On January 5, 2016, the First Department issued a decision in Northern Group Inc. v. Merrill Lynch, Pierce, Fenner & Smith Inc., 2016 NY Slip Op. 00012, affirming the dismissal of a fraud claim for failure to allege reasonable reliance, explaining:
[T]hese sophisticated plaintiffs [could not] have reasonably relied on the alleged misrepresentations in this arm’s-length transaction, since they admit that they never read the relevant prospectuses, which were filed with the Securities and Exchange Commission (SEC) and were publicly available through SEC’s website, and from which plaintiffs could have ascertained the specific risks that they claim were not disclosed to them. The record shows that other information that plaintiffs claim was withheld from them either was in fact known by their chief investment officer or was ascertainable through other publicly available sources.
(Internal citations omitted).