Broker-Dealers Ditch Some Claims In $500M DBSI Ponzi Suit

Law360, New York (September 26, 2013, 4:08 PM ET) -- A Delaware federal judge ruled Wednesday that most of the securities fraud claims, albeit narrowed considerably, can go forward against many of the broker-dealers who allegedly helped defunct real estate investment firm Diversified Business Services & Investments Inc. pull off a $500 million Ponzi scheme that sent it into bankruptcy.

U.S. District Judge Gregory M. Sleet allowed claims against some of the broker-dealers brought under Section 10(b) of the Securities Exchange Act and common law fraud to continue, finding that DBSI's liquidation trustee, James R. Zazzali,...
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