Justia Securities Law Opinion Summaries

The Idaho Department of Finance ("Department") filed a civil enforcement action against appellant appellant, Sean Zarinegar, Performance Realty Management LLC ("PRM") and other nominal defendants, alleging Zarinegar and PRM committed securities fraud. The Department moved for summary judgment; Zarinegar and PRM responded with their own motion for partial summary judgment and a motion to strike several documents submitted by the Department in support of its motion for summary judgment. A few days before the district court was set to hear arguments on the motions, counsel for Zarinegar and PRM moved the district court for leave to withdraw as counsel of record. At the hearing, the district court preliminary denied the motion to withdraw, entertained the parties’ arguments, and took all matters under advisement. The district court later issued a memorandum decision and order denying, in part, Zarinegar’s, and PRM’s motions to strike. The district court also denied Zarinegar’s and PRM’s motion for partial summary judgment. The district court granted summary judgment for the Department after finding Zarinegar and PRM had misrepresented and omitted material facts in violation of Idaho Code section 30-14-501(2) and fraudulently diverted investor funds for personal use in violation of section 30-14-501(4). The district court then granted the motion to withdraw. The district court entered its final judgment against Zarinegar and PRM September 30, 2019. Zarinegar, representing himself pro se, appealed the judgment, arguing: (1) the district court lacked jurisdiction to enter judgment against him; (2) the district court violated his constitutional right to a jury trial and right to proceed pro se; (3) the district court’s denial of Zarinegar’s motions to strike as to certain documents was an abuse of discretion; and (4) the district court erroneously granted summary judgment for the Department. Finding no reversible error, the Idaho Supreme Court affirmed the district court's judgment. View "Idaho v. Zarinegar" on Justia Law

Investor Recovery Fund, LLC was the assignee of six claims held by individual investors who lost their investments in the Hopkins Northwest Fund, LLC (the fund). Randall Hopkins and Brian Murphy were the principals of the fund, and together they owned and managed Hopkins Financial Services, Inc. (Hopkins Financial). The individual investors formed Investor Recovery for the purposes of asserting a collective claim against Hopkins Financial and the fund’s principals individually (collectively, Hopkins Associates). The fund declared a moratorium on redemptions in 2008, preventing investors from taking their money out of the fund. The individual investors lost their investments when the fund declared bankruptcy six years later. Investor Recovery sued Hopkins Associates, asserting claims of fraud by nondisclosure. The district court granted the principals’ motion for a directed verdict after seven days of trial, concluding that Investor Recovery did not prove that the individual investors’ losses were causally connected to the principals’ alleged nondisclosures. The Idaho Supreme Court addressed the applicable standard of review when considering a directed verdict in a fraud by nondisclosure case. Finding the district court used the wrong standard in entering directed verdict in favor of Hopkins Associates, the Supreme Court reversed the district court’s directed verdict, vacated the judgment, and remanded the case for further proceedings. View "Investor Recovery Fund v. Hopkins" on Justia Law

Donna Taylor appealed a district court’s judgment regarding her Series A Preferred Shares in AIA Services Corporation (AIA). In 1987, Donna received 200,000 Series A Preferred Shares in AIA as part of a divorce settlement. Between 1987 and 1996, Donna, AIA, and other relevant parties entered into various stock redemption agreements with differing terms and interest rates. One such agreement was challenged in Taylor v. AIA Servs. Corp., 261 P.3d 829 (2011). While the Taylor case was being litigated, AIA stopped paying Donna for the redemption of her shares, prompting her to file suit. Donna alleged several causes of action against AIA, with the primary issue being whether Donna was entitled to have her shares redeemed at the prime lending rate plus one-quarter percent. AIA contended any agreement providing that interest rate was unenforceable, and instead Donna’s redemption was governed by AIA’s amended articles of incorporation, which provided the interest rate as the prime lending rate minus one-half percent. The district court determined Donna’s share redemption was governed by AIA’s amended articles of incorporation, and as such, all but 7,110 of Donna’s shares had been redeemed. After review, the Idaho Supreme Court reversed the district court’s dismissal of Donna’s breach of contract claim as it related to a 1995 Letter Agreement, and remanded for further proceedings. The Supreme Court also reverse the district court’s dismissal of Donna’s fraud claims. The Court affirmed the district court’s dismissal of Donna’s unjust enrichment claim, and the dismissal of AIA’s counterclaim against Donna. View "Taylor v. Taylor" on Justia Law