[00:00:00] Speaker 00: Thank you. [00:00:01] Speaker 00: I appreciate that and I would like to reserve a time I have remaining for rebuttal. [00:00:06] Speaker 00: Thank you. [00:00:07] Speaker 00: You may please the court. [00:00:08] Speaker 00: My name is Emily Garrick and I am representing Patrick Hobble, the plaintiff appellant. [00:00:13] Speaker 00: And unless this court would prefer that I begin elsewhere, I'd like to start by discussing the pleading standard as it relates to the elements of materiality and falsehood. [00:00:22] Speaker 00: At its heart, I believe that this is a case about the pleading standard and materiality and falsehood are the most important elements in this case because they are the only elements that Hubble needs to allege for his Nevada statute claim, and they are the most contested elements of his other claims. [00:00:38] Speaker 00: With that in mind, what the district court should have done in this case was accept all of the allegations in the complaint as true, draw all reasonable inferences in Hubble's favor, and then ask whether Cadenzi made any materiality, false or misleading statements when he told investors that he had settled his dispute with Icomi and parted ways amicably with them, when in fact he was still suing Icomi over similar related claims in another jurisdiction. [00:01:03] Speaker 00: The answer to that question, of course, is yes. [00:01:05] Speaker 00: It is reasonable to interpret those statements as materially false or misleading, and since dismissal on the grounds of imperiality. [00:01:12] Speaker 03: Council, why don't you hold on a second. [00:01:14] Speaker 03: We're having a technical problem. [00:01:16] Speaker 03: The video keeps fading out. [00:01:20] Speaker 03: Pardon me? [00:01:25] Speaker 03: So is what's going to happen, it will just keep fading but coming back? [00:01:34] Speaker 03: All right, so we don't have a problem hearing you. [00:01:45] Speaker 03: Does your seeing us fade or do you still see us? [00:01:49] Speaker 00: It's fine on my end. [00:01:51] Speaker 03: All right. [00:01:51] Speaker 03: So I think for now, we'll just keep going. [00:01:55] Speaker 03: And if it becomes a serious problem, we'll let you know and maybe take a recess. [00:02:00] Speaker 03: But just so you know, sometimes your video fades out, but we can hear you just fine. [00:02:07] Speaker 03: So sorry for the interruption once you continue. [00:02:11] Speaker 00: Thank you. [00:02:11] Speaker 04: Appreciate it. [00:02:12] Speaker 04: I actually just pick up on a question, though, based on something you said at the top of your argument. [00:02:17] Speaker 04: Is there something different about the Nevada statutory claim in your view in terms of the elements here? [00:02:24] Speaker 00: Yes, so there are a couple of important distinctions between the Nevada statute claim. [00:02:31] Speaker 00: That's under NRS 90.572. [00:02:35] Speaker 00: Under the Nevada statute claim, the only elements that are at issue here are going to materiality and falsehood. [00:02:40] Speaker 00: Obviously, under the federal 10b claim, Hobble needs to plead materiality, falsehood, and then also, science and law causation. [00:02:48] Speaker 00: But the NRS 90.572, parentheses 2, does not require a lost causation or a cyanter and provides a rescission remedy to plant a slight cobble unlike 10b. [00:03:03] Speaker 00: Um, and I talk about this, uh, in the reply brief in more detail. [00:03:09] Speaker 00: Um, but there's, uh, I want to point out 1 case here, uh, secretary of state, the, which is citation. [00:03:18] Speaker 00: Uh, 1, 1, 7, Nevada 2, 9, 9, that case says, um, that unlike the, uh, federal 10 B claims, uh, and RS 90 dot 5, 7 D. [00:03:30] Speaker 00: Two and three, they say reliance and sign to are not required elements of securities fraud under those sections. [00:03:40] Speaker 00: And for loss causation, similarly, there is a difference here where the Nevada statute has a rescission remedy and does not require loss causation. [00:03:52] Speaker 00: There's another case that's in the reply brief, Chittany Bergstrom, where there's a 10B claim in an NRS 90.572 claim. [00:04:02] Speaker 00: They discussed lost causation for the 10B claim, but not for the Nevada statute claim. [00:04:08] Speaker 00: And the lower