The connection between a New York investment firm and the Ponzi scheme run by one of its principals is strong enough to warrant a trial on a securities fraud claim, the U.S. Court of Appeals for the Third Circuit has ruled, reversing the trial court’s dismissal of that claim after a handful of Pennsylvania investors brought several claims against the firm and its directors.
However, the appeals court agreed with the district court’s holding that the firm’s directors couldn’t be held liable for negligent supervision.
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