BROYLES v. CANTOR FITZGERALD & CO.

Civil Action Nos. 10-854-JJB-CBW, 10-857-JJB-CBW

JOSEPH N. BROYLES, ET AL., v. CANTOR FITZGERALD & CO, ET AL. Consolidated with: JOSEPH N. BROYLES, ET AL., v. CANTOR FITZGERALD & CO, ET AL.

United States District Court, M.D. Louisiana.

Editors Note
Applicable Law: 28 U.S.C. § 1441
Cause: 28 U.S.C. § 1441 - Petition for Removal: Securities Fraud
Nature of Suit: 850 Securities/Commodities
Source: PACER


Attorney(s) appearing for the Case

Joseph N. Broyles, Plaintiff, represented by Patrick N. Broyles , Broyles Law Firm. LLC.

Joseph N. Broyles, Plaintiff, represented by Alysson L. Mills , Fishman Haygood, Fredrick R. Tulley , Taylor, Porter, Brooks & Phillips, James R. Swanson , Fishman, Haygood, Phelps, Walmsley, Willis & Swanson, Jason W. Burge , Fishman Haygood Phelps Walmsley Willis & Swanson, John Anthony Milazzo, Jr. , Taylor, Porter, Brooks & Phillips, L.L.P., Molly Louise Wells , Fishman Haygood LLP & Ryan Keith French , Taylor, Porter, Brooks & Phillips, LLP.

Anne Richey, Plaintiff, represented by Alysson L. Mills , Fishman Haygood, Fredrick R. Tulley , Taylor, Porter, Brooks & Phillips, James R. Swanson , Fishman, Haygood, Phelps, Walmsley, Willis & Swanson, Jason W. Burge , Fishman Haygood Phelps Walmsley Willis & Swanson, John Anthony Milazzo, Jr. , Taylor, Porter, Brooks & Phillips, L.L.P., Molly Louise Wells , Fishman Haygood LLP, Ryan Keith French , Taylor, Porter, Brooks & Phillips, LLP & Patrick N. Broyles , Broyles Law Firm. LLC.

Karen L. Barranco, Plaintiff, represented by Alysson L. Mills , Fishman Haygood, Fredrick R. Tulley , Taylor, Porter, Brooks & Phillips, James R. Swanson , Fishman, Haygood, Phelps, Walmsley, Willis & Swanson, Jason W. Burge , Fishman Haygood Phelps Walmsley Willis & Swanson, John Anthony Milazzo, Jr. , Taylor, Porter, Brooks & Phillips, L.L.P., Molly Louise Wells , Fishman Haygood LLP, Ryan Keith French , Taylor, Porter, Brooks & Phillips, LLP & Patrick N. Broyles , Broyles Law Firm. LLC.

Susan B. Beninati, Plaintiff, represented by Alysson L. Mills , Fishman Haygood, Fredrick R. Tulley , Taylor, Porter, Brooks & Phillips, James R. Swanson , Fishman, Haygood, Phelps, Walmsley, Willis & Swanson, Jason W. Burge , Fishman Haygood Phelps Walmsley Willis & Swanson, John Anthony Milazzo, Jr. , Taylor, Porter, Brooks & Phillips, L.L.P., Molly Louise Wells , Fishman Haygood LLP, Ryan Keith French , Taylor, Porter, Brooks & Phillips, LLP & Patrick N. Broyles , Broyles Law Firm. LLC.

M. Badi Asbahi, Plaintiff, represented by Alysson L. Mills , Fishman Haygood, Fredrick R. Tulley , Taylor, Porter, Brooks & Phillips, James R. Swanson , Fishman, Haygood, Phelps, Walmsley, Willis & Swanson, Jason W. Burge , Fishman Haygood Phelps Walmsley Willis & Swanson, John Anthony Milazzo, Jr. , Taylor, Porter, Brooks & Phillips, L.L.P., Molly Louise Wells , Fishman Haygood LLP, Ryan Keith French , Taylor, Porter, Brooks & Phillips, LLP & Patrick N. Broyles , Broyles Law Firm. LLC.

