David Lerner Associates (DLA), the broker-dealer that regulators have accused of duping elderly investors, has finished off most of a related securities class action brought by Girard Gibbs.

In a decision issued on Wednesday, the U.S. Court of Appeals for the Second Circuit ruled that DLA didn’t violate federal securities laws in connection with the sale of five real estate investment trusts, known as the Apple REITs, with a combined value of $6.8 billion. Affirming an April 2013 decision by U.S. District Judge Kiyo Matsumoto in Brooklyn, the appeals court held that Girard Gibbs’ lead plaintiffs couldn’t point to any actionable misstatements by DLA.

The ruling wasn’t a total win for DLA and its defense lawyers at Bingham McCutchen, however. In its ruling, the Second Circuit revived parallel state law claims of breach of fiduciary duty and negligence. Matsumoto had dismissed those claims on the grounds that the plaintiffs failed to show that they’d suffered a loss. The Second Circuit disagreed with her reading of the evidence, writing that the alleged facts “plausibly suggest a decline in the true value of Apple REIT shares.”

Girard Gibbs faces an uphill battle when the case goes back before Matsumoto. She’s been a tough critic of the firm’s claims, writing that their “belabored complaint appears only be confirm that the Apple REITs are currently functioning in exactly the manner that was anticipated.”

In October 2012, the Financial Industry Regulatory Authority unveiled a $14 million settlement with DLA and its leaders, writing in a press release that DLA “targeted unsophisticated investors and the elderly” and “used misleading marketing materials.” The firm’s founder, David Lerner, was banned from the securities industry for a year as part of the settlement. DLA and Lerner didn’t admit any wrongdoing.

Bingham’s Kenneth Schacter argued for DLA at the Second Circuit, squaring off against John Kehoe of Girard Gibbs. Some DLA employees named as defendants are represented by attorneys at McGuireWoods.