The case seeks damages of more than $10 million. It was filed January 22 in U.S. District Court in Seattle against officers and directors of Znetix, a Bainbridge Island company that was shut down by federal regulators last year. Securities investigators say it's the biggest stock fraud case in state history.

The civil case was filed by Michael Grassmueck, the company's court-appointed receiver. It accuses the officers and directors of Znetix of doing too little to stop company founder Kevin Lawrence from misusing corporate funds.

Lawrence was arrested in August and faces trial this year on 64 counts of fraud and money laundering. Four others have pleaded guilty in what investigators say was a scheme that bilked as much as $91 million from more than five thousand investors. Little of the money has been recovered.