LACHTMAN COHEN & BELOWICH OBTAINS DISMISSAL OF $100 MILLION RICO CLAIM IN FEDERAL COURT

On May 20, 2025, the U.S. District Court for the Southern District of New York dismissed all claims in 3ǀ5ǀ2 Capital GP LLC et al. v. Ryan Wear et al. The plaintiffs—an asset management firm and a fund it managed—brought civil RICO claims and state law claims alleging misappropriation of proceeds from issued by Water Station Management (WSM). Plaintiffs alleged damages of “not less than $106.9 million.”

In the attached Opinion and Order, Judge Valerie Caproni dismissed all of Plaintiffs’ RICO claims under the “RICO Amendment” to the Private Securities Litigation Reform Act (PSLRA), holding that the alleged misconduct was closely tied to securities transactions and therefore barred by the RICO Amendment. With the dismissal of all federal law claims, the Court declined to exercise supplemental jurisdiction over the remaining state law claims.

Partner Greg Blue said: “From the outset, we believed the claims against our clients had no legal or factual basis. We agree with Judge Caproni’s well-reasoned decision and are pleased that the Court brought this chapter to a close.”

Greg was joined on the defense team by our colleagues Kerry Cunningham and Joanna Sandolo.