Preston Cloyd, Plaintiff, represented by Alysson L. Mills , Fishman Haygood, Fredrick R. Tulley , Taylor, Porter, Brooks & Phillips, James R. Swanson , Fishman, Haygood, Phelps, Walmsley, Willis & Swanson, Jason W. Burge , Fishman Haygood Phelps Walmsley Willis & Swanson, John Anthony Milazzo, Jr. , Taylor, Porter, Brooks & Phillips, L.L.P., Molly Louise Wells , Fishman Haygood LLP, Ryan Keith French , Taylor, Porter, Brooks & Phillips, LLP & Patrick N. Broyles , Broyles Law Firm. LLC.

Charles Richey, Plaintiff, represented by Alysson L. Mills , Fishman Haygood, Fredrick R. Tulley , Taylor, Porter, Brooks & Phillips, James R. Swanson , Fishman, Haygood, Phelps, Walmsley, Willis & Swanson, Jason W. Burge , Fishman Haygood Phelps Walmsley Willis & Swanson, John Anthony Milazzo, Jr. , Taylor, Porter, Brooks & Phillips, L.L.P., Molly Louise Wells , Fishman Haygood LLP, Ryan Keith French , Taylor, Porter, Brooks & Phillips, LLP & Patrick N. Broyles , Broyles Law Firm. LLC.

Russ P. Barranco, Plaintiff, represented by Alysson L. Mills , Fishman Haygood, Fredrick R. Tulley , Taylor, Porter, Brooks & Phillips, James R. Swanson , Fishman, Haygood, Phelps, Walmsley, Willis & Swanson, Jason W. Burge , Fishman Haygood Phelps Walmsley Willis & Swanson, John Anthony Milazzo, Jr. , Taylor, Porter, Brooks & Phillips, L.L.P., Molly Louise Wells , Fishman Haygood LLP, Ryan Keith French , Taylor, Porter, Brooks & Phillips, LLP & Patrick N. Broyles , Broyles Law Firm. LLC.

Registrar of Voters Employee Retirement System, Plaintiff, represented by Alysson L. Mills , Fishman Haygood, Fredrick R. Tulley , Taylor, Porter, Brooks & Phillips, James R. Swanson , Fishman, Haygood, Phelps, Walmsley, Willis & Swanson, Jason W. Burge , Fishman Haygood Phelps Walmsley Willis & Swanson, John Anthony Milazzo, Jr. , Taylor, Porter, Brooks & Phillips, L.L.P., Molly Louise Wells , Fishman Haygood LLP, Ryan Keith French , Taylor, Porter, Brooks & Phillips, LLP & Patrick N. Broyles , Broyles Law Firm. LLC.

Jody A. Barranco, Plaintiff, represented by Alysson L. Mills , Fishman Haygood, Fredrick R. Tulley , Taylor, Porter, Brooks & Phillips, James R. Swanson , Fishman, Haygood, Phelps, Walmsley, Willis & Swanson, Jason W. Burge , Fishman Haygood Phelps Walmsley Willis & Swanson, John Anthony Milazzo, Jr. , Taylor, Porter, Brooks & Phillips, L.L.P., Molly Louise Wells , Fishman Haygood LLP, Ryan Keith French , Taylor, Porter, Brooks & Phillips, LLP & Patrick N. Broyles , Broyles Law Firm. LLC.

Janice B. Virgadamo, Plaintiff, represented by Alysson L. Mills , Fishman Haygood, Fredrick R. Tulley , Taylor, Porter, Brooks & Phillips, James R. Swanson , Fishman, Haygood, Phelps, Walmsley, Willis & Swanson, Jason W. Burge , Fishman Haygood Phelps Walmsley Willis & Swanson, John Anthony Milazzo, Jr. , Taylor, Porter, Brooks & Phillips, L.L.P., Molly Louise Wells , Fishman Haygood LLP, Ryan Keith French , Taylor, Porter, Brooks & Phillips, LLP & Patrick N. Broyles , Broyles Law Firm. LLC.

Registrar of Voters Employee Retirement System, Plaintiff, represented by Patrick N. Broyles , Broyles Law Firm. LLC, Alysson L. Mills , Fishman Haygood, James R. Swanson , Fishman, Haygood, Phelps, Walmsley, Willis & Swanson, Jason W. Burge , Fishman Haygood Phelps Walmsley Willis & Swanson & Molly Louise Wells , Fishman Haygood LLP.

