Anwar et al v. Fairfield Greenwich Limited et al

Filing 1247

ENDORSED LETTER addressed to Judge Victor Marrero from David A. Barrett dated 2/28/2014 re: Accordingly, there is no need for the Court to reconsider its SLUSA rulings. ENDORSEMENT: The Clerk of Court is directed to enter into the public record of this action the letter above submitted to the Court by the Anwar Plaintiffs. (Signed by Judge Victor Marrero on 3/4/2014) (tn)

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575 LEXINGTON AVENUE' 7TH FLOOR' NEW YORK, NY 10022' PH. 212.446.2300 • FAX [phone]

February 28, 2014

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BY HAND
Judge Victor Marrero
United States District Court
Southern District of New York
500 Pearl Street
New York, New York 10007

Re:

Anwar, et al. v. Fairfield Greenwich Limited, et al.
Master File No. 09-CV-00118 (VM) (FM)

Dear Judge Marrero:
We previously wrote on behalf of the Anwar Plaintiffs on November 19, 20l3, in
response to a request from the Standard Chartered Bank Defendants ("SCB"), to suggest that any
reconsideration of this Court's rulings on SLUSA preclusion of state law claims should await the
Supreme Court's decision in Chadbourne & Parke LLP v. Troice. On February 26, 2014, the
Supreme Court decided Troice. See 2014 WL 714697 (2014). That decision obviates any need
for reconsideration and makes clear that this Court's rejection of SLUSA preclusion arguments
in Anwar v. Fairfield Greenwich, 728 F.Supp.2d 372, 397-99 (S.D.N.Y. 2010) ("Anwar If') was
correct.
The Supreme Court held that SLUSA preclusion "does not extend further" than
misrepresentations that are material to the purchase or sale of a covered security. Troice, at *7.
"A fraudulent misrepresentation or omission is not made 'in connection with' such a 'purchase
or sale of a covered security' unless it is material to a decision by one or more individuals (other
than the fraudster) to buy or to sell a 'covered security. '" Id. Thus, SLUSA applies "where the
misrepresentation makes a significant difference to someone's decision to purchase or to sell a
covered security, not to purchase or to sell an uncovered security." Id. SLUSA does not apply
to class actions where, as here, "plaintiffs allege (1) that they 'purchase [d]' uncovered securities,
... but (2) that the defendants falsely told the victims that the uncovered securities were backed
by covered securities." Id. at *3 (Court's emphasis).

WWW.BSFLLP.COM

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SCHILLER

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FLEXNER

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Judge Victor Marrero
February 28, 2014
Page 2
Your Honor correctly distinguished between Madoffs purported investments in covered
securities and Plaintiffs' investments in uncovered securities such as the Fairfield Funds, finding
that "[i]nvestments in the Funds simply were not purchases of covered securities,"
Anwar 11, 728 F.Supp.2d at 398. The Supreme Court's decision in Troice makes clear that this
Court was correct in rejecting Defendants' SLUSA arguments. Accordingly, there is no need for
the Court to reconsider its SLUSA rulings.

cc:

All counsel in Anwar (by email)
Sharon L. Nelles, Esq. (by email)
Richard E. Brodsky, Esq. (by email)

The Clerk of Court is directed to enter into the public record
Ofthl~ a ion the letter above submitted the Court by
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SO ORDERED.

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