On June 22, 2026, the Appeals Court of Massachusetts addressed the scope of disclosure obligations under the Massachusetts Uniform Securities Act (MUSA) in GIUL, LLC v. Shenghuo Medical, LLC. The court held that indirectly pointing investors to public information is insufficient and vacated the trial court’s ruling on MUSA claims and related Chapter 93A claims.
GIUL, LLC (GIUL), through its owner Paul Conte, invested in Shenghuo Medical, LLC (Shenghuo), with the expectation that the funds would be used to secure Shenghuo’s investment in Guided Therapeutics, Inc. (GTI), the manufacturer of a cervical cancer screening device known as LuViva. The investment failed to produce the anticipated return and GIUL then brought suit against Shenghuo and its managing members (Michael Antonoplos, Richard Blumberg, and Mark Faupel), as well as Shenghuo’s legal counsel, Mark Pearlstein. After most claims were disposed of prior to trial, a bench trial was held in March 2024 on GIUL’s remaining claims, including a claim under the Massachusetts Uniform Securities Act (MUSA) and a claim under Chapter 93A, Section 11.
The trial judge ruled in favor of all defendants on both the MUSA and Chapter 93A claims. Central to the judge’s reasoning on the MUSA claim was his finding that Antonoplos had adequately disclosed GTI’s financial condition by including a link to GTI’s public website in his June 9, 2016, solicitation email to Conte. The judge reasoned that had Conte navigated to GTI’s website and accessed its SEC filings, he would have seen disclosures indicating a working capital deficit of approximately $4 million and doubts about GTI’s ability to continue and its dependence on additional financing. The judge therefore concluded that GIUL had failed to prove that GTI had withheld material information about its financial condition, dismissing the MUSA claim. The judge also dismissed the Chapter 93A claim, because the statute requires that there be a material omission that was also unfair or deceptive.
The appeals court disagreed with the trial court’s application of the law on the disclosure issue as it related to Shenghuo, Antonoplos, and Blumberg. The court held that under MUSA, which the court interprets in alignment with federal securities law precedent, a buyer of securities has no duty to investigate or verify facts alleged by a seller. According to the court, merely providing a link to GTI’s general website was not equivalent to actually disclosing the contents of those filings. The court also invoked the principle that a seller who voluntarily discloses material facts in connection with a securities transaction assumes a duty to speak fully and truthfully on those subjects.
Because the appellate court found the omission of GTI’s financial condition to have been improperly analyzed by the trial court, and because the remaining defendants (Shenghuo, Antonoplos, and Blumberg) are potentially liable under MUSA if it was a material omission, the court held they are also potentially liable under Chapter 93A, should the trial judge find on remand that the omission was material and constituted an unfair or deceptive practice. The appellate court vacated the judgment in favor of Shenghuo, Antonoplos, and Blumberg on both the MUSA and Chapter 93A claims and remanded for further proceedings.
The decision may have implications for sellers of securities engaged in solicitation communications with prospective investors. In particular, the appeals court’s ruling could be read as allowing claims to proceed where disclosures are alleged to be insufficiently clear, even where the underlying information is publicly available. However, the opinion does not definitively resolve the extent to which references to such materials satisfy disclosure obligations under MUSA. Of note, the court also permitted the related Chapter 93A claim to proceed in tandem with the MUSA claim, leaving open the circumstances under which liability under the two statutes may overlap, including the potential for fee-shifting in appropriate cases.
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