A state Superior Court judge has granted injunctive relief against an Allendale-based company, its top executive and two other business entities as part of a lawsuit the state filed alleging the defendants defrauded nearly 800 investors of about $9.5 million.
In its July lawsuit, the state Bureau of Securities alleges Thomas Fagan, who founded Arbios Acquisition Partners LLC in 2009 to gain control of publicly traded Arbios Systems Inc., sold unregistered ASI promissory notes and ASI stock to investors, and “commingled investors’ funds among the entities he controlled, and misused approximately $2.3 million for his personal benefit and enrichment.”
Fagan was also accused of not being registered with the state when he sold $9.5 million in unregistered stock for his third company, Energex Systems Inc.
Both Fagan’s personal and business assets are frozen, and he is restricted from controlling, managing, directing or supervising securities issuers, according to a news release from the Bureau of Securities. The three entities have been assigned a monitor by the court to review and evaluate management and governance policies and procedures. The monitor will report back to the court in 90 days, with quarterly updates thereafter.