Jerry Trooien scores a partial victory in fraud suit

Jerry Trooien's four-year securities fraud battle against the former heads of a defunct tech start-up named Sproqit lives on.

A federal appeals court on Thursday affirmed a lower court's decision to dismiss most of Trooien's claims, but it ruled that his claims under the Minnesota Securities Act -- that he invested in the company based on a misrepresentation -- could still be viable, and directed the district court to revisit it.

Specifically, the three appeals judges interpreted the Minnesota Securities Act differently, saying the act does not require a securities plaintiff to prove the defendant intended to defraud them.

Trooien, a well-known Twin Cities real estate developer and investor, invested more than $6 million in Sproqit Technologies Inc., a start-up in Kirkland, Wash., that was developing software for mobile phones. He sued the company's former president, Peter Mansour, and former chief technology officer, Barry Roitblat, in 2006 claiming they ripped him off with false revenue forecasts and sales contracts, and promises that Microsoft was going to acquire it.

Brian Buckley, a lawyer for Mansour in Seattle, said the opinion on the Minnesota Securities Act was something of a surprise and could have potentially significant legal implications for future securities fraud cases. In the short term, it means Trooien gets another crack at his case.

Neither Trooien nor his attorney, George Eck, could not immediately be reached for comment.

Trooien was funding Sproqit's monthly expenses for a time, including payroll, court documents show. When he stopped in February 2006, Mansour and Roitblat quit.

Trooien appealed after losing his lawsuit last year in U.S. District Court in Minnesota. The Eighth U.S. Circuit Court of Appeals on Thursday upheld part of the decision.

Jennifer Bjorhus • 612-673-4683