court, the district court also [00:04:14] Speaker 00: only talks about materiality and falsehood in its opinion. [00:04:21] Speaker 00: And that's because those are the required elements under the Nevada statute claim. [00:04:25] Speaker 00: And that way it's fairly similar. [00:04:26] Speaker 00: The language pretty directly mirrors section 12A1 of the Securities Act and section 11 of the Securities Act. [00:04:37] Speaker 03: Council, when you tell us that we need to take the allegations in the complaint as true, I'll give you one example that I have a question about. [00:04:49] Speaker 03: In paragraph 40 of the complaint, you say, on information and belief, the Singapore litigation and the New Zealand litigation were closely related. [00:05:00] Speaker 03: We don't need to take that statement as true, right? [00:05:07] Speaker 00: Uh, yes, your honor, but I do believe that there are supporting allegations in the complaint, uh, that show that these are closely related. [00:05:16] Speaker 03: So what, what should we make and your friends point this out, but what should we make of the judgment from New Zealand where, uh, in paragraph 18 of the judgment, [00:05:27] Speaker 03: the judge or justice says the discontinued proceedings in this proceeding are relatively distinct and then goes and has a description of why that's the case. [00:05:42] Speaker 03: We're entitled to take a look at that in deciding whether the statements you've alleged here as misleading because of the relatedness of the actions actually are misleading, right? [00:05:56] Speaker 03: we can take a look at the New Zealand judgment, right? [00:06:00] Speaker 00: Yes, Your Honor. [00:06:01] Speaker 00: And I actually believe that when you read the New Zealand judgment in its entirety, as well as the other traditionally noticed document from Gdenzi, the lower court, and it's in the record here, they actually support our allegation that these are closely related for our purposes as far as whether or not an investor who cares about the Singapore litigation is also going to care about the New Zealand litigation. [00:06:25] Speaker 00: There's a few reasons for this, and again, I just want to emphasize the pleading standard here, which is if somebody could reasonably believe that this is material and misleading. [00:06:39] Speaker 00: But in both of these cases, Gdenzi accused Takomi of fraud and had fraudulent inducement claims against Takomi relating to the OMI token. [00:06:47] Speaker 00: And the court, yes, in the New Zealand opinion, says that these are distinct cases. [00:06:55] Speaker 00: They're still related. [00:06:56] Speaker 00: And they, for the court's purposes on whether or not they could even bring this claim about the bonus tokens, which was also an allegation that came up in the Singapore litigation, [00:07:09] Speaker 00: there's a carve-out in the Singapore litigation, in the Singapore settlement for the New Zealand litigation. [00:07:15] Speaker 00: That's why the court found that it could proceed on the bonus token claim. [00:07:22] Speaker 00: But there wouldn't have been a need for a carve-out at all if these weren't related cases. [00:07:27] Speaker 00: If, as the defendant says, as the defendant appellee says, these are completely unrelated cases, then there wouldn't have been a need for a carve-out. [00:07:36] Speaker 03: I think we've all seen in the practice of law belt and suspenders approaches to releases for the avoidance of doubt. [00:07:47] Speaker 03: The release here does not extend to case XYZ. [00:07:51] Speaker 00: Yes, absolutely. [00:07:53] Speaker 00: I think in this case, though, these are both cases that have fraudulent inducement claims involving the OMI token against the exact same defendant, Okomi. [00:08:04] Speaker 00: And anyone who's going to care about the Singapore litigation is also going to care about the New Zealand litigation. [00:08:11] Speaker 00: And the reason that Giddensi made all these public statements to try to quell these market fears about the fact that this really important insider was alleging fraud against DiComi, the company, this important insider who [00:08:27] Speaker 00: says that he is the largest investor in the token and who designed the token in the first place, he knew that people weren't going to like that he had any