Court Opinion

ID: 820281
Source: CourtListenerOpinion
Date Created: 2013-02-11 21:24:28.271182+00
Date Added: 2024-06-11T09:03:03.440319
License: Public Domain

FILED
                           NOT FOR PUBLICATION                                 FEB 11 2013

                                                                          MOLLY C. DWYER, CLERK
                    UNITED STATES COURT OF APPEALS                          U.S. COURT OF APPEALS

                            FOR THE NINTH CIRCUIT

DARRU K. “KEN” HSU,                              No. 11-17131
INDIVIDUALLY, AND AS TRUSTEE
OF THE DARRU K. HSU AND GINA T.                  D.C. No. 3:11-cv-02076-WHA
HSU LIVING TRUST U/A05/05/03,
INDIVIDUALLY AND ON BEHALF OF
ALL OTHERS SIMILARLY SITUATED                    MEMORANDUM*

              Plaintiff - Appellant,

  v.

UBS FINANCIAL SERVICES INC.,

              Defendant - Appellee.

                   Appeal from the United States District Court
                     for the Northern District of California
                   William H. Alsup, District Judge, Presiding

                          Submitted December 7, 2012**
                            San Francisco, California

Before: O’SCANNLAIN and CALLAHAN, Circuit Judges, and EZRA, Senior

        *
             This disposition is not appropriate for publication and is not precedent
except as provided by 9th Cir. R. 36-3.
       **
             The panel unanimously concludes this case is suitable for decision
without oral argument. See Fed. R. App. P. 34(a)(2).
District Judge.***

      Darru K. “Ken” Hsu (“Hsu”) appeals from the district court’s dismissal of

his action under the Investment Advisers Act of 1940 (“IAA”), 15 U.S.C. § 80b-1

et seq., against UBS Financial Services Inc. (“UBS”). We have jurisdiction

pursuant to 28 U.S.C. § 1291, and we affirm the dismissal of the First Amended

Complaint (“FAC”).

      Hsu argues that UBS deceived clients — thereby violating its fiduciary duty

as an investment advisor under § 206 — by leading them to believe that they

waived certain “unwaivable fiduciary duties” through a series of “hedge clauses.”

He fails to state a claim because he never identifies or explains what those

“unwaivable fiduciary duties” are and therefore has not provided UBS with fair

notice of the wrongs it has allegedly committed. Cf. Cooper v. Pickett, 137 F.3d

616, 625 (9th Cir. 1997) (to satisfy Rule 9, “a plaintiff must set forth more than the

neutral facts necessary to identify the transaction. The plaintiff must set forth what

is false or misleading about a statement, and why it is false.”). Assuming that Hsu

could pursue an action for rescission based on an alleged violation of § 215, Hsu’s

claim fails because the clauses he points to do not waive compliance with any

provision of the IAA.

        ***
             The Honorable David A. Ezra, Senior U.S. District Judge for the
District of Hawaii, sitting by designation.
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      Hsu also argues for the first time on appeal that the wrap fee contract

fraudulently provides that clients may select an investment manager of their choice

when, in practice, UBS allegedly requires clients to use a manager from a UBS-

approved list. However, “we will not consider arguments that are raised for the

first time on appeal.” Smith v. Marsh, 194 F.3d 1045, 1052 (9th Cir. 1999).

      Thus, this Court affirms the dismissal of the FAC for failure to state a claim.

The Court therefore need not address which statute of limitations properly applies

to the IAA.

              AFFIRMED.

                                          3