Case Study: South Cherry Street V. Hennessee Group

Law360, New York (July 29, 2009, 10:38 AM EDT) -- The U.S. Court of Appeals for the Second Circuit has issued an opinion that likely will be closely scrutinized for its potential application to lawsuits against financial advisers.

In that decision — South Cherry Street LLC v. Hennessee Group LLC, et al., 07-3658-cv (2d Cir. July 14, 2009) — the court affirmed dismissal of fraud and breach of contract claims based on allegations that an investment adviser fraudulently recommended investment in a hedge fund later discovered to be a Ponzi scheme.

The decision is significant for...
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