8/6/2019 MLSMK v. JPMorganChase

1/2

Search Searc

Like | Follow Leagle on Twitter |

Home Featured Decisions Leagle EyeViews Proposed Regulations Statutes Leagle Kontact Search About Us Contact Us

MLSMK INVESTMENT COMPANY...

View Case Cited Cases Citing Cases Comment (0)

0

MLSMK INVESTMENT COMPANY v. JP MORGAN CHASE & CO.

MLSMK INVESTMENT COMPANY, Plaintiff-Appellant,

v.

JP MORGAN CHASE & CO., JP MORGAN CHASE BANK, NA, Defendants-Appellees.

No. 10-3040-cv.

United States Court of Appeals, Second Circuit.

Argued: May 25, 2011.

Final Submission: June 10, 2011.

Decided: July 7, 2011.

HOWARD KLEINHENDLER, Wachtel & Masyr, LLP (Julian D. Schreibman, SaraG. Spiegelman, of counsel), New York, NY, for Plaintiff-Appellant.

PATRICIA M. HYNES, Allen & Overy LLP (Andrew Rhys Davies, Laura R. Hall, ofcounsel), New York, NY, for Defendants-Appellees.

Before: McLAUGHLIN, POOLER, and SACK, Circuit Judges.

SACK, Circuit Judge.

This case arises out of the massive and now infamous Ponzi

scheme1 perpetrated by Bernard L. Madoff, which culminatedabruptly with his arrest in December 2008 but whoseaftershocks continue.

Between October and December 2008, the plaintiff, MLSMKInvestment Company ("MLSMK"), invested $12.8 million with

Madoff's investment company, Bernard L. Madoff Investment Securities("BMIS"). The defendants, JP Morgan Chase & Co. ("JPMC") and JP MorganChase Bank, N.A. ("Chase Bank"), were, respectively, a trading partner forMadoff's apparently legitimate market-making business and the bank withwhich Madoff maintained the account for BMIS. MLSMK lost its $12.8 millioninvestment when, on December 11, 2008, Madoff was arrested and his assetsseized.

MLSMK subsequently filed this lawsuit in the United States District Court forthe Southern District of New York alleging several New York state-law claimsagainst the defendants. It also asserted a federal claim contending that thedefendants had conspired with Madoff to "fleece" his victims, in violation of theRacketeer Influenced and Corrupt Organizations Act ("RICO"), 18 U.S.C. 1962(d) and 1964(c). In that connection, MLSMK alleges that by late summer2008, the defendants became suspicious of Madoff's business activities andtherefore undertook a "due diligence" investigation into Madoff's activities, and

'

RYAN v. U.S., United States Court of Appeals, SeventhCircuitThe conviction of the former governor of Illinois after

the Supreme Court's honest services decision in

Skilling

EZELL v. CITY OF CHICAGO, United States Court ofAppeals, Seventh CircuitA challenge of the Chicago law requiring one hour of

range training as a prerequisite to legal gunownership

COX v. WAL-MART STORES INC., United States Courtof Appeals, Ninth CircuitAn employee's ADA discrimination claim

ATK LAUNCH SYSTEMS, INC. v. U.S. ENVIRONMENTALPROTECTION AGENCY, United States Court ofAppeals, Tenth CircuitDispute over including two Utah counties as anonattainment area under the Clean Air Act

NSK CORPORATION v. U.S., United States Court ofAppeals, Federal Circuit

Dispute over an antidumping duty order

1 2 3 4 5 ...

Click here to search for Archival Cases

Record Press, Inc.Appellate Litigation Financial Digital Printingrecordpress.com

Madoff Clawback ActionsResolution of Clawback Actions (212) 696 - 1999www.laxneville.com

Appellate DivisionFirst Department 2011 Calendar Phone: 800-531-2028dickbailey.com/fast/appeal/printing

Ads by Google Court Complaint Chase Bank Law

Ads by Google

Plaintiff

Securities

Bank Law Suits

Bank Scam

Uncontested Divorcewww.divorcefilers.comFast, economical, same day filings. No Courtappearances,. We do it all

Federal Criminal Lawyerwww.sentencingguideline.comJoseph A. Bondy, Federal Trial, Sentencing &

Appeals Attorney

A-Power Investorswww.pomerantzlaw.comAPWR shareholders contact Pomerantz aboutsecurities fraud class action

Top-Rated Injury Attorneywww.taublawfirm.come can come to you; Free consult. No fee unless

we win!

