Securities Fraud Claims Dismissed for Failure to Plead with Particularity

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Individual plaintiffs residing in Switzerland and France brought suit against four corporate defendants, as well as certain corporate officers thereof, for, among other things, violations of Section 10(b) of the Securities Exchange Act of 1934 and Rule 10b-5. Two of the corporate officers, Jason Beckman and Jason Colodne, moved to dismiss the Amended Complaint for failure to state a claim pursuant to Fed. R. Civ. P. 12(b)(6), and failure to plead fraud with particularity pursuant to Fed. R. Civ. P. 9(b).

The Amended Complaint alleges that plaintiffs were presented with an "investment opportunity" called the BLF, which was essentially a fund that made bridge loans to friends and clients of the Chimay family in order to facilitate business transactions. Plaintiffs claim that their investments were not used to facilitate bridge loans, but rather, were used for the defendants' personal benefit. Defendants' offer and sale of the purportedly fraudulent investment scheme ultimately resulted in the alleged misappropriation of plaintiffs' $4.2 million.

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Published In: Civil Procedure Updates, Finance & Banking Updates, Securities Updates

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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