The opinion of the court was delivered by: JOHN FULLAM, Senior District Judge
The Securities and Exchange Commission brought suit against Robert L.
Bentley, Bentley Financial Services, Inc. and Entrust Group, alleging
serious violations of the securities laws, and obtained the appointment
of a receiver for those entities (C.A. No. 01-5366). David H. Marion,
Esquire, was appointed Receiver, and given "complete jurisdiction over,
and control of all property, real, personal or mixed, including any
assets or funds, wherever located, of all defendants" (Order dated
November 7, 2001).
Briefly summarized, Robert L. Bentley and his corporations, Bentley
Financial Services, Inc. and Entrust Group, conducted an elaborate
financial swindle which eventuated into a Ponzi-scheme. Investors were led to believe that they were
purchasing from BFS federally-insured certificates of deposit (CD's),
whereas actually they were purchasing unregistered IOU's of BFS. Some $4
billion dollars worth of these unregistered securities were sold, far in
excess of BFS's ability to repay. Funds received from current investors
were used to keep the scheme afloat as long as possible, but, like all
Ponzi schemes, the arrangement collapsed.
In his capacity as Receiver of Bentley Financial Services, Inc., Mr.
Marion has brought this action against various entities and individuals
whose wrongful conduct allegedly helped to perpetuate the scheme, and
thus damaged BFS by increasing its liabilities to defrauded investors.
The defendants are:
1. Southeastern Securities, Inc., SFG Financial Services, Inc.,
Theodore Benghiat, and Casto Edwin Rivera (the "Benghiat Defendants").
Southeastern Securities is a registered broker-dealer which acted as
co-broker in many of the sales of unregistered securities; Benghiat was
President of Southeastern Securities and its related company "SFG, " and
Rivera was compliance officer.
2. Peninsula Bank and Joseph Marzouca, its executive vice president.
Peninsula Bank purported to be acting as escrow agent holding the
legitimate CD's which the securities sold by BFS were supposed to represent (i.e., in which the investors supposedly
obtained an interest).
3. TDI, Inc. ("TDI" and various related entities (hereinafter
collectively referred as "TDI") was a broker-dealer registered with NASD,
which employed Mr. Bentley for a time, and was allegedly involved in many
of the fraudulent sales. Defendant Jerry Manning was CEO and compliance
officer for TDI. Defendants John Strine and Jeffrey Wilson were,
respectively, vice president and president of TDI, and also compliance
Plaintiff's claims are set forth in a first amended complaint, 64 pages
in length, containing 271 paragraphs. Plaintiff is proceeding on several
theories, set forth in 20 separate counts. The Benghiat Defendants and
Peninsula Bank and its vice president Joseph Marzouca have filed motions
to dismiss under Fed.R.Civ.P. 12(b)(6). Peninsula Bank and Mr.
Marzouca also seek dismissal for lack of jurisdiction.
The amended complaint includes the following claims: Count I, violation
of the Securities Exchange Act, § 20(a), 15 U.S.C. § 78t(a);
Count II, respondeat superior liability under § 20(a) of the
Securities Exchange Act; Count III, respondeat superior liability for
failure to supervise registered representatives of a securities broker;
Counts IV and V, negligence; Count VI, negligent supervision; Count VII,
deepening insolvency; Counts VIII and IX, breach of fiduciary duty; Count X,
fraud; Count XI, breach of contract; Count XII, conversion; Count XIII,
violation of Pennsylvania securities law (70 P.S. §§ 1-501, 1-503);
Count XIV, aiding and abetting fraud; Count XV, aiding and abetting
constructive fraud; Count XVI, aiding and abetting breach of fiduciary
duty; Count XVII, aiding and abetting conversion; Count XVIII, aiding and
abetting deepening insolvency; Count XIX, negligent misrepresentation;
and, Count XX, unjust enrichment.
Since I am required, at this stage, to accept as true all factual
averments of the amended complaint, and since dismissal is improper
unless it is clear that plaintiff cannot possibly prove the claim
asserted; and since the amended complaint has obviously been prepared
with great care and skill, I am satisfied that, except for the issues
discussed below, the motions to dismiss lack arguable merit. Plaintiff
may well be unable to prove the claims being asserted, but he is entitled
to proceed with the attempt.
The potentially dispositive issues do require discussion. They are: (1)
whether this court has jurisdiction over the claims being asserted
against Peninsula Bank and Joseph Marzouca, in view of a forum-selection
clause in the document setting forth Peninsula Bank's role as escrow
agent; (2) whether plaintiff has standing to assert claims for conduct
which allegedly increased BFS's liability to defrauded investors; and (3)
whether plaintiff's claims are barred by the doctrine of in pari
I. The Forum-Selection Clause
Entrust, one of the Bentley receivership entities, entered into three
"custodian agreements" with the defendant Peninsula Bank, setting forth
the terms under which the Bank was to maintain a custody account for
federally-insured CD's. Each of these agreements contained the following
"This agreement is governed by the laws of the
state of Florida and by applicable federal law.
This agreement binds you and your heirs, personal
representatives, successors and assigns. You and
[Peninsula State Bank] agree that any legal action
related to this agreement shall be solely
determined by the federal or state courts sitting
in Date County, Florida. You and PSB agree to
irrevocably waive the right to trial by jury in
any action arising from this agreement."
It is clear that this lawsuit is not an "action arising from this
agreement." A closer question is whether this lawsuit constitutes a
"legal action related to this agreement." Peninsula contends that this
action is "related to" the escrow agreement because, in its view, certain
provisions of that agreement provide a complete defense against the
claims now being asserted by the Receiver. According to Peninsula, the
escrow agreements required Peninsula to carry out the instructions of Entrust, without any obligation to inquire into the propriety of
I have concluded that the forum-selection clause should not be
enforced, for several reasons. In the first place, the language "any
legal action related to this agreement" is less precise than the language
"any action arising from this agreement," and it is reasonable to suppose
that the contracting parties intended the two phrases to have the same
meaning. I am thus led to conclude that this lawsuit is ...