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January 20, 1976


The opinion of the court was delivered by: BRODERICK

 BRODERICK, District Judge

 The plaintiffs in this case allege a cause of action against defendants based upon Section 10(b) of the Securities Exchange Act of 1934 and Rule 10b-5. The liability of defendant Provident National Bank ("Provident") is predicated upon its alleged complicity in the role of an aider and abettor. This matter comes before the Court on motion of defendant Provident for summary judgment pursuant to Rule 56 of the Federal Rules of Civil Procedure. In ruling on this motion for summary judgment we have considered the pleadings, depositions, exhibits and arguments presented at oral argument. In a motion for summary judgment, the moving party has the burden of showing the absence of a genuine issue concerning any material fact. Adickes v. Kress & Co., 398 U.S. 144, 149, 26 L. Ed. 2d 142, 90 S. Ct. 1598 (1970). As stated in Moore's, Federal Practice, P 56.15[3] at 2335-36:

The courts are in entire agreement that the moving party for summary judgment has the burden of showing the absence of any genuine issue as to all the material facts, which, under applicable principles of substantive law, entitle him to judgment as a matter of law.
The courts hold the movant to a strict standard. To satisfy his burden the movant must make a showing that is quite clear what the truth is, and that excludes any real doubt as to the existence of any genuine issue of material fact. (Footnotes omitted).

 Although there are numerous issues of material fact that remain for trial as between plaintiffs and the defendants other than Provident, for the reasons expressed hereinafter, this Court has determined that there are no genuine factual issues relating to Provident's involvement in this alleged securities fraud. Examining the record before us, we conclude that Provident is entitled to summary judgment on Count I of the Second Amended Complaint. *fn1" Although the Court could retain jurisdiction as to Count V as pendent matter, we decline to do so; we therefore will dismiss the pendent law state claims in Count V. In summarizing the facts, we will accept the plaintiffs' version as true.

 Facts Alleged by Plaintiffs.

 In February 1972, defendant Barry K. Zern ("Zern") and plaintiff James S. Saltzman ("Saltzman") formed the brokerage firm of Zern, Saltzman & Co., Inc. In establishing the firm, Zern received two-thirds of the issued and outstanding stock and Saltzman received one-third. In addition, contributions of subordinated capital were made by several contributors.

 In order to insure that neither Zern nor Saltzman could unilaterally take any major action on behalf of their brokerage firm, they agreed that their joint authorization would be required for any disbursement of Zern, Saltzman & Co., Inc., funds in the amount of $5,000 or more. Furthermore, both Zern and Saltzman visited Provident to open a regular checking account for Zern, Saltzman & Co., Inc. and explained to Provident their agreement requiring joint authorization. Both Saltzman and Zern signed a Provident signature card expressly providing that both signatures were needed for checks exceeding $5,000. *fn2" At the time that Zern and Saltzman signed the signature card, Provident completed its standard four-part snap-out form which contained provisions to the same effect. *fn3" In addition, both Zern and Saltzman completed the printed form furnished by Provident and returned a Certified Copy of Corporate Resolutions. This corporate document, which established the checking account contract between Zern, Saltzman & Co., Inc. and Provident, contained the identical provisions regarding the necessity for both signatures for checks which exceeded $5,000. *fn4"

 Thereafter, commencing in December 1972, Zern, in the name of Aqua Gardens, Inc. ("Aqua Gardens"), allegedly purchased three pet stores for a total consideration of approximately $66,000. Zern, who was the sole shareholder and director of Aqua Gardens at the time of these purchases, allegedly made a total capital investment in Aqua Gardens of $10,000 and received 1,000 shares of Aqua Gardens common stock. Thus, plaintiffs claim that Zern purchased his Aqua Gardens stock for $10 per share.

 In May, 1973, Zern and Saltzman agreed to wind down the brokerage business of Zern, Saltzman & Co., Inc., but allegedly disagreed over Zern's desire to invest the funds of Zern, Saltzman & Co., Inc. in Aqua Gardens. Following a number of meetings, on June 22 and 27, Zern alone wrote two checks in the amounts of $74,172 and $40,000 on the Zern, Saltzman & Co., Inc. regular checking account made payable to Aqua Gardens. Even though Saltzman's signature was absent from the checks, whose amounts clearly exceeded $5,000, they were both honored by Provident.

 Plaintiffs claim that after Zern transferred a total of $172,000 in Zern, Saltzman & Co., Inc. funds to Aqua Gardens (which sum includes the amounts of the two checks in question), he then transferred 5,568 shares of Aqua Gardens stock to Zern, Saltzman & Co., Inc., thereby allegedly causing Zern, Saltzman & Co., Inc. to pay more than $30 per share when he had paid only $10 a share.

 The gravamen of plaintiffs' complaint against Provident is that Provident's action in cashing the two checks, each containing only one of the two required signatures, constituted a "reckless disregard for its duties and liabilities" sufficient to hold Provident liable as an "aider and abettor" of the alleged stock fraud perpetrated under Section 10(b) of the Securities Exchange Act of 1934 (15 U.S.C. § 78j(b)) and Rule 10b-5 promulgated thereunder. However, in its motion for summary judgment, Provident argues that its "slip up" was not the kind of error that would create liability under 10(b) and 10b-5. Provident contends that in order to establish its complicity, plaintiffs must prove that Provident possessed knowledge of the fraudulent scheme. Since there are no allegations or evidence that Provident knew of Zern's planned disposition of ...

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