Prestwick Capital Management, Ltd. v. Peregrine Financial Group, Inc.

Federal 7th Circuit Court
Civil Court
Citation
Case Number: 
No. 12-1232
Decision Date: 
July 19, 2013
Federal District: 
N.D. Ill., E. Div.
Holding: 
Affirmed
Dist. Ct. did not err in granting defendant’s motion for summary judgment in action alleging that defendant breached 2004 guarantee agreement that covered actions taken by third-party with respect to its customers, where plaintiffs (customers) alleged that third-party violated Commodity Exchange Act (CEA) by subjecting them to commodities fraud. While 2004 agreement gave customers assurance that third-party would conform to CEA through guarantee issued by defendant, defendant and third-party signed 2006 agreement that replaced 2004 agreement that essentially made third-party, as opposed to defendant, accountable for all customer losses. As such, 2006 agreement applied in instant lawsuit, where third-party’s actions that resulted in plaintiffs’ alleged losses occurred after execution of 2006 agreement. Fact that plaintiffs’ accounts with third-party were opened prior to 2006 agreement did not require different result, and defendant was not required to effectuate closure of plaintiffs’ accounts when 2006 agreement was executed, so as to give plaintiffs option to reopen their accounts in non-guaranteed status.