Nielen-Thomas v. Concorde Investment Services, LLC

Dist. Ct. did not err granting defendants’ motion to dismiss plaintiff’s class action complaint alleging breaches of Wisconsin and Nebraska securities laws, arising out of actions taken by plaintiff’s investment advisor that resulted in plaintiff and others experiencing huge losses in their accounts. Defendants could properly remove instant lawsuit to federal court pursuant to Securities Litigation Uniform Standards Act (SLUSA) and then move to dismiss instant lawsuit containing state law security claims because lawsuit qualified as “covered class action” that was both removable and precluded by SLUSA. While plaintiff argued that instant lawsuit did not qualify as covered class action under SLUSA because potential class members were less than 50, plaintiff’s lawsuit met SLUSA’s definition of covered class action under 15 USC section 78bb(f)(5)(B)(i)(II), because she brought her action on behalf of unnamed parties in representative capacity. As such, no putative securities class actions that are based on state law and otherwise meet SLUSA’s requirements can proceed in either federal or state court under SLUSA.