Stephenson v. Deutsche Bank Ag
Decision Date | 08 September 2003 |
Docket Number | Nos. Civ.024845(RJL/AJB), CIV023682(RJL/AJB), CIV023711(RHK/AJB).,s. Civ.024845(RJL/AJB), CIV023682(RJL/AJB), CIV023711(RHK/AJB). |
Parties | James P. STEPHENSON, Trustee, (02-4845) Ferris, Baker Watts, Inc., (02-3682) E*Trade Securities, LLC, (02-3711) Plaintiffs, v. DEUTSCHE BANK AG, et. al., (02-4845) Deutsche Bank Securities Ltd., et al., (02-3682) Deutsche Bank AG, et. al., (02-3711) Defendants. |
Court | Minnesota Supreme Court |
Robert L. Schnell, Jr., James L. Volling, Stephen M. Mertz, Jason K. Walbourn, Jesseca R.F. Grassley, Theodore R. Cheesebrough, Faegre & Benson LLP, Minneapolis, MN, for Plaintiff James P. Stephenson, Liquidating Trustee of MJK Clearing, Inc.
Terrence M. Fruth, Thomas E. Jamison, K. Jon Breyer, Fruth, Jamison & Elsass, P.A., Minneapolis, MN, Charles S. Fax, Richard A. Kirby, Shapiro Sher Guinot & Sandler, Washington, DC, Daniel Marino, Preston Gates Ellis & Rouvelas Meeds, Washington, DC, for Plaintiff Ferris, Baker Watts, Inc.
Terrence M. Fruth, Thomas E. Jamison, K. Jon Breyer, Fruth Jamison & Elsass, P.A., Minneapolis, MN, Marc T.G. Dworsky, Richard C. St. John, James C. Rutten, Munger Tolles & Olson LLP, Los Angeles, CA, Dennis C. Brown, for Plaintiff E*Trade Securities, Inc.
Michael J. Bleck, Michael E. Keyes, David E. Runck, Oppenheimer, Wolff & Donnelly LLP, Minneapolis, MN, James H.R. Windels, Jodi Golinsky, Michael J. Russano, Catheryn A. O'Rourke, Laura Laux Higgens, Davis Polk & Wardwell, New York, NY, for Defendants Deutsche Bank Securities Limited, Deutsche Bank Securities, Inc., and Deutsche Bank AG.
Teresa J. Kimker, Halleland Lewis Nilan Sipkins & Johnson, P.A., Minneapolis, MN, Richard M. Strassberg, Jeffrey A. Simes, Eric D. Musselman, Goodwin Procter LLP, New York, NY, for Defendant Wayne Breedon.
Madge S. Thorsen, Daniel C. Bryden, Kelly & Berens, Minneapolis, MN, Michael J. Dell, Amy Busa, Lauren Freeman-Bosworth, Jonathan M. Wagner, Kramer Levin Naftalis & Frankel LLP, New York, NY, Richard M. Sharfman, Laurence Greenwald, Michele L. Pahmer, Beth Webber, Stroock & Stroock & Lavan LLP, New York, NY, for Defendants Nomura Canada, Inc., Nomura Securities International, Inc., and Scott Reed.
J. Patrick McDavitt, Julie H. Firestone, Briggs and Morgan, P.A., Minneapolis, MN, Joel S. Forman, Karen Lee, Curtis, Mallet-Prevost, Colt & Mosle, New York, NY, for Defendant James Smith.
Jonathan M. Harris, Terrence J. Fleming, Eric J. Peck, Lindquist & Vennum P.L.L.P., Minneapolis, MN, for Defendant A.G. Edwards & Sons, Inc.
John M. Degnan, Murnane, Conlin, White & Brandt, St. Paul, MN, Dominic F. Amorosa, Amorosa Law Office, New York, NY, Michael Q. Carey, Carey & Associates, New York, NY, for Defendant Richard Evangelista.
These matters come before the Court on Defendants' motions to dismiss. In these three related actions, Plaintiffs James P. Stephenson, as trustee in bankruptcy for MJK Clearing ("the Trustee"), Ferris, Baker Watts, Inc. ("FBW"), and E*Trade Securities LLC ("E*Trade") have separately sued Defendants Deutsche Bank AG ("Deutsche Bank AG"), Deutsche Bank Securities, Inc. ("Deutsche Bank Securities"), Deutsche Bank Securities Limited ("Deutsche Bank SL"), Wayne Breedon, Nomura Canada, Inc. ("Nomura Canada"),2 Nomura Securities International, Inc. ("Nomura"),2 Scott Reed,2 RBF International, Inc. ("RBF"), Kenneth D'Angelo, Richard Evangelista, GenesisIntermedia, Inc. ("GENI"),3 Ramy El-Batrawi, Ultimate Holdings, Ltd. ("Ultimate Holdings"), Adnan Khashoggi, Bradford Keiller,3 James Smith,2 and A.G. Edwards & Sons, Inc. ("A.G. Edwards").45
Plaintiffs allege Defendants perpetrated or financed "a wide-ranging and sophisticated securities loan and market manipulation scheme" (Trustee Am. Compl. ¶ 1), that "resulted in the largest failure of a U.S. brokerage firm in at least 30 years" (E*Trade Am. Compl. at 1), producing "losses totaling in excess of $100 million." (FBW Am. Compl. ¶ 2.) As alleged by E*Trade:
What makes this story shocking, even in this post-Enron era, is not the quantum of greed involved, the involvement of a headline grabbing cast of characters including the notorious Saudi arms-dealer Adnan Khashoggi, or the scent of money laundering, but rather the sheer audacity and scope of the fraud .... involv[ing] the deliberate, orchestrated participation of at least a dozen people in manipulating, again in highly coordinated fashion, the market for the securities of at least three separate companies, over a period of two years.6
Plaintiffs assert a variety of claims against Defendants under federal and state securities law, state consumer statutes, common law, and the Racketeer Influenced and Corrupt Organizations Act ("RICO"), 18 U.S.C. § 1961, et seq. In response to Plaintiffs' overlapping Amended...
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