Just because a business fails does not mean fraud was committed, a U.S. District Court judge ruled recently–even though the SEC and the 11th Circuit disagree in this case.
In June, Senior Judge Marvin H. Shoob of the Northern District of Georgia again dismissed a securities fraud case brought by the SEC. The commission alleged that the principals in Merchant Capital defrauded 350 investors of more than $20 million. Judge Shoob’s ruling came despite the 11th Circuit’s strong suggestion that the defendants deserved punishment when it reversed part of Judge Shoob’s original decision, vacated other parts and remanded part back to him to reconsider.
