Roskind v. Morgan Stanley Dean Witter & Co. (2000)

[Modification of Opinion (80 Cal.App.4th 345) on denial of petition for rehearing.]

JAMES ROSKIND, Plaintiff and Appellant, v. MORGAN STANLEY DEAN WITTER & CO., Defendant and Respondent.

JONES, P.J.- It is ordered that the opinion filed herein on April 27, 2000, be modified as follows: The second paragraph on pages 9-10 [80 Cal. App. 4th 353, advance report, last par., p. 354, lines 1-13] is changed in its entirety, so that the paragraph now reads:

"We do not accept Morgan's assertions that Congress or other federal lawmakers intended to legalize the practice of trading ahead and make it the basis of a uniform federal system allowing violations of federal criminal law by securities brokers, and preempting the application of state laws to this unlawful practice. Application of state laws such as the UCL to forbid the practice of trading ahead would not impair or conflict with any provision of federal law, but would be consistent with the purposes and aims of federal law. (See Washington Mutual Bank v. Superior Court (1999) 75 Cal. App. 4th 773, 787 [permitting UCL action to proceed, because it was consistent with, and helped to implement the goals of, federal law].) In fact, since trading ahead constitutes the crime of mail fraud under federal law, it is actionable under the UCL, which borrows other law, including federal law, to define the "unlawful" practices that are UCL violations. (See Cel-Tech, supra, 20 Cal.4th at pp. 180-181; cf. also Stop Youth Addiction, Inc. v. Lucky Stores, Inc. (1998) 17 Cal. 4th 553, 562-573 [no preemption of UCL claims relating to tobacco sales to minors].)" (Original footnotes remain unchanged.) [80 Cal. App. 4th 1225f]

This modification does not effect a change in the judgment.

The petition for rehearing is denied.