57 - Monterosso Answer

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UNITED STATES DISTRICT COURT

SOURTHERN DISTRICT OF FLORIDA

CASE NO. 07-cv-61693 (JAL)

--------------------------------------------------------------------SECURITIES AND EXCHANGE COMMISSION, :

:

PLAINTIFF, :

:

:

v. :

:

:

JOSEPH J. MONTEROSSO and :

LUIS E. VARGAS, :

:DEFENDANTS. :

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ANSWER AND AFFIRMATIVE DEFENSES

OF DEFENDANT JOSEPH J. MONTEROSSO

Defendant Joseph J. Monterosso (Mr. Monterosso), by and through his undersigned

attorney, hereby submits this Answer and Affirmative Defenses to Plaintiff Securities and

Exchange Commissions (the Commissions) Complaint. In furtherance thereof, Mr.

Monterosso respectfully responds to the numbered paragraphs of the Commissions Complaint

as follows:

1. Mr. Monterosso denies the allegations in Paragraph 1.2. Mr. Monterosso denies the allegations in Paragraph 2.3. Mr. Monterosso denies the allegations in Paragraph 3.4. Mr. Monterosso denies the allegations in Paragraph 4.5. Mr. Monterosso denies the allegations in Paragraph 5.6. Mr. Monterosso denies the allegations in Paragraph 6.

Case 0:07-cv-61693-JAL Document 57 Entered on FLSD Docket 10/10/2008 Page 1 of 12


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23. Mr. Monterosso admits the allegations in Paragraph 23.24. Mr. Monterosso admits the allegations in Paragraph 24.25. Mr. Monterosso admits the allegations in Paragraph 25.26. Mr. Monterosso admits the allegations in Paragraph 26.27. Mr. Monterosso denies that Ronald Hay declined Mr. Monterossos offer to enter

into an agreement with Centerline, but admits the remaining allegations in

Paragraph 27.

28. Mr. Monterosso admits that Mr. Vargas contacted Mercurys chief financialofficer to request additional Codetel invoices, admits that Mercury refused this

request, and admits that GlobeTel and Mercury never entered into an agreement

for GlobeTel to provide financing for Codetels account with WCCS. Mr.

Monterosso denies the remaining allegations in Paragraph 28.

29. Mr. Monterosso denies that Chuck Leblo never entered into a Partner Incentiveand Financing Agreement with Lonestar. Mr. Monterosso admits the remaining

allegations in Paragraph 29.

30. Mr. Monterosso admits the allegations in Paragraph 30.31. Mr. Monterosso admits the allegations in Paragraph 31.32. Mr. Monterosso denies the allegations in Paragraph 32.33. Mr. Monterosso admits the allegations in Paragraph 33.34. Mr. Monterosso admits that the general description of call detail records

(CDRs) in Paragraph 34 is correct, but denies the remaining allegations in

Paragraph 34.

35. Mr. Monterosso denies the allegations in Paragraph 35.

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36. Mr. Monterosso denies the allegations in Paragraph 36.37. Mr. Monterosso denies the allegations in Paragraph 37.38. Mr. Monterosso denies the allegations in Paragraph 38.39. Mr. Monterosso admits the allegations in Paragraph 39.40. Mr. Monterosso denies the allegations in Paragraph 40.41. Mr. Monterosso admits the allegations in Paragraph 41.42. Mr. Monterosso admits the allegations in Paragraph 42.43. Mr. Monterosso admits the allegations in Paragraph 43.44.

Mr. Monterosso denies the allegations in Paragraph 44.

45. Mr. Monterosso admits the allegations in Paragraph 45.46. Mr. Monterosso denies that Telmetriks and XSTEL were not engaged in the

wholesale telecom business, but admits the remaining allegations in Paragraph 46.

47. Mr. Monterosso admits the allegations in Paragraph 47.48. Mr. Monterosso admits the allegations in Paragraph 48.49. Mr. Monterosso admits the allegations in Paragraph 49.50. Mr. Monterosso denies the allegations in Paragraph 50.51. Mr. Monterosso admits the allegations in Paragraph 51.52. Mr. Monterosso admits the allegations in Paragraph 52.53. Mr. Monterosso admits the allegations in Paragraph 53.54. Mr. Monterosso admits the allegations in Paragraph 54.55. Mr. Monterosso denies the allegations in Paragraph 55.56. Mr. Monterosso is without knowledge or information sufficient to form a belief as

to the truth of the allegations in Paragraph 56, and therefore denies them.

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57. Mr. Monterosso denies the existence of any fraudulent scheme of Monterossoand Vargas, as alleged in Paragraph 57. Mr. Monterosso is without knowledge

or information sufficient to form a belief as to the truth of the remaining

allegations in Paragraph 57, and therefore denies them.

58. Mr. Monterosso is without knowledge or information sufficient to form a belief asto the truth of the allegations in Paragraph 58, and therefore denies them.


60.

Mr. Monterosso is without knowledge or information sufficient to form a belief as


61. Mr. Monterosso denies the allegations in Paragraph 61.62. Mr. Monterosso is without knowledge or information sufficient to form a belief as







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72.









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83.




85. Mr. Monterosso denies involvement in any fraudulent scheme, as mentioned inParagraph 85. Mr. Monterosso is without knowledge or information sufficient to

form a belief as to the truth of the remaining allegations in Paragraph 85, and

therefore denies them.

86. Mr. Monterosso denies any false reporting, as mentioned in Paragraph 86. Mr.Monterosso is without knowledge or information sufficient to form a belief as to

the truth of the allegations in Paragraph 86, and therefore denies them.


