Energex Systems and the Magic of the Capitalist Marketplace

Energex Systems, Orthosonix, LawsuitLately I’ve been receiving a lot of big yellow envelopes in the mail, sent by the law firm McCarter and English. M&E are representing my interests in a class-action suit, Dow et al v. Fagan, et al.

One such envelope arrived in my mailbox several months ago bearing happy news. Thomas Fagan, the former CFO of Energex Systems, a biotechnology device manufacturer based in Allendale NJ, had been ordered by a NJ state grand jury to pay $10.2 million in investor restitution to the nearly 800 investors he had defrauded via the sale of unregistered securities. I am one of those defrauded investors.

My own investment was a small one, the minimum allowable for an initial investment at a time when Energex Systems (then called Orthosonix) was little more than a glimmer in Thomas Fagan’s ambitious eye. I’d written a check to Fagan in 1999, before my wife and I had kids, when we sometimes had some money lying around. Doing the math, I can see that many investors contributed a lot more money than I did. Continue reading