Firefighters' Retirement System, Plaintiff, represented by Steven Scott Stockstill , Firefighters Retirement System, Alysson L. Mills , Fishman Haygood, Fredrick R. Tulley , Taylor, Porter, Brooks & Phillips, James R. Swanson , Fishman, Haygood, Phelps, Walmsley, Willis & Swanson, Jason W. Burge , Fishman Haygood Phelps Walmsley Willis & Swanson, John Anthony Milazzo, Jr. , Taylor, Porter, Brooks & Phillips, L.L.P., Molly Louise Wells , Fishman Haygood LLP, Patrick N. Broyles , Broyles Law Firm. LLC & Ryan Keith French , Taylor, Porter, Brooks & Phillips, LLP.

Steven D Collins, Sr., Plaintiff - Consolidated, represented by Patrick N. Broyles , Broyles Law Firm. LLC, Alysson L. Mills , Fishman Haygood, Fredrick R. Tulley , Taylor, Porter, Brooks & Phillips, Jason W. Burge , Fishman Haygood Phelps Walmsley Willis & Swanson, John Anthony Milazzo, Jr. , Taylor, Porter, Brooks & Phillips, L.L.P., Molly Louise Wells , Fishman Haygood LLP, Ryan Keith French , Taylor, Porter, Brooks & Phillips, LLP & James R. Swanson , Fishman, Haygood, Phelps, Walmsley, Willis & Swanson.

Eilleen Collins, Plaintiff - Consolidated, represented by Patrick N. Broyles , Broyles Law Firm. LLC, Alysson L. Mills , Fishman Haygood, Fredrick R. Tulley , Taylor, Porter, Brooks & Phillips, Jason W. Burge , Fishman Haygood Phelps Walmsley Willis & Swanson, John Anthony Milazzo, Jr. , Taylor, Porter, Brooks & Phillips, L.L.P., Molly Louise Wells , Fishman Haygood LLP, Ryan Keith French , Taylor, Porter, Brooks & Phillips, LLP & James R. Swanson , Fishman, Haygood, Phelps, Walmsley, Willis & Swanson.

Sand Spring Capital III Master Fund, LLC, Plaintiff - Consolidated, represented by Kirk Reasonover , Reasonover & Associates, LLC, Joshua L. Rubenstein , Scheuermann & Jones, LLC, Lawrence Blake Jones , Scheuermann & Jones, Margaret Davis , Reasonover & Associates, LLC, Nicholas Harold Berg , Reasonover & Associates, LLC & William Spencer King , Reasonover & Associates.

Sand Spring Capital III, LLC, Plaintiff - Consolidated, represented by Kirk Reasonover , Reasonover & Associates, LLC, Joshua L. Rubenstein , Scheuermann & Jones, LLC, Lawrence Blake Jones , Scheuermann & Jones, Margaret Davis , Reasonover & Associates, LLC, Nicholas Harold Berg , Reasonover & Associates, LLC & William Spencer King , Reasonover & Associates.

Sand Spring Capital III, Ltd., Plaintiff - Consolidated, represented by Kirk Reasonover , Reasonover & Associates, LLC, Joshua L. Rubenstein , Scheuermann & Jones, LLC, Lawrence Blake Jones , Scheuermann & Jones, Margaret Davis , Reasonover & Associates, LLC, Nicholas Harold Berg , Reasonover & Associates, LLC & William Spencer King , Reasonover & Associates.

CA High Yield Fund, LLC, Plaintiff - Consolidated, represented by Kirk Reasonover , Reasonover & Associates, LLC, Joshua L. Rubenstein , Scheuermann & Jones, LLC, Lawrence Blake Jones , Scheuermann & Jones, Margaret Davis , Reasonover & Associates, LLC, Nicholas Harold Berg , Reasonover & Associates, LLC & William Spencer King , Reasonover & Associates.

