Con) In re: HERALD , PRIMEO, AND THEMA DANA TREZZIOVA , NEVILLE SEYMOUR DAVIS v. Sonja Kohn , Primeo Select Fund , Primeo Executive Fund , Hannes Saleta , Ernst &…

12‐156‐cv(L)
Trezziova v. Kohn
UNITED STATES COURT OF APPEALS
FOR THE SECOND CIRCUIT
_______________
August Term, 2012
(Argued: April 5, 2013; Petitions filed October 1, 2013; Decided: May 28, 2014)
Docket No. 12‐156‐cv (L), 12‐162 (Con)
_______________
In re: H ERALD , PRIMEO, AND THEMA
_______________
DANA TREZZIOVA , N EVILLE SEYMOUR DAVIS ,
Plaintiffs‐Appellants‐Petitioners,
REPEX V ENTURES , S.A., ON BEHALF OF ITSELF AND ALL OTHERS SIMILARLY SITUATED,
SCHMUEL CABILLY, K OREA E XCHANGE B ANK ,
Plaintiffs,
—v.—
SONJA K OHN , PRIMEO SELECT FUND , PRIMEO E XECUTIVE FUND , H ANNES SALETA ,
E RNST & YOUNG G LOBAL L IMITED, HSBC SECURITIES SERVICES (L UXEMBOURG) S.A.,
HSBC H OLDINGS PLC , B ANK MEDICI, UNICREDIT, B ANK AUSTRIA , PIONEER G LOBAL
ASSET MANAGEMENT S.P.A., ALFRED SIMON , K ARL E. K ANIAK , H ANS‐PETER
TIEFENBACHER , J OHANNES P. SPALEK , N IGEL H. FIELDING, J AMES E. O’N EILL ,
ALBERTO L A ROCCA , DECLAN MURRAY, URSULA RADEL‐L ESZCYNSKI, MICHAEL

-- 1 of 8 --

WHEATON , BA WORLDWIDE FUND MANAGEMENT, L TD ., PIONEER ALTERNATIVE
I NVESTMENT MANAGEMENT L TD ., B ANK OF B ERMUDA (CAYMAN ) L IMITED, B ANK OF
B ERMUDA (L UXEMBOURG) S.A., B ANK OF B ERMUDA L IMITED, E RNST & YOUNG
(CAYMAN ), ALBERTO B ENBASSAT, STEPHANE B ENBASSAT, G ENEVALOR , B ENBASSAT &
CIE , G ERALD J.P. B RADY, J OHN H OLLIWELL, SONJA K OHN , DANIEL MORRISSEY,
DAVID T. SMITH , WERNER TRIPOLT, B ANK MEDICI AG, UNICREDIT SPA, HSBC
I NSTITUTIONAL TRUST SERVICES (I RELAND ) L TD ., HSBC SECURITIES SERVICES
(I RELAND ) L TD ., HSBC H OLDINGS PLC , PRICEWATERHOUSE COOPERS I NTERNATIONAL
L TD ., PRICEWATERHOUSE COOPERS (DUBLIN ), PRICEWATERHOUSE COOPERS LLP,
PRICEWATERHOUSE COOPERS B ERMUDA , THEMA ASSET MANAGEMENT L IMITED, BA
WORLDWIDE FUND MANAGEMENT L IMITED, PETER MADOFF, ANDREW MADOFF,
MARK MADOFF, WILLIAM FRY, JPMORGAN CHASE & CO ., B ANK OF N EW YORK
MELLON , H ERALD (LUX), MESSRS . FERDINAND B URG AND CARLO REDING, THE
COURT APPOINTED L IQUIDATORS FOR H ERALD (LUX), H ERALD ASSET MANAGEMENT
L IMITED, UNICREDIT B ANK AUSTRIA AG, H ERALD USA FUND ,E RNST & YOUNG S.A.,
FRIEDRICH PFEFFER , FRANCO MUGNAI, THEMA I NTERNATIONAL FUND PLC ,
Defendants‐Appellees‐Respondents,
B ERNARD L. MADOFF, B ERNARD L. MADOFF I NVESTMENT SECURITIES , B ANK MEDICI
S.A., PETER SCHEITHAUER , H ERALD USA FUND , H ERALD L UXEMBURG FUND , B ANK
AUSTRIA CREDITANSTALT, UNICREDIT S.A., PIONEER ALTERNATIVE I NVESTMENTS ,
HSBC SECURITIES SERVICES , S.A., HAML, PAUL DE SURY, G ABRIEL SAFDIE , WILLIAM
A. J ONES , H ELMUTH E. FREY, ANDREAS PIRKNER , RICHARD G ODDARD, E RNST &
YOUNG, FRIEHLING & H OROWITZ,
Defendants.
_______________
B e f o r e :
PARKER and CARNEY, Circuit Judges, and RAKOFF, District Judge.*
* The Honorable Jed S. Rakoff, United States District Judge for the Southern
District of New York, sitting by designation.
2