litigation against eComey, especially for the alleged fraud, and especially in the crypto market, which are highly sensitive to litigation or anything that causes what they call FUD, fear, uncertainty, and doubt. [00:08:48] Speaker 00: That's why he made all these public statements in the first place. [00:08:51] Speaker 00: And when he made the statement about the Singapore settlement, he said that he had parted ways amicably with Ikomi. [00:08:58] Speaker 00: He at that time actually had active litigation with Ikomi, also alleging fraud against Ikomi. [00:09:05] Speaker 03: Although even in your complaint when you're citing [00:09:08] Speaker 03: what was said, it was the dispute was settled and we parted ways amicably after you explain in paragraph 31 that he said the lawsuit was about his not being paid and then said the dispute was settled and we parted ways amicably. [00:09:28] Speaker 03: Why wouldn't the [00:09:29] Speaker 03: Why wouldn't the reasonable person take that as being this is a dispute, we settled it, and we're fine as to this dispute over my not being paid? [00:09:45] Speaker 00: Thank you. [00:09:46] Speaker 00: So, I think 1 thing that's important here, if you look at paragraph 23. [00:09:50] Speaker 00: Of the complaints on year 40, this makes clear in the complaint and I'll talk about the supporting documents as well. [00:09:57] Speaker 00: That the Singapore litigation did not just involve claims about not getting paid involved both claims that had not been paid for work and. [00:10:05] Speaker 00: that he had been falsely induced to invest in the BV project. [00:10:09] Speaker 00: And that's citing the business desk article that was traditionally noticed in the lower court. [00:10:17] Speaker 00: And then that particular claim about the fraudulent inducement to invest is also in the footnote 13 on ER 28, [00:10:27] Speaker 00: of the New Zealand opinion. [00:10:29] Speaker 00: And so the Singapore litigation was, yes, it was about the non-payment for work, but it was also about a fraudulent inducement to invest claim. [00:10:40] Speaker 00: There's also a fraudulent inducement to invest claim that was added to the New Zealand law state at the time that he made these statements. [00:10:47] Speaker 00: That was also against ECOME. [00:10:49] Speaker 00: And the important thing to investors is that you have this important insider [00:10:53] Speaker 00: who's suing Icomi at all. [00:10:55] Speaker 00: So when he said the dispute was settled, what a reasonable investor and what a reasonable jury could interpret that to mean, that a reasonable investor could interpret that to mean, is that the impression that Gedensi was trying to give the market is that he was no longer [00:11:12] Speaker 00: suing a Komi that he did not have any legal disputes with them anymore about the OMI token. [00:11:20] Speaker 00: And they wouldn't have known about the New Zealand litigation as alleged in the complaint at the time. [00:11:27] Speaker 00: And so to the extent that there's any reasonable person who could believe that that's the impression that Kadenzi was trying to give the market, which I think [00:11:39] Speaker 00: He clearly was then under the pleading standard we win on material on on that on that issue. [00:11:46] Speaker 04: What about science or the district court had concerns about that element. [00:11:51] Speaker 00: Yeah, so first I want to point out again that the Nevada statute claim center. [00:11:57] Speaker 00: I don't think is an element there and you can look at the case that I just referenced earlier. [00:12:03] Speaker 00: But the for the same reason that was required. [00:12:11] Speaker 00: To disclose the negative information that would cut against the positive information that he was touting here at the positive information being the Singapore settlement and the negative information being. [00:12:21] Speaker 00: The New Zealand litigation says that. [00:12:28] Speaker 00: If you do not disclose the information, the negative information that cuts against the positive information, that demonstrates scienter. [00:12:37] Speaker 00: In addition to this, again, Giddensi himself made multiple public statements for the purpose of quelling market fears about the fact that he's this important insider suing Icomi. [00:12:48] Speaker 00: This