Opinion ID: 154940
Heading Depth: 2
Heading Rank: 2

Heading: The securities lawsuits

Text: A series of lawsuits were subsequently filed in California, Colorado, New York, and Delaware by investors with shares in AHI and/or partnership interests in AHI-related -5- limited partnerships. The suits alleged violations of federal and state securities laws, and named as defendants various individuals, including Barnard, who were involved in the management of AHI and/or AHI-related entities. Also named in several of the suits were Coopers & Lybrand, the accounting firm that assisted AHI in the offerings, and Otten, Johnson, Robinson, Neff & Ragonetti (Otten, Johnson), a law firm that also assisted AHI in the offerings. According to plaintiffs in the underlying actions, AHI’s statements and promises to investors were simply a cover-up for an elaborate Ponzi scheme. In particular, plaintiffs alleged that, at the time of the offerings, AHI’s basic business of monitoring alarm accounts was losing money. AHI offset those losses, plaintiffs alleged, by arranging the sale of limited partnership interests. Plaintiffs further alleged AHI’s representations of potential profits, as well as its underlying assumptions and representations about the alarm monitoring business, were untrue and/or lacked any reasonable basis in fact. The cases were eventually consolidated for pretrial purposes on April 9, 1992, pursuant to an order of the Judicial Panel on Multidistrict Litigation, in the United States District Court for the District of Colorado, under 28 U.S.C. § 1407.