Venable To Face Facebook Fraud Suit After 9th Circ. Revival

A Ninth Circuit panel on Monday largely revived a private investment company’s suit alleging Venable LLP helped a convicted fraudster steal $11.25 million in a bogus sale of Facebook shares prior to its initial public offering, saying the claims did not fall short of federal and state requirements.

The panel revived all but one claim in ESG Capital Partners LP’s suit alleging Venable and former partner David Meyer committed fraud while representing Troy Stratos, who has since been convicted on federal criminal fraud charges for assuming the identity of "Ken Dennis" in order to convince ESG to pay him $11.5 million for pre-IPO Facebook shares he knew he could not procure. The panel found ESG had sufficiently alleged the existence of misrepresentations, scienter and reliance. read more »