B2 Opportunity Fund, LLC v. Trabelsi et al

Filing 176

Judge Richard G. Stearns: ORDER entered granting 93 Motion to Dismiss for Failure to State a Claim (RGS, law2)

UNITED STATES DISTRICT COURT
DISTRICT OF MASSACHUSETTS
CIVIL ACTION NO. 17-10043-RGS
B2 OPPORTUNITY FUND, LLC
v.
NISSIM TRABELSI, ET AL.
MEMORANDUM AND ORDER ON
DEFENDANT VSTOCK TRANSFER, LLC’s
MOTION TO DISMISS
October 18, 2017
STEARNS, D.J.
Defendant VStock Transfer, LLC (VStock), moves to dismiss a bucket
full of claims brought by plaintiff B2 Opportunity Fund, LLC (B2), related to
an ill-boded stock transaction. For the reasons that follow, the court will
grant the motion.
BACKGROUND
VStock, a California limited liability company with a principal place of
business in New York City, provides stock transfer services. In 2014, VStock
was hired as a transfer agent by Mazzal Holding Corp., a Massachusettsbased company. In this capacity, VStock became entangled in the allegedly
fraudulent transaction at issue.

In early 2016, Mazzal’s CEO, Nissim

Trabelsi, entered into a Stock Purchase Agreement (SPA) in which he agreed

to sell 45.8 million restricted shares of Mazzal to B2. The SPA also promised
that “Shawn Telsi” would sell to B2 9.5 million “free-trading” shares of
Znergy-Mazzal stock. B2 alleges that Trabelsi held “Shawn Telsi” out to be
his brother-in-law, when in fact that name was an alias for Trabelsi himself.
As negotiations on the SPA inched forward, the parties contacted
VStock regarding the share transfers.

On January 11, 2016, a VStock

representative emailed instructions to Trabelsi explaining the mechanism
for transferring shares from himself to another shareholder. Dkt #77-10 at
10. On January 27, 2016, Trabelsi emailed a request to Joseph Donohue
(another VStock employee) to cancel certain shares of Mazzal being held in
trust. Trabelsi emailed the same instruction to the escrow agent. The next
day, the escrow agent emailed Donohue, introducing himself and asking
Donohue to review the adequacy of some attached documentation to
complete share transfers other than those contemplated in the SPA. Id. at 6.
The SPA was signed on February 4, 2016, and specified a closing date
of February 5. The SPA specified that B2’s payment for the shares was to be
held in escrow until the promised shares were either delivered or the escrow
agent was “informed by VStock” that the shares “have been returned to
[VStock] for transfer to” B2 or its designee.

An identical requirement

appeared in the escrow agreement that accompanied the SPA. On February
2

4, the escrow agent emailed Trabelsi, copying B2 (but not VStock), with
copies of transfer forms for the shares covered by the SPA and instructions
for completing the transfers. Am. Compl. ¶¶ 79-80; Dkt # 77-9.
On February 8, Trabelsi sent emails to B2’s managing member, the
escrow agent, and Donohue, stating that on February 5 he had mailed VStock
an envelope containing certain documentation: “transfer 9.5 million in
stocks from interactive brokerage,” “transfer from Shawn to new member,”
“transfer from Shawn to a new member,” “transfer from Nissim Trabelsi to
new member,” and “cancelling the stocks from the trust.” Dkt # 77-10 at 3.
Later on the morning of February 8, the escrow agent emailed Donohue
asking if the package contained “all you need to complete those transfers of
the shares from Nissin [sic] and Shawn Telsi and to cancel the shares owned
by the Trust?” Id. Donohue replied that afternoon that he had “received the
paperwork about a half hour ago and it appears we have all necessary
paperwork to process now all we need is confirmation from Nissim to
continue with [the] transaction.” Id. at 1. Relying on this statement, the
escrow agent released the funds to Trabelsi.
Unfortunately for B2, the transactions envisioned by the SPA were
never finalized because Trabelsi had not sent all of the required paperwork.
As a result, the transactions VStock processed came up short. On February
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5, 2016, it recorded a transfer of 9.5 million restricted Znergy-Mazzal shares
from Trabelsi to Telsi. Dkt # 77-11. Several weeks later, on February 26, it
received instructions from Trabelsi to transfer these same 9.5 million shares
from Telsi to B2’s designees. Am. Compl. ¶ 92. B2 alleges that this was a
central element of the alleged scheme — this transaction made it appear as if
B2 was receiving the promised free-trading shares from Telsi, when in fact it
was receiving restricted shares. In March of 2016, B2 discovered the bait and
switch, and, through the escrow agent, made demands on Trabelsi and Telsi
for the transfer of the free-trading shares.

