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Fraud Action Under Minnesota Securities Act

By FindLaw Staff on June 17, 2010 7:35 PM

Trooien v. Mansour, No. 09-2032, involved an action alleging violations of the Minnesota Securities Act, negligent and fraudulent misrepresentation, and breach of fiduciary duty.  The court of appeals affirmed summary judgment for defendants in part, on the grounds that 1) plaintiff's misrepresentation claims based on the company at issue's revenue projections were properly dismissed by the district court since they were not false statements of past or existing fact, and were not pled with sufficient particularity; and 2) the injuries alleged in plaintiff's breach of fiduciary duty claims were those to corporate assets, and a claim to recover damages for such injuries must be brought as a derivative action.  However, the court reversed in part, holding that claims arising under Minn. Stat. section 80A.01(b) required only a showing of negligence.

As the court wrote:  "Gerald Trooien brought this action against Peter Mansour and Barry Roitblat, former executive officers of Sproqit Technologies, Inc. (Sproqit), alleging violations of the Minnesota Securities Act (MSA), negligent and fraudulent misrepresentation, and breach of fiduciary duty, arising from Trooien's investment in Sproqit. The district court dismissed several of the securities and misrepresentation claims in Trooien's amended complaint for failure to plead with particularity, see Fed. R. Civ. P. 9(b), and granted summary judgment to Mansour and Roitblat on his remaining claims, see Fed. R. Civ. P. 56(c). Trooien appeals the dismissal and the adverse grant of summary judgment. We reverse in part and affirm in part."

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