Court Opinion

ID: 4671264
Source: CourtListenerOpinion
Date Created: 2021-03-25 14:08:44.107241+00
Date Added: 2024-06-11T08:02:30.238982
License: Public Domain

NOT FOR PUBLICATION WITHOUT THE
                            APPROVAL OF THE APPELLATE DIVISION
     This opinion shall not "constitute precedent or be binding upon any court ." Although it is posted on the
  internet, this opinion is binding only on the parties in the case and its use in other cases is limited. R. 1:36-3.

                                                     SUPERIOR COURT OF NEW JERSEY
                                                     APPELLATE DIVISION
                                                     DOCKET NO. A-0967-19

IN THE MATTER OF ERIC J.
BRUNO and MIRAKILL
BRANDS, LLC.
__________________________

                Submitted March 3, 2021 – Decided March 25, 2021

                Before Judges Sumners and Geiger.

                On appeal from the Department of Law and Public
                Safety, Division of Consumer Affairs.

                Levenson Law, LLC, attorneys for appellants Eric J.
                Bruno and Mirakill Brands, LLC (Scott Levenson, on
                the brief).

                Gurbir S. Grewal, Attorney General, attorney for
                respondent New Jersey Bureau of Securities (Jane C.
                Schuster, Assistant Attorney General, of counsel; Evan
                A. Showell, Deputy Attorney General, on the brief).

PER CURIAM

       Appellants Eric J. Bruno and Mirakill Brands, LLC (Mirakill), appeal a

September 24, 2019 final order issued by Christopher W. Gerold, Chief of the

New Jersey Bureau of Securities (the Bureau), that adopted the August 9, 2019
summary decision of Administrative Law Judge (ALJ) Thomas Betancourt in its

entirety. We affirm.

      We discern the following facts from the record. Mirakill was a Nevada

limited liability company (LLC) with offices in Old Tappan, New Jersey. BBA

Enterprises, LLC (BBA), was the managing member of Mirakill. Bruno owned

fifty-one percent of BBA and served as its president.

      Mirakill described its mission as developing a proprietary antimicrobial

product designed to prevent the growth of harmful bacteria on high-contact

surfaces.   Mirakill and Bruno offered and sold membership interests and

warrants called "units" to prospective investors. Prospective investors were

provided with a confidential private placement memorandum (PPM) that "set

forth the nature of the business, risks, executives, consultants, projected

revenues, use of funds, together with other information."    The PPM stated

Mirakill intended to raise up to $2,500,000, to be used for administrative,

production, and other uses in specified amounts.

      Mirakill also provided prospective investors with an Interest Purchase

Agreement (IPA) which confirmed they received the PPM and that their decision

to invest was based on the information contained in the PPM. At least eight

investors purchased interests and warrants, raising approximately $137,500.

                                                                        A-0967-19
                                       2
      The Bureau investigated Bruno and Mirakill to determine if they violated

the Uniform Securities Law (1997) (the Securities Law), N.J.S.A. 49:3-47 to -

76. The investigation included the deposition of Bruno and Gerard Adams,

Mirakill's marketing and branding expert.       Based on the documents and

information compiled during the investigation, Bureau Chief Gerold made the

following findings:

            1. Eric J. Bruno, residing in River Vale, New Jersey,
            was the President of Mirakill from at least July 2013 to
            June 2014 (the "Relevant Period"). Bruno has never
            been registered with the Bureau in any capacity.

            2. Mirakill was a Nevada [LLC] formed on July 1, 2013
            and dissolved on June 12, 2014 with offices located [in]
            . . . Old Tappan, New Jersey. BBA Enterprises LLC
            ("BBA") was the managing member of Mirakill. BBA
            was a Delaware limited liability company formed on
            June 12, 2012. Bruno was the President of BBA and
            owned a 51% stake in the company. Bruno cancelled
            BBA's limited liability registration with the Delaware
            Secretary State on June 14, 2014.

