Broker-Dealer Litigation - Greenberg Traurig LLP

anyway because the connection to bankruptcy was attenuated and state law issues predominated.
The court also rejected the defendants’ contention that the plaintiff’s federal charter supplied an
independent basis for federal jurisdiction.
Kexuan Yao v. Crisnic Fund, S.A., 2011 WL 3818406 (C.D. Cal. Aug. 29, 2011).
The plaintiff, a citizen of China, sued the defendants, a Costa Rican corporation and its
principal, a United States citizen and permanent resident of Costa Rica, asserting claims for
violations of federal securities laws and multiple state laws. The defendants moved to dismiss
for lack of personal jurisdiction, and the court denied the motion. With respect to the corporate
defendant, the court noted that its transaction with the plaintiff, which gave rise to the complaint,
was governed by a contract specifying the law of the State of Georgia as controlling, and
involved the shares of a corporation registered in Nevada. Under the nationwide service of
process provision in 15 U.S.C. § 78aa, the question was whether the United States, rather than
any particular state, was a proper forum. Based on these facts, the court found that the corporate
defendant had sufficient ties to the United States to satisfy due process. In addition, the court
found that the individual defendant, as a United States citizen with a Georgia driver’s license, a
mortgage on a home in Georgia, and business ties to a Georgia corporation, had sufficient
contacts with the United States to permit exercise of personal jurisdiction.
Anschutz Corp. v. Merrill Lynch and Co. Inc., 785 F. Supp. 2d 799 (N.D. Cal. 2011).
An investor in auction rate securities brought suit against the seller of the securities and
certain securities rating agencies, alleging market manipulation in violation of state and federal
securities laws. One of the rating agencies, Fitch Ratings, Ltd. (“FRL”), moved to dismiss for
lack of personal jurisdiction. FRL maintained that it did not rate the securities at issue, and that
it was a London-based entity organized under the laws of England and Wales, and primarily
rated securities in Europe, the Middle East, Africa, and Asia. Though the plaintiff produced
rating letters regarding the securities that defined “Fitch” to include FRL, the court found this
“slim reed” insufficient to find that FRL played a role in the ratings, particularly in the face of
FRL’s affidavit to the contrary. Accordingly, the court granted the motion and dismissed FRL as
a defendant.
Charles Schwab Corp. v. BNP Paribas Sec., 2011 WL 724696 (N.D. Cal. Feb. 23, 2011).
The plaintiff brought suit against the defendant in state court asserting various state law
claims as well as claims under the Securities Act stemming from the plaintiff’s purchase of
certificates in securitization trusts backed by residential mortgage loans. Defendants removed
the case, asserting that it was “related to” bankruptcy proceedings involving American Home
Mortgage Holdings (“AHM”), which originated loans included in one of the trusts and, pursuant
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