The Courier Mail recently reported that GOLD Coast fundraising outfit Amma Private Equity sold $8 million in music-streaming stock Guverra to an elderly man, who argues he was exhibiting symptoms of Alzheimer’s disease.

Keith Messer is an 80-year-old Hervey Bay farmer, and is suing Amma in a Federal Court lawsuit. Music-streamer Guvera, raised $185 million from investors, and ceased operating this year. His lawsuit claims he invested $8.7 million into Guvera over two years, after meeting Amma representatives spruiking the music service.

His case claims that he “suffered from Alzheimer’s disease since 2012” and the ailment “progressed significantly” in the ensuing two years. His lawsuit claims he was unable to comprehend complex issues, and this should have been apparent to Amma’s people. Messer's daughter allegedly met an Amma representative with her father and advised that Mr Messer “did not understand the investments, he had no paperwork … and that he did not wish to further invest in Guvera”.

'Amma was accused of going on to execute five more Guvera contracts worth $6 million for Mr Messer in the following eight months.

Mr Messer is now seeking damages from Amma and collapsed outfit Lotus Securities. Amma’s case also rejects claims from Mr Messer’s lawsuit that he should be treated as a retail client, a term meaning an average investor who requires certain documentation when pitched some investment ideas.

Mr Messer met the definition of a “sophisticated investor”, Amma said, because he had net assets of more than $2.5 million. His accountant, Vincent Cook of Summit Financial Services, had supplied certificates declaring him to be such an investor, Amma’s response said.

Mr Messer’s lawsuit said Mr Cook had introduced him to Amma around November 2012.

Amma earned $20 million in commissions for Guvera fundraising. Darren Herft is Amma chairman and a director of Guvera.

Mr Herft is also a director of Kwickie International, which is behind a celebrity chat app and is raising funds from investors.

Last month, Kwickie appointed Paul Jansz, Amma’s chief executive officer, as a director.

Mr Herft, via lawyers, declined to comment on the litigation. Attempts to obtain comment from Mr Cook were unsuccessful.'

The case is ongoing. In our view, this highlights how Sophisticated Investor certificates should not be valid for 2 years. The dangers of cognative decline are ever present, and potentially Mr Messer would have invested less if he had to refresh his certification during this period.