These shares were never

delivered; the only additional transfer, recorded in April, sent Trabelsi’s
remaining restricted shares to one of B2’s designees. Id. ¶ 148.
In June of 2016, B2 asked VStock for copies of the documents that
Trabelsi had provided VStock in February. Donohue initially replied that
VStock had received “no formal paperwork,” but only “emailed instructions.”
Dkt # 77-14. When B2 pointed to Donohue’s prior assertion that he had
received the “necessary paperwork,” Donohue responded that VStock had
returned “all originals” to Trabelsi, and the only form it retained from the
February transaction was the withdrawal form transferring 9.5 million
shares from a Telsi account at “Interactive Brokerage” to another Telsi
account. Dkt # 77-15 at 1, 11.
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B2 filed this lawsuit in January of 2017. As against VStock, B2 asserts
claims for securities fraud (Count I), common-law fraud (Counts II and IV),
conversion (Count VI), breach of fiduciary duty (Counts XVII and XVIII),
gross negligence (Counts XIX and XX), and wrongful registration (Count
XXI). 1 VStock has moved to dismiss, asserting that the court lacks personal
jurisdiction over it and that, in any event, B2 has failed to state a viable claim
against it. See Fed. R. Civ. P. 12(b)(2), (6).
DISCUSSION
The court turns first to B2’s securities fraud claim. If this claim
survives, VStock’s objections to personal jurisdiction go by the boards, as the
Securities Exchange Act of 1934 provides for nationwide service of process.
See 15 U.S.C. § 78aa(a); United Elec., Radio & Mach. Workers of Am. v. 163
Pleasant St. Corp., 960 F.2d 1080, 1086 n.6 (1st Cir. 1992).
To prevail on a claim under Section 10(b) of the Securities Exchange
Act and its implementing Rule 10b-5, a plaintiff must establish “(1) a material
misrepresentation or omission; (2) scienter; (3) a connection with the
purchase or sale of a security; (4) reliance; (5) economic loss; and (6) loss

The common-law fraud, breach of fiduciary duty, and gross
negligence claims are replicated because B2 brings them both on its own
behalf and as the assignee of the claims held by Mazzal, now known as
Znergy, Inc.
5
1

causation.” Miss. Pub. Employees’ Ret. Sys. v. Boston Sci. Corp., 523 F.3d
75, 85 (1st Cir. 2008). VStock asserts that B2 has failed to adequately plead
both scienter and loss causation.
Scienter is a “mental state embracing intent to deceive, manipulate, or
defraud.” Ernst & Ernst v. Hochfelder, 425 U.S. 185, 193 n.12 (1976). A
defendant may also have the requisite mental state if he “acted with a high
degree of recklessness.” Aldridge v. A.T. Cross Corp., 284 F.3d 72, 82 (1st
Cir. 2002). “Recklessness, as used in this context, ‘does not include ordinary
negligence, but is closer to being a lesser form of intent.’” Fire & Police Ass’n
of Colo. v. Abiomed, Inc., 778 F.3d 228, 240 (1st Cir. 2015) (quoting Greebel
v. FTP Software, Inc., 194 F.3d 185, 188 (1st Cir. 1999)). Thus, “a defendant
can be held liable for ‘a highly unreasonable omission, involving not merely
simple, or even inexcusable, negligence, but an extreme departure from the
standards of ordinary care, and which presents a danger of misleading
buyers or sellers that is either known to the defendant or is so obvious that
the actor must have been aware of it.’” City of Dearborn Heights Act 345
Police & Fire Ret. Sys. v. Waters Corp., 632 F.3d 751, 757 (1st Cir. 2011)
(quoting Greebel, 194 F.3d at 198).
Allegations of scienter are subject to a heightened pleading standard
under the Private Securities Litigation Reform Act of 1995 (PSLRA). See
6