CA High Yield Offshore Fund, LTD., Plaintiff - Consolidated, represented by Kirk Reasonover , Reasonover & Associates, LLC, Joshua L. Rubenstein , Scheuermann & Jones, LLC, Lawrence Blake Jones , Scheuermann & Jones, Margaret Davis , Reasonover & Associates, LLC, Nicholas Harold Berg , Reasonover & Associates, LLC & William Spencer King , Reasonover & Associates.

CA Core Fixed Income Fund, LLC, Plaintiff - Consolidated, represented by Kirk Reasonover , Reasonover & Associates, LLC, Joshua L. Rubenstein , Scheuermann & Jones, LLC, Lawrence Blake Jones , Scheuermann & Jones, Margaret Davis , Reasonover & Associates, LLC, Nicholas Harold Berg , Reasonover & Associates, LLC & William Spencer King , Reasonover & Associates.

CA Core Fixed Income Offshore Fund, LTD, Plaintiff - Consolidated, represented by Kirk Reasonover , Reasonover & Associates, LLC, Joshua L. Rubenstein , Scheuermann & Jones, LLC, Lawrence Blake Jones , Scheuermann & Jones, Margaret Davis , Reasonover & Associates, LLC, Nicholas Harold Berg , Reasonover & Associates, LLC & William Spencer King , Reasonover & Associates.

CA Strategic Equity Fund, LLC, Plaintiff - Consolidated, represented by Kirk Reasonover , Reasonover & Associates, LLC, Joshua L. Rubenstein , Scheuermann & Jones, LLC, Lawrence Blake Jones , Scheuermann & Jones, Margaret Davis , Reasonover & Associates, LLC, Nicholas Harold Berg , Reasonover & Associates, LLC & William Spencer King , Reasonover & Associates.

CA Strategic Equity Offshore Fund, LTD, Plaintiff - Consolidated, represented by Kirk Reasonover , Reasonover & Associates, LLC, Joshua L. Rubenstein , Scheuermann & Jones, LLC, Lawrence Blake Jones , Scheuermann & Jones, Margaret Davis , Reasonover & Associates, LLC, Nicholas Harold Berg , Reasonover & Associates, LLC & William Spencer King , Reasonover & Associates.

Commonwealth Advisors, Inc., Defendant, represented by Fredrick R. Tulley , Taylor, Porter, Brooks & Phillips, John Anthony Milazzo, Jr. , Taylor, Porter, Brooks & Phillips, L.L.P. & Ryan Keith French , Taylor, Porter, Brooks & Phillips, LLP.

Walter A Morales, III, Defendant, represented by Fredrick R. Tulley , Taylor, Porter, Brooks & Phillips, John Anthony Milazzo, Jr. , Taylor, Porter, Brooks & Phillips, L.L.P. & Ryan Keith French , Taylor, Porter, Brooks & Phillips, LLP.

Stone & Youngberg, LLC, Defendant - Consolidated, represented by George C. Freeman, III , Barrasso Usdin Kupperman Freeman & Sarver LLC, Jamie L. Berger , Barrasso Usdin Kupperman Freeman & Sarver LLC & Robert J. Dressel , Barrasso Usdin Kupperman Freeman & Sarver.

Mitchell Gage, Defendant - Consolidated, represented by George C. Freeman, III , Barrasso Usdin Kupperman Freeman & Sarver LLC & Sarah Leslie Rubin , Barrasso Usdin Kupperman Freeman & Sarver LLC.

Kenneth Williams, Defendant - Consolidated, represented by George C. Freeman, III , Barrasso Usdin Kupperman Freeman & Sarver LLC & Sarah Leslie Rubin , Barrasso Usdin Kupperman Freeman & Sarver LLC.

Anthony Guaimano, Defendant - Consolidated, represented by George C. Freeman, III , Barrasso Usdin Kupperman Freeman & Sarver LLC, Jamie L. Berger , Barrasso Usdin Kupperman Freeman & Sarver LLC & Robert J. Dressel , Barrasso Usdin Kupperman Freeman & Sarver.

Michael Jennings, Defendant - Consolidated, represented by James Rodney Chastain, Jr. , Kean, Miller, Hawthorne, D'Armond, Rory C. Flynn , Bruch Hanna LLP, Sandra M. Hanna , Bruch Hanna, pro hac vice & Tara Montgomery Madison , Kean Miller LLP.

