(CN) – An investment adviser lacks standing to sue several banks on his clients’ behalf, the 2nd Circuit ruled.
W.R. Huff Asset Management Co. Inc. sued Citibank, Bank of America, JPMorgan Chase and 35 other banks and organizations, alleging violations of federal securities law.
The district court denied the banks’ motion to dismiss due to lack of standing, but Judge Cabranes reversed on interlocutory appeal.
The suit stems from the bankruptcy and dissolution of Adelphia Communications in 2002. Huff alleged that the banks certified inaccurate financial disclosures on behalf of Adelphia.
Cabranes ruled that Huff’s clients should sue the banks instead of Huff.
“Huff has not alleged that it suffered any injury,” Cabranes wrote, “rather, the alleged injury was suffered by Huff’s clients.”