Appeals Court Affirms Stiff $95K Sanction Against Lawyer, Client
A federal appeals court has affirmed a nearly $95,000 sanction against a New York lawyer and his client for knowingly filing a time-barred securities fraud suit.
The 2nd U.S. Circuit Court of Appeals last week issued a summary order upholding the sanction imposed by U.S. District Judge Denis R. Hurley last year against Long Island lawyer Mitchell A. Stein and his client, John H. Libaire Jr., according to a report Thursday in the New York Law Journal.
Libaire and other minority shareholders in a members-only hunting preserve had sued the preserve in state court in 2003, claiming corporate mismanagement and breach of fiduciary duty. When that case was dismissed, Libaire went to federal court, where he argued that payment of his $7,800 annual dues for 2005 constituted the purchase of a security.
New York lawyer Steven Altman, who represents Libaire and Stein, said he is considering an appeal. “I believe the decision was in error and the complaint was well-founded, within existing precedent, and the final chapter has not yet been written,” he said.
Ronald J. Rosenberg of Garden City, N.Y., who represented the preserve, said he was pleased by the ruling, which he said makes clear that the imposition of sanctions is mandatory ” for frivolous securities act claims such as this one.”
