Defendants Argue No Basis for Fraud Claims
FNEX and Maverick urged the court to dismiss all claims except defamation, contending that Leader Capital’s complaint lacks the specificity required to sustain allegations of securities fraud under federal pleading standards.
“Plaintiff makes conclusory statements that unspecified representatives of Defendants ‘spread false information’ or ‘made material misrepresentations,’” the motion said. “Such statements do not meet the requirements for pleading securities fraud.”
The companies further characterized the lawsuit as a dispute about alleged defamatory remarks, not a bona fide securities violation. They argued that any negative comments attributed to them occurred after the termination of the agreement and don’t amount to breach of contract or interference with economic relations.
Allegations of Harm and Investor Exodus
Leader Capital, based in Vancouver, Washington, alleges that after breaking ties with FNEX and Maverick, it saw a wave of investor exits that were “abnormal and inconsistent” with the fund’s historical patterns.
According to the complaint, FNEX and Maverick representatives told investors that Leader’s management were “bad guys” and falsely implied that the firm was under investigation by the SEC. Leader clarified that the SEC had only conducted a routine examination, and there was no enforcement action or probe into misconduct.
“These statements created a false impression that Leader Capital had violated federal securities laws,” the firm stated in its complaint, describing the implications as misleading omissions designed to alarm investors.
