In today’s fraud notes, we examine two cases: K.M. v. Ursuline School of New Rochelle, 2025 N.Y. Slip Op. 04643 (2d Dept. Aug. 13, 2025) (here), and Three C, LLC v. City Settlement Serv., Inc., 2025 N.Y. Slip Op. 04678 (Aug....more
On August 1, 2025, the Securities and Exchange Commission (“SEC”) announced (here) that it charged a Wisconsin resident and three limited liability companies that he owns and controls – Investors Capital LLC, Global Investors...more
This Blog has written frequently about the substance and scope of general releases. In New York, “a valid release constitutes a complete bar to an action on a claim which is the subject of the release.” If “the language of a...more
A claim for fraud requires “a material misrepresentation of a fact, knowledge of its falsity, an intent to induce reliance, justifiable reliance by the plaintiff and damages.” In First Trinity Life Ins. Co. v. Advance Funding...more
6/3/2025
/ Appeals ,
Appellate Courts ,
Business Litigation ,
Fraud ,
Insurance Litigation ,
Jurisdiction ,
Lottery ,
Misrepresentation ,
New York ,
Scienter ,
Summary Judgment
In Crawford v. Integrated Asset Mgt. Servs., LLC, 2025 N.Y. Slip Op. 01352 (2d Dept. Mar. 12, 2025) (here), the Appellate Division, Second Department reversed the denial of the defendants’ motion to dismiss the plaintiffs’...more
Pre-IPO investing involves buying a stake in a company before the company makes its initial public offering of securities. Many stock promoters invite potential investors to invest in a pre-IPO offering by providing an...more
2/10/2025
/ Broker-Dealer ,
Enforcement Actions ,
Financial Crimes ,
Financial Industry Regulatory Authority (FINRA) ,
Fraud ,
Initial Public Offering (IPO) ,
Investment Funds ,
Private Equity ,
Securities and Exchange Commission (SEC) ,
Securities Fraud ,
Securities Regulation
We have written frequently about the substance and scope of general releases. In New York, “a valid release constitutes a complete bar to an action on a claim which is the subject of the release.” If “the language of a...more
In Katsorhis v. 718 W. Beech St, LLC, 2025 N.Y. Slip Op. 00211 (1st Dept. Jan. 15, 2025) (here), the Appellate Division, Second Department considered a fraud claim that the lower court sustained on the grounds that defendant...more
1/27/2025
/ Breach of Contract ,
Construction Contracts ,
Consumer Protection Laws ,
Damages ,
Evidence ,
Fraud ,
Misleading Statements ,
Motion to Dismiss ,
Property Owners ,
Real Estate Development ,
Real Estate Transactions
In New York, litigants often grapple with the appropriate limitation period to apply to breach of fiduciary claims. There is no single statute of limitations that the courts and the parties can look to. “Rather, the choice of...more
The justifiable reliance element has been described as a “fundamental precept” and a “venerable rule”. The requirement is one of the five elements of a fraud cause of action: (1) a misrepresentation or a material omission of...more
1/6/2025
/ Appeals ,
Cause of Action Accrual ,
Damages ,
Due Diligence ,
Fraud ,
Joint Tenancy with Right of Survivorship ,
Justifiable Reliance ,
Marital Assets ,
Misrepresentation ,
Omissions ,
Ownership Interest ,
Scienter ,
Summary Judgment
In Singh v. T-Mobile, 2024 N.Y. Slip Op. 05554 (2d Dept. Nov. 13, 2024) (here), the Appellate Division, Second Department affirmed the dismissal of an action for, among other things, breach of contract, breach of the covenant...more
11/18/2024
/ Breach of Contract ,
Cause of Action Accrual ,
Compensation ,
Conspiracies ,
Covenant of Good Faith and Fair Dealing ,
Dismissals ,
Fraud ,
Management Agreements ,
Sprint ,
T-Mobile ,
Unjust Enrichment
Statutes of limitations limit the time within which a defendant can be held liable for any type of alleged wrongdoing. Plaintiffs who do not pursue their rights within the limitations period will find the courthouse doors...more
10/28/2024
/ Breach of Duty ,
Damages ,
Declaratory Relief ,
Enforcement Actions ,
Fiduciary Duty ,
Fraud ,
Liability ,
Partnerships ,
Repudiation ,
Statute of Limitations ,
Tax Returns ,
Time-Barred Claims ,
Willful Misconduct
To state a cause of action for fraud, a plaintiff must allege “a material misrepresentation of a fact, knowledge of its falsity, an intent to induce reliance, justifiable reliance by the plaintiff and damages.” The...more
6/3/2024
/ Appeals ,
Breach of Contract ,
Breach of Duty ,
CPLR ,
Damages ,
Fiduciary Duty ,
Fraud ,
Gross Negligence ,
Justifiable Reliance ,
Limited Partnerships ,
Misrepresentation ,
New York ,
Scienter
By: Jeffrey M. Haber On many occasions, we have written about Ponzi schemes that have been the subject of enforcement actions brought by, and/or settlements with, the Securities and Exchange Commission (“SEC” or the...more
4/2/2024
/ Asset Freeze ,
Civil Penalty Fund ,
Crypto Exchanges ,
Cryptoassets ,
Disgorgement ,
Enforcement ,
Foreign Exchanges ,
Fraud ,
Freezing Order ,
Investment Advisers Act of 1940 ,
Investors ,
Permanent Injunctions ,
Ponzi Scheme ,
Securities Act of 1933 ,
Securities and Exchange Commission (SEC) ,
Securities Violations
It is not often that we examine a case involving the doctrine of champerty. The last time we did so was on March 8, 2023 (here). We also examined the champerty doctrine in 2021 (here), 2020 (here), and 2016 (here)....more
4/1/2024
/ Asset Purchaser ,
Bonds ,
Certifications ,
Champerty ,
Commercial Bank Accounts ,
Fraud ,
Liquidation ,
Loans ,
Luxembourg ,
Misrepresentation ,
Mortgage-Backed Securities ,
Negligence ,
New York ,
Private Right of Action ,
Promissory Notes ,
Special Purpose Vehicles
It should go without saying that people make mistakes. After all, people are human, and humans make mistakes.
