Docket No. 78128-1  Facts:  Respondent Clark Kinney and petitioner Kenneth Cook formed a corporation that sold and serviced heavy duty trucks.  Kinney eventually decided to sell his stock in the corporation to Cook and the parties signed a memorandum of understanding under which a debt owed to Cook by Kinney was cancelled in exchange for Kinney’s stock being transferred to Cook.  Kinney subsequently filed suit against Cook in an effort to void this agreement, claiming that Cook had misrepresented the fair market value of the stock.  Consequently, Cook was ordered to return the stock to Kinney and Kinney’s debt to Cook was reinstated.  Following the judgment, Cook demanded payment on the debt and Kinney complied in exchange for the return of the stock.  However, prior to the judgment, Cook had authorized the corporation to guarantee a large loan made by Mercedes Benz Credit Corporation to a limited liability corporation that Cook owns.  When Kinney became aware of this loan, he filed suit against Cook, claiming that Cook’s actions violated Washington’s Securities Act (Washington Revised Code §21.20). Continue reading →