Jack Turner, Defendant - Consolidated, represented by George C. Freeman, III , Barrasso Usdin Kupperman Freeman & Sarver LLC & Sarah Leslie Rubin , Barrasso Usdin Kupperman Freeman & Sarver LLC.

Stifel Financial Corp., Defendant - Consolidated, represented by George Denegre, Jr. , Liskow & Lewis, Stephen Henry Kupperman , Barrasso Usdin Kupperman Freeman & Sarver LLC, David N. Luder , Barrasso Usdin Kupperman Freeman & Sarver, Jackson S. Trugman , Sullivan & Cromwell LLP, pro hac vice, Mirais Moorman Holden , Liskow & Lewis, APLC, Robert A. Sacks , Sullivan & Cromwell LLP & Tyler Davis Trew , Liskow & Lewis.

Stifel, Nicolaus & Company, Inc., Defendant - Consolidated, represented by George Denegre, Jr. , Liskow & Lewis, Stephen Henry Kupperman , Barrasso Usdin Kupperman Freeman & Sarver LLC, David N. Luder , Barrasso Usdin Kupperman Freeman & Sarver, Jackson S. Trugman , Sullivan & Cromwell LLP, pro hac vice, Mirais Moorman Holden , Liskow & Lewis, APLC, Robert A. Sacks , Sullivan & Cromwell LLP & Tyler Davis Trew , Liskow & Lewis.

Kevin Miller, Defendant - Consolidated, Pro Se.

Michelle Wilson-Clarke, Defendant - Consolidated, represented by Thomas M. Flanagan , Flanagan Partners LLP, Andy J. Dupre , Flanagan Partners, LLP & Camille Elise Gauthier , Flanagan Partners LLP.

Noel Caldwell, Defendant - Consolidated, represented by Scott D. Wilson , Scott D. Wilson, APLC.

Sand Spring Capital III Master Fund, LLC, Counter Defendant - Consolidated, represented by Kirk Reasonover , Reasonover & Associates, LLC, Joshua L. Rubenstein , Scheuermann & Jones, LLC, Lawrence Blake Jones , Scheuermann & Jones & Nicholas Harold Berg , Reasonover & Associates, LLC.

Sand Spring Capital III Master Fund, LLC, Counter Defendant, represented by Kirk Reasonover , Reasonover & Associates, LLC, Joshua L. Rubenstein , Scheuermann & Jones, LLC, Lawrence Blake Jones , Scheuermann & Jones, Nicholas Harold Berg , Reasonover & Associates, LLC, Kirk Reasonover , Reasonover & Associates, LLC, Joshua L. Rubenstein , Scheuermann & Jones, LLC, Lawrence Blake Jones , Scheuermann & Jones & Nicholas Harold Berg , Reasonover & Associates, LLC.

Commonwealth Advisors, Inc., Counter Claimant, represented by Fredrick R. Tulley , Taylor, Porter, Brooks & Phillips, John Anthony Milazzo, Jr. , Taylor, Porter, Brooks & Phillips, L.L.P. & Ryan Keith French , Taylor, Porter, Brooks & Phillips, LLP.

Walter A Morales, III, Counter Claimant, represented by Fredrick R. Tulley , Taylor, Porter, Brooks & Phillips, John Anthony Milazzo, Jr. , Taylor, Porter, Brooks & Phillips, L.L.P. & Ryan Keith French , Taylor, Porter, Brooks & Phillips, LLP.

CA Core Fixed Income Fund, LLC, Counter Defendant, represented by Kirk Reasonover , Reasonover & Associates, LLC, Joshua L. Rubenstein , Scheuermann & Jones, LLC, Lawrence Blake Jones , Scheuermann & Jones & Nicholas Harold Berg , Reasonover & Associates, LLC.

CA Core Fixed Income Offshore Fund, LTD, Counter Defendant, represented by Kirk Reasonover , Reasonover & Associates, LLC, Joshua L. Rubenstein , Scheuermann & Jones, LLC, Lawrence Blake Jones , Scheuermann & Jones & Nicholas Harold Berg , Reasonover & Associates, LLC.

