Morvillo Abramowitz Obtains Federal Injunction Halting Pursuit of State Claims Arising from Hedge Fund Fraud

January 17, 2013

A Morvillo Abramowitz team led by Robert J. Anello, along with Jodi Misher Peikin, Sidhardha Kamaraju and Sean Nuttall, obtained an injunction preventing disgruntled investors in an independent defunct hedge fund from pursuing claims against Banc of America Securities. Investors who had been defrauded by the perpetrators of one of the largest securities frauds in Florida history filed several lawsuits against prime broker Banc of America Securities in both state and federal court, seeking to recover losses caused by the convicted hedge fund operators. In 2007, the Morvillo Abramowitz team successfully obtained the dismissal of the investors' claims in the United States District Court for the Southern District of Florida. The Eleventh Circuit affirmed that decision in 2010, in a significant ruling for prime brokers. While the Eleventh Circuit was considering the appeal, however, the investors commenced yet another lawsuit in Florida state court against Banc of America Securities, asserting the same essential claims. Invoking the All Writs Act and the Anti-Injunction Act, Morvillo Abramowitz successfully persuaded the District Court to protect its previous judgment and the judgment entered by the Eleventh Circuit by permanently enjoining the investors from pursuing claims against Banc of America Securities.