included doing the Icomi community interview about litigation, [00:12:52] Speaker 00: About the litigation releasing a statement on YouTube about the Singapore settlement in which he stated that he was willing to do a joint press release with the Komi and that he would always do what he could to quote help the token grow. [00:13:03] Speaker 00: He wanted people to think that the token would grow because he stood to profit from the sales of the token motive is not a required not required, but it can certainly help to demonstrate. [00:13:17] Speaker 00: And Gdenzi himself was the largest investor in the OMI token. [00:13:20] Speaker 00: He frequently sold large quantities of OMI and the market reaction to his litigation was bad for him for that reason. [00:13:28] Speaker 00: And he also sold $12 million of OMI tokens in this transaction with Hobble alone, which is an amount that dwarfs the total daily volume of OMI that's traded on crypto websites each day. [00:13:40] Speaker 00: And so I think all of that shows that he had a motive to [00:13:47] Speaker 00: to make these misleading statements about his litigation and try to quell these market fears, which is enough to demonstrate science. [00:13:59] Speaker 03: Did you want to reserve your remaining time? [00:14:02] Speaker 00: Thank you. [00:14:02] Speaker 00: Yes, your honor. [00:14:03] Speaker 03: Thank you. [00:14:15] Speaker 02: Good morning, Your Honors. [00:14:16] Speaker 02: If it please the Court, my name is Sinjina Ahuja, and I represent respondent Ben Gadenzi. [00:14:24] Speaker 02: The District Court correctly found that plaintiffs failed to adequately state a claim for federal securities fraud, state securities fraud, and common law fraud. [00:14:32] Speaker 02: The complaint is deficient. [00:14:34] Speaker 02: Notably, the appellant did have the opportunity to amend the complaint. [00:14:39] Speaker 02: They chose not to and instead let judgment be entered and appealed from that judgment. [00:14:44] Speaker 02: Fundamentally missing from the allegations of the complaint is any explanation of why the objectively reasonable token holder would actually care about the New Zealand litigation. [00:15:02] Speaker 02: The complaint itself doesn't actually tell you what the New Zealand litigation is about. [00:15:08] Speaker 02: There's really no statement as to why a reasonable investor or reasonable token holder would actually care. [00:15:15] Speaker 02: Why would the New Zealand litigation affect the value of the OMI token? [00:15:19] Speaker 02: Why would the New Zealand litigation affect the operations of the Veave marketplace? [00:15:25] Speaker 02: Why would the litigation affect the operations of IKOMI, the profits and losses of IKOMI? [00:15:32] Speaker 02: Why would a dispute between two founders have anything to do with the value of the OMI token? [00:15:36] Speaker 04: That's just- [00:15:39] Speaker 04: Isn't a dispute between two founders of something fairly significant in terms of evaluating the health of that entity? [00:15:47] Speaker 02: Not necessarily. [00:15:48] Speaker 02: It depends on what the dispute is about. [00:15:50] Speaker 02: We don't actually know what the dispute is about, that we've been given no detail or any information. [00:15:56] Speaker 02: They could just be quibbling about, well, who gets what token? [00:16:00] Speaker 01: I mean, that's a part of this case that I've been trying to think through and what to make of it, right? [00:16:05] Speaker 01: So different than in this country where litigation, [00:16:08] Speaker 01: the filing of cases is public record and that's available and people can know about these things. [00:16:14] Speaker 01: In this situation, we have this litigation that is not public and so only the people involved know about it, so the investors and the people out thinking about the value of this company have no idea about this information and how to factor it into their decision making. [00:16:29] Speaker 01: What do we do with that in terms of figuring out materiality and how much it's going to impact people? [00:16:36] Speaker 01: I understand the argument, and I would be making it, too, if I was in your shoes about, like, we don't know what that case is about. [00:16:41] Speaker 01: It might be totally irrelevant. [00:16:43] Speaker 01: But