NEW YORK (CN) – A federal judge dismissed the majority of recovery claims against companies and individuals who did business with A.R. Baron & Co., a broker-dealer that bilked customers out of millions of dollars before its bankruptcy in 1996.
Baron’s former officers, directors and key employees have been convicted of various crimes for their roles in operating and perpetuating massive securities fraud during the company’s four-year run.
Customers who lost more than $7.25 million through Baron’s criminal activities sought to recover from those who allegedly “propped the company up during its brief but felonious life,” the ruling states.
U.S. District Judge Paul Crotty found that, in most cases, the plaintiffs failed to state a claim or did not plead their claims with enough specificity. As a result, he dismissed the claims against investors and brokers, including Bear Stearns.
The only claim to survive summary judgment was a claim against the so-called “Apollo Defendants,” who allegedly bribed Baron to recommend securities owned by Apollo.
The plaintiffs sufficiently stated claims for market manipulation and civil conspiracy, Crotty ruled.