New York — The U.S. Court of Appeals for the Second Circuit has affirmed a district court’s decision that dismissed a securities fraud case against New York-based hedge fund investment adviser Hennessee Group LLC. In the 36-page opinion issued July 14, 2009, the Second Circuit upheld in its entirety the August 2007 ruling by Judge Colleen McMahon of the U.S. District Court for the Southern District of New York that dismissed claims of breach of contract and securities fraud in South Cherry Street, LLC. v. Hennessee Group. All of South Cherry’s arguments on the appeal were found to be without merit.
The claims were in connection with Hennessee’s investment advice regarding Bayou Management’s hedge funds that were uncovered as part of a large Ponzi scheme, for which Bayou’s principals were found guilty of securities fraud in 2005.
“We are delighted with the Second Circuit’s decision that finds all claims of breach of contract and securities fraud against Hennessee are without merit. Bayou’s Ponzi scheme caused many unfortunate events, but the Court’s decision establishes that Hennessee was not a participant on any level,” said Bennett Falk, Hennessee’s trial counsel and a partner in the securities litigation and regulatory practice group in the Florida office of Bressler, Amery and Ross, P.C.