Searching over 5,500,000 cases.

Buy This Entire Record For $7.95

Download the entire decision to receive the complete text, official citation,
docket number, dissents and concurrences, and footnotes for this case.

Learn more about what you receive with purchase of this case.


August 15, 2002


The opinion of the court was delivered by: Alesia, District Judge.


Before the court are (1) defendants' motions in limine and (2) defendants' motion for summary judgment, pursuant to Federal Rule of Civil Procedure 56(c). For the following reasons, the court: (1) grants in part and denies in part defendants' motions in limine and (2) grants in part and denies in part defendants' motion for summary judgment as follows. The court grants defendants' motion for summary judgment on Count I of plaintiffs' complaint. On its own motion, the court dismisses Counts II and III of plaintiffs' complaint without prejudice. The court denies as moot defendants' motion for summary judgment on Counts II and III of plaintiffs' complaint.


Plaintiffs Ronald R. Tirapelli ("Tirapelli") and Michael Webb ("Webb") (collectively, "plaintiffs") bring this suit, claiming that defendants are liable for federal securities law violations, Illinois securities law violations, and Illinois common law fraud. Particularly, plaintiffs claim that defendants made false representations of material fact in order to induce plaintiffs to invest in defendant Telecom Capital Group, L.L.C. ("TCG").*fn2 In order to understand the court's opinion, one must be aware of a number of facts. For the sake of clarity, a recitation of these facts is in four parts. Part A describes TCG and its retention of defendant Advanced Equities, Inc. ("Advanced Equities") to obtain investors in TCG. Part B discusses the meetings between plaintiffs and defendants, as well as plaintiffs' decision to invest in TCG. Part C outlines the relevant provisions of the documents that plaintiffs signed before investing in TCG. Part D discusses the current lawsuit.

A. TCG and the Sale of Membership Interests

TCG was formed on February 29, 2000 and was a limited liability company whose principal place of business was Chicago, Illinois.*fn3 Defendant Lee Wiskowski ("Wiskowski") served as president of TCG. TCG was formed primarily to invest in and make loans to companies engaged in the telecommunications, internet, or information technology businesses. The plan for TCG was to purchase buildings and remodel them as "incubators" and "carrier hotels" for start-up companies.*fn4 In order to raise capital, TCG retained defendant Advanced Equities to sell Preferred Membership Interests in TCG as part of a private placement. Ronald Stuppy ("Stuppy") was one of the Advanced Equities brokers who solicited investments in TCG.

B. The Meetings and Plaintiffs' Decision to Invest in TCG

In early 2000, Stuppy told Tirapelli — who had previously made two investments through Stuppy — about the opportunity to invest in TCG. Stuppy explained the concept of TCG to Tirapelli and suggested that Tirapelli come to Chicago to talk to other people involved in the company. Soon thereafter, Tirapelli traveled to Chicago to attend a meeting regarding TCG at Advanced Equities's offices.

Tirapelli, Stuppy, Wiskowski and defendant Jack Pressman ("Pressman") attended this meeting. Tirapelli made an audio recording of this meeting.*fn5 At this meeting, Wiskowski made a presentation about TCG and explained what it intended to do with the money that it hoped to raise through the sale of the membership interests. Wiskowski explained TCG's plan to purchase buildings to be used as incubators and carrier hotels. After the meeting, Tirapelli, Stuppy, Wiskowski, and Pressman toured a building at 2233 South Throop Street in Chicago (the "Throop Property") that TCG was going to use for its business.

After Tirapelli returned home, he called his close friend Webb. During this telephone call, Tirapelli told Webb that he thought he had found a good investment for them. The two arranged to meet at Webb's office to discuss the opportunity to invest in TCG. During that meeting, Tirapelli played the tape that he had recorded at the first meeting. After playing the tape and discussing the opportunity with Webb, Tirapelli arranged for another meeting regarding TCG at Advanced Equities's offices in Chicago.

In March 2000, Tirapelli and Webb met with Wiskowski, Pressman, and Stuppy at Advanced Equities's offices in Chicago. Wiskowski and Pressman gave a presentation about TCG during this meeting. After the presentation, Webb and Tirapelli each decided to invest $250,000.00 in TCG.

C. The Subscription Documents

TCG required each plaintiff to review and sign a set of documents (the "Subscription Documents") before investing.*fn6 The documents explained the terms of the investment and included a questionnaire that required each potential investor to demonstrate that he satisfied the requirements for participation in the investment. Tirapelli and Webb each signed their Subscription Documents before investing in TCG.

The Subscription Documents contained a non-reliance clause, which provided:

[I]n evaluating the suitability of an investment by the undersigned in the Company, the undersigned has relied solely upon the materials made available to the undersigned at the undersigned's request and independent investigations made by the undersigned in making the decision to purchase the Preferred Membership Interests subscribed for herein, and acknowledges that no representations or warranties (oral or written), have been made to the undersigned with respect thereto.

(the "Non-Reliance Clause") (Defs.' Ex. 9 & 10 at 5-6.) Thus, in signing the Subscription Documents, Tirapelli and Webb represented that they each had relied only on the terms of the Subscription Documents and the accompanying documents in deciding to invest in TCG, and that they had not relied upon any other representation.

The Subscription Documents explained that plaintiffs' investments in TCG "were subject to the terms and conditions contained herein." (Defs.' Ex. 9 & 10 at 1.) The documents provided in capital letters that: "IN MAKING AN INVESTMENT DECISION, INVESTORS MUST RELY ON THEIR OWN EXAMINATION OF THE COMPANY AND THE TERMS OF THE OFFERING." (Id.) Additionally, the Subscription Documents explained how TCG planned to use the money from the investments. According to the agreement:

[TCG] is offering up to 100 Preferred Membership Interests. [TCG] has been formed to invest in one or more telecommunications, internet, information technology or other technology based companies. . . . In addition, [TCG] anticipates that it will invest in a limited liability company or other entity which will hold the real estate and improvements located at 2233 S. Throop, Chicago, Illinois and consisting of a 700,000 square foot office building (the "Commonwealth Edison Property"). The Commonwealth Edison Property is currently under contract to Jack Pressman or an affiliate. [TCG] will also purchase up to 2,500,000 Series A Preferred Shares . . . of OptimalPATH Digital Network, Inc., a Delaware corporation . . . to be issued at $2.40 per Share. [TCG] reserves the right to reject any subscription in whole or in part for any reason in its sole discretion.

(Defs.' Ex. 9 & 10 at 1-2.) (emphasis added). Similarly, a section of the Subscription Documents entitled, "Information Regarding Investment Considerations," ...

Buy This Entire Record For $7.95

Download the entire decision to receive the complete text, official citation,
docket number, dissents and concurrences, and footnotes for this case.

Learn more about what you receive with purchase of this case.