Schumpeter, Capitalism, Socialism and Democracy. Review Essay by Thomas K.
Signed by Judge Freda L. Defendant or Goldman Sachs 1, alleging that Goldman Sachs failed to advise him to decrease or divest his investments in the now-infamous Madoff Fund.
As a result of Goldman Sachs actions, Plaintiff asserts that he lost his life savings of over 15 million dollars. Plaintiff s claims sound in breach of fiduciary duty, negligent misrepresentation, and gross negligence.
Defendant moves to dismiss these claims, arguing that New York law applies and that the claims were filed beyond the statutory limitations period under New York law, are preempted by New York law, and are otherwise insufficiently plead under Federal Rule of Civil Procedure 12 b 6.
While the Court concludes that a final determination on choice of law is premature at this pleading stage, applying the law of the forum state of New Jersey, the Court nonetheless grants Defendant s motion, pursuant to Federal Rule of Civil Procedure 12 b 6.
As I must on a motion to dismiss, I take the following allegations from Plaintiff s Complaint as true. Plaintiff is a 69 year old retiree, who lives with his wife in New Jersey. InPlaintiff sold the business for approximately 20 million dollars.
This amount represented virtually all of [Plaintiff s] net worth. According to Plaintiff, he was, and still is, an unsophisticated investor.
Ayco 1, a company he retained as his financial advisor. Ayco advised Plaintiff to first invest 4 million dollars in the Madoff Fund inand then to increase his investment to 12 million dollars in By SeptemberPlaintiff was investing 15 million dollars in the Madoff Fund.
Plaintiff alleges that, throughout this time frame, Ayco led him to believe that it was properly taking into consideration his risk tolerance in advising him to invest such a large percentage of his net worth in the Madoff Fund. Shortly thereafter, in or around late or earlyLarry Abrahams Abrahamsan employee of Ayco, contacted Plaintiff s family the Goodman Family to inform Plaintiff of Goldman Sachs purchase of Ayco.
Indeed, it is alleged throughout the Complaint that communications intended for Plaintiff were often made to the Goodman Family or to Plaintiff s son, Kevin Goodman. Plaintiff alleges that Abrahams and other Ayco Ayco is not named as a party to this litigation, presumably because Plaintiff and Ayco have an arbitration clause in an investment advisor agreement dated May 7,that calls for application of New York law.
See Del Sordo Decl. Abrahams then requested permission from the Goodman Family to share Plaintiff s confidential financial information with Goldman Sachs. After permission was granted, Abrahams proposed a meeting to Kevin Goodman by email dated January 28,which email stated: We now have access to two things we never had before at Ayco: While I certainly can make recommendations.
The focus of the meeting would be: There is no allegation in the Complaint that Plaintiff ever entered into a retainer agreement with Goldman Sachs.
The purpose of the meeting was for Goldman Sachs to present its investment advice to Plaintiff.
Plaintiff, however, did not attend the meeting his son Kevin Goodman attended it instead. At the meeting, Duda made a presentation to Kevin Goodman in which he recommended that Plaintiff maintain at least 7 million dollars in the Madoff Fund and transfer 5 million dollars to Goldman Sachs hedge funds, which funds were in the same category of higher risk alternative investments as the Madoff Fund.
Plaintiff alleges that Goldman Sachs advised him to leave at least 7 million in the Madoff Fund despite an alleged internal ban through which Goldman Sachs had 3 prohibited its own asset managers from investing in that fund.
Notably, Plaintiff does not allege that he heeded Goldman Sachs advice to transfer 5 million dollars to Goldman Sachs hedge funds. It appears from the Complaint that he left all of his investment in the Madoff Fund. In the most general fashion, Plaintiff alleges that Goldman Sachs maintain[ed] direct contact with the Goodman Family in the years following the [M]eeting.
The Complaint does not allege how many, or in which, years Goldman Sachs maintained contact. In addition, the Complaint does not point to any specific communications, their subject matter, or whether the communications were oral or written.The “anomalous currency space,” or ACS (pronounced “ace”), is a materials-based approach that can serve as a platform for a wide range of anticounterfeiting strategies by providing a region or regions that differ entirely in materials composition from the banknote substrate.
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