Brokerage Legent Loses Bid To Toss Margin Fraud Suit

Law360, New York (July 30, 2009, 6:34 PM EDT) -- A judge has batted down Legent Clearing LLC's motion to dismiss allegations that it aided and abetted another financial services firm in illegally using custodial accounts as collateral for margin trading.

Enterprise Trust Co. receiver Phillip L. Stern has standing to sue Legent because he is seeking to redress a distinct harm to Enterprise, not just to its customers, Judge James B. Zagel ruled in the U.S. District Court for the Northern District of Illinois on Tuesday.

Legent had contended that the receiver lacked standing to...
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