            Offer and Sale of Unregistered Mirakill Securities

            3. Mirakill purported to be a start-up business that
            would be developing an improved, proprietary
            antimicrobial additive designed to prevent the growth
            of harmful microorganisms with industrial uses
            including plastics, paints, and filters (the "Mirakill
            Product").

            4. During the Relevant Period, [appellants] offered and
            sold unregistered securities in the form of membership

                                                                        A-0967-19
                                       3
interests and warrants to buy membership interests in
Mirakill. Each membership interest and warrant to buy
a membership interest in Mirakill was sold as one "unit"
(the "Mirakill Securities").

5. [Appellants] raised approximately $137,000 from
the sale of the unregistered Mirakill Securities to at
least seven New Jersey residents.

6. The Mirakill Securities are securities as defined in
N.J.S.A. 49:3-49(m) of the Securities Law and were
required by N.J.S.A. 49:3-60 to be registered with the
Bureau, federally covered, or exempt from registration.

7. The Mirakill Securities were not registered with the
Bureau, "federally covered" or otherwise exempt from
registration.

8. In or about September or October 2013, [appellants],
along with two other officers of Mirakill, held an event
for prospective Mirakill investors. Approximately
[thirty] to [forty] individuals attended. During the
event, Bruno provided an overview of the Mirakill
Product to the prospective investors, as well as its
potential applications, and discussed the amount of
funds that would be required to bring the Mirakill
Product to market. After the event, several of the
attendees purchased the Mirakill Securities.

9. Mirakill's investors were provided the Mirakill PPM
describing the Mirakill Securities, the nature of
Mirakill's business risks, executives, consultants,
project revenues, use of funds, and other material
information that would be useful to investors.

10.    Mirakill investors were also provided a
subscription    agreement      ("Interest   Purchase
Agreement") [(IPA)] to sign that was an exhibit to the

                                                           A-0967-19
                           4
Mirakill PPM. The [IPA] confirmed that they had been
provided a copy of the PPM and that their investment
decision was based on the information contained in the
Mirakill PPM. Bruno countersigned the [IPAs] as
President of Mirakill.

11. In addition to countersigning the [IPA], Bruno
personally met with certain investors, received and
deposited investment checks, and received wire
transfers into accounts that he controlled.

Misuse of Investor Funds

12. Investor funds were deposited or wired into an
account ending in 1735 held in the name of Mirakill
Brands, LLC at Oppenheimer & Co., Inc. (the "Mirakill
Account"). The Mirakill Account was opened on
August 27, 2013. Bruno and another office of Mirakill
were the only authorized signatories.

13. Bruno and Mirakill, through Bruno, made material
misstatements of fact to investors through the Mirakill
PPM, which stated investor funds would be use for:

      a. administrative uses, including office space,
      salaries, and professional fees.

      b. production of the Mirakill Product, including
      purchase of raw materials, deposits, packaging,
      and other direction productions costs; and

      c. other business uses including intellectual
      property registration, working capital, research
      and development, and marketing of the Mirakill
      Product.

14. Contrary to the statements in the Mirakill PPM, and
without disclosure to Mirakill investors, Bruno used

                                                          A-0967-19
                           5
investors' funds for his own personal expenses and
entertainment.

15. Bruno misused at least $82,000 of investor funds.
The misuse of investor funds from the Mirakill Account
included:

      a. Cash withdrawals at ATMs totaling $28,148;

      b. Automobile lease and insurance payments
      totaling $1,500;

      c. Debit card charges at restaurants, liquor stores,
      and grocery stores totaling $19,388;

      d. Debit card charges at a New York "gentleman's
      club" totaling $7,134;

      e. Limousine services totaling $2,222.18;

      f. Pharmacy, gas station, and convenience store
      purchases totaling $1,033; and

      g. Clothing and dry[-]cleaning expenses totaling
      $2,333.

