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Securities and Exchange Commission v. Lidingo Holdings, LLC

United States District Court, W.D. Washington, Seattle

July 26, 2018

SECURITIES AND EXCHANGE COMMISSION, Plaintiff,
v.
LIDINGO HOLDINGS, LLC, etal, Defendants.

          ORDER GRANTING IN PART AND DENYING IN PART SECOND MOTION TO DISMISS

          RICARDO S. MARTINEZ, CHIEF UNITED STATES DISTRICT JUDGE.

         I. INTRODUCTION

         This matter comes before the Court on Defendant Kamila Bjorlin's Motion to Dismiss the Amended Complaint pursuant to Federal Rule of Civil Procedure 12(b)(6). Dkt. #81. Defendant Bjorlin seeks dismissal of all claims against her on the basis that they are time-barred as she asserts that all claims are solely-derivative of the claims previously dismissed against former Defendant Lidingo Holdings, LLC ("Lidingo"). Id. Plaintiff opposes the motion, asserting that its claims are not time-barred, and that it has adequately pled its claims against Defendant Bjorlin in her individual capacity separate and apart from the claims it previously brought against Lidingo. Dkt. #83. Having reviewed the record before it, and finding oral argument to be unnecessary on this motion, the Court now GRANTS IN PART AND DENIES IN PART Defendant's motion to dismiss for the reasons discussed herein.

         II. BACKGROUND

         Plaintiff initially filed its Complaint in the United States District Court for the Southern District of New York. Dkt. # 1. The matter was subsequently transferred to this Court on October 27, 2017. Dkt. #53. According to the parties:

Following an investigation, the SEC filed this action under the antifraud and antitouting provisions of the federal securities laws alleging Defendants Lidingo Holdings, LLC ("Lidingo"), Kamilla Bjorlin ("Bjorlin"), Andrew Hodge ("Hodge"), Brian Nichols ("Nichols"), and Vincent Cassano ("Cassano") engaged in a scheme to promote the stock of public companies without disclosing compensation they received for the promotion directly or indirectly from the issuers, and in many instances, by falsely stating they had received no compensation at all.
The SEC has charged Defendants with violating Sections 17(a) and 17(b) of the Securities Act of 1933 ("Securities Act"), 15 U.S.C. §§ 77q(a) and 77q(b); and Section 10(b) and Rule 10b-5 of the Securities Exchange Act of 1934 ("Exchange Act"), 15 U.S.C. § 78j(b) and 17 C.F.R. § 240.10b-5. Defendants have responded with numerous defenses to the counts raised.

Dkt. #61 at 1-2. Defendants Lidingo and Cassano have since been dismissed from this action. Dkts. #72 and #73. In its prior Order dismissing Lidingo, the Court denied Plaintiff leave to amend, and directed that, "[d]ue to the length and complexity of the Complaint in this case, no later than fourteen (14) days from the date of this Order, Plaintiff shall file an Amended Complaint in conformance with the rulings in this Order." Dkt. #73 at 19.

         Plaintiff then filed a Motion for Clarification of the Court's Order of Dismissal. Dkt. #74. The Court declined to clarify its Order, finding that Plaintiff sought "impermissible guidance on how to file its Amended Complaint." Dkt. #76. Plaintiff filed its Amended Complaint on June 8, 2018. Dkt. #77. The instant motion followed.

         III. DISCUSSION

         A. Standard of Review

         On a motion to dismiss for failure to state a claim under Federal Rule of Civil Procedure 12(b)(6), all allegations of material fact must be accepted as true and construed in the light most favorable to the nonmoving party. Cahillv. Liberty Mut. Ins. Co., 80 F.3d 336, 337-38 (9th Cir. 1996). However, the Court is not required to accept as true a "legal conclusion couched as a factual allegation." Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009) (quoting Bell Atl. Corp. v. Twombly, 550 U.S. 544, 555 (2007)). The Complaint "must contain sufficient factual matter, accepted as true, to state a claim to relief that is plausible on its face." Id. at 678. This requirement is met when the plaintiff "pleads factual content that allows the court to draw the reasonable inference that the defendant is liable for the misconduct alleged." Id. Absent facial plausibility, Plaintiffs claims must be dismissed. Twombly, 550 U.S. at 570.

         Though the Court limits its Rule 12(b)(6) review to allegations of material fact set forth in the Complaint, the Court may consider documents of which it has taken judicial notice. See F.R.E. 201; Swartz v. KPMG LLP, 476 F.3d 756, 763 (9th Cir. 2007). Defendant Bjorlin has asked to Court to take judicial notice, as it previously did, that Lidingo Holdings, LLC, with registered agent Kamilla Bjorlin, was formerly registered to do business in the State of Washington, but is now terminated. Dkt. #81 at 3. The Court will do so, as this information is contained in the public records maintained by the Secretary of State of the State of Washington, and can be retrieved on the public website for the Secretary of State of the State of Washington Corporations division, https://www.sos.wa.gov/corps/ (last visited July 25, 2018). Defendant Bjorlin also requests that the Court take judicial notice that Lidingo was dissolved in Nevada on October 14, 2014. Dkt. #81 at 3. Plaintiff does not dispute that fact. Dkt. #83 at 1, fn. 1. Accordingly the Court also takes judicial notice of that fact.

         B. Time-Bar ...


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