In a spectacular start to the New Year, BMK litigators have won summary judgment on securities fraud and related claims in a case filed in Federal District Court for the Eastern District of Pennsylvania.
The securities fraud case involved claims against a New York-based investment management firm and certain of its senior officers and directors as a result of a separate and unrelated business operated by another senior officer which turned out to be a fraudulent enterprise. Five plaintiffs brought suit against the firm alleging that the firm was liable for violating the federal securities laws under Section 10(b), breach of fiduciary duty, and under Pennsylvania’s consumer protection laws, and that its officers and directors were liable for Control Person liability under Section 20(a) of the Exchange Act and for negligent supervision.
On January 5, 2012, the Court granted the Defendants’ motion for summary judgment on all counts. Agreeing with the arguments advanced by BMK, the Court held that the plaintiffs’ claims could not survive in light of their inability to show that the Defendants had any knowledge or involvement in the separate, fraudulent enterprise operated by their former fellow officer, and that his misconduct could not be imputed to the firm.
The BMK litigation team was led by partners Edward Kutchin and Kerry Northup, and included associate Julie Rising and contract attorney Anne French.
The case is captioned Barry Belmont v. MB Investment Partners, No. 09-4951 (E.D. Pa.).