16. Bruno also transferred $21,000 from the Mirakill
Account to BBA's bank account at Wells Fargo ending
in 5247, which he misused as follows:

      a. Debit card purchases at the same New York
      "gentleman's club" totaling $1,649;

      b. Cash withdrawals from ATMs and counter
      withdrawals totaling $18,108; and

                                                             A-0967-19
                            6
                  c. Debit card charges for other personal expenses
                  including restaurant meals, limousine services,
                  gasoline, and dry cleaning.

      The Bureau Chief determined that appellants committed the following

violations of the Securities Law:

               18. Bruno and Mirakill, through Bruno, made untrue
               statements of material facts and/or omitted . . .
               material facts necessary in order to make the
               statements made, in light of the circumstances under
               which they were made, not misleading to investors
               in connection with the offer and sale of securities.

               19. Each omission or materially false statement
               constitutes a violation of N.J.S.A. 49:3-52(b).

                  ....

               22. Bruno and Mirakill, through Bruno, offered and
               sold securities that were not registered with the
               Bureau.

               23. The Mirakill Securities were required to be
               registered with the Bureau, federally covered, or
               exempt pursuant to N.J.S.A. 49:3-60.

               24. Each offer or sale of unregistered securities
               constitutes a violation of N.J.S.A. 49:3-60 and is
               cause for the imposition of civil monetary penalties
               pursuant to N.J.S.A. 49:3-60.

                  ....

               26. Bruno acted as an agent, as defined under
               N.J.S.A. 49:3-49(b), in effecting or attempting to

                                                                      A-0967-19
                                      7
               effect transactions in Mirakill Securities from and in
               New Jersey.

               27. Bruno was not registered with the Bureau as an
               agent of Mirakill.

               28. Bruno violated N.J.S.A. 49:3-56(a), which
               provides, among other things, that only persons
               registered with the Bureau may lawfully act as
               agents.

                  ....

               31. Mirakill employed Bruno to act as an agent, as
               defined under N.J.S.A. 49:3-49(b), to attempt to
               effect transactions in securities in or from New
               Jersey.

               32. Mirakill's conduct constituted employing an
               agent who was not registered with the Bureau in
               violation of N.J.S.A. 49:3-56(h).

      On May 23, 2018, the Bureau Chief: (1) ordered Mirakill and Bruno to

cease and desist from further violations of the Securities Law; (2) assessed a

$100,000 civil monetary penalty against Mirakill and Bruno, jointly and

severally, for their violations of the Securities Law; and (3) denied Mirakill and

Bruno any exemptions under N.J.S.A. 49:3-50(a), (b).

      Appellants filed a contesting answer and requested a hearing. In their

answer, they admitted that Bruno "has never been registered with the Bureau in

any capacity," but claimed that he met an exemption to register under N.J.S.A.

                                                                            A-0967-19
                                        8
49:3-50(b) "because sales were made to less than ten (10) [New Jersey]

residents." This matter was then transferred to the Office of Administrative Law

as a contested case and assigned to ALJ Betancourt.

      The parties cross-moved for summary decision pursuant to N.J.A.C. 1:1-

12.5. The cross-motions were supported by voluminous certifications, exhibits,

and the deposition transcripts. On August 9, 2019, ALJ Betancourt issued an

Initial Decision granting summary decision to the Bureau, denying appellants'

cross-motion, and affirming the Bureau Chief's May 23, 2018 summary order.

The ALJ concluded that the evidence was "so one sided that [the Bureau] must

prevail as a matter of law."