Greebel, 194 F.3d at 195. Consequently, B2 must, “with respect to each act
or omission . . . state with particularity facts giving rise to a strong inference
that the defendant acted with the required state of mind.” 15 U.S.C. § 78u4(b)(2). The requisite “strong inference” exists where that inference is
“cogent and at least as compelling as any opposing inference of
nonfraudulent intent.” Tellabs, Inc. v. Makor Issues & Rights, Ltd., 551 U.S.
308, 314 (2007). As this formulation implies, courts must evaluate “not only
inferences urged by the plaintiff . . . but also competing inferences rationally
drawn from the facts alleged.” Id.
B2’s claim against VStock rests on a single alleged misrepresentation:
Donohue’s statement that Trabelsi appeared to have sent “all necessary
paperwork” for the transaction. This misrepresentation, B2 contends, led
the escrow agent to release the funds to Trabelsi despite the fact that no
shares had actually been transferred. B2’s theory of the case is that Trabelsi
and VStock were working “in tandem” to deceive B2 and effectuate the fraud,
and that VStock’s representation that it had “all necessary paperwork” was
“knowingly incomplete, false, deceptive, and misleading.” Pl.’s Opp’n at 5.
Alternatively, B2 contends that VStock made this statement “with a high
degree of recklessness knowing that it did not know and could not know
whether it had all of the necessary documents without further inquiry, thus
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presenting a danger of misleading . . . so obvious that VStock must have been
aware of it.” Id. at 24.
B2 offers two theories to support an inference of scienter. First, it
argues that Donohue, VStock’s representative, must have known the terms
of the SPA, and therefore could not have possibly believed that whatever
forms he received matched the transactions spelled out in the SPA. However,
the allegation that Donohue knew the SPA’s terms is made on information
and belief, and B2 adds nothing to the mix that demonstrates that Donohue
in fact possessed such knowledge. 2
B2’s second argument is somewhat more persuasive. It argues that
Donohue should have known that whatever documents he received did not
match the description of the four items that Trabelsi claimed to have sent.
Evaluating this argument is complicated by the fact that it is not clear
precisely what Trabelsi sent to Donohue. The parties are in agreement that
Donohue received a form, dated February 5, 2016, that purported to transfer
9.5 million shares from Trabelsi’s account at “Interactive Brokerage” into
Telsi’s name. That transaction matches the first item in Trabelsi’s email —
documentation to “transfer 9.5 million in stocks from interactive brokerage.”

Similarly, to the extent that B2 suggests that VStock was deliberately
conspiring with Trabelsi to defraud B2, no facts have been plead that would
make this allegation plausible, much less “cogent and compelling.”
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2

What (if any) other paperwork VStock received, particularly with respect to
the other transfers Trabelsi described in his email, is unclear. From this, B2
argues, it can be inferred that if Donohue had examined the documents and
then compared them to Trabelsi’s email, he would have recognized that they
did not match. Consequently, Donohue’s statement was either knowingly
false or made with reckless disregard as to its truth, supporting an inference
of scienter.
Although this inference can perhaps be drawn, it competes with the
more plausible inference that VStock was simply negligent. Under the
transfer agreement with Mazzal, VStock was charged with carrying out
transactions ordered by authorized Mazzal agents and supported by
appropriate documentation. Trabelsi sent some indeterminate set of forms
to VStock. Donohue’s responsibility was to process whatever transfers were
authorized by the documentation he was provided.

Perhaps Donohue

received only documentation permitting the Interactive Brokerage transfer,
in which case his statement that he had “all necessary paperwork to process”
that single “transaction” would be true; Donohue’s failing would be in not
raising concerns about the presumed discrepancy between Trabelsi’s email
and the paperwork that he received.

If Donohue received other

documentation for transactions that were not executed, his failing would
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have stemmed from an incomplete understanding of the tasks he was
expected to perform. Under either alternative, it is difficult to say that an
intent to deceive or recklessness, rather than ordinary negligence, provides
the more likely explanation for his acts or omissions.
Other aspects of the transaction make the inference of negligence the
more cogent and compelling explanation. VStock is scarcely a “paradigmatic
securities fraud defendant,” namely “a corporate insider standing to profit
from the sale of artificially inflated securities.” ACA Fin. Guar. Corp. v.
Advest, Inc., 512 F.3d 46, 66-67 (1st Cir. 2008). VStock is a transfer agent
performing services for set fees. B2 has provided no reason to believe
VStock’s gain from the transaction would be more than nominal — indeed,
the initial email from VStock to Trabelsi lists the total fees for the
transactions Trabelsi described as at most $200. Dkt # 77-10 at 10. VStock’s
financial incentive to consciously defraud or act recklessly thus hardly
compares with that of a typical defendant in a securities fraud case. No other
motive has been suggested for VStock to engage in fraudulent behavior.
Although B2 points out that “the absence of a motive allegation is not fatal”
to a securities fraud claim, Tellabs, 551 U.S. at 325, it is a “relevant

