Posts tagged "1102314"

Genovesi v. Nelson, et al. (Lawyers Weekly No. 11-023-14)

NOTICE: All slip opinions and orders are subject to formal revision and are superseded by the advance sheets and bound volumes of the Official Reports.  If you find a typographical error or other formal error, please notify the Reporter of Decisions, Supreme Judicial Court, John Adams Courthouse, 1 Pemberton Square, Suite 2500, Boston, MA 02108-1750; (617) 557-1030; SJCReporter@sjc.state.ma.us       13‑P‑661                                        Appeals Court   LAWRENCE GENOVESI  vs.  ANDREW NELSON & others.[1] No. 13‑P‑661. Norfolk.     December 9, 2013.  ‑  March 5, 2014. Present:  Grainger, Brown, & Carhart, JJ.   Limitations, Statute of.  Practice, Civil, Statute of limitations, Motion to dismiss.  Notice.  Fraud.  Negligence, Misrepresentation.  Fiduciary.  Consumer Protection Act, Pleading, Securities transactions.  Uniform Securities Act.  Securities.       Civil action commenced in the Superior Court Department on July 29, 2011.   A motion to dismiss was heard by Paul E. Troy, J.     Michael R. Perry for the plaintiff. Charles L. Solomont for Andrew Nelson. Christopher P. Litterio for Steven Ricciardi & another.   GRAINGER, J.  The plaintiff, Lawrence Genovesi, appeals from an order entered by a judge in the Superior Court allowing the defendants’ motions to dismiss his third amended complaint on statute of limitations grounds.   Factual background.  We recite those facts alleged in the complaint that plausibly suggest entitlement to relief, taking them as true for purposes of our review of the judge’s ruling on the motion to dismiss.  See Iannacchino v. Ford Motor Co., 451 Mass. 623, 635-636 (2008).  In 2003 and 2004, Genovesi, who then was serving as board chair at Network Engines, Inc., realized a cash gain of approximately $ 3 million from his company’s stock participation plan.  At the time, his home was encumbered by a $ 1.5 million mortgage subject to a prepayment penalty.  Accordingly, Genovesi sought a low-risk liquid investment to ensure he would have cash on hand to discharge the mortgage when the prepayment penalty period expired.  Genovesi, an unsophisticated investor, consulted with his financial advisor, Andrew Nelson, at Lehman Brothers, Inc. (Lehman), to identify an appropriate investment vehicle for his cash holdings.  Nelson recommended that Genovesi invest in a collateralized debt obligation known as “Paragon CDO.”  Nelson told Genovesi that the Paragon CDO investment presented low risk, similar to a United States Treasury or municipal bond.  Nelson further represented that the Paragon CDO was comprised of AAA-rated debt and that Genovesi’s risk was limited only to the yield.  At Nelson’s recommendation, Genovesi met with two additional Lehman sales agents, Steven Ricciardi and Gannon McCaffery.  Ricciardi and McCaffery also advised Genovesi that the Paragon CDO was low risk, was comprised of AAA-rated debt, and that the risk profile was similar to that of a United States Treasury or municipal […]

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Posted by Massachusetts Legal Resources - March 5, 2014 at 6:36 pm

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