Paul Hastings Secures Dismissal on Behalf of FIM Advisers in Securities Class Action Case Involving Madoff Feeder Funds
New York, NY (April 1, 2011) Paul, Hastings, Janofsky & Walker LLP, a leading global law firm, announced today that the firm secured a dismissal on behalf of FIM Advisers, and two of its principals in connection with a nationwide class action lawsuit brought in the Southern District of New York on behalf of investors in two funds managed by Kingate Management Ltd (KML). The Kingate Funds were feeder funds to Bernard L. Madoff Investment Services (BLMIS).
The complaint originally asserted several federal securities claims and state law claims for fraud, negligent misrepresentation, gross negligence, breach of fiduciary duty, constructive fraud, third party beneficiary breach of contract, constructive trust, mutual mistake and unjust enrichment. Plaintiffs sought to recover all of their investment losses, plus approximately $750M in consulting fees paid by KML to FIM over the course of their relationship, plus punitive damages and attorneys fees.
In its decision, the Court dismissed the complaint in its entirety on the grounds that all of the fraud-based claims were precluded under the Securities Litigation Uniform Standards Act (SLUSA) and that all of the non-fraud based claims were preempted under New York's Martin Act. The Court also held that plaintiffs would not be permitted to file any amended complaint because it would be futile.
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