Jury finds GOP Senate candidate misled investors
Posted February 18, 2014 3:52 p.m. EST
Updated February 18, 2014 9:04 p.m. EST
Raleigh, N.C. — A Wake County jury found Tuesday that Republican U.S. Senate candidate Dr. Greg Brannon misled investors in a technology start-up.
As a result of the civil judgment, Brannon will be personally liable for repaying $250,000. If the judgment is upheld on appeal, he will also have to pay 8 percent interest from the time each of the aggrieved investors wrote their checks and could be required to pay their attorneys' fees in the case.
Jurors determined that Brannon's co-defendant Robert Rice didn't mislead investors and isn't responsible for repaying them.
"I completely disagree with this verdict and feel that I was treated unfairly by the court. I will defend my integrity and will be appealing this decision," Brannon said in a statement emailed shortly after the verdict was read.
Asked if the verdict would deter him from his U.S. Senate run, Brannon said, "No way," he said, adding that he would appeal the verdict.
The judgment comes less than three months before Republican voters will make their selection in the May primary. Brannon said he planned to file as a Senate candidate this week, making him one of at least five Republicans who plan to run for the chance to challenge Democratic U.S. Sen. Kay Hagan.
Although state House Speaker Thom Tillis is the frontrunner in the race in terms of both fundraising and polling, Brannon and Rev. Mark Harris of Charlotte are his two strongest rivals.
Brannon has been endorsed by FreedomWorks, a grassroots group associated with the tea party wing of the GOP. He has also gotten favorable nods from the likes of U.S. Sen. Rand Paul of Kentucky and radio talker Glenn Beck.
The case creates an obstacle to Brannon's bid. To find Brannon liable for repaying the investors' money, jurors had to find that he either lied to those investors or should have known that the information he was passing on was false or misleading.
The finding is one ripe for campaign ads.
In 2010, Brannon, a Cary obstetrician, was a board member for the start up Neogence, which promised to create an augmented reality application called Mirascape.
During the trial, Brannon was described as a member of the board who spent five to 10 hours per week advising the company and helping to recruit more investors.
Rice, the company's co-founder, was described by one witness as "the creative genius" behind the company. Local lawyer David Kirkbride was also a member of the board and for a few months was the company's CEO.
Two investors, Lawrence Piazza and Salvatore Lampuri, sued to recoup a total of $250,000 they invested in the company. Piazza and Lampuri allege that company officials "over-sold" the potential for the company to do business with Verizon.
Specifically, they alleged that Brannon and other company officials told them there was the potential to become part of the original equipment shipped with new Verizon Droid phones. In reality, the deal that was potentially on the table had to do with being part of an advertising campaign.
Originally, Kirkbride was part of the suit, but an earlier court ruling excused him as a defendant. It was possible for both Brannon and Rice to be found liable, but in their verdict, jurors said that Rice did not bear responsibility for misleading investors.
Brannon never took the stand in his defense, something that the plaintiff's lawyer, Steve Epstein, pointed to in closing arguments on Monday.
"Why didn't he testify if what Larry and Sal said about him was not true," Epstein said.
Brannon's lawyer, Michael Frazier said he was "disappointed" in the jury's verdict.
Steve Epstein, a lawyer with Poyner Spruill who represented Piazza and Lampuri, said his clients were "gratified that justice was done."