On Dec. 20, 2011, the New York Court of Appeals, in Assured Guaranty (UK) LTD v. J.P. Morgan Investment Management Inc.1 finally put to rest a see-saw controversy that, for nearly a quarter century, had engendered much litigation in both the lower state courts and in the federal courts in New York over the proper interpretation of the Court’s 1987 holding in CPC International v. McKesson Corporation2 in which the Court barred private plaintiffs from asserting private causes of action based on violations of the Martin Act, New York State’s “blue sky” law that regulates the public sale of securities and real estate investment offerings.
‘Assured Guaranty’
The Court reconfirms its holding in CPC that “a private litigant may not pursue a common-law cause of action where the claim is predicated solely on a violation of the Martin Act3 or its implementing regulations and would not exist but for the statute.” However, it now also holds—contrary to several lower court decisions rendered in the interim since 1987—that “an injured investor may bring a common-law claim (for fraud or otherwise) that is not entirely dependent on the Martin Act for its viability,” and that “[m]ere overlap between the common law and the Martin Act is not enough to extinguish common-law remedies.”
This content has been archived. It is available through our partners, LexisNexis® and Bloomberg Law.
To view this content, please continue to their sites.
Not a Lexis Subscriber?
Subscribe Now
Not a Bloomberg Law Subscriber?
Subscribe Now
LexisNexis® and Bloomberg Law are third party online distributors of the broad collection of current and archived versions of ALM's legal news publications. LexisNexis® and Bloomberg Law customers are able to access and use ALM's content, including content from the National Law Journal, The American Lawyer, Legaltech News, The New York Law Journal, and Corporate Counsel, as well as other sources of legal information.
For questions call 1-877-256-2472 or contact us at [email protected]
