Preemption And The Martin Act

Law360, New York (February 14, 2011, 2:46 PM EST) -- In a little-noticed decision that apparently flew under the radar right before the holidays, New York’s Appellate Division, First Department, ruled that the Martin Act, New York’s “blue sky” law, does not preempt common law claims for breach of fiduciary duty and gross negligence.

The decision, unless overruled by New York’s Court of Appeals, threatens to upset what had become increasingly settled expectations that securities-type claims cannot be brought as common law claims in state court in New York. The decision may give new impetus to...
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