$7.8 Million Judgment: Local Equity Fund Manager Found Liable for Fraud, Civil Theft


Update 5 p.m. Sept. 15

Richard Gora, attorney for Gregory Imbruce, issued this statement on behalf of his client:

“Mr. Imbruce strongly disagrees with the arbitrator’s award and expects the decision to be dismissed due to numerous factors. Specifically, while the award does not find Mr. Imbruce liable for fraud, the Article falsely states that a judgment of fraud was entered against him. The Article also falsely implies and in fact states that the arbitration involved the SEC, which it did not. As such, the Article includes statements that are wildly and factually incorrect, manipulative, misleading and intentional. Certain of the investors continue to support Mr. Imbruce in order to obtain the truth of the significant value Mr. Imbruce created in successfully developing and acquiring energy assets at attractive values that led to the creation of Starboard Resources, Inc. (f/k/a Starboard Resources LLC), which an expert valued at over $360 million in early 2014. Mr. Imbruce continues to investigate his rights and remedies and will respond accordingly in the proper setting as well as continue to protect and support the minority investors in every regard as he has done to date.”

Asked for his reaction to the statement, Jon Whitcomb, an attorney representing counter-claimants, said: “These are the same arguments he made to the arbitrator, which were rejected.”

(Editor’s Note: The arbitration award was filed with the SEC as part of an 8-K by Brush Resources, Inc., a publicly traded company. There was no cause of action for fraud—however, explicitly in the award the judge says that Mr. Imbruce acted fraudulently and cites violations of the Connecticut Uniform Securities Act including fraud and deceitful conduct.)

Original Article

An abitrator has found a New Canaan man liable for breach of contract, civil theft, unjust enrichment and Connecticut state securities violations following a verdict issued Friday in a longstanding battle that also involves two town residents who had invested with him.

The $7.8 million judgment against Gregory Imbruce was filed Monday with the U.S. Securities and Exchange Commission.

Judge Elaine Gordon in an arbitration award ruled against Imbruce and in turn, in favor of a number of counter-claimants, including New Canaan’s Brad Higgins and the late Bill Mahoney, formerly a partner at Bridgewater.

Imbruce “without legal authority, wrongfully, fraudulently, and/or in breach of their fiduciary duties, caused Certain Respondents/Counterclaimants to suffer damages in the amount of $1,602,235,” Gordon wrote. She tripled that amount and added in fees, such as for lawyers, to land on a final figure of exactly $7,805,544.05, according to the filing.

The arbitrator also ordered that Imbruce forfeit equity in the funds, which could be valued as high as $10 million, officials say. That equity will be dispersed pro rata to the investors, under the arbitration award.

New Canaan resident Jon Whitcomb, a partner with Stamford-based Diserio, Martin, O’Connor & Castiglioni LLP, is listed as lead attorney for the counter-claimants.

Asked by NewCanaanite.com for his reaction to the award, Whitcomb responded: “Obviously this is a complete vindication of my clients.”

Imbruce’s attorney, Richard Gora of Monroe, could not immediately be reached for comment.

Investors had put money into three funds run by Imbruce to invest in oil and gas assets in Texas and Oklahoma. Concerns over how Imbruce was managing the assets culminated in arbitration, with lawsuits filed from both sides. Gordon ruled against Imbruce in each of his claims.

Gordon also ruled against William Pettinati Jr., who had brought claims against the counter-claimants, represented by Whitcomb.

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