Source: https://www.sonnlaw.com/faq/ponzi-schemes/common-remedies-claims/amp/
Timestamp: 2018-07-18 09:07:03
Document Index: 694420437

Matched Legal Cases: ['§ 77', '§ 77', '§ 78', '§ 78', '§ 240', '§ 78', '§ 240', '§ 104', '§ 78', '§ 78', '§ 77', '§ 20', '§ 230', '§ 20', '§ 20']

1. Normally referred to as “Sale of Unregistered Securities in Violation of Sections 5(a) and 5(c) of the Securities Act, ”15 U.S.C. §§ 77e( a) and 77e[c]. 2. 15 U.S.C. § 77b(a)(1); 15 U.S.C. § 78c(a)(10). 3. 328 U.S. 293, 66 S.Ct. 1100, 90 L.Ed. 1244 (1946). 4. 328 U.S. at 298-99, 66 S.Ct. at 1103. 5. 540 U.S. 389, 124 S.Ct. 892, 157 L.Ed.2d 813 (2004). 6. 540 U.S. at 393, 124 S.Ct. at 896 (quoting Reves v. Ernst & Young, 494 U.S. 56, 110 S.Ct.945, 108 L.Ed.2d 47 (1990)). 7. S.E.C. v. Mutual Benefits Corp., 408 F.3d 737, (11th Cir.2005); Howey, 328 U.S. at 299, 66 S.Ct. at 1103; see also Tcherepnin v. Knight, 389 U.S. 332, 336, 88 S.Ct. 548, 553, 19 L.Ed.2d 564 (1967). 8. 389 U.S. 332, 336, 88 S.Ct. 548, 553, 19 L.Ed.2d 564 (1967). 9. See 15 U .S.C. § 78j(b), and Rul e 10b-5, 17 C .F.R. § 240.10b-5. 10. ” 15 U.S.C. § 78j. 11. ” 17 CFR § 240.10b-5. 12. United States v. O’Hagan, 521 U.S. 642, 651, 117 S.Ct. 2199, 138 L.Ed.2d 724 (1997). 13. Superintendent of Ins. of N.Y. v. Bankers Life & Casualty Co., 404 U.S. 6, 13, n. 9, 92 S.Ct.165, 30 L.Ed.2d 128 (1971). 14. See Dura Pharmaceuticals, Inc. v. Broudo, 544 U.S. 336, 341-342, 125 S.Ct. 1627, 161 L.Ed.2d 577 (2005). 15. Central Bank of Denver vs. First Interstate Bank of Denver, 511 U.S., at 177, 114 S.Ct. 1439 (1994). 16. Id. 17. The Court added the following: “Were we to allow the aiding and abetting action proposed in this case, the defendant could be liable without any showing that the plaintiff relied upon the aider and abettor’s statements or actions. See also Chiarella [ v. United States, 445 U.S. 222, 228, 100 S.Ct. 1108, 63 L.Ed.2d 348 (1980) ]. Allowing plaintiffs to circumvent the reliance requirement would disregard the careful limits on 10b-5 recovery mandated by our earlier cases.” Ibid. The decision in Central Bank led to calls for Congress to create an express cause of action for aiding and abetting within the Securities Exchange Act. Then-SEC Chairman Arthur Levitt, testifying before the Senate Securities Subcommittee, cited Central Bank and recommended that aiding and abetting liability in private claims be established. S. Hearing No. 103-759, pp. 13-14 (1994). Congress did not follow this course. Instead, in § 104 of the Private Securities Litigation Reform Act of 1995 (PSLRA), 109 Stat. 757, it directed prosecution of aiders and abettors by the SEC. 15 U.S.C. § 78t(e). 18. Section 20(a) of the Exchange Act, 15 U .S.C. § 78t(a). Section 15 of the Securities Act of 1933 also imposes liability on controlling persons. See 15 U.S.C. § 77o (West 20007). 19. H.R.Rep. No. 73-152, at 12 (1933); see generally William O. Douglas, Directors Who Do Not Direct, 47 Harv. L.Rev. 1305 (1934); Loftus C. Carson II, The Liability of Controlling Persons Under the Federal Securities Acts, 72 Notre Dame L.Rev. 263, 266 (1997). 