Nature of the Case
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Facts
P was a group of investors formed to purchase pre-IPO Facebook shares. Burns was P's managing agent. Venable LLP (D) is a law firm Meyer (D) was an attorney at that firm. Stratos (DS), an alleged con artist, masqueraded as 'Ken Dennis.' Meyer (D) assisted Ds in creating Soumaya Securities, LLC. Meyer (D) and Ds named the company after billionaire Carlos Slim's late wife, Soumaya, and attorney Meyer (D) told Burns that Ds was affiliated with Slim. DS was not actually affiliated with Slim. Soumaya Securities was not authorized to do business in California, had no bank accounts, and filed no tax returns. DS masqueraded as 'Ken Dennis.' in connection with all Soumaya Securities transactions, yet Soumaya Securities' operating documents, which attorney Meyer (D) prepared, listed DS as Soumaya Securities' manager and sole member and 'Kenneth Dennis' as its CEO. Meyer (D) maintained a client trust account only for DS. 'Dennis,' the CEO of Soumaya Securities, negotiated the sale of pre-IPO Facebook stocks to P. Meyer (D) met with Ds 25 times in person and spoke to Ds at least 100 times on the phone. Burns had questions and called Meyer (D) to verify 'Dennis's' representations. Meyer (D) informed Burns that 'Dennis' was in contact with Facebook executives and had access to millions of Facebook shares. Meyer (D) told managing agent Burns that 'Dennis' 'is who he says he is.' Meyer (D) assured managing agent Burns that 'Dennis' and Soumaya Securities were Slim's affiliates, that the sale was legitimate, that Meyer (D) represented 'Dennis' and Soumaya Securities in the sale, and that Meyer (D) would provide deal documentation. P pled that without Meyer's (D) assurances, P would not have gone through with the deal. P wired $2.8 million into Venable LLP's trust account as a deposit. The entire $2.8 million was deposited into DS's personal client trust fund account, not to any account for Soumaya Securities. Meyer (D) had an all-day meeting with Ds at Venable LLP's offices. P pled that, had Burns known that the $2.8 million would not be held in trust pending the sale's completion, he would not have authorized Meyer (D) to release it. Burns communicated with 'Dennis' through DS's wpacquisitions@gmail.com email address-the same email address that Meyer (D) used with Ds. Meyer(D) was copied on some of Burns's emails to 'Dennis' at the email address that Meyer (D) knew belonged to Ds. DS needed a bank account as he had been blacklisted from a number of banks. Venable LLP (D) opened a bank account for Soumaya Securities at Bank of America. 'Dennis,' told Burns that the deal was imminent and that an additional $7.2 million was needed. Meyer (D) provided purchase documentation to Burns. The money was wired. Bank of America froze the Soumaya Securities account and then closed it on July 26. Venable LLP (D) arranged to transfer the funds to a third party but never told P. 'Dennis,' told Burns that the deal was closing and that he needed an additional $1.25 million to secure P's shares. Meyer (D) opened a new bank account at UBS. Venable LLP (D) listed Ds-and not 'Dennis'-as Soumaya Securities' 'Beneficial Owner' on the UBS account. P had sent a total of $11.25 million. P sued Ds. The claims against Venable LLP (D) and Meyer (D) were dismissed, and P appealed.
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