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Wang v. The Bear Stearns Companies LLC

United States District Court, S.D. New York

April 16, 2014

VIVINE H. WANG, Plaintiff,
v.
THE BEAR STEARNS COMPANIES LLC, J.P. MORGAN SECURITIES LLC, J.P. MORGAN CLEARING CORP., DELOITTE & TOUCHE LLP, ALAN D. SCHWARTZ, ALAN C. GREENBERG, JOEY ZHOU, and GARRETT BLAND, Defendants

Decided: April 15, 2014.

Page 538

For the Plaintiff: Mohammed K. Ghods, Esq., William Stahr, Esq., Jeremy A. Rhyne, Esq., GHODS LAW FIRM, Santa Ana, CA.

For Joe Zhou and Garrett Bland, Defendants: Brad S. Karp, Esq., Eric S. Goldstein, Esq., Jessica S. Carey, Esq., Jonathan Hurwitz, Esq., PAUL, WEISS, RIFKIND, WHARTON & GARRISON LLP, New York, NY.

OPINION

Page 539

ROBERT W. SWEET, D.J.

Defendants Joe Y. Zhou (" Zhou" ) and Garrett Bland (" Bland" ) (collectively, the " Defendants" ) have moved pursuant to Federal Rules of Civil Procedure 9(b) and 12(b) (6) to dismiss the claims against them in the complaint filed on March 29, 2011 (the " Complaint" ) by plaintiff Vivine H. Wang (" Wang" or the " Plaintiff" ). Upon

Page 540

the conclusions set forth below, the motion is granted and the Complaint is dismissed as to Zhou and Wang with leave granted to replead within 20 days.

Prior Proceedings

Wang purchased 150,000 shares of The Bear Stearns Company Inc. (" Bear Stearns" ) between March 6, 2008 and March 14, 2008 through a Bear Stearns brokerage account upon the order of her husband, Roger Wang (" Roger Wang," collectively with Plaintiff the " Wangs" ). The purchase and its circumstances are the subject of the Complaint. The Wangs refused payment on the purchase.

After the Wangs refused to pay for purchases of Bear Sterns stock, Bear Stearns liquidated Wang's brokerage account and filed an arbitration claim to recover the money owed. ( See ¶ ¶ 38-39).[1] Wang refused to participate in the arbitration, and Bear Stearns was eventually awarded $3,048,514.87 on June 9, 2009. (¶ 40). The award was confirmed and a judgment was entered by a district court in California on January 13, 2010. Bear Stearns was also subsequently awarded attorneys' fees and costs.

While Bear Stearns's arbitration against Vivine Wang was proceeding, in April 2008, Roger Wang filed a complaint against Bear Stearns, Zhou, and Bland in California state court, alleging state law violations in connection with the March 2008 purchases of Bear Sterns stock in his wife's account. (No. BC388727 (Cal. Super. Ct., Los Angeles)). Roger Wang alleged that he, not his wife, authorized the purchases, although the account was solely in her name. Roger Wang's suit, which asserted a putative class claim, was removed to the United States District Court for the Central District of California (08 Civ. 5523 (C.D. Cal.), Doc. No. 42), and then transferred by the MDL Panel to this Court for coordinated or consolidated pretrial proceedings with the other related actions pending here.

Roger Wang's action was subsequently consolidated with related securities actions under the caption In re Bear Stearns Cos., Inc. Securities Litigation, No. 08 Civ. 2793 (the " Securities Action" ). (08 M.D.L. 1963 (S.D.N.Y.), Doc. No. 31 ΒΆ 21). In the Securities Action, court-appointed Lead Plaintiff filed a Consolidated Class Action Complaint on February 27, 2009, which asserted claims on behalf of " all persons and entities that, between December 14, 2006 and March 14, 2008 ...


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