Opinion ID: 361048
Heading Depth: 2
Heading Rank: 3

Heading: Other Misrepresentations

Text: 30 The district court found that the statement that the FM 390 was capable of a mass (multibillion bit) memory was misleading because there was no readily available automatic photodata card selector system. Foto-Mem depended on the Mosler mechanism for its show demonstrators. The memorandum stated that the memory bank was the heart of the Risar. This was true. But the investors were not informed that what kept the heart beating was the Mosler selectriever. As the New York Times' experience proved, the Risar could not operate satisfactorily because the photodata card calling up system was defective. The investors should have been told explicitly the important role that the Mosler selectriever played in Foto-Mem's system. It might then have been obvious to some of them that dependence on a competitor for a vital part of the unit made this an extremely hazardous venture. 31 We think the district court was justified in finding that an explanation of how the money invested was to be used implied that, as far as the FM 390 and the Risar were concerned, research and development was about over and production and sales were just around the corner. 8