20. S.Rep. No. 73-47, at 5-6 (1933); see also H.R.Rep. No. 73-152, at 12 (1933); Stock Exchange Practices: Hearing on S. Res. 84 (72nd Cong.) and S. Res. 56 and 97 (73rd Cong.) Before the Senate Comm. on Banking and Currency, 73rd Cong., 1st Sess. 6556 (1934) (remark of Sen. Barkley). 21. H.R.Rep. No. 73-1383, at 26 (1934) (emphasis added). 22. Brown v. Enstar Group, Inc., 84 F.3d 393, 396 (11th Cir.1996) (citations omitted).See also Hoffend v. Villa (In re Villa), 261 F.3d 1148 (11th Cir. 2001)(Under this Court’s interpretation of the term “controlling person” under § 20(a), a “controlling person” may include not only partners or principals under agency law, but also any person who has the power to control the conduct of another person who has violated securities laws.); Davidco Investors, LLC v. Anchor Glass Containers, 2006 U.S. Dist. LEXIS 11527, Fed. Sec. L. Rep. (CCH) P93,732 (M.D.Fla. 2006)(A defendant is liable as a controlling person if he “had the power to control the general affairs of the entity primarily liable at the time the entity violated the securities laws . . . [and] had the requisite power to directly or indirectly control or influence the specific corporate policy which resulted in the primary liability.””). 23. 17 C.F.R. § 230.405. 24. See Sheinkopf, 927 F.2d at 1270. “For [defendant] to be liable … there must be ‘significantly probative’ evidence that the [defendant] exercised, directly or indirectly, meaningful hegemony over” the controlled person.) (citation omitted); Harrison v. Dean Witter Reynolds, Inc., 974 F.2d 873, 880-881 (7th Cir.1992) (describing a similar requirement for plaintiff); Metge v. Baehler, 762 F.2d 621, 631 (8th Cir.1985) (holding that control person merely must possess, not necessarily exercise, the power to determine the acts or omissions upon which the underlying violation is predicated); San Francisco-Okla. Petroleum Exploration Corp. v. Carstan Oil Co., 765 F.2d 962, 964 (10th Cir.1985) (stating that a plaintiff establishes a prima facie case of controlling person liability “when the … defendant [is] shown to be a controlling person”); Hollinger v. Titan Capital Corp., 914 F.2d 1564, 1572 (9th Cir.1990) (same). 25. Enstar Group, Inc., 84 F.3d at 397 n. 6.; see also G.A. Thompson & Co., Inc., 636 F.2d at 958. 26. See Boguslavsky v. Kaplan, 159 F.3d 718, 720 (2d Cir. 1998) (“§ 20(a) liability requires an individualized determination of a defendant’s control of the primary violator as well as a defendant’s particular culpability”) (emphasis added); see also Ganino v. Citizens Utilities Co., 228 F.3d 154, 170 (2d Cir. 2000) (“To make out a prima facie case under § 20(a)…plaintiff ‘must… show that the controlling person was in some meaningful sense a culpable participant’ ”); First Jersey Sec., 101 F.3d at 1472 (plaintiff must “show that the controlling person was ‘in some meaningful sense [a] culpable participant’ ”); Hollin v. Scholastic Corp., 252 F.3d 63, 77-78 (2d Cir. 2001) (emphasis added). Gurfein v. Ameritrade, Inc., 411 F. Supp. 2d 416, 427 (S.D.N.Y. 2006). 27. See e.g. See Complaint, Scheck Investments LP vs. MBC et al. Case no. 04-21160 (S.D. FL 2004).