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consideration,” id., in evaluating the strength of an inference of scienter.3
Taken together, these “characteristics . . . make it more difficult to infer a
high degree of recklessness or an intent to defraud.” ACA, 512 F.3d at 66.
At oral argument, B2 posited a variation of its first two arguments: that
VStock, through Donohue – if it did not have advance notice of the terms of
the SPA and did not realize at the time it made its representation that “it
appears we have all necessary paperwork” – nonetheless acquired additional
duties to correct this statement once Donohue discovered that the paperwork
was, in fact, incomplete.4 B2 raises this argument in response to VStock’s
contention that where a transfer agent performs merely “ministerial
functions,” it cannot be liable for securities fraud. See Reyos v. United
States, 431 F.2d 1337, 1346 (10th Cir. 1970), aff’d in part, rev’d in part,
Affiliated Ute Citizens of Utah v. United States, 406 U.S. 128, 152 (1972) (no

B2 suggests that VStock may have had an additional financial
motivation because B2 had agreed as part of the SPA to pay approximately
$5,000 in unpaid fees owed by Znergy-Mazzal to VStock. Whatever limited
financial incentive this might have created is undermined by the fact that
there is no allegation that VStock was aware of that aspect of the SPA.
3

To the extent that any question of VStock’s failure to correct its error
about having “all the necessary paperwork” may also bear on the plaintiff’s
common-law fraud claim against VStock, the court takes no position on this
issue, since the remaining state law claims will be dismissed for lack of
personal jurisdiction. The court’s discussion is therefore limited to what
VStock’s actions or omissions tell us about the plaintiff’s allegations of
scienter in the context of the securities fraud claim.
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4

liability where defendant transfer agent “did no more than to perform
ministerial functions required to carry out the transfer of the shares of
stock”). Instead, B2 argues that VStock’s affirmative representation to the
escrow agent that it had “all the necessary paperwork” went beyond the mere
ministerial duties of processing stock transfers, see Pl.’s Opp’n at 29,
allowing for scienter to be imputed to the transfer agent.
The court is not convinced. This case is distinguishable from Affiliated
Ute Citizens, where the transfer agents were found to be “active in
encouraging a market” for the stock in question, had “solicit[ed] and
accept[ed] standing orders” from other buyers, and had “received
commissions and gratuities from the expectant” buyers. 406 U.S. at 152.
There are no facts pled here that suggest that Donohue’s, or VStock’s,
compensation depended on pushing through the share transfer without
waiting for the proper paperwork, or that VStock took a more active role in
the transaction beyond processing Trabelsi’s instructions. See Kenler v.
Canal Nat’l Bank, 489 F.2d 482, 485 (1st Cir. 1973) (noting the common law
rule that “a transfer agent cannot be held liable to a stockholder in damages
for mere nonfeasance”). The court ultimately concludes that even if the
statement made by Donohue was negligent, B2 cannot rely on that statement

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to support the conclusion that VStock was acting beyond its ministerial role
as a transfer agent.
In a final volley, B2 points to the fact that “Trabelsi chose VStock to be
Mazzal’s transfer agent,” and that “[d]iscovery could well show additional
motivations and connections behind that choice that are not currently known
to B2.” Pl.’s Opp’n at 27 n. 13. Maybe so. However, B2 is not unique among
plaintiffs in securities cases who suspect foul play and are frustrated by the
lack of opportunity to take discovery to further investigate their hunches.
The heightened pleading standards that apply under the PSLRA reflect a
deliberate choice made by Congress to bar even some possibly meritorious
claims from proceeding past the pleading stage. See Local No. 8 IBEW Ret.
Plan & Trust v. Vertex Pharm., Inc., 838 F.3d 76, 83 n.9 (1st Cir. 2016)
(acknowledging that “prior to discovery, few plaintiffs will be in a position to
make specific allegations about the form of internal documents” or
discussions, but also noting that Congress has nonetheless “deliberately
raised the entry bar to discovery . . . through the PSLRA’s heightened
pleading standards” (alteration in original) (quoting Auto. Indus. Pension
Trust Fund v. Textron, Inc. 682 F.3d 34, 40 (1st Cir. 2012)).
Under the circumstances, the court concludes that B2 has failed to
sufficiently plead scienter. The most cogent and compelling inference is that
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VStock acted with “simple, or even inexcusable, negligence,” not with a
degree of recklessness “closer to a lesser form of intent.” Greebel, 194 F.3d
at 198, 199. The Section 10(b) claim will therefore be dismissed.5
VStock next challenges this court’s jurisdiction over it for purposes of
the remaining state-law claims. It is the plaintiff’s burden to demonstrate
that personal jurisdiction exists. Adelson v. Hananel, 510 F.3d 43, 48 (1st
Cir. 2007). District courts may employ any of several methods to evaluate
the adequacy of a plaintiff’s proof. See Boit v. Gar-Tec Prods., Inc., 967 F.2d
671, 675-678 (1st Cir. 1992). As the parties have expressed no preference
among methods, the court will resort to the most common: the “prima facie”

