193 F.3d 85 (2nd Cir. 1999), 98-9269, Anatian v Coutts Bank

Docket Nº:Docket Nos. 98-9269, 98-9270
Citation:193 F.3d 85
Party Name:RACHAMIN ANATIAN, ATIK LLC, CHARLES GUNDY LLC, CHESED LLC, KABALLA LLC, KETER LLC, MAMASH LLC and VAN HARPER LLC, Plaintiffs-Appellants, v. COUTTS BANK (SWITZERLAND) LTD., formerly known as COUTTS & CO. AG, Defendant-Appellee. MORDECHAI GAL-OLIVER and MARGARET GAL-OLIVER, Plaintiffs-Appellants, v. COUTTS BANK (SWITZERLAND) LTD., formerly known as C
Case Date:September 20, 1999
Court:United States Courts of Appeals, Court of Appeals for the Second Circuit
 
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Page 85

193 F.3d 85 (2nd Cir. 1999)

RACHAMIN ANATIAN, ATIK LLC, CHARLES GUNDY LLC, CHESED LLC, KABALLA LLC, KETER LLC, MAMASH LLC and VAN HARPER LLC, Plaintiffs-Appellants,

v.

COUTTS BANK (SWITZERLAND) LTD., formerly known as COUTTS & CO. AG, Defendant-Appellee.

MORDECHAI GAL-OLIVER and MARGARET GAL-OLIVER, Plaintiffs-Appellants,

v.

COUTTS BANK (SWITZERLAND) LTD., formerly known as COUTTS & CO. AG, Defendant-Appellee.

Docket Nos. 98-9269, 98-9270

United States Court of Appeals, Second Circuit

September 20, 1999

Argued: April 28, 1999

Appeal from memorandum order and judgment of the United States District Court for the Southern District of New York (Rakoff, J.) dismissing plaintiffs' federal securities fraud and antiracketeering claims with prejudice. Appellants claim that the district court erred in

(1) dismissing their securities fraud claims for failure to state a claim under the Securities and Exchange Act of 1934 and failure to plead fraud with particularity; (2) dismissing their RICO claims for failure to allege a RICO "enterprise" sufficiently distinct from the RICO "person" and failure to plead fraud with particularity; and (3) dismissing the amended complaint without granting leave to amend.

Affirmed.

Page 86

BARBARA L. LIPSHUTZ, Jacobs, Debrauwere & Dehn, LLP, New York, NY, for Plaintiffs-Appellants.

PHILIP H. SCHAEFFER, White & Case LLP, New York, NY, for Defendants-Appellees.

Before: WALKER and POOLER, Circuit Judges and MOTLEY, District Judge[*].

POOLER, Circuit Judge:

Rachamin Anatian, seven limited liability companies he controls, Mordechai Gal-Oliver and Margaret Gal-Oliver ("plaintiffs") appeal from the memorandum order and judgment of the United States District Court for the Southern District of New

Page 87

York (Rakoff, J.) dismissing their securities fraud and RICO allegations. We conclude that plaintiffs failed to state a claim for fraud in connection with the sale or transfer of a security and failed to allege a RICO "enterprise" in connection with the section 1962(c) claims sufficiently distinct from the RICO "person." In addition, we find that plaintiffs failed to plead fraud with the particularity required by Fed. R. Civ. P. 9(b). Therefore, we affirm the judgment of the district court.

BACKGROUND

In reviewing the dismissal of a complaint, we must accept as true the facts alleged in the complaint and draw all reasonable inferences in plaintiffs' favor. See Northrop v. Hoffman of Simsbury, Inc., 134 F.3d 41, 43 (2d Cir. 1997). The facts, unless otherwise noted, are as plaintiffs allege. In 1995, Rachamin Anatian became a client of Coutts Bank. He borrowed over $3.7 million from Coutts, secured by his shares of stock in USA Detergents. In the spring and summer of 1995, Anatian founded and became principal shareholder of a home shopping network known as Global Shopping...

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