Judge Allows Abetting Claim Against Law Firm Under State Securities Fraud Law
A federal judge has refused to dismiss a lawsuit against a New York Law firm accused of aiding and abetting securities fraud by a collapsed hedge fund that was one of its clients.
U.S. District Judge Harold Baer of Manhattan said the law firm Seward & Kissel could be sued under an Oregon securities fraud statute, the New York Law Journal reports. Lawyers can’t be sued for aiding and abetting securities fraud under federal law.
Oregon-based investor Howard Houston claims he invested $2.75 million in Wood River Partners based on documents prepared by the law firm that promised the fund would pursue a diversified investment strategy.
Seward & Kissel won a separate lawsuit seeking to hold it responsible for the collapse of the hedge fund in December. A New York appeals court ruled the firm’s work did not constitute representations to investors.