the problem is that nobody gets to make that judgment because it's not public record. [00:16:49] Speaker 01: So what do we do with that? [00:16:52] Speaker 02: Well, you're right, Your Honor. [00:16:54] Speaker 02: It's not public record. [00:16:56] Speaker 02: However, they still have the burden of pleading why it is material to the case and simply saying nobody knows, therefore it's [00:17:04] Speaker 02: de facto material is not good enough. [00:17:07] Speaker 02: They still have to plead with particularity why the reasonable token holder would actually find the New Zealand litigation to be material to their investment. [00:17:16] Speaker 01: Does the fact that it's not open information result in us having to think about the duty to speak differently? [00:17:26] Speaker 01: Because typically, there's no affirmative duty to talk, except when it's necessary to [00:17:34] Speaker 01: correct a misimpression. [00:17:37] Speaker 01: And that's what I'm wondering about. [00:17:39] Speaker 01: Does that duty trigger here in terms of correcting misimpressions because of information that is hidden? [00:17:46] Speaker 02: Well, that duty only applies to information that would be material. [00:17:52] Speaker 02: So you only have the obligation to speak about information that is material. [00:17:58] Speaker 02: And I would note that [00:18:02] Speaker 02: that the Jagos judgment, the New Zealand judgment, was not actually attached to the complaint. [00:18:06] Speaker 02: That was something that we affirmatively put into the record. [00:18:10] Speaker 02: And it was because they stated on information and belief that the New Zealand litigation and the OMEA litigation, or sorry, the New Zealand litigation and the Singapore litigation were substantially similar. [00:18:25] Speaker 02: The Jagos judgment affirmatively says that it is not. [00:18:28] Speaker 02: And it doesn't only say it in the paragraph that was cited by Your Honor. [00:18:32] Speaker 02: It actually goes on to say it later in different paragraphs of the judgment. [00:18:42] Speaker 04: But at the point that we're looking at the judgment for that purpose, wouldn't we also look at it to know what the case is about, which was kind of the top of your argument to say, well, we have no idea what it's about, but we do know, because we can look at the judgment which was introduced into the record and which no one seems to be saying we can't look at. [00:19:00] Speaker 02: Sure. [00:19:00] Speaker 02: We can look at the judgment, and the judgment says that the claims are distinct. [00:19:08] Speaker 02: And in fact, the purpose of the judgment was the defendants in that case were stating that actually this case can't go forward against ECOMI because it is similar to the Singapore litigation. [00:19:20] Speaker 02: And the court found no, it isn't, so it can go forward. [00:19:23] Speaker 02: And that's the only reason it was able to go forward in that case was because the court specifically said that [00:19:31] Speaker 02: that the discontinued proceedings and this proceedings are relatively distinct. [00:19:35] Speaker 02: The former related to MB Technology's compensation and OMI tokens or reimbursement for its advisory services. [00:19:41] Speaker 02: The latter relates to MB Technology's share subscription and transfer investments in Orbeez. [00:19:47] Speaker 02: Now, Mr. Habel makes the point that the Singapore litigation was also about fraud. [00:19:56] Speaker 02: What was significant about the Singapore litigation was that it was for 64 billion tokens and it involved a worldwide asset freeze of ECOME. [00:20:04] Speaker 02: So all of the assets of ECOME were frozen. [00:20:08] Speaker 02: That was obviously going to be material to an OME token holder. [00:20:11] Speaker 02: The New Zealand litigation didn't have that. [00:20:13] Speaker 02: There was no worldwide asset freeze. [00:20:16] Speaker 02: It was a dispute, a quibble between two founders or really one contractor and the founders of [00:20:26] Speaker 02: of the Veev marketplace. [00:20:27] Speaker 03: And so putting aside for a minute your argument about materiality and a lack, I suppose lack of explanation in the complaint, there's no dispute as far as I can tell that part of what your client said is we parted ways amicably, right? [00:20:51] Speaker 