When people draft a document, especially a lengthy or complex one, it is not uncommon for a mistake to be...more
3/11/2024
/ Borrowers ,
Clerical Errors ,
Contract Drafting ,
Contract Terms ,
Fraud ,
Lenders ,
Loan Agreements ,
Loan Documentation ,
Mistake ,
Personal Liability ,
Presumption of Validity ,
Promissory Notes ,
Reformation
A common theme in commercial litigation is the assertion of a breach of contract claim and a fraudulent inducement claim. A plaintiff claiming a breach of contract must show (1) the existence of a contract; (2) the...more
As readers of this Blog know, we often write about the pleading requirements under the Civil Practice Law and Rules (“CPLR”). In that regard, many of our articles involve cases in which CPLR 3016(b) is at issue – the...more
12/18/2023
/ Breach of Contract ,
Business Disparagement ,
Cause of Action Accrual ,
Chief Information Security Officer (CISO) ,
CPLR ,
Defamation ,
False Statements ,
Fraud ,
Insubordination Policy ,
Libel ,
Reasonable Particularity Requirement ,
Slander
By: Jeffrey M. Haber In TD Bank, N.A. v. Keenan, 2023 N.Y. Slip Op. 06158 (2d Dept. Nov. 29, 2023) (here), the Appellate Division, Second Department examined the often “nettlesome” question of whether a plaintiff claiming...more
12/14/2023
/ Breach of Contract ,
Default ,
Due Diligence ,
Foreclosure ,
Fraud ,
HELOC ,
Misrepresentation ,
Mortgages ,
Objective Falsity ,
Omissions ,
Reasonable Reliance Claims ,
Title Insurance ,
Unjust Enrichment ,
Verification Requirements
As we have often explained in the articles in which we have examined fraud claims, to withstand a motion to dismiss, the plaintiff must plead fraud with particularity as required under CPLR § 3106(b), cannot lump all the...more
In July of this year, we wrote about a fraud action involving the EB-5 Immigrant Investor Program (“EB-5 Program” or “Program”) (here). Under the EB-5 Program, investors are eligible for permanent residency status in the U.S....more
11/29/2023
/ EB-5 ,
Enforcement ,
False Statements ,
Foreign Direct Investment ,
Foreign Investment ,
Fraud ,
Fraud and Abuse ,
Immigrant Investor Program ,
Misleading Statements ,
Permanent Residence Cards ,
Securities Act of 1933 ,
Securities and Exchange Commission (SEC) ,
Securities Exchange Act of 1934 ,
Unregistered Brokers ,
Unregistered Securities ,
USCIS ,
Willful Misconduct
Affinity fraud is a type of investment fraud. In this form of fraud, the person committing the fraud preys upon members of an identifiable group, such as a religious or ethnic community, the elderly, or a professional group....more
10/25/2023
/ Asset Freeze ,
Enforcement ,
False Advertising ,
Fraud ,
Investment Advisers Act of 1940 ,
Investment Fraud ,
Ponzi Scheme ,
Pyramid Schemes ,
Restraining Orders ,
Securities and Exchange Commission (SEC) ,
Securities Exchange Act of 1934
“A” brings an action against “B”. The causes of action asserted against “B” are all timely for statute of limitations purposes.
Following discovery, “A” learns that “C” played a material role in the facts and...more
On August 23, 2023, the Appellate Division, Second Department issued two decisions that briefly touched upon fraud causes of action: Hershman v. Bank of N.Y. Mellon, 2023 N.Y. Slip Op. 04369 (2d Dept. Aug. 22, 2023) (here),...more
A common theme in commercial litigation is the assertion of a breach of contract claim and a fraudulent inducement claim. Where both claims are asserted, more times than not, the fraud claim is dismissed under the duplication...more