9th Circ. Nixes Radical Bunny Execs' Appeal In SEC Suit

Law360, Los Angeles (July 10, 2013, 11:05 PM ET) -- The Ninth Circuit on Wednesday denied an appeal by managing members of bankrupt Radical Bunny LLC accused of funneling more than $189 million to also-bankrupt Mortgages Ltd., ruling that the managers didn't prove they were trading commercial notes instead of securities.

The appellate court agreed with an Arizona federal court that the four managers falsely represented to investors holding 900 accounts in 20 states that their loan investments were collateralized and secured, even after their attorneys allegedly told them that wasn't the case.

“A reasonable investor...
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