Hyer v. Malouf
United States District Court for the District of Utah
Fed. Sec. L. Rep. (CCH) ¶ 94,857 (D. Utah 2008)
Dodd Hyer (plaintiff) invested roughly $2.2 million in three condominium developments after being solicited by Matthew Malouf (defendant) through oral and written communications, receiving project-offering documents describing the investments; Hyer alleged Malouf never conveyed the promised ownership interests, never built the condos, and diverted Hyer's money to other investors, in violation of §12(a)(2) of the Securities Act. Malouf moved to dismiss, arguing Hyer failed to allege any public offering, a prerequisite for a §12(a)(2) claim.
Whether a plaintiff adequately alleges a "public offering" of securities, as required to state a claim under §12(a)(2) of the Securities Act, by identifying a substantial number of other investors who received a substantially similar solicitation.