02: Yes. [00:20:51] Speaker 03: And wouldn't a reasonable person reading we parted ways amicably take that to mean we have no other extant disputes? [00:21:04] Speaker 02: I think it depends on the context, Your Honor, and the significance of the dispute that remains. [00:21:10] Speaker 02: Again, the Singapore litigation involved a worldwide asset freeze, involved 64.5 billion tokens. [00:21:18] Speaker 02: What remained was [00:21:20] Speaker 02: litigation in New Zealand of which significance we don't really know. [00:21:24] Speaker 02: It hasn't been alleged. [00:21:24] Speaker 02: It hasn't been pled. [00:21:26] Speaker 02: And the fact that the more significant litigation was settled could very well be a reason why the parties would have parted amicably. [00:21:36] Speaker 03: But they hadn't parted because there's still this ongoing litigation. [00:21:42] Speaker 03: So the parted would, a reasonable person would take that as we're done. [00:21:49] Speaker 03: We've settled. [00:21:50] Speaker 03: But they weren't completely done. [00:21:56] Speaker 03: And at least one could argue that having an ongoing lawsuit that includes apparently some fraud allegations means that whatever it is that happened in case number one, it's not entirely amicable yet. [00:22:12] Speaker 02: So again, it has to be material. [00:22:13] Speaker 02: So falsity has two components. [00:22:15] Speaker 02: It has the component of it being false. [00:22:17] Speaker 02: It also has the component of it being material. [00:22:20] Speaker 02: Now, would the reasonable investor actually care that the New Zealand litigation was ongoing? [00:22:25] Speaker 03: Well, what they allege in paragraph 49, among other places, is the fact of litigation is generally very important to the market for tokens and as evidenced by what they describe above and the significant price decline when news was revealed. [00:22:46] Speaker 03: So that's at least something as to why this information would be viewed or could be viewed as material, right? [00:22:57] Speaker 03: It's at least something. [00:22:58] Speaker 02: Well, it's entirely conclusory. [00:23:01] Speaker 02: Saying that litigation is generally very important to the market for tokens is a very general statement. [00:23:07] Speaker 02: That does not satisfy the requirements of the PSLRA. [00:23:12] Speaker 02: Now, there was a price decline. [00:23:15] Speaker 02: as we've stated in our briefing, the entire market cratered at the time. [00:23:21] Speaker 02: And in fact, the OMI token had begun falling for over a month before the litigation was disclosed. [00:23:29] Speaker 02: So the price alone is not going to make something material. [00:23:35] Speaker 02: But simply stating that companies get sued all the time. [00:23:40] Speaker 02: In the allegations of the complaint, the market cap for the OMI token was $388 million. [00:23:45] Speaker 02: why the reasonable token holder would care about a $1 million lawsuit is not explained. [00:23:53] Speaker 04: And furthermore... Doesn't it have to do with the nature of Mr. Gadenzi's role? [00:24:00] Speaker 04: I mean, that would seem to be their argument that it wasn't just a random lawsuit. [00:24:04] Speaker 04: It was somebody who was heavily involved in the company. [00:24:06] Speaker 04: He had two lawsuits pending. [00:24:09] Speaker 04: He talked about one of them. [00:24:10] Speaker 04: He didn't disclose the other one. [00:24:12] Speaker 04: And the implication from his comments might be that [00:24:15] Speaker 04: you know, their dispute has been resolved. [00:24:18] Speaker 04: And in fact, it's alleged that that was not true. [00:24:21] Speaker 04: And so why wouldn't that be material? [00:24:25] Speaker 02: Well, again, simply stating, not stating that the New Zealand litigation was ongoing, they still have to explain why a reasonable investor would think it is material to their ownership of the OMI token. [00:24:42] Speaker 02: Why would this litigation matter? [00:24:44] Speaker 04: you know, unless this court is willing to... I mean, shouldn't we take something from the fact that, at least in the second conversation, the second statement, your client affirmatively disclosed this or, you know, raised this issue? [00:24:55] Speaker 04: I mean, doesn't that suggest that even from his