Magistrate Judge Gabriel Gorenstein
Under agreement, Cayman Islands-based Pinnacle Performance issued notes that were sold to investors of Singapore-based Hong Leong Finance (HLF). The notes failed. HLF was required to compensate investors for $32 million in losses. HLF’s 2012 lawsuit against Pinnacle and other affiliates of domestic corporation Morgan Stanley followed a 2010 class action by Pinnacle note purchasers in Dandong v. Pinnacle Performance. The court granted Morgan Stanley and its affiliates a protective order staying discovery until resolution of their motion to dismiss HLF’s amended complaint asserting Lanham Act claims as well as fraud, fraudulent inducement, negligent misrepresentation and contract breach. In finding that it lacked diversity jurisdiction the court observed that although HLF and three defendants were foreign entities, it rejected HLF’s assertion that those entities were Morgan Stanley’s alter egos, and lacked citizenship apart from Morgan Stanley’s. Further, distinguishing Bozant v. Bank of New York, the court found that because other courts have refused to recognize securities as "goods" under the Lanham Act, it lacked jurisdiction over any of HLF’s Lanham Act claims.