      The ALJ excluded the unsworn certifications of Adam Bruno, Dr. Gregori

Moriello, and Christine Schneidman from consideration because they did not

comply with Rule 1:4-4(b). He considered Bruno's suspect expenditures "the

most troubling" and "unexplained" of the allegations.        Appellants did not

support their "blanket statement" that investor funds spent on "dinners, outings,

gentlemen's clubs, and the like" were for manufacturing supplies, equipment, or

recruitment of Advisory Board members and additional capital.           The ALJ

observed "[t]here is no real dispute that Bruno used investor funds for other than

Mirakill business." He also noted "[t]here are no descriptions of events where

                                                                            A-0967-19
                                        9
Advisory Board members are recruited . . . [or] description of events where

additional capital [was] sought. Nothing at all is said about the large amount of

ATM withdrawals."

      Furthermore, the ALJ found "Bruno and Mirakill failed to disclose this

use of company funds to potential investors. The use of investor funds is a

material fact and must be disclosed."       Prior to investing in Mirakill, Marc

Demyen, George Venizelos, Michael DiGiorgio, and Michael Baldino "were not

apprised by Bruno that investor funds would be used for Bruno's personal

benefit, expenses and entertainment. None of them would have invested in

Mirakill had they been so apprised."

      The ALJ further found the Mirakill interests were securities as

expansively defined by N.J.S.A. 49:3-49(m) and unregistered securities in

violation of N.J.S.A. 49:3-60 and that "Mirakill refer[red] to the Units as

securities several times in both the PPM and the Agreement." Thus, appellants

failed to demonstrate that the Mirakill interests were exempt under N.J.S.A.

49:3-50(b)(9):

            [Appellants] offer no evidence that they reasonably
            believed that all buyers are purchasing for investment.
            They have not established that there was no
            renumeration. In fact, Bruno received renumeration by
            his misuse of investor funds to pay personal expenses.
            Likewise, [appellants] have not offered any evidence

                                                                           A-0967-19
                                       10
             that the Mirakill securities were not offered or sold by
             general solicitation of any general advertisement.

             [Appellants] have admitted that the Mirakill securities
             were not registered.

Additionally, Bruno acted as an unregistered "agent for Mirakill when he

solicited investments from various individuals,' in violation of N.J.S.A. 49:3-

56(a) and, in turn, that Mirakill employed Bruno as an unregistered agent in

violation of N.J.S.A. 49:3-56(h).

      Lastly, the ALJ found that Bruno "misrepresented the use of investor

funds to at least five individuals[.]" He "sold, or solicited the sale of, securities

to at least five individuals," in violation of the Security Law, which carries up

to a $10,000 penalty for the first violation and up to a $20,000 penalty for each

subsequent violation under N.J.S.A. 49:3-70.1.

      Thus, the ALJ affirmed the Bureau Chief's May 23, 2018 summary order.

Appellants filed written exceptions to the Initial Decision, contending the

decision was flawed procedurally and substantively. The Bureau contended the

exceptions were both substantively without merit and procedurally deficient

under N.J.A.C. 1:1-18.4(b)(2), (3).

      The Bureau Chief issued a September 24, 2019 final order adopting the

ALJ's Initial Decision in its entirety. The Final Order: (1) ordered Mirakill and

                                                                              A-0967-19
                                        11
Bruno to cease and desist from further violations of the Securities Law; (2)

assessed a $100,000 civil monetary penalty against Mirakill and Bruno, jointly

and severally; (3) denied Mirakill and Bruno any exemptions under N.J.S.A.

49:3-50(a)(9), (10), and (11) and N.J.S.A. 49:3-50(b); and (4) ordered that the

exemption from registration requirements provided by N.J.S.A. 49:3-56(b), (c),

and (g) be revoked as to Bruno and Mirakill. This appeal followed.

      Appellants raise the following points for our consideration:

            I. THE ALJ ERRED IN GRANTING SUMMARY
            DECISION AND THE COMMISSIONER ACTED
            ARBITRARILY    AND   CAPRIC[I]OUSLY   IN
            ADOPTING HIS FINDINGS THAT MIRAKILL’S
            OFFERING    IS   NOT    EXEMPT     FROM
            REGISTRATION PURSUANT TO N.J.S.A. 49:3-
            50(b)(9).

