Anwar et al v. Fairfield Greenwich Limited et al

Filing 1407

DECISION AND ORDER re: #1399 MOTION for Reconsideration or, Alternatively, Certification of Question for Interlocutory Appeal. filed by Standard Chartered PLC, Standard Chartered Bank International (Americas) Limited, Standard Chartererd Bank, Standard Chartered International (USA) Ltd. Accordingly, for the reasons stated above, it is hereby ORDERED that the Motion (Dkt. No. 1399) of defendants Standard Chartered Bank International (Americas) Ltd., Standard Chartered International (USA) Ltd., Standard Chartered Bank, and Standard Chartered PLC (collectively, "Standard Chartered Defendants") for reconsideration of the Court's July 29, 2015 Decision and Order is GRANTED in part, as described in the Decision above, dismissing allegations based on the Standard Chartered Defendants' failure to disclose investment risk. The Court's August 13, 2015 Decision and Order denying in part the Standard Chartered Defendants' motion for reconsideration remains in effect. The Clerk of Court is directed to terminate the Standard Chartered Defendants' motion for reconsideration (Dkt. No. 1399). (As further set forth in this Order) (Signed by Judge Victor Marrero on 8/28/2015) (lmb) Modified on 8/28/2015 (lmb).

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UNITED STATES DISTRICT COURT
SOUTHERN DISTRICT OF NEW YORK

'1<JC #

11:-~~~l~i~ll _ _ c)-:dj

------------------------------x
PASHA

-i~---1.:

..

s. ANWAR, et al.,

09-cv-118 (VM)
Plaintiffs,
DECISION AND ORDER

-againstFAIRFIELD GREENWICH LIMITED,
et al.,

Defendants.

----------------------------- x
VICTOR MARRERO, United States District Judge.
I

On August 12, 2015, defendants Standard Chartered Bank
International

(Americas)

International
Standard

(USA)

Chartered

Defendants")

moved

Reconsideration")

Ltd.,

Ltd.

Standard

I

Standard

Chartered

Chartered

PLC

(collectively,

for

reconsideration

Bank,

and

"Standard Chartered
(the

"Motion

for

of this Court's Decision and Order dated

July 29, 2015 (Dkt. No. 1396, the "July 29 Decision"), insofar
as it denied the Standard Chartered Defendants'
dismiss the "Due Diligence

Clai~s"

motion to

brought by the Standard

!

Chartered Plaintiffs. 1 (Dkt. Nos. 1399, 1400.)
On

August

13,

2015,

the

Court

denied

the

Standard

Chartered Defendants' motion as to their first two arguments:

As discussed more fully in the July. 29 Decision, the term "Standard
Chartered Plaintiffs" denotes the 74 pl~intiffs in the 56 cases asserting
claims against the Standard Chartered Defendants,
and which were
consolidated in this Court for pretrial! purposes.

1

(1)

that

the Court

"misapplied . [In re Kingate Mgmt.

Ltd.

Litig., 784 F.3d 128 (2d Cir. 2015)] by considering only the
Madoff fraud in assessing conduct"; and
"overlooked controlling precedent
609 F.3d 512

(2)

[i.e., Romanov. Kazacos,

(2d Cir. 2010); Hanly v. S.E.C.,

(2d Cir. 1969)] establishing that Plaintiffs'
Claims'

rest

that the Court

on

the

Bank

providing

investment recommendations."

false

415 F.2d 589
'Due Diligence

and

misleading

(See Dkt. No. 1403 at 3-4, the

"August 13 Decision.")
However,

the

Court

acknowledged

that

the

Standard

Chartered Defendants' third argument -- that the "unique due
diligence claim"

in Saca v.

Standard Chartered Bank Int' 1

(Americas) Ltd., No. 11-CV-3480, :Ls predicated on allegations
of false conduct and should be precluded under the Securities
Litigation Uniform Standards Act of 1998
No.

105-353,

77p(b),

§

101,

77bb(f) (1)

112

Stat.

3227

warranted

(August 13 Decision at 9.)

As spch,

("SLUSA"), Pub. L.

(1998),
further

15

U.S.C.

§§

consideration.

the Court ordered the

Standard Chartered Plaintiffs to show cause as to why the
Court should not dismiss the

all~gations

that are predicated

on a duty to disclose investment risk and that Plaintiffs
offer in support of their breach of fiduciary duty claims, as
argued

in

Saca.

The

Court

assumes

familiarity

with

the

relevant facts and legal standards as described in the July
2

29 Decision, the Motion for Rec0111sideration, and the August
13 Decision.

By letter dated August 20,
indicated their agreement with

2015,

the Saca Plaintiffs

the Court's description of

claims permitted under SLUSA, and indicated that they "will
pursue no claims that are 'predicated on allegations of either
complicity in the Madoff fraud er any other conduct by the
Standard

Chartered

Defendants

involving

falsity

as

an

element.'" (Dkt. No. 1405 (quoting August 13 Decision at 9) .)
Further,

the

Sac a

Plaintiffs

"acknowledge[d]

that

'allegations predicated on the failure to disclose investment
risk'

. are precluded."

(Id.

(quoting August 13 Decision

at 10) . )
The Court agrees that such allegations are predicated on
allegations of false conduct with respect to the valuation of
the Madof f feeder funds and the risk therein of investing in
those

funds.

Therefore,

particular allegations

the

Court

supportin~

now

dismisses

those

breach of fiduciary duty

claims. As the Court noted in its August 13 Decision,
though such allegations are dismissed,
Chartered Plaintiffs have

even

all of the Standard

"surviving Due Diligence

Claims

based on duties independent of any• duty to disclose investment
risk."

(August 13 Decision at 10.)

Accordingly, for the reasons stated above, it is hereby
3

ORDERED that the Motion

(Dkit. No.

Standard

Chartered

Bank

Standard

Chartered

International

Chartered Bank,

1399)

(Americas)

International
(USA)

Ltd.

and Standard Ch,artered PLC

"Standard Chartered Defendants")

of defendants
Ltd.

I

Standard

I

(collectively,

for reconsideration of the

Court's July 29, 2015 Decision and Order is GRANTED in part,
as described in the Decision above,
based

on

disclose

the

Standard

investment

Chartered

risk.

The

dismissing allegations
Defendants'

Court's

failure

August

13,

to
2015

Decision and Order denying in part the Standard Chartered
Defendants' motion for reconsideration remains in effect.
The Clerk of Court is directed to terminate the Standard
Chartered Defendants'

motion for reconsideration

1399).
SO ORDERED.

Dated: New York, New York
28 August 2015

U.S.D.J.

4

(Dkt.

No.