The plaintiffs brought a motion for default judgment against their former investment advisor and his corporate entities for fraud and breach of fiduciary duty, and for summary judgment against the mutual fund dealer, FundEx, on the basis of vicarious liability.
The court granted default judgment against the advisor and his companies, finding the elements of civil fraud and breach of fiduciary duty were established based on deemed admissions.
However, the court dismissed the motion for summary judgment against FundEx, concluding that genuine issues requiring a trial existed regarding whether the advisor's wrongful acts were sufficiently connected to his authorized conduct to impose vicarious liability, and whether the plaintiffs' claims were discoverable outside the limitation period.