Even if B2 had adequately pled scienter, its claim would likely falter
at the loss causation element, regardless of the applicable pleading standard.
See Mass. Ret. Sys. v. CVS Caremark Corp., 716 F.3d 229, 239 n.6 (1st Cir.
2013) (noting uncertainty about the appropriate standard). A party must
show a “sufficient connection” between the material false statement or
omission and the loss, Bricklayers & Trowel Trades Int’l Pension Fund v.
Credit Suisse Secs. (USA) LLC, 752 F.3d 82, 86 (1st Cir. 2014), or that the
statement or omission was a “substantial cause” of its losses, Mass. Ret. Sys.,
716 F.3d at 239. Most circuits have viewed this requirement as embodying
traditional principles of but-for and proximate causation, see, e.g., FindWhat
Inv. Grp. v. FindWhat.com, 658 F.3d 1282, 1309 (11th Cir. 2011), and the
First Circuit has implied that it sees things no differently, see Wortley v.
Camplin, 333 F.3d 284, 295 (1st Cir. 2003) (observing in reviewing a
securities fraud trial that the defendant’s loss causation argument raised
questions of “[p]roximate causation and intervening cause”). Here, two
intervening causes threaten to break the causal chain: the nonfeasance of the
escrow agent (who allegedly breached the escrow agreement by releasing
funds before a contractual prerequisite was met) and Trabelsi’s failure to
abide by the terms of the SPA.
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5

approach. Daynard v. Ness, Motley, Loadholt, Richardson & Poole, P.A.,
290 F.3d 42, 51 (1st Cir. 2002). Under this approach, the court does not
engage in factfinding, but instead examines whether the plaintiff has
provided “evidence which, taken at face value, suffices to show all facts
essential to personal jurisdiction.” Baskin-Robbins Franchising LLC v.
Alpenrose Dairy, Inc., 825 F.3d 28, 34 (1st Cir. 2016). The court will thus
“‘accept the plaintiff’s (properly documented) evidentiary proffers as true,’
and construe those facts ‘in the light most congenial to the plaintiff’s
jurisdictional claim.’” Hannon v. Beard, 524 F.3d 275, 279 (1st Cir. 2008)
(quoting Daynard, 290 F.3d at 51). The court also considers uncontested
facts put forward by the defendant. Daynard, 290 F.3d at 51.
B2 must demonstrate that the exercise of personal jurisdiction over
VStock meets the requirements of both the Massachusetts long-arm statute
and the Due Process Clause of the Fourteenth Amendment. See Cossart v.
United Excel Corp., 804 F.3d 13, 18 (1st Cir. 2015). Although for the most
part these two requirements overlap, some daylight can be found between
them. See id. Here, however, the court can bypass the long-arm statute, as
personal jurisdiction is lacking under the constitutional standard.
“In order for a . . . court to exercise specific jurisdiction, ‘the suit’ must
‘aris[e] out of or relat[e] to the defendant’s contacts with the forum.’”
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Bristol-Myers Squibb Co. v. Superior Ct. of Calif., 137 S. Ct. 1773, 1780
(2017) (quoting Daimler AG v. Bauman, 134 S. Ct. 746, 754 (2014))
(emphasis omitted). To satisfy this standard, “the defendant’s suit-related
conduct must create a substantial connection with the forum State.” Walden
v. Fiore, 134 S. Ct. 1115, 1121 (2014). Thus, “specific jurisdiction is confined
to adjudication of issues arising from, or connected with, the very
controversy that establishes jurisdiction.” Bristol-Myers Squibb, 137 S. Ct.
at 1780 (quoting Goodyear Dunlop Tires Ops., S.A. v. Brown, 564 U.S. 915,
919 (2011)).
Courts employ a three-part approach when analyzing specific
jurisdiction, asking:
(1) whether the claim ‘directly arise[s] out of, or relate[s] to, the
defendant’s forum state activities;’ (2) whether the defendant’s
in-state contacts ‘represent a purposeful availment of the
privilege of conducting activities in the forum state, thereby
invoking the benefits and protections of that state’s laws and
making the defendant’s involuntary presence before the state’s
courts foreseeable;’ and (3) whether the exercise of jurisdiction
is reasonable.
Baskin-Robbins, 825 F.3d at 35 (quoting C.W. Downer & Co. v. Bioriginal
Food & Sci. Corp., 771 F.3d 59, 65 (1st Cir. 2014)). All three elements of the
test must be met for personal jurisdiction to attach. Id.
The first step is dispositive here, as B2 has failed to demonstrate that
its claims arise out of VStock’s contacts with Massachusetts. It is true that
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B2 is able to point to a number of contacts between VStock and the
Massachusetts forum: VStock’s contract to provide transfer services to
Mazzal; VStock sent stock certificates to Mazzal shareholders in
Massachusetts; it billed Mazzal in Massachusetts for its services; it
exchanged emails with Trabelsi while he was in Massachusetts; it was
providing services to Mazzal when Donohue made the misstatement at issue;
it processed a transfer of the free-trading shares from Trabelsi’s brokerage
account to Telsi, whose address was in Massachusetts; and it mailed the
“rejected” documents back to Trabelsi in Massachusetts. 6
But a comparison of these contacts with B2’s claims demonstrates an
essential mismatch. For tort claims, the First Circuit encourages district
courts to examine “whether the plaintiff has established ‘cause in fact (i.e.,
the injury would not have occurred ‘but for’ the defendant’s forum-state
activity) and legal cause (i.e., the defendant’s in-state conduct gave birth to
the cause of action.)’” Mass. Sch. of Law at Andover, Inc. v. Am. Bar Ass’n,