8/6/2019 MLSMK v. JPMorganChase

2/2

Disclaimer ::: Terms of Use ::: Privacy Statement ::: About Us ::: Contact Us ::: Copyright 2010 Leagle, Inc.

business was a thoroughly fraudulent enterprise. Nevertheless, MLSMK asserts,the defendants eager to continue receiving the substantial fees they derivedfrom Madoff's market-making and banking activity continued to trade withand provide banking services to him. MLSMK asserts that by failing to freezeMadoff's accounts, the defendants became liable for conspiracy to violate RICOby aiding and abetting Madoff's breach of fiduciary duty, commercial bad faith,and negligence.

The district court (Barbara S. Jones, Judge) dismissed the plaintiff'scomplaint in its entirety, concluding that the complaint did not adequately pleadany of the claims purportedly contained therein. We have affirmed that court'sdismissal of the plaintiff's state-law claims for aiding and abetting breach of

fiduciary duty, commercial bad faith, and negligence. See MLSMK Inv. Co. v. JPMorgan Chase & Co. ("MLSMK I"), No. 10-3040-cv, 2011 WL 2176152, 2011U.S. App. LEXIS 11425 (2d Cir. June 6, 2011) (summary order). With regard tothe remaining claim brought under RICO, addressing an issue of first impressionin this Court, we conclude that the claim also must be dismissed, because it isbarred by section 107 of the Private Securities Litigation Reform Act (the"PSLRA"), 18 U.S.C. 1964(c). We therefore affirm that portion of the districtcourt's judgment that remains on appeal.

BACKGROUND

The following statement of facts is drawn from the plaintiff's complaint. As isrequired on appeal from a successful motion to dismiss in the district court, weaccept as true all well-pleaded factual allegations in the complaint and draw allinferences in the plaintiff's favor. See Mortimer Off Shore Servs., Ltd. v. Fed.

Republic of Ger., 615 F.3d 97, 114 (2d Cir. 2010), cert. denied, 131 S.Ct.

1502 (2011); see also Harris v. Mills, 572 F.3d 66, 71-72 (2d Cir. 2009)(reciting the Supreme Court's guidance in Bell Atl. Corp. v. Twombly, 550 U.S.544 (2007), and Ashcroft v. Iqbal, 129 S.Ct. 1937 (2009), that we need notcredit legal conclusions couched as factual statements or "threadbare recitals ofthe elements of a cause of action, supported by mere conclusory statements"(alterations and internal quotation marks omitted)).

Click here for unpaginated view

ESTATE OF BRENNAN v. CHURCH OFSCIENTOLOGY FLAG SERVICE ORGANIZATION,

INC.

MXENERGY INC. v. GEORGIA PUBLIC SERVICECOMMISSION

CRAWFORD v. LAWYERS TITLE INSURANCECORPORATION

MacMULLIN v. CUNANAN

EMBRY v. STATE

PASILLAS v. HSBC BANK USA

VILLANOVA v. INNOVATIVE INVESTIGATIONS,INC.

MATTER OF BRONX COMM. FOR TOXIC FREESCHOOLS v. NEW YORK CITY SCHOOL CONSTR.

AUTH.

PROMETHEUS RADIO PROJECT v. FEDERALCOMMUNICATIONS COMMISSION

KOEWLER v. REVIEW BOARD OF INDIANADEPARTMENT OF WORKFORCE DEVELOPMENTAND DILLARDS, INC.

PEOPLE v. PREASMYER

GONZALES v. CITY OF BOZEMAN

TOO MUCH MEDIA v. HALE

YOHANNES v. HOLDER

DOUCETTE v. HALLSMITH/SYSCO FOOD SERVICES,INC.

DIEBOLD INCORPORATED v. CONTINENTAL

CASUALTY COMPANY

IN RE ESTATE OF MARUN

USAA CASUALTY INSURANCE COMPANY v. CALLERY

EX PARTE E.R.G.

GRANITE v. USAA CASUALTY INSURANCECOMPANY

Ads by Google Bank Fraud Affaire Madoff Out of Court To Court For