Miscellaneous

Eighth Circuit Finds SLUSA Preemption Based on Merely Coincident Nondisclosures

The Plaintiffs argue that the Bank's non-disclosure was not ?in connection with? the purchase of the securities, such that the non-disclosure did not relate to a decision whether to purchase a security. See O'Brien v. Cont'l Ill. Nat'l Bank & Trust Co., 593 F.2d 54, 60 (7th Cir.1979). Under Dabit, however, ?it is enough that the fraud alleged ?coincide? with a securities transaction-whether by the plaintiff or by someone else.? Dabit, 547 U.S. at 85. The Plaintiffs' complaint alleges nondisclosures that clearly coincided with the Bank's purchase of shares in the Nations Funds mutual fund. Given the identical coverage of Section 10(b) and SLUSA, it follows that the Plaintiffs' state-law claims are preempted.

Full post as published by Federal Civil Practice Bulletin on May 21, 2008 (boomark / email).