perspective, it was something a reasonable investor would want to know? [00:25:01] Speaker 02: Well, he raised it in response to Mr. Hable bringing up that he worked for, that he had designed the tokenomics for the OMI token. [00:25:11] Speaker 02: And he then explained, yes, I did, but I didn't get paid for it. [00:25:15] Speaker 02: But now that dispute is settled. [00:25:20] Speaker 02: He was referring to the dispute regarding his non-payment for services. [00:25:26] Speaker 02: And again, the complaint actually doesn't allege that the Singapore litigation dealt with fraud. [00:25:31] Speaker 02: What they do say at paragraph 23 is that news articles, one news article, explained that there was some element of a false inducement [00:25:42] Speaker 02: in the Singapore litigation. [00:25:43] Speaker 02: But the complaint itself doesn't say that that's what the Singapore litigation was about. [00:25:47] Speaker 02: And in fact, the documents for the Singapore litigation are public. [00:25:53] Speaker 02: What it does say at paragraph 22 is that Godenzi sued Ikomi in Singapore, claiming that he was not paid for his services. [00:26:01] Speaker 02: That is what the dispute was about. [00:26:03] Speaker 02: Again, it involved an asset freeze and 64.5 billion tokens, which would be significant if [00:26:11] Speaker 02: ECOME was unable to access its assets, that would be significant. [00:26:15] Speaker 02: The New Zealand litigation did not have that. [00:26:19] Speaker 02: And again, it does not, there's no explanation of how the New Zealand litigation would actually affect the value of the OME token, which again, the OME token is not a stock. [00:26:31] Speaker 02: It's not, it's a separate cryptocurrency that operates on its own, trades on its own. [00:26:37] Speaker 02: It's not an ownership interest in ECOME. [00:26:39] Speaker 02: It's a separate thing. [00:26:41] Speaker 02: And again, there's no explanation of how the New Zealand litigation, which I believe the PSLRA requires, requires that explanation. [00:26:51] Speaker 02: Even if the court looks at the Ninth Circuit ruling in the NRA Nectar case. [00:26:56] Speaker 02: In that case, the defendants were accused of not disclosing certain aspects of their research that they had done or studies on the research that they had done for their obesity drug. [00:27:09] Speaker 02: They had not disclosed that the obesity drug could cause heart problems or wasn't beneficial for hearts. [00:27:19] Speaker 02: And the court said in that case, all right, maybe, but why is that significant to [00:27:26] Speaker 02: the actual shareholder. [00:27:27] Speaker 02: And that piece is missing. [00:27:29] Speaker 02: They have the opportunity to amend to actually explain why it would be important. [00:27:34] Speaker 02: But it's not a reasonable inference that can be drawn here as to why the OME token or why a reasonable investor would think the OME token would actually be affected by this New Zealand litigation for which we have no actual description of what the causes of action are and how they would affect the OME token. [00:27:52] Speaker 04: On the Nevada statutory claim, do you agree that there's not a science requirement there? [00:27:57] Speaker 02: So the case that was just brought up and actually that argument was not made in any of the briefing in the lower court or in their opening brief or in their reply brief. [00:28:06] Speaker 02: So I haven't had an opportunity to actually look at that case. [00:28:09] Speaker 02: That's a new argument. [00:28:11] Speaker 02: With regard to loss causation, that argument is incorrect. [00:28:17] Speaker 02: The case they've cited, the Chitney case, was actually a default judgment case. [00:28:21] Speaker 02: It's unpublished. [00:28:22] Speaker 02: I would urge the court to look at the McDonald versus Placios case, 710, Fed APS 318. [00:28:32] Speaker 02: It's a 2018 case, which specifically says to prevail on securities fraud, the defendant has to make the same loss causation showing necessary to prevail on his federal claim that's specifically analyzing the NRS. [00:28:45] Speaker 02: 30 seconds left to discuss loss causation. [00:28:49] Speaker 02: I think in this case, they've clearly failed to allege loss causation. [00:28:53] Speaker 02: They have the actual burden to