Summary Judgment for Defendants Affirmed in Securities Fraud Case

In Whitehead v. BBVA Compass Bank, 2020 WL 6536897 (11th Cir. Nov. 6, 2020), the Eleventh Circuit affirmed summary judgment in favor of the defendant bank and bank officer on the plaintiff’s claims for securities fraud.  The plaintiff, an investor, claimed that the defendants wrongfully failed to inform him of the risks involved in acquiring a certain CD for his investment portfolio. The investor sought as damages the amount he lost when he surrendered the CD some 19 months after acquiring it. The district court granted the defendants’ motion for summary judgment, and the Eleventh Circuit, in a decision written by Judge Ray visiting from the Northern District of Georgia and joined by Judge Newsom and Judge Branch, affirmed.

First, the court noted, even assuming that there was sufficient evidence in the record to create a genuine dispute about whether the defendants had, in fact, urged the investor to purchase the CD without explaining the penalties for early surrender, it was not the defendants but a different bank officer, from a different bank, who actually acted as the investor’s representative in purchasing and surrendering the CD. Further, the court continued, the purchase of the CD did not cause the complained-of loss. It was the surrender of the CD, not the purchase, that caused the investor to incur a penalty. There was no evidence that the defendants had anything to do with the decision to surrender the CD, and the defendants therefore were entitled to summary judgment.

Posted by Valerie Sanders.

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