CA High Yield Fund, LLC, Counter Defendant, represented by Kirk Reasonover , Reasonover & Associates, LLC, Joshua L. Rubenstein , Scheuermann & Jones, LLC, Lawrence Blake Jones , Scheuermann & Jones & Nicholas Harold Berg , Reasonover & Associates, LLC.

CA High Yield Offshore Fund, LTD., Counter Defendant, represented by Kirk Reasonover , Reasonover & Associates, LLC, Joshua L. Rubenstein , Scheuermann & Jones, LLC, Lawrence Blake Jones , Scheuermann & Jones & Nicholas Harold Berg , Reasonover & Associates, LLC.

CA Strategic Equity Fund, LLC, Counter Defendant, represented by Kirk Reasonover , Reasonover & Associates, LLC, Joshua L. Rubenstein , Scheuermann & Jones, LLC, Lawrence Blake Jones , Scheuermann & Jones & Nicholas Harold Berg , Reasonover & Associates, LLC.

CA Strategic Equity Offshore Fund, LTD, Counter Defendant, represented by Kirk Reasonover , Reasonover & Associates, LLC, Joshua L. Rubenstein , Scheuermann & Jones, LLC, Lawrence Blake Jones , Scheuermann & Jones & Nicholas Harold Berg , Reasonover & Associates, LLC.

Sand Spring Capital III Master Fund, LLC, Counter Defendant, represented by Kirk Reasonover , Reasonover & Associates, LLC, Joshua L. Rubenstein , Scheuermann & Jones, LLC, Lawrence Blake Jones , Scheuermann & Jones & Nicholas Harold Berg , Reasonover & Associates, LLC.

Sand Spring Capital III, LLC, Counter Defendant, represented by Kirk Reasonover , Reasonover & Associates, LLC, Joshua L. Rubenstein , Scheuermann & Jones, LLC, Lawrence Blake Jones , Scheuermann & Jones & Nicholas Harold Berg , Reasonover & Associates, LLC.

Sand Spring Capital III, Ltd., Counter Defendant, represented by Kirk Reasonover , Reasonover & Associates, LLC, Joshua L. Rubenstein , Scheuermann & Jones, LLC, Lawrence Blake Jones , Scheuermann & Jones & Nicholas Harold Berg , Reasonover & Associates, LLC.


THIS APPLIES TO CIVIL ACTION NO. 3:10-854

RULING

JAMES J. BRADY, District Judge.

Before the Court is the Investor Plaintiffs' Motion for Partial Summary Judgment regarding whether they have standing to pursue their claims against Defendants' Walter A. Morales and Commonwealth Advisors, Inc. (collectively, the "Commonwealth Defendants").1 The Commonwealth Defendants have filed an Opposition to which the Investor Plaintiffs have filed a Reply.2

Twice now the Court has found that the Investor Plaintiffs lacked standing to assert their claims against former co-defendants3 because the claims were derivative of those of the CA Funds.4 Although raised as an affirmative defense by the Commonwealth Defendants in their Answer,5 it is the Investor Plaintiffs who have now placed the legal issue of standing on the Court's plate for a summary judgment determination. Specifically, the Investor Plaintiffs contend that they have standing to assert their purchaser claims, which are distinct from their holder claims that were previously dismissed by the Court.6

The parties do not dispute the Court's previous finding that Delaware and Cayman law govern the issue of whether the Investor Plaintiffs' claims are direct or derivative.7 Nor do the parties dispute that the Delaware Supreme Court decision, Tooley v. Donaldson, Lufkin & Jenrette,8 previously relied upon by the Court,9 sets forth the test for determining whether a claim is derivative or direct. As articulated in Tooley, the analysis requires that:

a court should look to the nature of the wrong and to whom the relief should go. The stockholder's claimed direct injury must be independent of any alleged injury to the corporation. The stockholder must demonstrate that the duty breached was owed to the stockholder and that he or she can prevail without showing an injury to the corporation.10

It is also undisputed that in Smith v. Waste Mgmt., Inc.,11 the Fifth Circuit, applying the Tooley standard, held that a stockholder's claims of fraud and negligent misrepresentation were derivative because "[t]he misrepresentations that allegedly caused [plaintiff's] losses injured not just [the plaintiff] but the corporation as a whole."12 This is where the agreement between the Investor Plaintiffs and the Commonwealth Defendants comes to a halt.

