In securities fraud action, appellate court affirms $32.1 million judgment for GMSR's clients and remands for additional award of prejudgment interest
December 5, 2007
OCM Principal Opportunities Fund v. CIBC World Markets (2007) 2007 Cal.App. LEXIS 1995 (California Second District Court of Appeal, Division Four). [published]. Plaintiffs brought an action for fraud and securities law violations against an investment banker, alleging that the defendant banker had aided and abetted the marketing of the promissory notes knowing that the issuer was on the brink of extinction. The original sale of the notes enabled the defendant to recover its own investment in the company, leaving subsequent note purchasers, including plaintiffs, with virtually worthless pieces of paper. The $32.1 million judgment reflected the jury's $52 million verdict adjusted for settlements that the plaintiffs received from other sources.
In the appeal, GMSR co-counseled with plaintiffs' trial counsel, Hennigan, Bennett & Dorman. The Court of Appeal affirmed the judgment against the defendant. In a 63-page published decision, it rejected the defendant's attack on the sufficiency of the evidence to support the jury's findings, as well as the defendant's arguments that it owed no duty to the plaintiffs because the plaintiffs purchased the notes on the open market and that the judgment included twice the amount of damages the jury intended to award. On plaintiffs' cross-appeal, the court reversed the trial court's denial of prejudgment interest, holding that interest must be awarded when a defendant has willfully violated state securities laws.
Irving H. Greines
Marc J. Poster
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