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Tort/Negligence – Ponzi Scheme – Fund Administrator

Tort/Negligence – Ponzi Scheme – Fund Administrator

We affirm the Business Court’s rulings for the reasons stated in its decisions dated 10 August 2015 (As the administrator of a fund that was operating as a Ponzi scheme, defendant SS&C Fund Administration Services, LLC, had a duty to refrain from forwarding to the plaintiff-investors information that SS&C knew was false or inaccurate; otherwise, SS&C did not have a duty to protect plaintiffs from defendant Maiden’s alleged misconduct beyond complying with its specific duties under its administrative services agreement with the Maiden Capital Opportunity Fund, LP.), 1 September 2020, and 15 September 2020 (dismissing plaintiffs’ claims against SS&C).



(Murphy, J.) SS&C has not established a lack of triable issues of fact or its entitlement to judgment as a matter of law on several of plaintiffs’ claims: negligence, gross negligence, negligent misrepresentation, North Carolina Securities Act secondary liability under G.S. § 78A-56(c)(2), and punitive damages. SS&C has however met its burden in showing summary judgment to SS&C was appropriate on plaintiffs’ claims for grossly negligent misrepresentation, civil conspiracy, and aiding and abetting constructive fraud. Accordingly, I would reverse in part and affirm in part.

Bradshaw v. Maiden (Lawyers Weekly No. 012-578-22, 61 pp.) (Darren Jackson, J.) (Hunter Murphy, J., dissenting in part & concurring in part) Appealed from Mecklenburg County Superior Court (Louis Bledsoe, C.J.) Matthew Quinn, James Roberts and Gary Mauney for plaintiffs; Michael Kaeding, Ryan Etheridge, Paul Weiss Rifkind, Robert Atkins and Jeffrey Recher for defendant. 2022-NCCOA-917

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