Searching over 5,500,000 cases.


searching
Buy This Entire Record For $7.95

Download the entire decision to receive the complete text, official citation,
docket number, dissents and concurrences, and footnotes for this case.

Learn more about what you receive with purchase of this case.

Robertson v. Metlife Securities, Inc.

United States District Court, W.D. New York

March 30, 2018

FREDIA ROBERTSON, AS GUARDIAN FOR MARY KATHERINE HART, Plaintiff,
v.
METLIFE SECURITIES, INC., et al., Defendants.

          DECISION AND ORDER

          HON. FRANK P. GERACI, JR. CHIEF JUDGE

         INTRODUCTION

         On April 14, 2016, Plaintiff Fredia Robertson filed a Complaint against Defendants[1] on behalf of Mary Katherine Hart alleging one federal-law claim under a section of the Securities Exchange Act, 15 U.S.C. § 78j(b) and enacted under 17 C.F.R. 240.10b-5 (“Rule 10b-5”), and seven state-law claims all alleging that Defendants operated a scheme to defraud Hart. See ECF No. 1. Specifically, Plaintiff alleged the following eight claims: (1) Phillips and the Merritts forged a power of attorney giving the Merritts authority to act as agents for Hart on October 29, 2010; (2) Phillips and the Merritts forged another power of attorney giving the Merritts authority to act as agents for Hart on July 30, 2010; (3) Xerox stole money from Hart's 401(k) and pension plan; (4) the Merritts and Xceed FCU stole money out of Hart's accounts at Xceed FCU; (5) the MetLife Defendants and the Merritts stole Hart's money from her retirement accounts; (6) the MetLife Defendants and the Merritts violated 15 U.S.C. § 78j(b) and Rule 10b-5 by transferring Hart's pension into a MetLife annuity; (7) the MetLife Defendants and the Merritts violated New York State securities laws; and (8) the MetLife Defendants, the Merritts, WoodForest, and Phillips stole money from Hart's WoodForest account. ECF No. 1.

         On May 31, 2016, and February 1, 2017, Plaintiff withdrew claims against Xerox and Xceed FCU, respectively. ECF Nos. 4, 29. Consequently, both Defendants were dismissed from the case. Id.

         The remaining Defendants, except the Merritts, [2] moved to dismiss the Complaint at various times: Phillips on May 31, 2016; the MetLife Defendants on July 12, 2016; and WoodForest on September 23, 2016. ECF Nos. 5, 17, 24. The Motions to Dismiss are currently before the Court. For the reasons stated, the MetLife Defendants' Motion to Dismiss the Complaint, is GRANTED, the Complaint is DISMISSED, and the Motions to Dismiss for Phillips and WoodForest are DENIED AS MOOT.

         BACKGROUND[3]

         On October 23, 2010, Mary Katherine Hart suffered a major stroke that permanently altered her mental functions. On July 13, 2013, Plaintiff, Hart's sister, was appointed as Hart's temporary guardian, and then appointed as her permanent guardian on May 27, 2014. Before her stroke, Hart worked for nearly forty years as a machinist for Xerox. Over that time, she accumulated a pension worth $609, 659.80 as of April 25, 2011, and a 401(k) worth approximately $194, 880.65.

         On October 29, 2010, the Merritts forged a power of attorney naming them and Plaintiff as agents for Hart. Phillips notarized the power of attorney. Debbie Merritt is Hart's longtime friend, and Markia Merritt is Debbie Merritt's daughter and Hart's goddaughter.

         On or about April 18, 2011, the Merritts met with Charlie Williams, Jr., a registered representative of MetLife Securities, Inc., licensed to sell securities. The Merritts used the power of attorney to establish an annuity with MetLife Securities, Inc. (“MSI”). Specifically, Hart's Xerox pension, then valued at $598, 350.32, was transferred into an MSI annuity. While filling out documents to establish the MSI annuity, Williams and the Merritts made false statements regarding Hart's current annual income, liquid net worth, risk of tolerance of the contract, the face value of her life insurance holdings, the replacement of an existing annuity contract, the income objective of the contract, the primary purpose of the contract, and when Hart would take a disbursement from the annuity.

         Williams knew the annuity was not a suitable investment for Hart. He allowed the Merritts to establish the annuity on behalf of Hart to receive commissions and to defraud Hart. At no time did Hart approve the annuity or the transfer of money from her pension.

         Plaintiff alleges that the actions of Williams and the Merritts, and their false statements on documents used to establish the annuity, constituted manipulative and deceptive devices and contrivances in violation of Rule 10b-5. Specifically, the actions and false statements formed a device, scheme, or artifice to defraud Hart by purchasing securities. Moreover, Williams's actions constituted a course of business which operated as a fraud and deceit upon Hart.

         Finally, Defendants MetLife Securities, Inc., Metropolitan Life Insurance Company, MetLife of Upstate New York failed to maintain and enforce a proper system of internal supervision in violation of its duty as a “controlling person” under 15 U.S.C. § 78t.

         DISCUSSION

         I. Motion to ...


Buy This Entire Record For $7.95

Download the entire decision to receive the complete text, official citation,
docket number, dissents and concurrences, and footnotes for this case.

Learn more about what you receive with purchase of this case.