-- 2 of 8 --

_______________
Plaintiffs‐Appellants Neville Seymour Davis and Dana Trezziova filed
petitions seeking panel rehearing or rehearing en banc of both this panel’s
opinion concerning SLUSA and its related summary order concerning forum non
conveniens. Because we did not misapprehend or overlook any point of law or fact
and because the intervening Supreme Court ruling concerning SLUSA,
Chadbourne & Park LLP v. Troice, 134 S. Ct. 1058 (2014), confirms our opinion’s
logic and holding, we deny the petitions for panel rehearing.
_______________
Appearances:
E RIC ALLEN I SAACSON (Joseph D. Daley, Robbins Geller Rudman
& Dowd LLP; Francis A. Bottini, Jr., Albert Y. Chang, Bottini &
Bottini, Inc.), Robbins Geller Rudman & Dowd LLP, San
Diego, CA, for Plaintiff‐Appellant‐Petitioner Neville Seymour
Davis.
PATRICE L. B ISHOP, Stull, Stull & Brody, Beverly Hills, CA, for
Plaintiff‐Appellant‐Petitioner Dana Trezziova.
ANDREW RHYS DAVIES (Laura R. Hall), Allen & Overy LLP, New
York, NY, for Defendant‐Appellee‐Respondent JPMorgan Chase &
Co.
L EWIS J. L IMAN (Jeffrey A. Rosenthal), Cleary Gottlieb Steen &
Hamilton LLP, New York, NY, for Defendant‐Appellee‐
Respondent The Bank of New York Mellon Corporation.
3

-- 3 of 8 --

THOMAS G. RAFFERTY (Antony L. Ryan), Cravath, Swaine &
Moore LLP, New York, NY, for Defendant‐Appellee‐Respondent
PricewaterhouseCoopers (Dublin) on behalf of the “Forum Non
Conveniens Defendants.”
Thomas J. Moloney, David E. Brodsky, Cleary Gottlieb Steen &
Hamilton LLP, New York, NY, for Defendants‐Appellees‐
Respondents HSBC Holdings plc, HSBC Securities Services
(Ireland) Limited, HSBC Institutional Trust Services (Ireland)
Limited, and HSBC Securities Services (Luxembourg) S.A.
Michael E. Wiles, Debevoise & Plimpton LLP, New York, NY, for
Defendants‐Appellees‐Respondents Alberto Benbassat, Stephane
Benbassat, Genevalor, Benbassat & Cie, Gerald J.P. Brady, Daniel
Morrissey, David T. Smith, Thema Asset Management Limited, and
Thema International Fund plc.
William R. Maguire, Marc A. Weinstein, Hughes Hubbard &
Reed LLP, New York, NY, for Defendant‐Appellee‐Respondent
Ernst & Young (Cayman).
Michael S. Flynn, Davis Polk & Wardwell LLP, New York, NY, for
Defendant‐Appellee‐Respondent PricewaterhouseCoopers LLP.
Sanford M. Litvack, Dennis H. Tracey, III, Lisa J. Fried, Hogan
Lovells US LLP, New York, NY, for Defendant‐Appellee‐
Respondent PricewaterhouseCoopers Bermuda.
Jay P. Lefkowitz, Joseph Serino, Jr., David S. Flugman, Kirkland
& Ellis LLP, New York, NY, for Defendants‐Appellees‐
Respondents Herald USA Fund, Franco Mugnai, and Friedrich
Pfeffer.
Jeff G. Hammel, Maria A. Barton, Latham & Watkins LLP, New
York, NY, for Defendant‐Appellee‐Respondent Hannes Saleta.
4

