GUSTAFSON v. STRANGIS

Nos. 3-82 Civ. 965, 3-82 Civ. 1402, 4-82 Civ. 1223 and 4-83 Civ. 145.

572 F.Supp. 1154 (1983)

Joan GUSTAFSON, L.F. and Frances Bolduc, Henry M. Hanson, John Locke, Douglas Howard, Orrin Ostlund, Robert Solheim and Allan E. Rutman, Plaintiffs, v. John A. STRANGIS, Jerry Alstead, David T. Dempsey, Alstead, Strangis and Dempsey, Incorporated, a Minnesota corporation; United Financial Group, Inc., a Minnesota corporation; Alstead, Strangis and Dempsey Tax Shelters Investment, Inc., a Minnesota corporation; First United Securities Corporation, a Minnesota corporation; United Performance Industries, Inc., a Minnesota corporation; Joseph Francis and Richard A. Salada, Jonathan Miner, Brad Haddy, Eric Gudrais, Jeffrey Wendel and National Association of Securities Dealers, Inc., a Delaware corporation, Defendants. Michael R. FRANTZ, as Personal Representative for the Estate of Donald R. Frantz, Plaintiff, v. ALSTEAD, STRANGIS & DEMPSEY, INC., United Financial Group, Inc., United Performance Industries, Inc. and First United Securities Corporation (all Minnesota corporations); Jerry Alstead, David Dempsey, Joseph Francis, Richard Salada, Jonathan Miner, Brad Haddy, Erick Gudrais and Jeff Wendel; and National Association of Securities Dealers, Inc., a Delaware corporation, Defendants. Chris CHASE, Michael Del Castello, Diamond Oil Company, Jerrold S. Frank, Muriel Greengard, Fred Halverson and Constance Halverson, North Star Pipe & Supply Company, John L. Olson, Peter Sidlow, and Dr. R. James and Mildred Vaccarella, Plaintiffs, v. ALSTEAD, STRANGIS & DEMPSEY, INCORPORATED, United Financial Group, Inc., United Performance Industries, Inc., and First United Securities Corporation (all Minnesota corporations); Jerry Alstead, David Dempsey, Joseph Francis, Richard Salada, Jonathan Miner, Brad Haddy, Erick Gudrais, and Jeff Wendel; and National Association of Securities Dealers, Inc., a Delaware corporation, Defendants. Gabriel T. CHEHADEH, individually, and d/b/a N.A. Investment Management Corporation, and on behalf of himself and all others investing through Gabriel T. Chehadeh, individually, and d/b/a N.A. Management Corporation, Plaintiffs, v. Jerry ALSTEAD, David T. Dempsey, Joseph Francis and Richard Salada, individually and as directors of Alstead, Strangis & Dempsey, Inc., or United Financial Group, Inc., and John Doe, Mary Roe and XYZ Corporation, as assignees of Jerry Alstead, John Strangis, David T. Dempsey, and the directors of Alstead, Strangis & Dempsey, Inc., and Alstead, Strangis & Dempsey, Inc., a Minnesota corporation, United Financial Group, Inc., a Minnesota corporation, First United Securities Corporation, a Minnesota corporation, United Performance Industries, Inc., a Minnesota corporation, and the National Association of Securities Dealers, Inc., a Delaware corporation, and Jonathan S. Miner, Brad Haddy, Jeff Wendel and Eric Gudrais, Defendants.

United States District Court, D. Minnesota, Third Division.

October 5, 1983.


Attorney(s) appearing for the Case

Zimmerman, Caplan & Reed by Barry G. Reed, Minneapolis, Minn., for Gustafson.

Keith Simons, Hopkins, Minn., for Frantz.

Lindquist & Vennum by Norman Newhall, Minneapolis, Minn., for Chase.

Collins, Buckley, Sauntry & Haugh by Thomas J. Germscheid, St. Paul, Minn., for Chedhadeh.

Popham, Haik, Schnobrich, Kaufman & Doty by Clifford M. Greene, Scott E. Richter, Minneapolis, Minn., Andrew McR. Barnes, Washington, D.C., for defendant NASD.


MEMORANDUM ORDER

ALSOP, District Judge.

This matter comes before the court upon the motion of defendant National Association of Securities Dealers, Inc. (NASD) to dismiss all claims against it in all of the above-entitled cases pursuant to Fed.R. Civ.P. 12(b)(6). Plaintiffs oppose the motion.

Plaintiffs in their complaints assert that defendant NASD failed to make a thorough investigation of Alstead, Strangis & Dempsey, Inc. (ASD), failed to...

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