            II. THE ALJ ERRED IN GRANTING SUMMARY
            DECISION AND THE COMMISSIONER ACTED
            ARBITRARILY    AND     CAPRIC[I]OUSLY IN
            ADOPTING HIS FINDINGS THAT [APPELLANTS]
            ARE NOT EXEMPT FROM REGISTRATION
            PURSUANT TO N.J.S.A. 49:3-56(b).

            III. THE ALJ ERRED IN GRANTING SUMMARY
            DECISION AND THE COMMISSIONER ACTED
            ARBITRARILY     AND   CAPRIC[I]OUSLY   IN
            ADOPTING HIS FINDINGS THAT THERE EXISTS
            NO GENUINE ISSUES OF MATERIAL FACT AS TO
            WHETHER THE MIRAKILL LLC "MEMBERSHIP
            UNITS" CONSTITUTE SECURITIES.

                                                                         A-0967-19
                                      12
            IV. THE ALJ ERRED IN GRANTING SUMMARY
            DECISION AND THE COMMISSIONER ACTED
            ARBITRARILY    AND    CAPRIC[I]OUSLY  IN
            ADOPTING HIS FINDINGS THAT THERE EXISTS
            NO GENUINE ISSUES OF MATERIAL FACT AS TO
            WHETHER [APPELLANTS] MADE MATERIALLY
            FALSE AND/OR MISLEADING STATEMENTS
            AND/OR OMITTED MATERIAL FACTS IN THEIR
            OFFERING.

            V. THE ALJ ERRED IN GRANTING SUMMARY
            DECISION AND THE COMMISSIONER ACTED
            ARBITRARILY    AND    CAPRIC[I]OUSLY  IN
            ADOPTING HIS FINDINGS THAT THERE EXISTS
            NO GENUINE ISSUES OF MATERIAL FACT AS TO
            WHETHER [APPELLANTS] MISUSED ANY
            INVESTOR FUNDS.

      Appellate review of a final agency decision is limited. In re Carter, 191

N.J. 474, 482 (2007). We do not ordinarily overturn a final agency decision "in

the absence of a showing that it was arbitrary, capricious or unreasonable, or

that it lacked fair support in the evidence." Ibid. (quoting Campbell v. Dep't of

Civ. Serv., 39 N.J. 556, 562 (1963)).       In general, our role is limited to

determining:

            (1) whether the agency’s action violates express or
            implied legislative policies, that is, did the agency
            follow the law; (2) whether the record contains
            substantial evidence to support the findings on which
            the agency based its action; and (3) whether in applying
            the legislative policies to the facts, the agency clearly
            erred in reaching a conclusion that could not reasonably
            have been made on a showing of the relevant factors.

                                                                           A-0967-19
                                      13
            [Mazza v. Bd. of Trs., 143 N.J. 22, 25 (1995) (citing
            Campbell, 39 N.J. at 562).]

      Moreover, in reviewing final agency decisions, we "must defer to an

agency's expertise and superior knowledge of a particular field." Carter, 191

N.J. at 483 (quoting Greenwood v. State Police Training Ctr., 127 N.J. 500, 513

(1992)). "[I]f substantial evidence supports the agency's decision, 'a court may

not substitute its own judgment for the agency's even though the court might

have reached a different result.'" Ibid. (quoting Greenwood, 127 N.J. at 513).

However, we are not "bound by the agency's interpretation of a statute or its

determination of a strictly legal issue." Ibid. (quoting Mayflower Sec. Co. v.

Bureau of Sec., 64 N.J. 85, 93 (1973)).

      A party is entitled to summary decision where the motion record "show[s]

that there is no genuine issue as to any material fact challenged and that the

moving party is entitled to prevail as a matter of law." N.J.A.C. 1:1-12.5(b).