-- 4 of 8 --

Richard A. Martin, Katherine L. Maco, Alison K. Roffi, Orrick
Herrington & Sutcliffe LLP, New York, NY, for Defendant‐
Appellee‐Respondent Ernst & Young S.A.
Claudius O. Sokenu, John Gueli, Shearman & Sterling LLP, New
York, NY, for Defendant‐Appellee‐Respondent Ernst & Young
Global Limited.
Franklin B. Velie, Jonathan G. Kortmansky, Mitchell C. Stein,
Sullivan & Worcester LLP, New York, NY, for Defendant‐
Appellee‐Respondent UniCredit Bank Austria AG.
Price O. Gielen, Nathan Daniel Adler, Neuberger, Quinn, Gielen,
Rubin & Gibber, P.A., Baltimore, MD, for Defendant‐Appellee‐
Respondent Sonja Kohn.
Brett S. Moore, Porzio Bromberg & Newman P.C., New York, NY,
for Defendant‐Appellee‐Respondent Herald (LUX) by and through
Messrs. Ferdinand Burg and Carlo Reding, the Court‐Appointed
Liquidators for Herald (LUX).
Susan L. Saltzstein, Marco E. Schnabl, Skadden, Arps, Slate,
Meagher & Flom LLP, New York, NY, for Defendant‐Appellee‐
Respondent UniCredit S.p.A.
Mitchell J. Auslander, James C. Dugan, Wilkie Farr & Gallagher
LLP, New York, NY, for Defendant‐Appellee‐Respondent William
Fry.
Fraser L. Hunter, Jr., Wilmer Cutler Pickering Hale and Dorr LLP,
New York, NY, for Defendant‐Appellee‐Respondent
PricewaterhouseCoopers International Ltd.
5

-- 5 of 8 --

_______________
PER CURIAM :
On September 16, 2013, this Court filed an opinion affirming the judgment
of the United States District Court for the Southern District of New York (Richard
M. Berman, Judge), which dismissed the plaintiffs’ state‐law claims against
defendants JPMorgan Chase & Co. and Bank of New York Mellon Corporation as
precluded by the Securities Litigation Uniform Standards Act of 1998 (“SLUSA”),
15 U.S.C. § 78bb(f). In re Herald, Primeo, and Thema, 730 F.3d 112 (2d Cir. 2013)
(holding that SLUSA precludes state‐law class action claims against these banks
because the claims are predicated on the banks’ involvement with the fraudulent
securities transactions of Bernard L. Madoff Investment Securities (“Madoff
Securities”)). Simultaneously, this Court filed a summary order affirming the
District Court’s dismissal of claims against the remaining defendants on the
ground of forum non conveniens. In re Herald, Pimeo, and Thema, 540 F. App’x 19 (2d
Cir. 2013).
Plaintiffs‐Appellants Dana Trezziova and Neville Seymour Davis filed
petitions seeking panel rehearing and rehearing en banc of both the SLUSA
opinion and the forum non conveniens summary order. In view of the Supreme
6

-- 6 of 8 --

Court’s grant of certiorari to an appeal from a Fifth Circuit judgment concerning
the reach of SLUSA, we postponed a decision on these petitions. Now that we
have reviewed the resulting Supreme Court opinion, Chadbourne & Park LLP v.
Troice, 134 S. Ct. 1058 (2014), and received briefing from the parties concerning its
effect on In re Herald, the petitions are ripe for determination. Because the fraud
perpetrated by Madoff Securities was “material to a decision by one or more
individuals (other than the fraudster) to buy or to sell a ‘covered security,’ ”
Troice, 134 S. Ct. at 1066, the Supreme Court’s ruling confirms the logic and
holding of In re Herald. Accordingly, we deny the petitions.
Troice clarifies the scope of SLUSA by delineating an outer limit to its
requirement that the fraud be “in connection with the purchase or sale of a
covered security.” 15 U.S.C. § 78bb(f)(1). Specifically, Troice arose from the
scheme by Allen Stanford to induce victims to purchase certificates of deposit of
the Stanford Investment Bank, certificates that were rendered worthless when
Stanford’s Ponzi scheme was revealed. But those certificates of deposit were
indisputably not “covered securities,” and the closest that the plaintiffs in Troice
could get to statutorily defined “covered securities” was the allegation that
Stanford induced purchase of the uncovered securities by, among other
7

-- 7 of 8 --

misrepresentations, vague promises that the Stanford Investment Bank had
significant holdings in various covered securities.
This, the Supreme Court held, was too remote. The plaintiffs in Troice were
not seeking, directly or indirectly, to purchase covered securities. See Troice, 134 S.
Ct. at 1062. Thus, a plaintiff in Troice was entirely distinguishable from “a victim
who took, tried to take, or maintained an ownership position in the statutorily
relevant securities through ‘purchases’ or ‘sales’ induced by the fraud.” Id. at
1067 (emphasis supplied).
Madoff Securities, by contrast, fraudulently induced attempted
investments in covered securities, albeit through feeder funds (not alleged in the
instant complaints as anything other than intermediaries), and the defendant
banks are alleged to have furthered that scheme. Madoff Securities’ victims thus
“tried to take . . . an ownership position in the statutorily relevant securities,” i.e.,
covered securities. That Madoff Securities (a Ponzi scheme) fraudulently failed to
follow through on its promise to place the investments in covered securities does
not in any respect remove this case from the ambit of SLUSA as defined in Troice.
We have considered the other arguments raised in the petitions, and they
are without merit. Accordingly, we DENY the petitions for panel rehearing.
8

-- 8 of 8 --