Boyd v. Kingdom Trust Co., 080918 OHSC, 2017-1336

Docket Nº:2017-1336
Opinion Judge:FRENCH, J.
Party Name:Boyd et al. v. Kingdom Trust Company et al.
Attorney:Sebaly, Shillito & Dyer, Toby K. Henderson, and Scott S. Davies, for petitioners. Ulmer & Berne, L.L.P., Frances Floriano Goins, and Daniela Paez, for respondent Kingdom Trust Company. Porter, Wright, Morris & Arthur, L.L.P., and Caroline H. Gentry; and Shartsis Friese, L.L.P., Jahan P. Raissi, a...
Judge Panel:O'Connor, C.J., and O'Donnell, Kennedy, Fischer, DeWine, and DeGenaro, JJ., concur.
Case Date:August 09, 2018
Court:Supreme Court of Ohio
 
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2018-Ohio-3156

Boyd et al.

v.

Kingdom Trust Company et al.

No. 2017-1336

Supreme Court of Ohio

August 9, 2018

Submitted May 22, 2018

On Order from the United States Court of Appeals for the Sixth Circuit, Certifying a Question of State Law, No. 17-3026.

Sebaly, Shillito & Dyer, Toby K. Henderson, and Scott S. Davies, for petitioners.

Ulmer & Berne, L.L.P., Frances Floriano Goins, and Daniela Paez, for respondent Kingdom Trust Company.

Porter, Wright, Morris & Arthur, L.L.P., and Caroline H. Gentry; and Shartsis Friese, L.L.P., Jahan P. Raissi, and Roey Z. Rahmil, for respondent PENSCO Trust Company, L.L.C.

Womble Bond Dickinson, L.L.P., Katrina L.S. Caseldine, Kevin A. Hall, and M. Todd Carroll, in support of respondents for amicus curiae Retirement Industry Trust Association.

Meyer Wilson Co., L.P.A., and David P. Meyer, in support of neither party for amicus curiae Public Investors Arbitration Bar Association.

FRENCH, J.

{¶ 1} The United States Court of Appeals for the Sixth Circuit has certified a question of Ohio law that asks whether R.C. 1707.43, a provision of the Ohio Securities Act, imposes joint and several liability on persons who aided in the purchase of illegal securities but did not participate or aid in the sale of the illegal securities. We answer the question in the negative.

FACTS AND PROCEDURAL HISTORY

{¶ 2} Ohio residents Cynthia Boyd and Thomas Flanders, the plaintiffs-petitioners in this matter, are the alleged victims of a Ponzi scheme operated by William Apostelos. According to petitioners, Apostelos and his associates formed Midwest Green Resources, L.L.C., and WMA Enterprises, L.L.C., as the vehicles for offering illegal securities to investors. Apostelos is not a party to this case.

{¶ 3} Apostelos allegedly persuaded Boyd, Flanders, and others to open self-directed individual retirement accounts ("IRAs") to invest in equity interests in Midwest Green Securities and promissory notes issued by WMA Enterprises. Boyd opened a self-directed IRA account with defendant-respondent Kingdom Trust Company. Flanders opened a self-directed IRA account with defendant-respondent PENSCO Trust Company, L.L.C. Once the accounts were established, Apostelos asked investors to direct the trust companies to purchase his securities or to execute powers-of-attorney giving him the ability to direct the trust companies to purchase his securities using the investors' IRA assets. Apostelos allegedly used the money raised from these investors to pay earlier...

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