The New York Court of Appeals recently held that the Martin Act—New York's "Blue Sky" law—does not preclude private plaintiffs from pursuing common law claims such as fraud and negligent misrepresentation relating to securities transactions. In Assured Guar. (UK), Ltd. v. J.P. Morgan Inv. Mgmt., Inc., the Court (New York's highest court) unanimously held that breach of fiduciary duty and gross negligence claims tied to alleged mismanagement of an investment portfolio are not barred by the Martin Act. This decision represents an important clarification of New York law and significantly expands the ability of private parties to assert common law claims against financial institutions and other parties in securities-related actions under New York law.
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