Westlaw Topical Highlights: Securities, April 30, 2015

April 30, 2015

To match analysis CHINA-IPO/Topical Highlights for Securities provides summaries of significant federal and state judicial decisions and legislative and administrative activities affecting Securities law. A Westlaw subscription is required to access the documents linked from this page.

Investment Advisors: Loan officer employed by mortgage companies lacked apparent authority to offer investment scheme to borrowers.  Harkness v. Platten, 2015 WL 1573374 (Or.App.)

A loan officer employed by mortgage companies lacked apparent authority to invest the proceeds of borrowers’ mortgage loan in hard-money loans to developers and building contractors. Thus, borrowers could not prove their “case within a case” to support a legal malpractice action against attorneys who encouraged the borrowers to settle their lawsuit against the mortgage companies. It was not reasonable for borrowers to believe that offering the investment scheme was part of the loan officer’s job, even if the loan officer met with the borrowers about the investment scheme at the mortgage companies’ offices and used their letterhead, the borrowers invested in notes that were repayable at the mortgage companies’ office addresses, the borrowers funded the first hard-money loan with a cashier’s check made out to one of the mortgage companies, and the loan officer’s assistant also knew about all of the borrowers’ investments and would assist the borrowers with information on those matters. The Court of Appeals was required to disregard much of the evidence of the information that the borrowers relied upon to conclude that the mortgage companies were offering the investment scheme, because that information came from the mortgage companies’ employees rather than from the companies themselves. 2015 WL 1573374. (The full-text of the rest of the Topical Highlights is available within Westlaw Next, subscription required).

Fraud: Corporation had duty to disclose additional facts to prevent its true statements from being misleading.  Beaver County Employees’ Retirement Fund v. Tile Shop Holdings, Inc. 2015 WL 927456 (D.Minn.)

Fraud: Investors state law class action did not allege conduct falling with SLUSA preclusion. In re Kingate Management Ltd. Litigation 2015 WL 1839874 (C.A.2 (N.Y.))