You are here: / / Causes of Action Based Upon Allegations of Violations of Martin Act Concerning...
,

Causes of Action Based Upon Allegations of Violations of Martin Act Concerning Fraud in the Selling of Securities Allowed to Go Forward— Supreme Court Should Not Have Evaluated Merits on Motion to Dismiss

The First Department determined Supreme Court should not have dismissed certain Martin Act/Executive Law causes of action alleging fraud in the sale of securities brought by the Attorney General against Charles Schwab. The First Department explained that Supreme Court should not have evaluated the merits of the case in determining the motion to dismiss:

The Martin Act causes of action are based on General Business Law § 352-c(1)(a), which, where applicable, prohibits fraud, concealment, suppression or false pretense, and General Business Law § 352-c(1)(c), which prohibits false representations or statements to induce or promote the issuance, purchase or sale of securities within or from the State. It is alleged in the complaint that defendant, Charles Schwab & Co., Inc. (Schwab), a registered securities broker-dealer, engaged in fraudulent and deceptive conduct in the sale of auction rate securities (ARS) to the investing public. The Attorney General asserts that Schwab misrepresented ARS to its customers as safe, liquid investments while concealing the fact that they were complex financial instruments with significant, inherent and increasing liquidity risks. * * *

In dismissing the Martin Act causes of action, the court concluded that the “misrepresentations alleged were true when made and the complaint contains no allegations that ARS were liquid at a time when they were illiquid.” The court based this conclusion on its own finding that there had been no failures in the auctions in the 20 years preceding August 2007. In reaching this conclusion, the court erroneously engaged in an evaluation of the merits of the Martin Act causes of action. On a motion to dismiss for failure to state a cause of action, it is not the function of the court to evaluate the merits of the case… . People v Charles Schwab & Co, Inc, 2013 NY Slip Op 05722, 1st Dept 8-27-13

 

You might also like
DRUG FACTORY JURY INSTRUCTION NOT SUPPORTED BY THE EVIDENCE, NEW TRIAL ORDERED (FIRST DEPT).
AS PLAINTIFF WAS REMOVING DUCTS FROM THE CEILING, A PORTION OF A DUCT STRUCK PLAINTIFF AND THE A-FRAME LADDER CAUSING HIM AND THE LADDER TO FALL TO THE FLOOR; IT IS ENOUGH THAT THE LADDER WAS “UNSECURED;” PLAINTIFF NEED NOT SHOW THE LADDER WAS DEFECTIVE (FIRST DEPT). ​
NEW YORK DOES NOT HAVE GENERAL OR LONG-ARM JURISDICTION OVER A UK CORPORATION WHICH ALLEGEDLY MANUFACTURED A DEFECTIVE PART OF AN EXCAVATOR (FIRST DEPT). ​
PLAINTIFFS’ MOTION FOR SUMMARY JUDGMENT IN THIS COMPLEX BREACH OF CONTRACT ACTION INVOLVING THE SALE OF A BUSINESS AND A RELATED LEASE WAS PROPERLY GRANTED; THE TERMS OF THE CONTRACTS WERE UNAMBIGUOUS AND NEITHER THE DOCTRINE OF PREVENTION NOR THE DOCTRINE OF FRUSTRATION OF PURPOSE APPLIED (FIRST DEPT).
IN A REAR-END COLLISION, INNOCENT PLAINTIFF ENTITLED TO SUMMARY JUDGMENT ON PLAINTIFF’S LACK OF FAULT, BUT CONFLICTING FACTS PRECLUDED SUMMARY JUDGMENT AGAINST ONE OR BOTH DEFENDANTS.
Sale of Notes Was Champertous—Seller Subcontracted Out Its Litigation for Political Reasons In Violation of Judiciary Law 489 (1)
NYC Fire Department Cannot Be Compelled to Bargain Over the “Zero Tolerance” Drug-Test Policy for EMS Personnel
QUESTION OF FACT WHETHER PLAINTFF SLIPPED AND FELL ON ICE OR SNOW IN AN AREA WHICH HAD BEEN CLEARED SUCH THAT IT CONSTITUTED A “PASSAGEWAY” WITHIN THE MEANING OF THE INDUSTRIAL CODE RE: THIS LABOR LAW 241(6) ACTION (FIRST DEPT).

Categories

Sign Up for the Mailing List to Be Notified When the Site Is Updated.

  • This field is for validation purposes and should be left unchanged.

Copyright © 2026 New York Appellate Digest, Inc.
Site by CurlyHost | Privacy Policy

Level One Request for Information Not Justified by “Drug-Prone” Area or... Irreparable Injury to Plaintiffs Not Demonstrated and Balance of Equities Did...