Legal Research

Second Circuit Ruling Sets Important Precedent for Firms that Recommend Clients Invest in Funds that Later Turn Out to be Ponzi Schemes

By David Badertscher, PLL

Source: Lexology, July 24, 2009.

Court holds that adviser recommending that its clients invest in Bayou funds, which turned out to be Ponzi schemes, is not liable for violating federal securities antifraud statute
Sidley Austin LLP
"The United States Court of Appeals for the Second Circuit?s recent decision in South Cherry Street, LLC v. Hennessee Group LLC, No 07-3658-cv, 2009 WL 2032133 (2d Cir. July 14, 2009) (?South Cherry Street?) sets an important precedent for firms that recommend their clients invest, or that invest for their clients, in funds that are later revealed to be Ponzi schemes."

Full post as published by New York Supreme Court Criminal Term Library on July 24, 2009 (boomark / email).