88. Mr. Monterosso admits the allegations in Paragraph 88.89. Mr. Monterosso admits the allegations in Paragraph 89.

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90. Mr. Monterosso denies the allegations in Paragraph 90.91. Mr. Monterosso is without knowledge or information sufficient to form a belief as


92. Mr. Monterosso denies the allegations in Paragraph 92.93. Mr. Monterosso denies the allegations in Paragraph 93.94. Mr. Monterosso denies the allegations in Paragraph 94.95. Mr. Monterosso admits the allegations in Paragraph 95.96. Mr. Monterosso admits the allegations in Paragraph 96.97.

Mr. Monterosso repeats his responses to Paragraphs 1 through 96.

98. Mr. Monterosso denies the allegations in Paragraph 98.99. Mr. Monterosso denies the allegations in Paragraph 99.100. Mr. Monterosso denies the allegations in Paragraph 100.101. Mr. Monterosso denies the allegations in Paragraph 101.102. Mr. Monterosso repeats his responses to Paragraphs 1-101.103. Mr. Monterosso denies the allegations in Paragraph 103.104. Mr. Monterosso denies the allegations in Paragraph 104.105. Mr. Monterosso denies the allegations in Paragraph 105.106. Mr. Monterosso denies the allegations in Paragraph 106.107. Mr. Monterosso repeats his responses to Paragraphs 1 through 106.108. Mr. Monterosso is without knowledge or information sufficient to form a belief as


109. Mr. Monterosso denies the allegations in Paragraph 109.110. Mr. Monterosso denies the allegations in Paragraph 110.

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111. Mr. Monterosso denies the allegations in Paragraph 111.112. Mr. Monterosso repeats his responses to Paragraphs 1 through 111.113. Mr. Monterosso is without knowledge or information sufficient to form a belief as


114. Mr. Monterosso denies the allegations in Paragraph 114.115. Mr. Monterosso denies the allegations in Paragraph 115.116. Mr. Monterosso repeats his responses to Paragraphs 1 through 115.117. Mr. Monterosso is without knowledge or information sufficient to form a belief as


118. Mr. Monterosso denies the allegations in Paragraph 118.119. Mr. Monterosso denies the allegations in Paragraph 119.120. Mr. Monterosso repeats his responses to Paragraphs 1 through 119.121. Mr. Monterosso denies the allegations in Paragraph 121.122. Mr. Monterosso denies the allegations in Paragraph 122.123. Mr. Monterosso admits that he was an officer of GlobeTel between at least May

2005 and September 2006, but denies the remaining allegations in Paragraph 123.

124. Mr. Monterosso admits that he was an officer of GlobeTel, and that Mr. Vargaswas a person acting under his direction, between at least May 2005 and

September 2006, but denies the remaining allegations in Paragraph 124.

125. Mr. Monterosso denies the allegations in Paragraph 125.126. Mr. Monterosso denies the allegations in Paragraph 126.

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AFFIRMATIVE DEFENSES

First Affirmative Defense

The Commissions Complaint fails to state a claim upon which relief may be granted.

Second Affirmative Defense

The Commissions Complaint fails to plead fraud with the requisite particularity.

Third Affirmative Defense

The Commissions claims for injunctive relief should be dismissed because the

Commission has an adequate remedy at law, has not satisfied all prerequisites for injunctive

relief, and because there is no likelihood that Mr. Monterosso will commit any future violation of

the federal securities laws.

Fourth Affirmative Defense

The Commissions claims are barred because Mr. Monterosso did not act at any time

with the requisite scienter.

Fifth Affirmative Defense

The Commissions claims are barred because Mr. Monterosso reasonably relied upon the

advice of legal counsel and other professionals with respect to the conduct that is the subject of

the Commissions Complaint.

Sixth Affirmative Defense

The Commissions claims are barred, in whole or in part, because Mr. Monterosso acted

at all relevant times in good faith.

Seventh Affirmative Defense

The Commissions requested relief is not supported by the nature and scope of the

alleged violations that, even if true, caused no investor harm.

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* * *

WHEREFORE, having fully answered the Commissions Complaint, Defendant Joseph J.

Monterosso denies that the Commission is entitled to any of the relief it has requested in any

form, prays that the Commissions Complaint be dismissed with prejudice with costs against the

Commission, and respectfully requests any further relief that the Court deems just and proper.

Mr. Monterosso hereby demands a trial by jury.

Dated: October 10, 2008

Miami Beach, Florida

Respectfully Submitted,

/s/ Mark David Hunter_____Mark David Hunter, Esq.

Florida Bar No. 12995

Leser Hunter Taubman & Taubman, PLLC407 Lincoln Road, Suite 500

Miami Beach, Florida 33139(305) 604-5547 (Telephone)

(305) 604-5548 (Facsimile)E-Mail: [email protected]

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mailto:[email protected]:[email protected]:[email protected]


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CERTIFICATE OF SERVICE

I hereby certify that, on October 10, 2008, I electronically filed the foregoingdocument with the Clerk of the Court using CM/ECF. I also certify that the foregoing is being

served this day on all counsel of record listed below via transmission of Notices of ElectronicFiling generated by CM/ECF or in some other authorized manner for those counsel who are notauthorized to receive Notices of Electronic Filing electronically.

Service List

Brent Mitchell (CM/ECF)

Cheryl J. Scarboro ([email protected])

Jeffrey T. Ingelise (CM/ECF)

Reid A. Muoio ([email protected])

Walter J. Mathews (CM/ECF)

D. Patricia Wallace (CM/ECF)

/s/ Mark David Hunter______________

Mark David Hunter, Esq.

mailto:[email protected]:[email protected]:[email protected]:[email protected]

57 - Monterosso Answer

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