California Court of Appeal

In this cross-state securities fraud case involving a nationally-listed stock, plaintiffs allege that defendant securities firms violated California and New Jersey law through their involvement in massive naked sort selling of plaintiff Overstock.com shares. Dismissal of the New Jersey Racketeer Influenced and Corrupt Organizations claim and summary judgment in favor of defendants on the California market manipulation claims is affirmed in major part, but reversed as to summary judgment for defendant Merrill Lynch Professional Clearing Corporation (Merrill), where: 1) the evidence raises a triable issue that Merrill effected a series of transactions in California and did so for the purpose of inducing others to trade in the manipulated stock; and 2) Corporations Code section 25400(b) reaches firms that execute, clear, and settle trades.

Appellate Information

• Decided 11/13/2014
• Published 11/13/2014

Judges

• Banke

Court

• California Court of Appeal

Counsel