Summary decision is appropriate "where the undisputed material facts . . .

indicate that a particular disposition is required as a matter of law." In re Robros

Recycling Corp., 226 N.J. Super. 343, 350 (App. Div. 1988). We review the

grant of summary decision de novo. N.J. Div. of Tax'n v. Selective Ins. Co.,

399 N.J. Super. 315, 322 (App. Div. 2008).

                                                                              A-0967-19
                                        14
      Applying these well-settled principles, we affirm substantially for the

reasons expressed by the Bureau Chief in his May 23, 2018 summary order and

the ALJ in his August 9, 2018 initial summary decision. We add the following

comments.

      The Securities Law makes it unlawful for any "security" to be offered or

sold unless: (1) the security is registered under the Securities Law; (2) the

security is a federally covered security; or (3) the security is exempt under the

Securities Law.    N.J.S.A. 49:3-60.     The Securities Law defines the term

"security" broadly; it includes any "certificate of interest," "transferable share,

investment contract," or "warrant or right to subscribe to or purchase, any of the

foregoing." N.J.S.A. 49:3-49(m).

      The Securities Law's definition of security "unequivocally follow[s] the

definition proffered by the Federal Securities Act of 1933." Manheim NJ Invs.,

Inc. v. Div. of Tax'n, 30 N.J. Tax 18, 34 (N.J. Tax Ct. 2017) (citing Conroy v.

Schultz, 80 N.J. Super. 443, 450 (Ch. Div. 1963)). Indeed, the Securities Law's

definition is "virtually identical" as that of 15 U.S.C. 77b(a)(1). AMR Realty

Co. v. State, Bureau of Sec., 149 N.J. Super. 329, 334 (App. Div. 1977). We

look to the United State Supreme Court for guidance. Manheim, 30 N.J. Tax at

34 (citing Conroy, 80 N.J. Super. at 451).

                                                                             A-0967-19
                                       15
      An investment contract is a security where there is "[(1)] an investment of

money [(2)] in a common enterprise with [(3)] profits to come solely from the

efforts of others." SEC v. W.J. Howey Co., 328 U.S. 293, 301 (1946). Our

Supreme Court adopted this test in AMR Realty, 149 N.J. at 339.

      A financial instrument meeting the definition of a security may be offered

or sold without registration if exempt under the Securities Law. N.J.S.A. 49:3-

60. "[T]he burden of proving an exemption or an exception from a definition is

upon the person claiming it." N.J.S.A. 49:3-50(d).

      Offers or sales of securities are exempt if sales are not made to more than

ten people within twelve months, as long as "(i) the seller reasonably believes

that all buyers are purchasing for investment, and (ii) no commission or other

remuneration is paid or given directly or indirectly for soliciting any prospective

buyer in this State, and (iii) the securities are not offered or sold by general

solicitation or any general advertisement." N.J.S.A. 49:3-50(b)(9).

      Appellants first argue a genuine issue of material fact existed as to

whether the "units" they offered and sold are securities as defined by the

Securities Law. Conceding the Mirakill units were neither registered in New

Jersey nor federally covered, appellants contend the units met the exemption in

N.J.S.A. 49:3-50(b)(9) because they only had nine investors, Bruno did not

                                                                             A-0967-19
                                       16
receive renumeration from investor funds, and the units were not offered or sold

by general solicitation.

      The Mirakill units, however, are investment contracts as defined by the

Securities Law and W.J. Howey. First, the Mirakill units were undoubtedly

purchased with an expectation of profits; the PPM distributed to investors

described the company's business model and expected earnings.           Second,

Mirakill is a common enterprise. Lastly, Mirakill's investors expected their

profits to come solely from the efforts of Mirakill's leadership.

      The Mirakill units were not exempt from registration. Mirakill has not

produced any evidence that Bruno did not receive renumeration from his misuse

of investor funds. In fact, appellants misconstrue their burden of disproving

renumeration by stating "there is no evidence in the record to contradict that

[Bruno] received no renumeration for the Mirakill offering." On the contrary,

there is ample evidence that Bruno received renumeration.

