9th Circ. Finds Middleman Not Liable In $64M Stock Scam

Law360, Los Angeles (September 10, 2013, 5:09 PM EDT) -- The Ninth Circuit on Tuesday partially reversed a district court’s decision to hold 1st Global Stock Transfer LLC and its owner responsible for a scam that lost investors in CMKM Diamonds Inc. $64 million.

The three-judge panel found there was material evidence to suggest that 1st Global and its owner, Helen Bagley, hadn’t participated in the scam — which sold billions of fake securities backed by fake diamond mining, buying and selling — when they transferred hundreds of billions of shares of stock.

The panel affirmed...
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