Arthur N. ABBEY, Plaintiff-Appellant, v. Theodore C. SKOKOS, Defendant, and 3F Therapeutics, Inc., Defendant-Appellee, 509 F. App'x 92

SUMMARY ORDER Plaintiff-Appellant, Arthur N. Abbey, appeals from the district court’s judgment entered on February 22, 2011, following its grant of

summary judgment in favor of the defendants on his claims under § 10(

b) of the Securities and Exchange Act of 1934, 15 U.S.C. § 78j(b), its related regulations, and state common law fraud. We assume the parties’ familiarity with the underlying facts, procedural history, and specification of issues for review. “We review a district court’s grant of

summary judgment de novo, construing the evidence in the light most favorable to the nonmoving party and drawing all reasonable inferences in that party’s favor.” Kuebel v. Black & Decker Inc., 643 F.3d 352, 358 (2d Cir.2011). “Summary judgment is appropriate only if the moving party shows that there are no genuine issues of material fact and that the moving party is entitled to judgment as a matter of law.” Miller v. Wolpoff & Abramson, L.L.P., 321 F.3d 292, 300 (2d Cir.2003). “To sustain a private claim for securities fraud under

Section 10(b), ‘a plaintiff must prove (1) a material misrepresentation or omission by the defendant; (2) scienter; (3) a connection between the misrepresentation or omission and the purchase or sale of a security; (4) rebanee upon the misrepresentation or omission; (5) economic loss; and (6) loss causation.’ Moreover, a plaintiffs reliance on the defendant’s misrepresentation must have been reasonable in order for the claim to proceed.” Ashland Inc. v. Morgan Stanley & Co., Inc., 652 F.3d 333, 337 (2d Cir.2011) (citations omitted).

The undisputed evidence in this case, taken in the light most favorable to Abbey, demonstrates that he is a sophisticated investor. Rebanee is unreasonable if “through minimal diligence, the investor should have discovered the truth” in a situation where related documents were readily available, Starr v. Georgeson S’holder, Inc., 412 F.3d 103, 109 (2d Cir.2005) (internal quotation marks omitted), or where a sophisticated investor failed to take reasonable steps to access critical information. Schlaifer Nance & Co. v. Estate of Warhol, 119 F.3d 91, 98-99 (2d Cir.1997).

Here, there were documents readily available to Abbey that would have demonstrated the financial state of 3FTI and undermined any reliance on Theodore Skokos’s representation to Abbey that Abbey’s investment was merely “window dressing.” Furthermore, where, as here, the parties have executed a written agreement that contains a provision disclaiming any other representations than those listed in the agreement, it is unreasonable to rely on the alleged extra-contractual misrepresentations. Harsco Corp. v. Segui, 91 F.3d 337, 345-46 (2d Cir.1996).

As a matter of law, Abbey’s reliance on the statements of Skokos was unreasonable. Abbey’s common law fraud claim fails on the same grounds. Reasonable rebanee is an element of common law fraud under New York law, and it is assessed in the same manner as under federal securities law. Ashland, 652 F.3d at 339; see also Crigger v. Fahnestock & Co., Inc., 443 F.3d 230, 234-35 (2d Cir.2006). We have considered Abbey’s remaining arguments and find them to be without merit. Accordingly, the judgment of the district court hereby is AFFIRMED.