On January 14, 2015, a Los Angeles, California judge rejected a class certification motion filed on behalf of more than 200 investors who claim Metropolitan Life Insurance Co. agents and the affiliated brokerage firm New England Securities Corp. persuaded them to buy unregistered securities from an alleged $216 million Ponzi scheme. The Court reasoned that the individualized issue of whether each investor relied on an agent’s alleged misrepresentations prevents a class action from being certified. Due to the court’s ruling DLG investment fraud victims will have to pursue their own claims either in court or through FINRA arbitration.
The class action lawsuit followed a 2009 suit that the U.S. Securities and Exchange Commission (SEC) filed alleging that a Tony Russon, a MetLife regional manager, and Russon Financial Services solicited investments in unregistered issued by Diversified Lending Group (DLG). DLG is accused of being a fraudulent Ponzi scheme. The class action plaintiffs sought certification of a class of investors with claims regarding MetLife’s negligent supervision and negligent hiring and for violation of state law barring the sale of unregistered securities.
The plaintiffs claim MetLife and subsidiary New England Life Insurance Co. failed to perform proper due diligence to ensure that the recommended DLG investments were legitimate. The defendants in the case raised the typical defense that they owed no duty to the investors to vet the DLG investments. Although the Judge in the case denied class certification, he entered a finding that the plaintiffs had supplied sufficient factual allegations to support claims that the defendants had acted as agents of DLG by inducing investment into the company’s securities.
DKR’s FINRA arbitration and investment fraud lawyers routinely handle cases on behalf of Los Angeles investment fraud victims. If you have lost money as a result of investment fraud or stockbroker misconduct, contact us for a free case evaluation at 888-578-6255 or firstname.lastname@example.org.