show that the drop in price was not due to anything else. [00:29:00] Speaker 02: And the fact that the entire crypto market was cratering at the time, the token had already begun falling for a month before, there's no explanation. [00:29:07] Speaker 02: The complaint simply ignores this fact. [00:29:11] Speaker 02: And that on its own shows that loss causation has not been pled in this case. [00:29:17] Speaker 03: All right. [00:29:18] Speaker 03: Thank you. [00:29:29] Speaker 03: Council, you have a couple of minutes for your rebuttal. [00:29:32] Speaker 00: Thank you, Your Honor. [00:29:33] Speaker 00: There's a few points that I want to make here. [00:29:34] Speaker 00: First, the Council for Al-Ghidenzi says that there's no reason to think that the [00:29:44] Speaker 00: that New Zealand litigation would have been important for investors. [00:29:49] Speaker 00: This is just not true. [00:29:51] Speaker 00: So there's a few points I want to make on that. [00:29:53] Speaker 00: First, the complaint goes into detail on this, but any public discussion of Gudenzi's litigation was discouraged by investors because they said that it would spread fear and distrust, which quickly undermines the value of a crypto token. [00:30:07] Speaker 00: This is discussed in detail in paragraphs 27 through 29. [00:30:12] Speaker 00: and any posts and videos about Gdansi's litigation were taken down by the investor community because of these pressures and potential investors who wanted more information about the lawsuit were told that they would have to look at private messaging groups for more information because posting information about the litigation publicly was viewed as so harmful for the price of the token. [00:30:33] Speaker 00: Gdansi himself, when he made the statements about the settlement, [00:30:36] Speaker 00: with Singapore, it was clearly done for the purpose of trying to negate any negative market information. [00:30:42] Speaker 00: And he even said that he wanted to help make the token grow. [00:30:47] Speaker 00: I also want to point out that the New Zealand opinion said that the claims are distinct for the purposes of whether they're completely precluded from being brought [00:30:57] Speaker 00: the new claim against Sikomi was going to be completely precluded from being brought, not whether or not they weren't related at all, which they clearly were. [00:31:08] Speaker 00: The Singapore litigation had, the Jagos judgment, the New Zealand opinion actually said that the claims would likely have been precluded from being brought in Singapore, but would be allowed to be brought in New Zealand. [00:31:24] Speaker 00: And I don't think that it's, [00:31:26] Speaker 00: The lower court should not have assumed, as it did, that all the investors cared about regarding the litigation was the asset free. [00:31:34] Speaker 00: There's no reason to think that, and you shouldn't infer that in Udenzi's favor. [00:31:38] Speaker 04: Can I ask you, one thing your friend on the other side says, we don't really know anything about what the New Zealand litigation was about, and the complaint doesn't provide details on that. [00:31:47] Speaker 04: Can you address that argument? [00:31:51] Speaker 00: Yeah, so the New Zealand litigation in the complaint on paragraph 37 says that it involved IKOMI agreeing to transfer up to 11.8 billion tokens in exchange for Kenzi's investment in Orbis. [00:32:08] Speaker 00: There was this bonus token claim that is also discussed in the record in the business desk article [00:32:16] Speaker 00: And in the New Zealand opinion, that was a claim for bonus tokens to be paid by Acome if Genensee had invested. [00:32:27] Speaker 00: That was 118 Bitcoin worth of these tokens, which is a very significant amount. [00:32:35] Speaker 00: And [00:32:36] Speaker 00: Anybody who, and again, I think that what's important here also is that you have Kadenzi who is saying that the company committed fraud in both of these lawsuits. [00:32:47] Speaker 00: And that is in the complaint when you look at paragraphs 40, 38, and 23. [00:32:53] Speaker 00: All right. [00:32:55] Speaker 03: Thank you, counsel. [00:32:57] Speaker 03: We thank both counsel for their arguments. [00:33:00] Speaker 03: The case just argued is submitted and with that we are adjourned for the day.