Opinion ID: 2544308
Heading Depth: 3
Heading Rank: 3

Heading: Securities Fraud

Text: Section 8-6-19(a)(2), Ala.Code 1975, grants the buyer of a security a right of action against a seller who sold the security by means of any untrue statement of a material fact or any omission to state a material fact. This Court has stated: [A] claim of a violation of § 8-6-19(a)(2), Ala.Code 1975, requires (1) a sale or an offer to sell a security (2) by means of a false statement or omission (3) of material fact and (4) the ignorance of the buyer as to the untruth or omission. Blackmon v. Nexity Fin. Corp., 953 So.2d 1180, 1191 (Ala.2006). This claim must be pleaded with particularity under Rule (b). The investors asserted their claim of securities fraud against Hinds, Decatur, Kirkland, and Gulf Stream. In their briefs on appeal, the investors maintain that this claim relates to DGB's purchase of a 40% interest in Bon Harbor in June 2005. It is unclear whether a claim under § 8-6-19(a)(2) may arise from the sale of an interest in an LLC. Moreover, the investors have not alleged any false statement or omission of material fact by Hinds, Decatur, Kirkland, or Gulf Stream relating to DGB's purchase of an interest in Bon Harbor. The investors, therefore, have not stated a claim of securities fraud upon which relief can be granted, and the trial court did not err in dismissing the claim.