Christopher Cooke and Brian Sullivan, CPA (website http://www.sullivanco.net/) will be making a presentation entitled “Retainer Scams What CPAs Should Know” at the Los Angeles meeting of the Fraud and Financial Investigations Section of the Society of California CPAs (see http://www.calcpa.org/events-and-programs/event-details?id=2d16bc41-d32e-4eec-8d59-3284ef61e433).
Since 2012, Steven Ruth has been representing clients in a dispute arising out of one client’s employment at and efforts to purchase a restaurant. Three of these clients were brought in as cross-defendants on the eve of the original trial date. One of these clients successfully moved to quash service of summons, but the other two remained as parties to the action. Cross-complainant asserted that they were liable as parties to alter egos of, investors in, or partners or joint venturers with the corporate cross-defendant.
We moved for summary judgment on behalf of the two remaining late-added cross-defendants. We also moved for summary adjudication on the claim for declaratory relief as to the other cross-defendants on the grounds that cross-complainant sought relief for an existing breach, not to obtain prospective relief.
The Court recently granted our motion in its entirety. The Court found that
- There was no evidence that the late-added parties were parties to the subject agreements.
- There was no evidence that the late-added parties owned or controlled the corporate cross-defendant.
- There was no evidence of a partnership or joint venture.
- Cross-complainant sought relief for an existing breach, not to obtain prospective relief.
The Court’s order leaves cross-complainant with claims only for breach of contract and an accounting against the two remaining cross-defendants.
On Thursday, July 7, 2016, the Hon. Richard Seeborg of the United States District Court in San Francisco granted Murphy Cooke Kobrick’s motion to dismiss the third amended class action complaint filed against firm client Alfred Lopez in the case Siegal et. al. v. Gamble, et al., U.S.D.C. N.D. Cal. Case No. 3:13-cv-03570-RS with prejudice. The decision, if not appealed, ends a class action lawsuit against MCK’s client. The plaintiffs, a group of investors in a limited partnership managed by Tri-Valley Corporation, an oil and gas exploration firm based in Bakersfield, California, had sought $97 million against the firm’s client and other defendants. MCK partner Christopher C. Cooke prepared, and argued the successful motion on behalf of the firm, which was third motion to dismiss he had filed in the case. See related news story: http://www.law360.com/articles/815217?ta_id=561592&utm_source=targeted-alerts&utm_medium=email&utm_campaign=case-article-alert
Steven Ruth recently represented the holder of a deed of trust on multi-unit residential real estate in San Francisco. The outstanding debt amounted to approximately $250,000. The debtor had failed to make any payments since buying the property from our client. Mr. Ruth negotiated a settlement on terms favorable to the client, who received payment in full.
Ninth Circuit Insider Trading Ruling
On Monday, the Ninth Circuit came down with an important decision on insider trading and tippee liability in U.S. v. Salman, limiting the impact of the Second Circuit’s landmark U.S. v. Newman holding, at least in California and other Western states within the Ninth Circuit’s jurisdiction. In a key ruling, the Ninth Circuit expressly declined to follow Newman’s requirement that the person providing the tip—i.e., material nonpublic information– must receive a personal, “tangible” benefit to be liable for breach of fiduciary duty and thus guilty of insider trading. Instead, the Ninth Circuit holds that, under SEC v. Dirks, the seminal Supreme Court decision on tipper-tippee liability, one brother’s love for another brother, and desire to make a gift of insider information to him, suffices to establish the tipping brother/insider’s breach of fiduciary duty and therefore the illegality of his conduct.