2nd Circ. Curbs Market Manipulation Suits In Baron Case

Law360, New York (May 7, 2013, 2:40 PM EDT) -- A divided Second Circuit raised the bar Tuesday for market-manipulation suits against defendants who didn't communicate directly with victims of an alleged fraud, tossing federal securities claims against an A.R. Baron & Co. investor accused of aiding the defunct broker’s pump-and-dump scheme.

In a 2-1 opinion, the appeals panel ruled that Isaac R. Dweck, a principal investor in Baron, could not be held liable under Section 10(b) of the Securities Exchange Act of 1934 for allegedly helping the firm sell shoddy securities to unwitting investors while...
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