After reviewing the argument and jurisprudence relied upon by the parties, the Court hereby finds merit in the Commonwealth Defendants' "standing" argument set forth in their Opposition.13 The Court further adopts the Commonwealth Defendants' reasoning and analysis as set forth in Section C (2) of its Opposition as its own.14

Accordingly, the Court hereby denies Investor Plaintiffs' Motion for Partial Summary Judgment on the grounds that the Investor Plaintiffs lack standing to assert their claims against the Commonwealth Defendants.15 The Investor Plaintiffs' claims against Walter A. Morales and Commonwealth Advisors, Inc., are hereby dismissed. This Ruling also terminates the Joint Motion to Certify Judgment Dismissing Stone & Younberg Defendants as Final.16

FootNotes


1. Doc. 700. Investor Plaintiffs filed their Memorandum in Support of Plaintiffs' Motion for Partial Summary Judgment a second time on July 5, 2016. Doc. 733. The "Investor Plaintiffs" include the following: Joseph N. Broyles, M. Badi Asbahi, Preston Cloyd, Steve Collins and Eileen Collins, Charles and Anne Richey, Susan B. Beninati, Russ P. Barranco, Janice B. Virgadamo, Jody A. Barranco, Karen L. Barranco, the Municipal Employee's Retirement System of Louisiana, the Firefighters' Retirement System, and the Registrar of Voters Employee Retirement System.
2. Doc. 731 and Doc. 770.
3. The Court previously dismissed Cantor Fitzgerald & Co. for lack of standing on the Investor Plaintiffs' holder claims, mismanagement claims, fraud claims, rescission claims and negligence claims. Doc. 111. On reconsideration, the Court granted the remaining claim of aiding and abetting a breach of fiduciary duty without reaching the question of whether the claim was direct or derivative. Doc. 129. On January 13, 2014, the Court entered a Final Judgment Pursuant to Rule 54(b) of the Federal Rules of Civil Procedure dismissing Cantor Fitzgerald & Co. with prejudice from the action. Doc. 145. On December 8, 2014, the Court also dismissed the Investor Plaintiffs' claims against Stone & Youngberg LLC, Stifel Financial Corporation, and Stifel, Nicolaus & Company, Inc., for lack of standing. Doc. 274.
4. The "CA Funds" refers to the following: CA High Yield Fund, LLC; CA High Yield Offshore Fund, Ltd.; CA Core Fixed Income Fund, LLC; CA Core Fixed Income Offshore Fund, Ltd.; CA Strategic Equity Fund, LLC.; CA Strategic Equity Offshore Fund, Ltd.; Sand Spring Capital III, Ltd.; Sand Spring Capital III, LLC; and Sand Spring Capital III Master Fund, L.L.C.
5. Doc. 194, p. 3. (Answer of Commonwealth Defendants to Fifth Amended Complaint).
6. Doc. 111, p. 17.
7. See Doc. 731, p. 2; Doc. 700-2, p. 13, n. 27, The Investor Plaintiffs also assert that Cayman law is substantially the same as Delaware law.
8. Tooley v. Donaldson, Lufkin & Jenrette, Inc., 845 A.2d 1031, 1033 (Del. 2004).
9. See Doc. 111, p. 11; Doc. 274, p. 4.
10. Id. at 1039.
11. Smith v. Waste Mgmt., Inc., 207 F.3d 381 (5th Cir.2005)
12. Id. at 384-85.
13. Doc. 731. The Court rejects the Commonwealth Defendants' argument — that the CA Funds' bankruptcy proceedings prohibit the Investor Plaintiffs from seeking true rescission and therefore would result in double recovery — because it lacks evidentiary and legal support. Doc. 731, Section C (3), pp. 7-9.
14. Doc. 731, Section C (2), pp. 5-6.
15. Doc. 700.
16. Doc. 912.

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