B2 relies on at least three contacts which are wholly irrelevant to the
relatedness inquiry. First, the fact that VStock has transacted business with
other companies in Massachusetts says nothing about whether B2’s claims
against VStock arise out of its forum contacts. Second, the fact that VStock
mailed information to Massachusetts shareholders on Mazzal’s behalf has
nothing to do with the claims asserted in this case. Third, the fact that the
escrow agent, in reliance on Donohue’s statement, wired funds to
Massachusetts does not constitute a contact between VStock and
Massachusetts.
17
6

142 F.3d 26, 35 (1st Cir. 1998) (quoting United Elec., Radio & Mach.
Workers, 960 F.2d at 1089). None of VStock’s recited Massachusetts forum
contacts gave birth to B2’s claims. VStock is incorporated in California and
performed all the relevant transfer services from New York. Donohue’s
allegedly false statement, which is at the crux of the claims, was made in New
York to a Utah-based escrow agent. Any torts VStock committed thus
occurred outside of Massachusetts and have no relation to VStock’s forum
contacts.7 See Phillips Exeter Acad. v. Howard Phillips Fund, 196 F.3d 284,
289-291 (1st Cir. 1999) (concluding that an extra-forum breach of fiduciary
duty does not satisfy the relatedness requirement). As a result, the contacts
B2 identifies show only that its claims “arose out of the general relationship
between the parties.”

That showing does not suffice for relatedness.

Sawtelle v. Farrell, 70 F.3d 1381, 1389 (1st Cir. 1995). The court is without
jurisdiction over the remaining state-law claims against VStock.

The only possible exception is B2’s wrongful registration claim under
Massachusetts law, which focuses on VStock’s transfer of shares from
Trabelsi’s Interactive Brokerage account into Telsi’s name at an address in
Newton, Massachusetts. Even assuming that the other elements of personal
jurisdiction might be met with respect to that claim, liability under the
statute requires evidence of collusion, see Mass. Gen. Laws ch. 106, §§ 8115(2), 8-404(a)(4), and nothing is pled to plausibly suggest collusion
between Telsi (or Trabelsi, if no such person exists) and VStock.
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7

ORDER
For the foregoing reasons, VStock’s motion to dismiss is ALLOWED.
SO ORDERED.
/s/ Richard G. Stearns
__________________________
UNITED STATES DISTRICT JUDGE

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