      Appellants further argue that Bruno was not required to be registered

because he was a broker-dealer and met a fifteen-sales-or-less exemption. But

N.J.S.A. 49:3-56(a) makes it unlawful for any person to act as an agent "unless

that person is registered or exempt from registration" under the Securities Law.

                                                                          A-0967-19
                                       17
Likewise, it is unlawful for "any broker-dealer or issuer to employ an agent . . .

unless the agent is registered." N.J.S.A. 49:3-56(h).

      The record demonstrates that Bruno served as Mirakill's exclusive agent.

He met with potential investors as the "face" of Mirakill and solicited their

investments.    Although agent registration is not required under certain

circumstances, none of those exemptions apply to this case. 1 Bruno served as

an unregistered agent of Mirakill, in violation of N.J.S.A. 49:3-56(a), (h).

      "Both Congress and our Legislature have chosen to protect investors by

assuring that they [will] be given all materials necessary to make an informed

decision." Rudbart v. N. Jersey Dist. Water Supply Comm'n, 127 N.J. 344, 348

(1992). The Securities Law makes it unlawful

            for any person, in connection with the offer, sale, or
            purchase of any security, directly or indirectly . . . (b)
            [t]o make any untrue statement of a material fact or to
            omit to state a material fact necessary in order to make

1
   Agent registration is not required for: (1) sale of a security that is "issued or
guaranteed by the United States, any state, [or] any political subdivision of a
state," N.J.S.A. 49:3-50(a)(1); (2) any security issued or guaranteed by Canada,
N.J.S.A. 49:3-50(a)(2); (3) "[a]ny security issued by and representing an interest
in or a debt of, or guaranteed by, any bank, savings institution, or trust
company," N.J.S.A. 49:3-50(a)(3); (4) "[a]ny investment contract issued in
connection with" employee retirement or benefit plans under N.J.S.A. 49:3-
50(11); (5) certain federally covered securities under N.J.S.A. 49:3-50(b); (6)
sales made to employees, partners, or directors of the issuer; or (7) for
transactions related to penny stocks. N.J.A.C. 13:47A-3.3(b).
                                                                               A-0967-19
                                        18
            the statements made, in the light of the circumstances
            under which they are made, not misleading[.]

            [N.J.S.A. 49:3-52(b).]

"[M]ateriality depends on the significance the reasonable investor would place

on the withheld or misrepresented information." Basic Inc. v. Levinson, 485

U.S. 224, 240 (1988).

      The Bureau argues the PPMs appellants distributed failed to inform

potential investors that appellants planned to use investor funds to finance "trips

to   gentlemen's   clubs   or   other   personal     expenses"   and   that    such

misrepresentations or omissions were material to the investors' decision to invest

in Mirakill. Appellants argue all the sums spent at gentlemen clubs, outings,

dinners, and the like were "for the recruitment of advisory board members and/or

to attract additional investment capital."         They contend these expenses

constituted marketing expenses under the PPM.

      These purported marketing expenses totaled $83,605.64, nearly sixty

percent of the entire sum contributed by investors. In contrast, the $500,000

marketing estimate set forth in the PPM is only twenty percent of the projected

estimated investments, $2,500,000. Surely, Mirakill investors would find a

misstatement equating to a forty percent difference of allocated investor funds

as "material." Appellants clearly violated N.J.S.A. 49:3-52(b).

                                                                              A-0967-19
                                        19
      Appellant's remaining arguments are without sufficient merit to warrant

discussion in a written opinion. R. 2:11-3(e)(1)(E).

      In sum, the record amply supports the Bureau Chief's and ALJ's factual

findings. Their legal conclusions are likewise fully supported by the record and

consonant with applicable law. We discern no basis to overturn any aspect of

the Bureau Chief's final order.

      Affirmed.

                                                                           A-0967-19
                                      20