investigation, the SEC sued Dr. Gane in August 2003, alleging he committed securities fraud by failing to disclose material information in a due diligence package distributed to investors and by making false and misleading statements in two press releases and two publicly-disseminated interviews. The SEC had sought an injunction along with maximum monetary penalties against Dr. Gane, as well as a lifetime ban from serving as a corporate officer or director.
“This case was a classic example of government overreaching,” said David Bayless, a partner at Morrison & Foerster, which represented Dr. Gane and tried the case against the SEC. “The Commission’s ‘get tough’ approach has backfired.”
Dr. Gane consistently maintained throughout the SEC’s investigation and lawsuit that there was no basis for the charges.
The United States District Court for the Southern District of Florida agreed that the SEC had no case against Dr. Gane. In the Court’s opinion issued January 4, 2005, which followed a six-day trial in December 2004, the Honorable Judge Jose A. Gonzalez ruled in favor of Dr. Gane on all claims.
Judge Gonzalez concluded that Dr. Gane’s statements about Dicom’s revenue goals were not material and so a reasonable investor would not rely upon them in making an investment decision. Also, Judge Gonzalez found that Dr. Gane did not act with fraudulent intent as to any of the alleged misrepresentations or omissions upon which the SEC based its lawsuit, stating in the opinion “there is no evidence here of any motivation for Dr. Gane to have committed securities fraud.” (Op., page 40 at paragraph 75.) Dr. Gane never defrauded any investor as shown by the fact that he “never sold, or attempted to sell, any Dicom stock that he owned.” (Op., page 39 at paragraph 75.)
Mr. Bayless was himself District Administrator for the San Francisco office of the SEC from 1994 to 1999 before joining Morrison & Foerster as a partner in the firm’s securities enforcement and securities litigation group.
Dr. Gane was represented by David B. Bayless, Tammy Albarran and Adrian Sawyer of Morrison & Foerster in San Francisco, and by Brian Miller and Francisco Rodriguez of Akerman Senterfitt in Miami, Florida.
Please let us know if you would like to speak with David Bayless or would like a copy of the opinion.
Morrison & Foerster LLP http://www.mofo.com/ is a leading international law firm with more than 1,000 lawyers in 19 offices, in key technology and finance centers around the world.
Jessica Miller, 415-268-6901, jessicamiller@mofo.com
Allan Ripp, 212-721-7468, arippnyc@aol.com
Morrison & Foerster LLP
CONTACT: Jessica Miller of Morrison & Foerster LLP, +1-415-268-6901,jessicamiller@mofo.com; or Allan Ripp, +1-212-721-7468, arippnyc@aol.com, forMorrison & Foerster LLP
Web site: http://www.mofo.com/
