Contact us with your California corporate & securities law questions (949) 353-6347 or Contact us here

Failure To Disclose Finder's Fee Found Not To Be Actionable

This interesting, but atypical case, involves one of the many possible issues that can arise from the use of unlicensed finders to raise securities.

Five years ago, Daniel Azouri met Marvin Lipschultz at the Cannes Film Festival.  Mr. Azouri suggested that Mr. Lipschultz invest in a movie venture.  Mr. Lipschultz invested a total of $220,000 in the expectation of a return of $1.15 million.  When that didn't happen, Mr. Lipschultz sued alleging that Mr. Azouri had failed to disclose that he was to receive a finder's fee equal to the anticipated return, contingent upon the project's success.

In an order issued earlier this week, U.S. District Court Judge Kent J. Dawson ruled that Mr. Lipschultz had failed to state a claim under Rule 10b-5.  Golden Palm Invs. v. Azouri, 2015 U.S. Dist. LEXIS 75095 (D. Nev. 2015).  I found particularly interesting Judge Dawson's analysis loss causation. The plaintiffs alleged that had they known of Mr. Azouri's commission arrangement, they would not have invested.  Judge Dawson, however, found that what Azouri stood to gain had no effect on the execution of future course of the investment agreement.  This case is atypical because Mr. Azouri's commission was contingent upon the the project's success, not simply the investment.

Share on:

ANY QUESTIONS REGARDING CALIFORNIA CORPORATE AND SECURITIES LAW? CONTACT US DIRECTLY

We offer expert advice with the intricacies of California law.

Our years of experience and expertise allow us to help clients navigate the business laws in California.

CONTACT US

Get the latest news and analysis about California Corporate & Securities law. Subscribe to our newsletter today!

We respect your email privacy

ABOUT OUR AUTHOR

30172DBAB0084D3A8F39D7AF0A8E79BC.ashx Keith Paul Bishop
Partner at Allen Matkins
(949) 353-6328
 Contact me
Learn More About Keith

nominee-badge

Get the latest news and analysis about California Corporate & Securities law. Subscribe to our newsletter today!

We respect your email privacy

CATEGORIES

see all

RECOGNITION

YOUTUBE

FACEBOOK