Lustgraaf v. Behrens
United States Court of Appeals for the Eighth Circuit
619 F.3d 867 (2010)
Relevant factsFree
Behrens (defendant), a registered representative of broker-dealer Sunset (defendant) and general agent of Sunset's parent KCL (defendant), ran a Ponzi scheme, and his victims (plaintiffs) sued Sunset and KCL under securities law's control-person liability provisions; the district court dismissed against both, finding neither exercised sufficient control over Behrens.
IssueFree
Whether, to state a claim for control-person liability, a plaintiff must demonstrate that a person violated securities laws, that the defendant controlled that person, and that the defendant had the power to dictate the acts or omissions that produced the violation.
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