Broker-Dealer Litigation - Greenberg Traurig LLP

the admission by the investment manager’s employee that he understood these transactions
would be matched by trades in U.S. securities in the normal course of business.
TAGC Mgmt. LLC v. Lehman, 2011 WL 3796350 (S.D.N.Y. Aug. 24, 2011).
A group of companies that attempted to start a business in China sued the Chinese law
firm that assisted them, as well as an associate at the law firm who performed a small amount of
work on the project, claiming violations of various state and federal laws, including Section
10(b) of the Securities Exchange Act of 1934. The defendant-law firm associate moved to
dismiss for lack of personal jurisdiction and the court granted the motion. The associate, a
Georgia resident licensed to practice in Georgia, lacked any connections to the state of New
York: he never transacted business there, had no clients in New York, never conducted business
through the firm’s New York office or visited that office, and had never set foot in the state.
Accordingly, the court concluded that the New York long-arm statute did not permit exercise of
personal jurisdiction over him.
In re Herald, Primeo & Thema Sec. Litig., 2011 WL 5928952 (S.D.N.Y. Nov. 29, 2011).
Three foreign plaintiffs each purporting to represent a class of foreign investors in foreign
investment funds brought suit against the foreign funds and their directors, administrators,
custodians, investment managers, auditors, advisors, lawyers and financial intermediaries based
on the funds’ investments with Bernard L. Madoff Investment Securities LLC. After dismissing
certain of the plaintiffs’ claims as precluded by the Securities Litigation Uniform Standards Act
and preempted under New York’s Martin Act, the court turned to the defendants’ motion to
dismiss the remaining claims on the basis of forum non conveniens in favor of Ireland and
Luxembourg. Those nations, where closely related suits were already pending, permitted
litigation of the subject matter of the plaintiffs’ suit and served as adequate alternative fora.
Because the plaintiffs essentially admitted forum shopping, bringing suit in the U.S. to take
advantage of the class action device, avoid costly fee shifting, and to pursue RICO claims, the
court found their choice of forum deserving of little deference. Additionally, both the public and
private interest factors favored litigation in Ireland and Luxembourg, given the evidence and
witnesses located there and the fact that suits were already pending. Accordingly, the court
dismissed the remaining claims based upon the doctrine of forum non conveniens.
In re Optimal U.S. Litig., 2011 WL 6424988 (S.D.N.Y. Dec. 21, 2011).
Foreign plaintiffs, who were investors in a fund that invested 100% of its assets with
Bernard L. Madoff Investment Securities LLC, brought suit alleging that the defendants failed to
conduct adequate diligence regarding Madoff, ignored red flags, and made misstatements and
omissions regarding fund shares. The defendants moved to dismiss under the doctrine of forum
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