Northstar Financial Advisors v. Schwab Investments, No. 16-15303 (9th Cir. 2018)
Annotate this CaseThe Securities Litigation Uniform Standards Act (SLUSA) barred a plaintiff class from bringing a covered class action based on state law claims alleging that the defendants made a misrepresentation or omission or employed any manipulative or deceptive device in connection with the purchase or sale of a covered security. The panel held, in this case, that SLUSA precluded all of Northstar's claims against Schwab and that the district court correctly dismissed them. However, the panel held that the district court erred in dismissing the claims with prejudice.
Court Description: Securities The panel (1) affirmed the district court’s dismissal of class claims brought under state law as precluded by the Securities Litigation Uniform Standards Act and (2) reversed the dismissal with prejudice and remanded to give plaintiff the opportunity to amend its complaint. The panel held that SLUSA bars a plaintiff class from bringing (1) a covered class action (2) based on state law claims (3) alleging that the defendants made a misrepresentation or omission or employed any manipulative or deceptive device (4) in connection with the purchase or sale of (5) a covered security. The central question is whether the complaint describes conduct by the defendant that would be actionable under the 1933 or 1934 Securities Acts. The court must determine whether (1) the
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